The First Trust Dorsey Wright Focus 5 ETF (NasdaqGM: FV) is an ETF of ETFs backed by a momentum-based strategy. As such, FV can and does make occasional changes to its roster of sector and industry ETFs.
Recently, FV dumped the First Trust Utilities AlphaDEX Fund (NYSEArca: FXU) to add the First Trust Technology AlphaDEX Fund (NYSEARCA: FXL).
First Trust’s AlphaDEX ETFs are based “on growth factors including three, six and 12-month price appreciation, sales to price and one year sales growth, and, separately, on value factors including book value to price, cash flow to price and return on assets,” according to First Trust
“The First Trust Dorsey Wright Focus 5 ETF, which uses a computer algorithm to choose stocks that are likely to outperform, recently ramped up its holdings of tech shares in a big way. The fund-of-funds dumped its position in the First Trust Utilities AlphaDex fund in favor of the First Trust Technology AlphaDex ETF — giving it a 60 percent weighting in technology,” reports Bloomberg.
FXL is now FV’s largest holding with a weight of 20.3%, just ahead of the 20.1% allocated to the First Trust Dow Jones Internet Index Fund (NYSEArca: FDN).