The adjacent table gives investors an individual Realtime Rating for FV on several different metrics, including liquidity, expenses, performance, volatility, dividend, concentration of holdings in addition to an overall rating. The "A+ Metric Rated ETF" field, available to ETFdb Pro members, shows the ETF in the Large Cap Blend Equities with the highest Metric Realtime Rating for each individual field. To view all of this data, sign up for a free 14-day trial for ETFdb Pro. To view information on how the ETFdb Realtime Ratings work, click here.View the Category Report
The following tables and charts contain in-depth metrics for this ETF and compare it to similar peer ETFs within its ETFdb Category.
This ETF is not currently available for commission free trading on any platforms.
There are 15 other ETFs in the Large Cap Blend Equities ETFdb Category that are also eligible for commission free trading:
This section shows how this ETF has performed relative to its peer group ETFdb Category.
The following charts can be customized to display historical performance in a number of different formats, including line charts, bar charts, and candlesticks. Time periods can be adjusted to increase or decrease the period shown, ranging from five minutes to several months.
The following chart also includes the option to compare the performance of FV relative to other ETFs and benchmarks or to include indicators such as Bollinger Bands, relative strength, and moving averages.
This section shows how the volatility of this ETF compares to the peer group ETFdb Category.
Published March 1, 2016
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The First Trust Dorsey Wright Focus 5 ETF (FV ) corresponds to the price and yield of the Dorsey Wright Focus Five Index. The fund will invest at least 90% of its net assets in ETFs that compose the index. The index is designed to provide targeted exposure to the five First Trust sector-based ETFs that the index issuer believes offer the greatest potential to outperform the other ETFs. The index selects five ETFs based on relative price momentum and weights the constituent ETFs equally.
FV offers significant exposure to health care and consumer companies; health care accounts for more than 33% of exposure, while consumer names account for almost 40%. This means the ETF is prone to regulatory changes on the health care side as it relates to HMOs, Big Pharma and biotech. At the same time, the consumer names are impacted by global monetary policy. Over the course of the last 12 months, biotech, which is typically among the best performers in the health care sector, has seen its momentum slow.
This can be attributed to a variety of factors such as the exposé on Valeant, an increased regulatory focus on drug pricing in the U.S., and generic drug manufacturers outside the U.S. eating away market share, leaving little wiggle room for Big Pharma. The global consumer, meanwhile, remains resilient. However, significant headwinds in the form of slowing demand in China, rising interest rates in the U.S., a strong dollar, and a negative interest rate policy adopted by the ECB and the Japanese central bank have all been a drag on corporate earnings worldwide.
The macro picture for FV is negative. Let’s look at several points worth considering. This year is an election year, and for some of FV’s constituents in the health care sector, the U.S. is by far the biggest market. With political rhetoric against FV’s largest constituents, owing to regulatory oversight on drug pricing, relationships with pharma retailers, and competition from generics, it appears that pre-election 2016 will bring a repeat of last year’s performance. While consumer names like Amazon (AMZN) and other sectors such as financials will probably offset some of the losses caused by the health care industry, the relative exposure of FV to health care is too large to ignore.
That takes us to FV’s financial ratios. FV has $3.4 billion in assets under management and has a yield of 0.16%, which is below market average. The ETF is at the midpoint of its all-time high of $25.51 and its all-time low of $17.75, hit in April 2014, just when it began trading. The fund’s expense ratio is 0.89%, which is significantly higher than other funds in its category. FV has a turnover ratio of 0%.
I believe there are other opportunities in specific companies to which FV offers exposure. Given the lack of historical performance, an unclear theme, a recent runup, fees, and the headline risks, FV will be attractive below $20. With FV right now at $21.28, I believe it is a Weak Sell with a price target of $20.50.
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