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First Trust to launch First Trust Dorsey Wright Focus 5 ETF

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First Trust Advisors is planning to launch the First Trust Dorsey Wright Focus 5 ETF on 6 March.

The fund seeks investment results that correspond generally to the price and yield (before the fund’s fees and expenses) of an equity index called the Dorsey Wright Focus Five Index.
 
The Dorsey Wright Focus Five Index is designed to provide targeted exposure to the five First Trust sector and industry based ETFs identified by DWA’s index methodology to offer the greatest potential to outperform the other ETFs in the selection universe.
 
First Trust sector and industry based ETFs provide the universe for the index selection. Using the DWA relative strength ranking system, the ETFs are compared to each other to determine inclusion. Each ETF is given a score to objectively determine where it ranks relative to all other ETFs in the universe. The top five ranking ETFs are included in the index and the relative strength analysis is conducted on a weekly basis. ETFs are replaced when they fall sufficiently out of favour, based on their relative strength, versus the other ETFs within the universe.
 
The index is rebalanced periodically so each position is equally weighted. DWA believes the design of the index allows them to identify major themes in the market, have exposure to those sectors whose price action is superior to others in the universe and eliminate exposure to those sectors whose price action is sub-par relative to others in the universe.
 
Dorsey, Wright & Associates (DWA) is an independent and privately owned registered investment advisory firm that provides professional management of equity portfolios for investors and investment research services for numerous broker/dealers and large institutions around the world.
 
“This is a strategy that Dorsey Wright created and has maintained for years,” says Tom Dorsey, president and CEO of Dorsey, Wright & Associates. “I personally use the strategy in my portfolio as an important piece of the core. We are excited to continue our partnership with First Trust and to bring this strategy to investors in a single ETF, which is designed to track the newly created Dorsey Wright Focus Five Index.”

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