First Trust Advisors has cross listed the First Trust Dorsey Wright International Focus 5 ETF (NASDAQ: IFV) on the Mexican stock exchange, Bolsa Mexicana de Valores (BMV).
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 International Focus Five Index (the “index”).
JP Morgan sponsors the cross-listing of First Trust’s ETFs and services the ETFs by handling corporate actions, disseminating information and working with investors in Mexico.
The Dorsey Wright International Focus Five Index is designed to provide targeted exposure to the five First Trust international ETFs identified by Dorsey, Wright & Associates, LLC’s (DWA) index methodology that offer the greatest potential to outperform the other ETFs in the selection universe. First Trust’s country/region-based ETFs provide the universe for the index selection. Using the DWA relative strength ranking system, the ETFs are compared to each other based on price momentum to determine inclusion. Each ETF is given a score that allows DWA 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 upon rebalance. DWA believes the design of the index allows them to identify major themes in the market, have exposure to those countries or regions whose price action is superior to others in the universe and eliminate exposure to those countries or regions whose price action is sub-par relative to others in the universe.
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. Technical analysis provides the cornerstone of their approach and relative strength plays a very important role. Relative strength is a ranking system used to measure a security’s price momentum relative to its peers and helps DWA identify meaningful patterns in daily share price movements.
“The First Trust Dorsey Wright International Focus 5 ETF provides an efficient, scalable way for financial advisors and their clients to gain exposure to an international price momentum rotation strategy, combining the insights of Dorsey Wright’s research on relative strength with First Trust’s robust lineup of international ETFs,” says Ryan Issakainen, CFA, Senior Vice President, Exchange-Traded Fund Strategist at First Trust.
