FT Portfolios Canada has launched the First Trust Dorsey Wright Dynamic US Sector Rotation Index ETF (FSR) which seeks to replicate the performance of a total return US equities industry sector rotational index, net of expenses.
Currently, the First Trust ETF seeks to replicate the performance of the Dorsey Wright Dynamic US Sector Focus Five Index, net of expenses and will generally seek to hedge substantially all of its US dollar currency exposure back to the Canadian dollar.
The index employs a rules-based US sector rotation strategy, which uses proprietary relative strength signals to construct a dynamic US equity portfolio that provides equal-weighted exposure to five TSX-listed US sector index ETFs that represent the strongest US sectors based on relative strength.
The US sectors include, but may not be limited to, the following sectors: consumer staples, consumer discretionary, energy, financial, industrials, healthcare, materials, technology and utilities.
Exposure to US cash equivalents is also evaluated and the inclusion and weight of a US cash allocation in the Index is adjusted based upon its rank relative to the US Sectors. The US cash allocation is a US dollar-denominated cash position represented by nine equally weighted US treasury-bills ranging from 30 to 91 days in duration.
"First Trust Dorsey Wright Dynamic US Sector Rotation Index ETF (CAD-Hedged) provides a simplified way for Canadian investors to gain exposure to a sector rotation strategy with the ability to allocate to cash equivalents. Dorsey Wright's research on relative strength is widely followed in North America and we are pleased to offer this ETF, which tracks an index that combines their insights with First Trust's fundamentally weighted line-up of TSX-listed US sector index ETFs," says Karl Cheong, head of ETFs at First Trust Canada.