Daily ETF Watch: New ‘Focus 5’ Fund Debuts

March 18, 2016

First Trust today rolled out an ETF that serves as a complement to the $3.4 billion First Trust Dorsey Wright Focus 5 ETF (FV | B-41). The First Trust Dorsey Wright Dynamic Focus 5 ETF (FVC) follows a similar methodology, but the fund can allocate up to 95% of its portfolio to a cash index depending on the momentum of other potential components.

The index selects its noncash components from the list of industry and sector ETFs offered by First Trust. Twice a month, index methodology uses relative strength analysis to determine the five funds with the most momentum and equal-weights the funds in the portfolio. The equal weights are reset every time one of those five ETFs are switched.

Where the methodology differs from that of FV is with regard to the cash component. If one-third of the potential components have less momentum than the cash index, it comes into play. The cash index’s weight is determined by its percentage ranking with regard to its momentum relative to the ETFs in the selection universe. The allocation to cash can only be adjusted by 33% or less during each bimonthly evaluation.

FVC comes with an expense ratio of 0.79%—that’s 10 basis points less than what FV charges.

Van Eck Global Rebranding
Van Eck Global recently announced that it would be adopting a universal brand—“VanEck”—for all of its businesses and products, including its Market Vectors ETF family. The rebranding will be implemented in stages starting May 1, a press release said.

Van Eck’s Market Vectors ETFs include nearly 60 funds, with more than $21 billion in assets under management, which represents the bulk of the firm’s total assets. It’s currently the 10th-largest ETF issuer in the U.S. market. Its largest and best-known fund is the Market Vectors Gold Miners ETF (GDX | C-76), with $6.3 billion.

During the rebranding process, the ETFs will be renamed the VanEck Vectors.

“With our new branding, we want to emphasize that VanEck is continually exploring and offering innovative ways to create wealth,” said Cari Cardaci, Van Eck Global’s chief marketing officer, in the press release. The firm worked with New York-based creative agency Addison in developing the messaging and logo for the new brand.

Additional Developments

The following funds are set to have their last day of trading on March 18:

Contact Heather Bell at [email protected].

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