It tracks the Dorsey Wright Focus Five Index and is an ETF of ETFs that concentrates its investments in the First Trust sector ETFs ranking highest on relative strength within its eligible universe. Rather than individual stocks, it follows market leadership at the sector level.

It suits tactical allocation investors who find it hard to pick leading sectors themselves but want to ride the momentum trend.

It is a passive (index-tracking) ETF managed by First Trust.

The index provider ranks First Trust sector ETFs using its own relative strength methodology and includes only the few at the top. ETFs whose rankings slip drop out at the periodic reconstitution, and newly rising sectors take their place. Sector rotation, not stock selection, is the driver of returns.

• Selection is rules-based and looks only at price momentum rankings, so there is no manager discretion.
• Short reconstitution intervals let it reflect shifts in sector leadership relatively quickly.
• Because it holds sector ETFs rather than individual stocks, it is less exposed to a single stock's problems.

Assets under management (AUM) stand at $3.8B, and the expense ratio is 0.89% per year.

Because of its momentum rotation structure, the fees of the underlying ETFs may add another layer of cost, so total cost should be considered.

It tends to keep up relatively well when sector leadership is clear and persistent, and to lag in sideways markets where leadership changes often, because its rotations arrive late. It favors markets with a clear direction.

When money flocks to broad index core products, the presence of tactical momentum products fades. Conversely, when the gaps between sectors widen, interest in rotation strategies tends to return, and this pattern repeats.

Its strength is that it follows sector leadership by the rules. Its weaknesses are the cost burden, concentration in a few holdings and lagging rotations.

The products placed alongside it in the comparison table invest in different areas, such as financials, industrials and the broad Nasdaq index, so it makes sense to compare them only on expense level and fund size. On that basis, this product's cost burden is on the high side. For closer substitutes, looking at FVC, which also adjusts its cash allocation, IFV, the international version, PDP, which uses stock-level relative strength, and MTUM, which holds a large-cap momentum factor, will make the choice clearer.

Here are the items to check before buying this product. A momentum rotation product differs in character from core assets, so it is safer to look first at the cost structure, the sector composition and the rotation speed before deciding on a position size.

Because it concentrates in a few sectors, drawdowns can be deeper than those of core indexes when leadership changes. Relative strength reacts with a lag, so losses can easily accumulate in the early stage of a change in direction.

We recommend considering it as a satellite allocation alongside core assets. If you want to lower costs, compare it with the low-cost sector products in the comparison table, and if you want similar momentum exposure, weigh it against FVC or MTUM.