First Trust Exchange-Traded Fund VI First Trust Dorsey Wright Dynamic Focus 5 ETF
Top 10 Holdings
What is FVC?
This exchange-traded fund seeks investment results that correspond generally to the price and yield (before the funds fees and expenses) of an index called the Dorsey Wright Dynamic Focus Five Index. The Dorsey Wright Dynamic Focus Five Index (the "index") is designed to provide targeted exposure to five First Trust sector and industry based ETFs and the Nasdaq US T-Bill Index (the "cash index"). The index combines Dorsey, Wright & Associates (DWA) systematic momentum approach to sector rotation and risk management via cash equivalents represented by 1- to 3-month U.S. Treasury bills in the cash index. To construct the index, DWA begins with the universe of First Trust sector and industry ETFs and the cash index. Using the DWA proprietary relative strength methodology, the ETFs are compared to each other to determine inclusion by measuring each ETFs price momentum relative to other ETFs in the universe. Each ETF is given a score that allows the index to objectively determine where it ranks relative to all other ETFs in the universe and five ETFs that satisfy certain trading volume and liquidity requirements are selected for inclusion. The relative strength analysis is conducted on a bi-monthly basis. ETFs are replaced when they fall sufficiently out of favor, based on their relative strength, versus the other ETFs within the universe. When an ETF is added or removed, the index is rebalanced so each ETF position is equally weighted. The index can gain varying amounts of exposure to the cash index when the relative strength of more than one-third of the universe of First Trust ETFs begins to diminish relative to the cash index. The cash index is evaluated on a bi-monthly basis. The cash index may constitute between 0% and 95% of the index, but is limited to an increase or decrease of no more than 33% per evaluation.
ETFs related toFVC
ETFs correlated to FVC include LGRO, GAUG, AUGW
What is ETF correlation?
Correlation is a measure of the strength of the relationship between two ETFs. It quantifies the degree to which prices of the two ETFs typically move together.
Here, correlation is measured over the past year with the Pearson correlation coefficient (Pearon’s r), which ranges from -1 to 1.
Using ETF correlations in portfolio and strategy construction
ETF correlations can help you create investing strategies and portfolios. Use them to:
- •Build a diversified portfolio from uncorrelated or inversely correlated ETFs with the aim of minimizing portfolio risk.
- •Compare correlated or related ETFs to find one with a lower expense ratio or higher trading volume.
- •Create an investing strategy that hedges an ETF with an uncorrelated or inversely correlated ETF.
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We show information based on calculations performed by Composer using data from our provider. Information provided here is based on calculations performed by Composer using data sourced from Xignite, an unaffiliated third party. Composer believes this information is reliable, but has not verified the data and there is no guarantee that the calculations are accurate.