An index-tracking ETF based on Dorsey Wright’s
systematic momentum strategy for sector rotation using their
relative strength ranking system
First Trust Advisors L.P. (“First Trust”) a global
exchange-traded fund (ETF) provider and asset manager, announced
that it 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”).
J.P. 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 favor, 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,” said Ryan Issakainen, CFA, Senior Vice
President, Exchange-Traded Fund Strategist at First Trust.
For more information about First Trust, please contact Ryan
Issakainen of First Trust at (630) 765-8689 or
RIssakainen@FTAdvisors.com.
About First Trust
First Trust Advisors L.P., along with its affiliate First Trust
Portfolios L.P., are privately held companies which provide a
variety of investment services, including asset management and
financial advisory services, with collective assets under
management or supervision of approximately $117 billion as of April
30, 2015 through unit investment trusts, exchange-traded funds,
closed-end funds, mutual funds and separate managed accounts. First
Trust is based in Wheaton, Illinois. For more information, visit
http://www.ftlatinamerica.com.
You should consider the fund’s investment objectives, risks,
and charges and expenses carefully before investing. Contact First
Trust Portfolios L.P. at 1-800-621-1675 or visit
www.ftlatinamerica.com to obtain a prospectus or a
summary prospectus which contains this and other information about
the fund. The prospectus or summary prospectus should be read
carefully before investing.
ETF Characteristics
The fund lists and principally trades its shares on The NASDAQ
Stock Market LLC. and the Bolsa Mexicana de Valores.
The fund’s return may not match the return of the Dorsey Wright
Focus Five Index. The ETFs held by the fund will generally not be
bought or sold in response to market fluctuations.
Investors buying or selling fund shares on the secondary market
may incur customary brokerage commissions. Market prices may differ
to some degree from the net asset value of the shares. Investors
who sell fund shares may receive less than the share’s net asset
value. Shares may be sold throughout the day on the exchange
through any brokerage account. However, unlike mutual funds, shares
may only be redeemed directly from the fund by authorized
participants, in very large creation/redemption units.
Risks
The fund’s shares will change in value, and you could lose money
by investing in the fund. One of the principal risks of investing
in the fund is market risk. Market risk is the risk that a
particular ETF owned by the fund, fund shares or stocks in general
may fall in value. There can be no assurance that the fund's
investment objective will be achieved.
The ETFs in which the fund invests may invest in small
capitalization and mid capitalization companies. Such companies may
experience greater price volatility than larger, more established
companies.
The ETFs in which the fund invests invest in securities of non
U.S. issuers, which are subject to additional risks, including
currency fluctuations, political risks, withholding, the lack of
adequate financial information, and exchange control restrictions
impacting foreign issuers. These risks may be heightened for
securities of companies located in, or with significant operations
in, emerging market countries. The ETFs in which the fund invests
may invest in depositary receipts, which may be less liquid than
the underlying shares in their primary trading market.
The ETFs in which the fund invests may hold investments that are
denominated in non-U.S. currencies, or in securities that provide
exposure to such currencies, currency exchange rates or interest
rates denominated in such currencies. Changes in currency exchange
rates and the relative value of non-U.S. currencies will affect the
value of the fund's investment and the value of fund shares.
The fund invests in securities of affiliated ETFs, which
involves additional expenses that would not be present in a direct
investment in such affiliated ETFs.
The fund currently has fewer assets than larger funds, and like
other relatively new funds, large inflows and outflows may impact
the fund's market exposure for limited periods of time.
The fund is classified as “non-diversified” and may invest a
larger percentage of its assets in the securities of a smaller
number of issuers. As a result, the fund may be more susceptible a
single economic or regulatory occurrence affecting these issuers,
experience increased volatility and be highly concentrated in
certain issuers.
First Trust Advisors L.P. is the adviser to the fund. First
Trust Advisors L.P. is an affiliate of First Trust Portfolios L.P.,
the fund's distributor.
The fund is not sponsored, endorsed, sold or promoted by DWA.
DWA makes no representation or warranty, express or implied, to the
owners of the fund or any member of the public regarding the
advisability of trading in the fund. DWA’s only relationship to
First Trust is the licensing of certain trademarks and trade names
of DWA and of the index, which is determined, composed and
calculated by DWA without regard to First Trust or the fund.
Investors should review all relevant offering materials,
including all applicable risk factors, and should consult with
financial and tax advisors relating to tax and other consequences
of investing in a particular security prior to making an
investment.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150522005921/en/
First TrustRyan Issakainen(630) 765-8689RIssakainen@FTAdvisors.com
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