FCTE: Muted Performance After Energetic Start, Still Worth Watching, A Hold

2025-03-28 23:33:02 ET

Summary

• FCTE is an actively managed vehicle with a strategy designed "to identify and own stocks that can outperform the S&P 500 across the entire market cycle."
• It has a portfolio of just 20 stocks. Adjustments are made monthly as "the screens are rerun."
• FCTE's factor mix is currently heavy in quality, light in value, with adequate growth exposure. Consumer staples, energy, utilities, and real estate are ignored.
• Regarding performance, FCTE has failed to impress me. The issue is that it has beaten IVV in 2025 but underperformed since inception.
• While it is certainly worth following FCTE, reasons for a Buy rating are lacking.

Today, it is time to revisit the SMI 3Fourteen Full-Cycle Trend ETF ( FCTE ), an actively managed exchange-traded fund that attracted my attention for the first time in August 2024.

Back then, this debutant looked fairly attractive, as its start was nothing short of energetic. However, proceeding with a Buy rating was something I considered premature, naming three reasons, including its too-short trading history (and, consequently, hasty extrapolation of results was dangerously wrong), a clearly high expense ratio of 85 bps, and unsupportive market conditions. So can it qualify for a Buy rating today?...

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