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First Trust NASDAQ Global Auto Index Fund (CARZ)
Investment Objective/Strategy - The First Trust NASDAQ Global Auto Index Fund is an exchange-traded fund. The investment objective of the Fund is to seek investment results that correspond generally to the price and yield, before the Fund's fees and expenses, of an equity index called the NASDAQ OMX Global Auto Index.
There can be no assurance that the Fund's investment objectives will be achieved.
  • The index is a modified market-capitalization weighted index that includes securities of companies that are classified as an Automobile Manufacturer.
  • To be included in the index, a security must meet the following criteria:
    • listed on an index-eligible global stock exchange,
    • have a minimum worldwide market capitalization of at least $500 million,
    • have a minimum three-month average daily dollar trading volume of $1 million.
  • The index employs a modified market cap weighting methodology in which larger companies receive a larger index weighting. The index weighting methodology includes caps to prevent high concentrations among larger stocks.
  • The index is reconstituted annually and rebalanced quarterly.
Fund Overview
TickerCARZ
Fund TypeInternational Equity
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon
CUSIP33734X309
Intraday NAVCARZIV
Fiscal Year-End09/30
ExchangeNASDAQ Stock Market
Inception5/9/2011
Inception Price$29.88
Inception NAV$29.88
Rebalance FrequencyQuarterly
Expense Ratio0.70%
Current Fund Data (as of 8/28/2014)
Closing NAV1$39.84
Closing Share Price2$39.77
Bid/Ask Midpoint$39.81
Bid/Ask Discount0.08%
Total Net Assets$65,739,089
Outstanding Shares1,650,002
Daily Volume2,493
Average 30-Day Daily Volume18,079
Closing Share Price 52-Week High/Low$41.54 / $36.01
Closing NAV 52-Week High/Low$41.37 / $36.03
Number of Holdings37
Fund Characteristics (as of 7/31/2014)7
Median Market Cap.$14,467
Maximum Market Cap.$200,435
Minimum Market Cap.$874
Price/Earnings11.26
Price/Book1.46
Price/Cash Flow7.10
Price/Sales0.50
Top Holdings (as of 8/29/2014)
Holding Percent
Ford Motor Company 8.43%
General Motors Company 8.01%
Toyota Motor Corporation 8.01%
Honda Motor Co., Ltd. 7.67%
Daimler AG 6.84%
Tesla Motors, Inc. 5.17%
Fuji Heavy Industries Ltd. 4.27%
Nissan Motor Co., Ltd. 4.23%
Hyundai Motor Company 4.16%
Kia Motors Corporation 3.95%

Holdings are subject to change.

Top Country Exposure (as of 8/29/2014)
Country Percent
Japan 35.07%
United States 25.11%
Germany 17.28%
South Korea 8.32%
France 5.07%
China 4.40%
Italy 2.29%
Hong Kong 1.29%
Malaysia 0.66%
Taiwan 0.51%
Bid/Ask Midpoint and NAV History (Since Inception)
Past performance is not indicative of future results.
Distribution Information
Dividend per Share Amt3$0.3954
30-Day SEC Yield (as of 7/31/2014)41.26%
12-Month Distribution Rate (as of 7/31/2014)51.21%
Index Yield (as of 7/31/2014)61.98%
Bid/Ask Midpoint vs. NAV (as of 6/30/2014)
Number of Days Bid/Ask Midpoint Above NAV
Quarter Ended 0-49
Basis Points
50-99
Basis Points
100-199
Basis Points
>=200
Basis Points
6/30/2014 40 1 0 0
3/31/2014 30 4 0 0
12/31/2013 24 12 0 0
9/30/2013 20 24 5 0
Number of Days Bid/Ask Midpoint Below NAV
Quarter Ended 0-49
Basis Points
50-99
Basis Points
100-199
Basis Points
>=200
Basis Points
6/30/2014 22 0 0 0
3/31/2014 18 9 0 0
12/31/2013 25 3 0 0
9/30/2013 13 2 0 0

The price used to calculate market return is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange, on which shares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated.

Month End Performance (as of 7/31/2014)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception8
Fund Performance *
NAV 1.25% 1.72% 10.21% 10.35% N/A N/A 10.24%
After Tax Held 0.83% 1.27% 9.64% 9.93% N/A N/A 9.83%
After Tax Sold 0.71% 0.98% 5.78% 7.86% N/A N/A 7.79%
Market Price 1.17% 1.18% 10.20% 10.28% N/A N/A 10.27%
Index Performance **
NASDAQ OMX Global Auto IndexSM 2.29% 2.84% 12.16% 11.58% N/A N/A 11.65%
MSCI World Index 2.13% 4.48% 15.96% 11.89% N/A N/A 9.94%
Quarter End Performance (as of 6/30/2014)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception8
Fund Performance *
NAV 3.58% 4.56% 21.98% 11.09% N/A N/A 11.50%
After Tax Held 3.15% 4.10% 21.36% 10.66% N/A N/A 11.08%
After Tax Sold 2.03% 2.58% 12.44% 8.43% N/A N/A 8.78%
Market Price 3.32% 3.87% 21.77% 10.90% N/A N/A 11.49%
Index Performance **
NASDAQ OMX Global Auto IndexSM 3.70% 4.91% 23.12% 12.09% N/A N/A 12.69%
MSCI World Index 4.86% 6.18% 24.05% 11.81% N/A N/A 10.79%
3-Year Statistics (as of 7/31/2014)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
CARZ 21.29% -3.47 1.29 0.55 0.83
MSCI World Index 13.74% --- 1.00 0.86 1.00
Standard Deviation is a measure of price variability (risk). Alpha is an indication of how much an investment outperforms or underperforms on a risk-adjusted basis relative to its benchmark.Beta is a measure of price variability relative to the market. Sharpe Ratio is a measure of excess reward per unit of volatility. Correlation is a measure of the similarity of performance.

*Performance data quoted represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate and shares when sold or redeemed, may be worth more or less than their original cost.

After Tax Held returns represent return after taxes on distributions. Assumes shares have not been sold. After Tax Sold returns represent the return after taxes on distributions and the sale of fund shares. Returns do not represent the returns you would receive if you traded shares at other times. Market Price returns are based on the midpoint of the bid/ask spread. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative. The fund's performance reflects fee waivers and expense reimbursements, absent which performance would have been lower.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.

**Performance information for the NASDAQ OMX Global Auto IndexSM is for illustrative purposes only and does not represent actual fund performance. The Index does not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the performance shown. Indexes are unmanaged and an investor cannot invest directly in an index.

The expense ratio for this fund is 0.70%.

The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of 23 developed markets around the world.

Footnotes
1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's shares outstanding.
2 Fund shares are purchased and sold on an exchange at their share price rather than net asset value (NAV), which may cause the shares to trade at a price greater than NAV (premium) or less than NAV (discount).
3 Most recent distribution paid or declared through today's date. Subject to change in the future.
4 30-day SEC yield is calculated by dividing the net investment income per share earned during the most recent 30-day period by the maximum offering price per share on the last day of the period.
5 12-Month Distribution Rate is calculated by dividing the sum of the fund's trailing 12-month ordinary distributions paid or declared by the NAV price. Distribution rates may vary.
6 Index yield represents the weighted average trailing 12-month dividend of the constituents of the NASDAQ OMX Global Auto Index(SM)
7 All market capitalization numbers are in USD$ Millions.
8 Inception Date is 5/9/2011

You should consider the fund's investment objectives, risks, and charges and expenses carefully before investing. You can download a prospectus or summary prospectus, or contact First Trust Portfolios L.P. at 1-800-621-1675 to request a prospectus or 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.

The fund's return may not match the return of the NASDAQ OMX Global Auto IndexSM.  Securities 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.

Risk Considerations

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 stock 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 fund may invest in small capitalization and mid capitalization companies. Such companies may experience greater price volatility than larger, more established companies.

An investment in a fund containing securities of non-U.S. issuers is subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting non-U.S. issuers. The fund may invest in depositary receipts which may be less liquid than the underlying shares in their primary trading market.

The fund invests in consumer discretionary companies. The success of consumer discretionary companies is tied closely to the performance of the overall domestic and international economies, interest rates, competition, consumer confidence, disposable household income and consumer spending. Changes in demographics and consumer tastes can also affect the demand for, and success of, consumer discretionary products.

The automotive industry can be highly cyclical, and companies in the industry may suffer periodic operating losses. The industry can be significantly affected by labor relations and fluctuating component prices. While most of the major automotive manufacturers are large companies, others may be non-diversified in both product line and customer base and may be more vulnerable to events that negatively impact the industry.

The fund invests in the stock of companies operating in Japan. Because Japan's economy and equity market share a strong correlation with the U.S. markets, the Japanese economy may be affected by economic problems in the U.S. Japan also has a growing economic relationship with China and other Southeast Asian countries. Should political tension increase, it could adversely affect the economy and destabilize the region as a whole. Japanese securities may also be subject to lack of liquidity, excessive taxation, government seizure of assets, different legal or accounting standards and less government supervision and regulation of exchanges than in the U.S.

The fund is classified as "non-diversified" and may invest a relatively high percentage of its assets in a limited number of issuers. As a result, the fund may be more susceptible to a single adverse economic or regulatory occurrence affecting one or more of 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.

NASDAQ®, OMX®, NASDAQ OMX®, and NASDAQ OMX Global Auto IndexSM are trademarks of The NASDAQ OMX Group, Inc. (NASDAQ OMX collectively with their affiliates, are referred to as the "Corporations") and are licensed for use by First Trust Advisors L.P. The fund has not been passed on by the Corporations as to its legality or suitability. The fund is not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUND.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value
 
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
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