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First Trust Managed Municipal ETF (FMB)
Investment Objective/Strategy - The primary investment objective of the Fund will be to generate current income that is exempt from regular federal income taxes and its secondary objective will be long term capital appreciation. Under normal market conditions, the Fund will seek to achieve its investment objectives by investing at least 80% of its net assets (including investment borrowings) in municipal debt securities that pay interest that is exempt from regular federal income taxes.
There can be no assurance that the Fund's investment objectives will be achieved.
Fund Overview
Fund TypeMunicipal Bonds
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBrown Brothers Harriman
Portfolio Manager/Sub-AdvisorFirst Trust Advisors L.P.
Fiscal Year-End10/31
Inception Price$50.00
Inception NAV$50.00
Gross Expense Ratio*0.65%
Net Expense Ratio*0.50%
* As of 2/4/2016
First Trust has contractually agreed to waive management fees of 0.15% of average daily net assets until March 1, 2017.
Current Fund Data (as of 2/10/2016)
Closing NAV1$52.75
Closing Share Price2$52.92
Bid/Ask Midpoint$52.93
Bid/Ask Premium0.34%
Total Net Assets$47,476,744
Outstanding Shares900,002
Daily Volume20,816
Average 30-Day Daily Volume10,912
Closing Share Price 52-Week High/Low$52.92 / $50.76
Closing NAV 52-Week High/Low$52.76 / $50.94
Number of Holdings127
Fund Characteristics (as of 1/29/2016)
Weighted Average Effective Duration86.23 Years
Weighted Average Maturity9.80 Years
Weighted Average Price$112.81
Weighted Average Coupon4.82%
Portfolio information statistics exclude cash and other assets and liabilities.
Top Holdings (as of 2/10/2016)
Holding Percent
CENTRL PLAINS ENERGY PROJ NE G PROJ NO 3, 5%, due 09/01/2027 3.03%
LOUISIANA ST PUBLIC FACS AUTH 5%, due 11/01/2035 2.43%
SCAGO SC EDUCTNL FACS CORP FOR 5%, due 12/01/2029 2.28%
NORTH CAROLINA ST CAPITAL FACS 5%, due 06/01/2026 2.23%
MICHIGAN ST FIN AUTH LTD OBLGR 5%, due 12/01/2025 2.12%
PIEDMONT SC MUNI PWR AGY ELEC REF-SER A3, 5%, due 01/01/2023 1.83%
WISCONSIN ST HLTH & EDUCTNL FA 5%, due 08/15/2031 1.81%
HAMILTON CNTY OH HLTH CARE FAC 5.25%, due 06/01/2027 1.74%
GUAM GOVT BUSINESS PRIVILEGE T 5%, due 11/15/2022 1.59%

Holdings are subject to change.

NAV History (Since Inception)
Past performance is not indicative of future results.
Maturity Exposure (as of 1/29/2016)
Years Percent
2 - 2.99 Years 0.25%
3 - 3.99 Years 0.06%
4 - 4.99 Years 6.41%
5 - 5.99 Years 5.63%
6 - 6.99 Years 15.17%
7 - 7.99 Years 13.22%
8 - 8.99 Years 7.00%
9 - 9.99 Years 8.37%
10 - 14.99 Years 23.99%
15 - 19.99 Years 14.33%
25 - 29.99 Years 1.19%
Cash 4.38%
Distribution Information
Dividend per Share Amt3$0.1150
30-Day SEC Yield (as of 1/29/2016)42.11%
Unsubsidized 30-Day SEC Yield (as of 1/29/2016)52.11%
12-Month Distribution Rate (as of 1/29/2016)62.63%
Taxable Equivalent Yield (as of 1/29/2016)73.72%
Bid/Ask Midpoint vs. NAV (as of 12/31/2015)
Number of Days Bid/Ask Midpoint Above NAV
Quarter Ended 0-49
Basis Points
Basis Points
Basis Points
Basis Points
12/31/2015 64 0 0 0
9/30/2015 47 0 0 0
6/30/2015 49 13 0 0
3/31/2015 38 3 0 0
Number of Days Bid/Ask Midpoint Below NAV
Quarter Ended 0-49
Basis Points
Basis Points
Basis Points
Basis Points
12/31/2015 0 0 0 0
9/30/2015 17 0 0 0
6/30/2015 1 0 0 0
3/31/2015 20 0 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.

Credit Quality (as of 1/29/2016)
Cash 4.38%
AA 16.22%
A 29.61%
BBB 26.85%
BB 7.74%
B 0.62%
NR 14.58%
The credit quality information presented reflects the ratings assigned by one or more nationally recognized statistical rating organizations (NRSROs), including Standard & Poor's Ratings Group, a division of the McGraw Hill Companies, Inc., Moody's Investors Service, Inc., Fitch Ratings or a comparably rated NRSRO. For situations in which a security is rated by more than one NRSRO and ratings are not equivalent, the highest ratings are used. Sub-investment grade ratings are those rated BB+/Ba1 or lower. Investment grade ratings are those rated BBB-/Baa3 or higher. The credit ratings shown relate to the creditworthiness of the issuers of the underlying securities in the Fund, and not to the Fund or its shares. Credit ratings are subject to change.
Top Sector Exposure (as of 1/29/2016)
CCRC 14.76%
INSURED 10.57%
GAS 5.00%
GO-LTD 4.63%
GO-UNLTD 3.91%
Month End Performance (as of 1/29/2016)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund Performance *
Net Asset Value (NAV) 2.77% 1.56% 3.45% N/A N/A N/A 5.87%
After Tax Held 2.32% 1.46% 2.10% N/A N/A N/A 4.55%
After Tax Sold 1.59% 0.88% 1.96% N/A N/A N/A 3.88%
Market Price 2.59% 1.30% 3.46% N/A N/A N/A 5.91%
Index Performance
Barclays Municipal 10 Year Revenue Index 2.77% 1.54% 3.35% N/A N/A N/A 5.30%
Quarter End Performance (as of 12/31/2015)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund Performance *
Net Asset Value (NAV) 1.91% 3.84% 3.84% N/A N/A N/A 5.18%
After Tax Held 1.46% 2.48% 2.48% N/A N/A N/A 3.86%
After Tax Sold 1.11% 2.19% 2.19% N/A N/A N/A 3.36%
Market Price 2.19% 4.15% 4.15% N/A N/A N/A 5.38%
Index Performance
Barclays Municipal 10 Year Revenue Index 1.66% 3.87% 3.87% N/A N/A N/A 4.60%

*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.

Indexes do 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 gross expense ratio for this fund is 0.65%. Expenses are capped contractually at 0.50% per year.

Barclays Municipal 10 Year Revenue Index - The Index is a subset of the Barclays Municipal Bond Index that measures the performance of investment-grade revenue bond issues with remaining maturities of 8 to 12 years.

1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's outstanding shares .
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 to today's date. Subject to change in the future. There is no guarantee that the fund will declare dividends.
4 The 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 and includes the effects of fee waivers and expense reimbursements, if applicable.
5 The unsubsidized 30-day SEC yield is calculated the same as the 30-day SEC yield, however it excludes contractual fee waivers and expense reimbursements.
6 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.
7 The taxable equivalent yield is for illustrative purposes only. This information illustrates approximately what you would have to earn on taxable investments to equal the tax-exempt estimated current return using the highest federal tax bracket for 2016. This information is based on present law as of the date of publication and does not account for any proposed changes in tax rates. This information does not account for limitations on deductions, the alternative minimum tax or taxes other than Federal personal income tax.
8 A measure of a bond's sensitivity to interest rate changes that reflects the change in a bond's price given a change in yield.
9 Inception Date is 5/13/2014

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.

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. The fund is subject to management risk because it is an actively managed portfolio. In managing the fund's investment portfolio, the advisor will apply investment techniques and risk analyses that may not have the desired result. There can be no assurance that the fund's investment objectives will be achieved.

The fund is subject to market risk. Market risk is the risk that a particular security owned by the fund or shares of the fund in general may fall in value. The values of municipal securities held by the fund may be adversely affected by local political and economic conditions and developments.

Municipal bonds are subject to numerous additional risks, including credit risk, income risk, interest rate risk, call risk and zero coupon bond risk. Credit risk is the risk that an issuer of a security will be unable or unwilling to make dividend, interest and/or principal payments when due and that the value of a security may decline as a result. Income risk is the risk that income from the fund's fixed income investments could decline during periods of falling interest rates. Interest rate risk is the risk that the value of the securities in the fund will decline because of rising market interest rates. Call risk is the risk that performance could be adversely impacted if an issuer calls higher-yielding debt instruments held by the fund. Zero coupon bond risk is the risk that zero coupon bonds may be highly volatile as interest rates rise or fall because they do not pay interest on a current basis.

Income from municipal bonds held by the fund could be declared taxable because of, among other things, unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of a bond issuer. All or a portion of the fund's otherwise exempt-interest dividends may be taxable to those shareholders subject to the federal alternative minimum tax.

The fund may invest in high yield securities, or "junk" bonds, which are subject to greater market fluctuations and risk of loss than securities with higher ratings, and therefore, may be highly speculative. The market for high yield securities is smaller and less liquid than that for investment grade securities.

Participation interests in municipal leases pose special risks because many leases and contracts contain "non-appropriation" clauses that provide that the governmental issuer has no obligation to make future payments under the lease or contract unless money is appropriated for this purpose by the appropriate legislative body.

The fund currently intends to effect a portion of creations and redemptions for cash, rather than in-kind securities. As a result, the fund may be less tax-efficient.

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 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.

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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