An investment in an equity portfolio should be made with an understanding of the risks associated with an investment in common stocks including the risk that the financial condition of the issuers of the equities or the general condition of the stock market may worsen.
Closed-end funds are subject to various risks, including management's ability to meet the fund's investment objective, and to manage the fund's portfolio when the underlying securities are redeemed or sold, during periods of market turmoil and as investors' perceptions regarding the funds or their underlying investments change. Unlike open-end funds, which trade at prices based on a current determination of the fund's net asset value, closed-end funds frequently trade at a discount to their net asset value in the secondary market. Certain closed-end funds may employ the use of leverage which increases the volatility of such funds.
Risks associated with investing in foreign securities may be more pronounced in emerging markets where the securities markets are substantially smaller, less liquid, less regulated and more volatile than the U.S. and developed foreign markets.
An investment in securities of foreign issuers should be made with an understanding of the additional risks involved, such as currency fluctuations, political risk, withholding, the lack of adequate financial information, and exchange control restrictions impacting foreign issuers.
Investing in high-yield securities or "junk" bonds should be viewed as speculative and you should review your ability to assume the risks
associated with investments which utilize such securities. High-yield securities are subject to
numerous risks, including higher interest rates, economic recession, deterioration of the junk bond
market, possible downgrades and defaults of interest and/or principal. High-yield security prices
tend to fluctuate more than higher rated securities and are affected by short-term credit
developments to a greater degree.
Investment grade bonds are subject to numerous risks including higher interest rates, economic recession, deterioration of the investment grade bond market or investors' perception thereof, possible downgrades and defaults of interest and/or principal.
Limited duration
bonds are subject to interest rate risk, which is the risk that the value of
a security will fall if interest rates increase. While limited duration bonds
are generally subject to less interest rate sensitivity than longer duration
bonds, there can be no assurance that interest rates will rise during the life
of the trust.
The value of mortgage-backed securities will decline with increases
in interest rates.The value of mortgage-backed securities will also fluctuate
with changes in the general condition of the mortgage-backed securities market,
changes in inflation rates or when political or economic events affecting Ginnie
Mae occur.
Municipal bonds are subject to numerous risks, including higher interest rates, economic recession, deterioration of the municipal bond market, possible downgrades and defaults of interest and/or principal. Interest income from closed-end municipal bond funds is generally exempt from federal income tax. However, certain distributions may be subject to federal income tax and/or subject to the alternative minimum tax.
Options are subject to various risks including that their value may be adversely affected if the market for the option becomes less liquid or smaller. In addition, options will be affected by changes in the value and dividend rates of the stock subject to the option, an increase in interest rates, a change in the actual and perceived volatility of the stock market and the common stock and the remaining time to expiration.
Preferred securities
are sensitive to changes in interest rates and the market price generally falls
with rising interest rates. Preferred securities are more likely to be called
for redemption in a declining interest rate environment.
An investment in a portfolio containing REIT securities is subject to additional risks, as companies involved in the real estate industry are subject to changes in the real estate market, vacancy rates and competition, volatile interest rates and economic recession.
The yield on senior loans will generally decline in a falling interest rate environment and increase in a rising interest rate environment. Senior loans are generally below investment grade quality ("junk"bonds). An investment in senior loans involves the risk that the borrowers may default on their obligations to pay principal or interest when due.
The value of the securities held by the trust may be subject to steep declines or increased volatility
due to changes in performance or perception of the issuers.The markets for credit instruments,
including municipal securities, have experienced periods of extreme illiquidity and volatility.
You should carefully consider the trust's investment objectives, risks, and charges and expenses before investing. Contact your financial advisor or call First Trust Portfolios, L.P. at 1.800.621.1675 to request a prospectus, which contains this and other information about the trust. Read it carefully before you invest.
This product information does not constitute an offer to sell, or a solicitation of an offer to buy securities in any state to any person to whom it is not lawful to make such an offer. Sales of any of these securities must include prospectus delivery and the services of a retail broker/dealer duly licensed in the appropriate states.
Not FDIC Insured, Not Bank Guaranteed and May Lose Value.