Value Line® Diversified Target 40 Portfolio, 2nd Quarter
Value Line® Divsd.Target 40 2Q '12- Term 7/9/13 (Value Line®
Diversified Target 40 Portfolio) is a unit investment trust which invests in
a fixed portfolio of stocks for approximately 15 months. The stocks are selected
by applying a disciplined investment strategy which adheres to pre-determined
factors. The portfolio seeks above-average total return; however, there is no
assurance the objective will be met.
The strategy is based on these steps:
- We begin with the 400 stocks that Value Line® currently
gives a #1 or #2 ranking for TimelinessTM. Value Line®
ranks approximately 1,700 stocks, 400 of which are given their #1 or #2 ranking
for TimelinessTM. They base their rankings on a long-term trend
of earnings, prices, recent earnings, price momentum, and earnings surprises.
- Eliminate stocks of foreign companies, stocks of companies with market capitalizations
of less than $2 billion, registered investment companies and limited partnerships.
- Rank the remaining stocks on three factors:
- Sustainable growth rate.
- Price to sales.
- Price to cash flow.
- Purchase an approximately equally-weighted portfolio of the 40 stocks with
the highest combined ranking on the three factors, subject to a maximum of
eight stocks from any one of the ten major GICS market sectors.
If this strategy had been applied since 1995, investors would have realized
higher total returns than by investing in the S&P 500 Index. It is important
to note that the past performance of the strategy is hypothetical and it is
not indicative of the future performance of the Value Line®
Diversified Target 40 Portfolio. Although this unit investment trust terminates
in approximately 15 months, the strategy is long-term. Investors should consider
their ability to pursue investing in successive portfolios, if available. There
may be tax consequences unless units are purchased in an IRA or other qualified
|Not FDIC Insured Not Bank Guaranteed May Lose Value
| Standard Deviations*
|| Average Annual Total Returns*
|| S&P 500 Index
|| S&P 500 Index
|Annual Total Returns
Past performance is no guarantee of future results and the actual current
performance of the portfolio may be lower or higher than the hypothetical performance
of the strategy. Hypothetical returns for the strategy in certain years were
significantly higher than the returns of the S&P 500 Index. Hypothetical strategy
returns were the result of certain market factors and events which may not be
replicated in the future. You can obtain performance information which is current
through the most recent month-end by calling First Trust Portfolios L.P. at
1-800-621-1675 option 2. Investment return and principal value of the portfolio
will fluctuate causing units of the portfolio, when redeemed, to be worth more
or less than their original cost.
Simulated strategy returns are hypothetical, meaning that they do not represent actual trading, and, thus, may not reflect material economic and market factors, such as liquidity constraints, that may have had an impact on actual decision making. The hypothetical performance is the retroactive application of the strategy designed with the full benefit of hindsight. Strategy returns reflect a sales charge of 2.95% in the first year, 1.95% in subsequent years, estimated annual operating expenses of 0.337%, plus organization costs, but not taxes or commissions paid by the portfolio to purchase securities. Strategy returns assume that dividends are reinvested semi-annually while index returns assume dividends are reinvested monthly.
Actual portfolio performance will vary from that of investing in the strategy stocks because it may not be invested equally in these stocks and may not be fully invested at all times. It is important to note that the strategy may underperform the S&P 500 Index in certain years and may produce negative results.
The S&P 500 Index is an unmanaged index of 500 stocks used to measure large-cap
U.S. stock market performance. The index cannot be purchased directly by investors.
Standard Deviation is a measure of price variability (risk). A higher degree of variability indicates more volatility and therefore greater risk.
You should consider the portfolio's investment objectives, risks, and
charges and expenses carefully 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 portfolio. Read it carefully
before you invest.
An investment in this unmanaged unit investment trust should be made with an
understanding of the risks involved with owning common stocks, such as an economic
recession and the possible deterioration of either the financial condition of
the issuers of the equity securities or the general condition of the stock market.
You should be aware that the portfolio is concentrated in stocks in the consumer
products sector which involves additional risks, including limited diversification.
The companies engaged in the consumer products industry are subject to certain
risks, including global competition, changing government regulations and trade
policies, currency fluctuations, and the financial and political risks inherent
in producing products for foreign markets.
An investment in a portfolio containing small-cap companies is subject to additional risks, as the share prices of small-cap companies are often more volatile than those of larger companies due to several factors, including limited trading volumes, products, financial resources, management inexperience and less publicly available information.
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.
"Value Line," "The Value Line Investment Survey," and "Value
Line TimelinessTM Ranking System" are registered trademarks
of Value Line Securities, Inc. or Value Line Publishing, Inc. that have been
licensed to First Trust Portfolios L.P. This product is not sponsored, recommended,
sold or promoted by Value Line Publishing, Inc., Value Line, Inc. or Value Line
Securities, Inc. First Trust Portfolios L.P. is not affiliated with any Value