Balanced Income Portfolio, Series 25

Although stocks have historically provided higher returns over the long-term than bonds or other fixed-income securities, there are investors who don't feel comfortable investing only in the stock market with all of its potential volatility. The Balanced Income Portfolio offers investors a lower-risk alternative to investing solely in stocks. To accomplish this, the portfolio invests approximately 50% in common stocks of companies which have above-average dividend yields and approximately 50% in closed-end funds which invest primarily in U.S. and foreign taxable bonds. Because stocks and bonds may react differently to changes in the economy and interest rates, diversifying assets in this manner has the potential to reduce the overall volatility of the portfolio.

Why Closed-End Funds?

Since closed-end funds maintain a relatively fixed pool of investment capital, portfolio managers are better able to adhere to their investment philosophies through greater flexibility and control. In addition, closed-end funds don't have to manage fund liquidity to meet potentially large redemptions.

Because they are not subjected to cash inflows and outflows, which can dilute income distributions over time, closed-end funds can generally provide a more stable income stream than other managed fixed-income investment products. However, as a result of bond calls, redemptions and advanced refundings, which can dilute a fund's income, stable income cannot be assured.

The Importance of Dividends

Corporations are not obligated to share their earnings with stockholders, so dividends may be viewed as a sign of a company's profitability as well as management's assessment of the future. Dividends have also had a significant impact on stock performance. Consider the historical effect dividends have had on companies in the S&P 500 Index.According to Ibbotson Associates, dividends have provided approximately 44% of the 9.81% average annual total return on the S&P 500 Index, from 1926 through 2009. 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. You should be aware that there is no guarantee that the issuers of the securities included in the portfolio will declare dividends in the future or that, if declared, they will either remain at current levels or increase over time.

Portfolio Objectives

The objectives of this unit investment trust are to provide the potential for a high rate of current monthly income and the potential for capital appreciation. There is, however, no assurance that the objectives will be achieved. We believe this portfolio offers investors the following:

• Diversified exposure to stocks and closed-end funds.
• Reduced volatility compared to an all-stock portfolio.

The portfolio terminates approximately five years from the initial date of deposit.

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.

Risk Considerations:
An investment in this unmanaged unit investment trust should be made with an understanding of the risks involved with an investment in a portfolio of common stocks and closed-end funds.

Common stocks are subject to certain risks, 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.

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.

An investment in a portfolio containing securities of foreign issuers is subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting foreign issuers. Risks associated with investing in foreign securities may be more pronounced in emerging markets where the securities markets are substantially smaller, less developed, less liquid, less regulated, and more volatile than the U.S. and developed foreign markets.

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.

Certain of the closed-end funds invest in high-yield securities or "junk" bonds. An investment in a portfolio which includes high-yield securities should be made with an understanding of the additional risks involved. Investing in high-yield securities should be viewed as speculative and you should review your ability to assume the risks associated with investments which utilize such bonds. 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 securities prices tend to fluctuate more than higher rated bonds and are affected by short-term credit developments to a greater degree.

Certain of the closed-end funds invest in investment grade bonds. An investment in a portfolio which includes investment grade bonds should be made with an understanding of the risks involved. 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.