Equity Closed-End Portfolio, Series 12

When it comes to investing for income, investors have several choices. Even with all the options, there are those investors who do not want to give up the growth potential offered by stocks in order to earn a high rate of current income. The Equity Closed-End Portfolio has been developed to address this need. The Equity Closed-End Portfolio is a unit investment trust that is comprised of a pool of closed-end funds which invest in dividend-paying equity securities.

The Importance of Dividends

Corporations are not obligated to share their earnings with stockholders so, in our opinion, dividends may be viewed as a sign of a company's profitability as well as management's assessment of the future.

Dividends have 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.

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 distributions over time, closed-end funds can generally provide a more stable income stream than other managed investment products. However, stable income cannot be assured.

Portfolio Objectives

This unit investment trust seeks to provide the potential for above-average capital appreciation and monthly income by investing in a well-diversified pool of closed-end funds that invest in dividend-paying equity securities. The portfolio terminates approximately two years from the initial date of deposit.This unit investment trust also offers investors the following:

• Potential for qualified dividend income


• Diversified exposure to stocks

It should be noted that the current favorable tax treatment of qualified dividend income is scheduled to expire on December 31, 2010.

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 associated with an investment in a portfolio of closed-end funds which invest in common.

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.

Certain of the closed-end funds invest in common stocks. Common stocks are subject to 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.

Certain of the closed-end funds invest in options. 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.

Certain of the closed-end funds in the portfolio invest in securities of foreign issuers. Foreign securities are 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 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.