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Select DSIP Portfolio, 4th Quarter 2017 Series

Regardless of the market environment, we believe dividends should be considered an important ingredient in an investor's overall investment plan. One strategy to help reach this goal is to buy a portfolio of companies with the potential to pass on a portion of their earnings to investors in the form of regular dividend increases.

The Importance Of Dividends

A company's ability to consistently pay — and increase —dividends is an important sign of that company's financial strength. Therefore, we believe investors who are seeking dividends through their investments should look for well-managed and financially sound companies with the potential to deliver solid returns. Companies that choose to reward stockholders with greater dividends (and many companies don't) can give investors the potential to increase capital and produce attractive total returns over time. Of course, past performance is no guarantee of future results.

In the opinion of Wells Fargo Advisors ("WFA"), this strategy of investing may allow for the accumulation of wealth over several years, while also seeking to provide capital preservation.

Dividends have had a significant impact on stock performance, and have provided approximately 42% of the 10.04% average annual total return on the S&P 500 Index, from January 1926 through December 2016.*

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Diversified Stock Income Plan

The Diversified Stock Income Plan (DSIP) was created to capitalize on a rising dividend strategy. The DSIP List is compiled based on analysis conducted by WFA to select stocks with attractive current yields, and WFA's view of the likelihood of the companies to consistently raise their annual dividends. To create the Select DSIP Portfolio, the WFA analysts choose stocks from the DSIP List following the process below.

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Portfolio Objectives

This investment seeks to:

  • Provide an Attractive Stream of Income.
    A portfolio of stocks believed to have the potential to regularly raise dividends offers investors the potential for a growing income stream. Because companies are selected for this portfolio based on their potential to not only pay dividends, but also their ability to increase them, this strategy can provide a natural inflation hedge. Rising dividends have also demonstrated an ability to cushion the fall of stock prices, especially in a rising interest rate environment.

  • Reduce Volatility and Modify Risk.
    The Select DSIP Portfolio helps counteract volatility through diversification. The portfolio includes companies across all market capitalizations and from various sectors of the economy. Any stock inevitably is subject to general price fluctuation, but diversification can help smooth out overall portfolio returns. In addition, dividend payments may enhance the investment's total return. However, diversification does not guarantee a profit or protect against a loss.
Not FDIC Insured • Not Bank Guaranteed • May Lose Value

You should carefully consider the portfolio's investment objectives, risks, charges and expenses before investing. Contact your Financial Consultant or call First Trust Portfolios at 1.800.621.1675 to request a prospectus, which contains this and other information about this portfolio. Read it carefully before you invest.

Although this unit investment trust terminates in approximately 15 months, the strategy is considered a long-term opportunity. 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 plan.

Risk Considerations:

An investment in this unmanaged unit investment trust should be made with an understanding of the risks involved with owning common stocks. The value of the securities held by the portfolio may be subject to declines or increased volatility due to changes in performance or perception of the issuers.

There may be tax consequences unless units are purchased in an IRA or other qualified plan.There are fees and sales charges associated with this investment. There is no assurance the objectives of this portfolio will be achieved.

The portfolio contains a foreign-issued security, which is subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting foreign issuers.

This portfolio contains a real estate investment trust, which is subject to additional risks, such as changes in the real estate market, vacancy rates and competition, volatile interest rates and economic recession.

An investment in a portfolio containing small-cap and mid-cap companies is subject to additional risks, as the share prices of small-cap companies and certain mid-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.

While the life of this portfolio is 15 months, this strategy offers the best potential when participants invest over many years, so investors should consider their ability to pursue investing in successive portfolios, if available.

While Wells Fargo Advisors has carefully evaluated and approved the securities in this portfolio, it may choose for any reason not to recommend any or all of the securities for another purpose or at a later date. This may affect the value of your units.

Wells Fargo Advisors is the trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.

*Data source: Ibbotson Associates. 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.

 
Fund Cusip Information
30304Y774 (Cash)
30304Y782 (Reinvest)
30304Y790 (Cash-Fee)
30304Y808 (Reinvest-Fee)
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The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA and the Internal Revenue Code. First Trust has no knowledge of and has not been provided any information regarding any investor. Financial advisors must determine whether particular investments are appropriate for their clients. First Trust believes the financial advisor is a fiduciary, is capable of evaluating investment risks independently and is responsible for exercising independent judgment with respect to its retirement plan clients.
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
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