Low Volatility Portfolio, Series 9
The ebb and flow of markets can have a significant impact on a portfolio. For investors focused on
long-term investment objectives, one way to potentially mitigate the adverse effects of market
movements is to invest in relatively low-volatility stocks. Typically, these stocks do not have as
dramatic price fluctuations (relative to other stocks), but change in value steadily over time.
The goal of the Low Volatility Portfolio is to provide investors with exposure to 50 well-capitalized
companies which have displayed low price fluctuations over time while also retaining capital
Portfolio Selection Process
Through our multi-factor selection process we seek to find the stocks that we believe have the
best prospects for above-average capital appreciation.
Step 1: Fundamental Model Ranking
All stocks contained in the S&P 500 Index are ranked by the following equally weighted factors to
determine an overall fundamental model rank:
- Price-to-cash flow.
- Return on assets.
Step 2: Volatility Model Ranking
All stocks contained in the S&P 500 Index are ranked
by long- and short-term volatility based on standard
deviation of historical returns in order to determine
each stock's volatility model rank.
Step 3: Select Lowest Volatility Stocks
The top 100 stocks in the S&P 500 Index according to
their volatility model rank are determined.
Step 4: Select Highest Fundamentally Ranked Stocks
The remaining stocks are ranked based on their fundamental model score and the top 50 stocks
are selected for the portfolio subject to a maximum of 25% in any one sector. Stocks are equally
weighted within the portfolio.
This unit investment trust seeks above-average
capital appreciation; however, there is no
assurance the objective will be met.
|Not FDIC Insured Not Bank Guaranteed May Lose Value
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 the number listed below 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.
An investment in a portfolio containing equity 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.
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.
One of the securities in the portfolio is issued by a Real Estate Investment Trust (REIT). 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.
Although this portfolio 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 plan.
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.