Investment Grade Multi-Asset Income Long-Term, 28
The First Trust Investment Grade Multi-Asset Income Portfolio, Long-Term Series
This unit investment trust seeks current income and capital preservation by investing in a portfolio of investment grade corporate and taxable municipal bonds. There is, however, no assurance that the objectives will be achieved.
- A diversified portfolio of investment grade corporate bonds and taxable municipal bonds
- Estimated weighted average maturity of approximately 25 to 30 years
- Minimum call protection of approximately 5 years
- 3.50% up-front maximum sales charge
Corporate Bond Basics
A corporate bond is a debt obligation issued by a corporation. Issuing bonds can be an alternative to offering equity ownership by issuing stock. Payments to bondholders have priority over payments to stockholders.
Taxable Municipal Bond Basics
A taxable municipal bond is a fixed-income security issued by a local
government entity that seeks to raise money to finance private
development. The municipality issues taxable municipal bonds when it
hopes to attract a business and the jobs it might bring to the area,
especially when the business may be otherwise unable to obtain
financing. Taxable municipal bonds typically offer yields more comparable
to those of other taxable fixed-income securities, such as corporate bonds
or bonds issued by U.S. governmental agencies, than to those of tax-exempt
Why Investment Grade?
Within the bond market, there is a category of bonds
considered "investment grade." Investment grade bonds are
rated BBB/Baa or higher by major credit rating
agencies. The designation of a bond as investment
grade is based upon an evaluation by a credit rating
agency of the corporation's credit history and ability
to repay obligations. This rating of investment grade
generally signifies that a credit rating agency considers the
quality of a particular bond to be sufficient to provide
reasonable assurance of the issuer's ability to meet their
obligations to bondholders. There is, however, no assurance
that the securities selected for the trust will continue to
receive an investment grade rating in the future or that
such rating will ensure an issuer's ability to satisfy its
obligations to bondholders.
Investment grade bonds generally are a high credit quality asset class with historically low default rates. The chart below illustrates that the average default rates for investment grade bonds have been significantly lower than for speculative grade bonds based on the most recent data available from Moody's Investors Service. Current default rates may vary from that of their historical averages and there can be no assurance that the default rate for investment grade bonds will not rise in the future.
| 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 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 associated with both investment grade
corporate bonds and taxable municipal bonds. These bonds are subject to numerous risks including rising interest rates, economic recession, deterioration
of the corporate or municipal bond market, possible downgrades, increased volatility, reduced liquidity and defaults of interest and/or principal.
Certain of the securities in the trust are
covered by insurance policies obtained by the
issuers or underwriters of the bonds from
insurance companies. There can be no
assurance that any insurer will be able to
satisfy its commitments in the event claims
are made in the future.
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 global
competition, changing government
regulations and trade policies, currency
fluctuations, and the financial and political
risks inherent in producing products for
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.
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. The markets for
credit instruments, including corporate and
municipal securities, have experienced
periods of extreme illiquidity and volatility.
Certain of the securities in the trust are issued
by Real Estate Investment Trusts (REITs).
Companies involved in the real estate
industry are subject to changes in the real
estate market, vacancy rates and
competition, volatile interest rates and
This UIT is a buy and hold strategy and investors should consider their ability to hold the trust until maturity. There may be tax consequences unless units are purchased in an IRA or other qualified plan.