REIT Growth & Income Plus, Series 14
A Real Estate Investment Trust (REIT) is a company that buys, develops, and/or manages income-producing real estate such as apartments, shopping centers, offices, and warehouses. In short, a REIT is a corporation that pools the capital of many investors to purchase one or more forms of real estate.
This unit investment trust seeks dividend income and capital appreciation;
however, there is no assurance the objectives will be met. The portfolio terminates
approximately two years from the initial date of deposit.
Investing In REITs
Income- REITs are currently required to distribute a majority of their
income annually as dividends to shareholders.Historically, this has made REITs
a significantly higher source of income versus other equities and competitive
with traditional fixed income investments (see chart). It should be noted that
dividends paid by REITs are generally not eligible for the reduced tax rates
for qualified dividend income.
Diversification - The trust invests in a number of REITs offering diversification
among properties and regions.This type of diversification may help to reduce
some of the fluctuations in the real estate market as a result of economic downturns
or changes in supply and demand in a specific region or type of property.
Asset Allocation - A study by Ibbotson Associates
found that adding REITs to a portfolio of stocks, bonds, and cash is a key factor for portfolio
diversification.1 We believe this makes a compelling case for the use of REITs
to reduce risks in a variety of investment portfolios.
Liquidity- Compared to traditional, privately-held real estate, which
may be difficult to sell, REITs are traded on major stock exchanges, making
them highly liquid. Additionally, units of the trust may be redeemed on any
business day at the redemption price.
Skilled Management- REIT investors also gain the advantage of skilled
management since REIT management teams tend to be experts within their specific
type of property or geographic location.
1 NAREIT,"The Investor's Guide to REITs," 2011
|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 involved with owning both REITs and common stocks,
including, among other factors, the possible deterioration of either the financial
condition of the issuers of the securities or the general condition of the stock
market, changes in the real estate market, vacancy rates and competition, volatile
interest rates or economic recession.
You should be aware that the portfolio is concentrated in REITs in the financials
sector which involves additional risks, including limited diversification. There
is no guarantee that the REITs in the portfolio will declare dividends in the
future or that, if declared, they will either remain at current levels or increase
over time. The financials sector is subject to the adverse effects of volatile
interest rates, economic recession, increased competition from new entrants
in the field, and the potential for increased regulation.
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.
An investment in a portfolio containing small-cap companies is subject to additional
risks, as the share prices of small-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