SMid High Dividend Portfolio, Series 27
Our objective with the SMid High Dividend Portfolio is to find small and mid-size companies with aboveaverage
dividend yields. Because smaller companies are often less reliant on the capital markets for credit,
they can be more nimble and better able to adjust in periods of economic change than larger companies.
Investing in dividend-paying stocks is a time-tested strategy for investors seeking income. History shows
that, over the long-term, dividends provide a key component of total return. As interest rates remain at
low levels, investors are turning their attention to dividend-paying stocks.
This unit investment trust seeks above-average total return through a combination of capital appreciation and dividend income; however, there is no assurance the objective will be met.
Portfolio Selection Process
Through our selection process we seek to find the stocks that we believe have the best prospects for above-average total return.
Identify the Universe
begin with an initial universe of stocks that trade
on a U.S. stock exchange and eliminate those
companies that do not meet our investment
criteria. These criteria are designed to identify
small and mid-size companies with aboveaverage
Examine Historical Financial Results
The next step in our process is to look for those companies that have earned a net cash flow return on investment that is above the average of their peers. Historically, companies that have increased their cash flows at a higher rate have rewarded shareholders with superior total returns.
Select Companies with Attractive Valuations
The final step in our
process is to select companies based on the fundamental analysis of our team of research analysts. The
stocks selected for the portfolio are those that meet our investment objectives, trade at attractive
valuations and, in our opinion, are likely to exceed market expectations of future cash flows.
|Not FDIC Insured Not Bank Guaranteed May Lose Value
You should consider the portfolio's investment objective, 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 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.
You should be aware that the portfolio is concentrated in stocks
in the financials sector which involves additional risks, including
limited diversification. The companies engaged in the financials
sector are subject to the adverse effects of volatile interest rates,
economic recession, decreases in the availability of capital,
increased competition from new entrants in the field, and
potential increased regulation.
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.
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.
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.
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.