Utilities Select Portfolio, Series 42
The utilities industry is regarded as a sector with the potential to provide investors with a high degree of stability while generating an above-average level of current income relative to other
equities. Should the overall market decline, utility stocks have historically tended to hold up better than stocks from other sectors. Because of these characteristics, utility company stocks are
sometimes considered an alternative to traditional fixed-income investments.
Today, the utilities industry is undergoing a radical transformation. The monopolistic, tightly regulated utilities created under trust-busting legislation more than 60 years ago are gradually being exposed
to competition. We believe that deregulation, along with technological advances and the increased desire for customer choice, will likely result in consolidation and greater efficiency within the industry.
The utilities sector currently has the second-highest dividend yield out of all sector categories in the S&P 500 Index, with a current yield of 3.55% as of May 4, 2017.1With interest rates
anticipated to increase, utility stocks may provide yields that remain attractive on a comparative basis.
This unit investment trust seeks monthly income and above-average capital appreciation; however, there is no assurance the objectives 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 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 an investment that is concentrated in stocks in the
utilities sector involves additional risks, including limited diversification.
The companies engaged in the utilities sector are subject to certain risks,
including price and supply fluctuations caused by international politics, energy
conservation, taxes, and other regulatory policies of various governments.
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.
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.