Value Line® Target 25 Portfolio, 2nd Quarter 2012 Series
Value Line® Target 25 2Q '12 - Term 7/9/13 (Value Line®
Target 25 Portfolio) is a unit investment trust which invests in a fixed portfolio
of stocks for approximately 15 months. The stocks are selected by applying a
disciplined investment strategy which adheres to pre-determined factors. The
portfolio seeks above-average total return; however, there is no assurance the
objective will be met.
The strategy is based on these steps:
- We begin with the 100 stocks that Value Line® currently gives a #1 ranking
for TimelinessTM (stocks of financial companies and companies whose shares
are not listed on a U.S. exchange are not eligible for inclusion in the Value
Line® Target 25 Strategy). Value Line® ranks approximately 1,700 stocks, only
100 of which are given their #1 ranking for TimelinessTM. They base their
rankings on a long-term trend of earnings, prices, recent earnings, price
momentum, and earnings surprises.
- We then rank the Value Line® #1 stocks for TimelinessTM
based on their 12- month and 6- month price appreciation, return on assets,
and price to cash flow.
- The 25 eligible stocks with the best overall ranking on the four factors
are selected by the sponsor for the portfolio.The stocks are weighted by market
capitalization subject to a minimum weighting of approximately 1% and a maximum
weighting of approximately 25%.
If this strategy had been applied since 1985, investors would have realized
higher total returns than by investing in the S&P 500 Index. It is important
to note that the past performance of the strategy is hypothetical and it is
not indicative of the future performance of the Value Line® Target 25 Portfolio.
Although this unit investment trust 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.
|Not FDIC Insured Not Bank Guaranteed May Lose Value
| Standard Deviations*
|| Average Annual Total Returns*
|Annual Total Returns
Past performance is no guarantee of future results and the actual current
performance of the portfolio may be lower or higher than the hypothetical performance
of the strategy. Hypothetical returns for the strategy in certain years were
significantly higher than the returns of the S&P 500 Index. Hypothetical strategy
returns were the result of certain market factors and events which may not be
replicated in the future. You can obtain performance information which is current
through the most recent month-end by calling First Trust Portfolios L.P. at
1-800-621-1675 option 2. Investment return and principal value of the portfolio
will fluctuate causing units of the portfolio, when redeemed, to be worth more
or less than their original cost.
Simulated strategy returns are hypothetical, meaning that they do not represent actual trading, and, thus, may not reflect material economic and market factors, such as liquidity constraints, that may have had an impact on actual decision making. The hypothetical performance is the retroactive application of the strategy designed with the full benefit of hindsight. Strategy returns reflect a sales charge of 2.95% in the first year, 1.95% in subsequent years and a breakpoint sales charge of 1.40% from 2006 through 2008, estimated annual operating expenses of 0.274%, plus organization costs, but not taxes or commissions paid by the portfolio to purchase securities. Returns assume that all dividends received during a year are reinvested monthly.
performance will vary from that of investing in the strategy stocks because
it may not be weighted the same as the strategy stocks and may not be fully
invested at all times. It is important to note that the strategy may underperform
the S&P 500 Index in certain years and may produce negative results.
The S&P 500 Index is an unmanaged index of 500 stocks used to measure large-cap
U.S. stock market performance.The index cannot be purchased directly by investors.
Standard Deviation is a measure of price variability (risk). A higher degree of variability indicates more volatility and therefore greater risk.
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 the portfolio is concentrated in stocks in both the consumer products and technology sectors which involves additional risks, including limited diversification. The companies engaged in the consumer products industry are subject to certain risks, including global competition, changing government regulations and trade policies, currency fluctuations, and the financial and political risks inherent in producing products for foreign markets. The companies engaged in the technology sector are subject to fierce competition, extreme price and volume fluctuations, and their products and services may be subject to rapid obsolescence. Technology company stocks have experienced extreme price and volume fluctuations that are often unrelated to their operating performance.
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
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.
The portfolio is heavily weighted in only a few stocks, making it more volatile
than an equally-weighted portfolio.
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.
"Value Line," "The Value Line Investment Survey," and "Value Line TimelinessTM
Ranking System" are registered trademarks of Value Line Securities, Inc. or
Value Line Publishing, Inc. that have been licensed to First Trust Portfolios
L.P. This product is not sponsored, recommended, sold or promoted by Value Line
Publishing, Inc., Value Line, Inc. or Value Line Securities, Inc. First Trust
Portfolios L.P. is not affiliated with any Value Line company.