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First Trust Dow Jones STOXX® European Select Dividend Index Fund (FDD)
Investment Objective/Strategy - First Trust Dow Jones STOXX® European Select Dividend Index Fund is an exchange-traded fund. The investment objective of the Fund is to seek investment results that correspond generally to the price and yield, before fees and expenses, of an equity index called the STOXX® Europe Select Dividend 30 Index.
 
There can be no assurance that the Fund's investment objectives will be achieved.
  • The Index is a dividend weighted index of 30 stocks selected from the STOXX® Europe 600 Index which includes high-dividend yielding companies across 18 European countries.
  • The universe of stocks consists of dividend-paying companies in the STOXX® Europe 600 Index that have a positive five year dividend-per-share growth rate and a dividend to earnings-per-share ratio of 60% or less.
  • Companies in the STOXX® Europe 600 Index universe are sorted by country and ranked in descending order according to their indicated annual net dividend yield. In the case of multiple stocks for a single company, the highest-yielding stock is chosen.
  • All current components of the Index are added to the selection list automatically.
  • For each company an "outperformance factor" is calculated: company net dividend yield divided by the net dividend yield of the respective region or county minus 1.
  • All companies are then sorted by their "outperformance factor."
    • All current components in the Index that are ranked 60 or higher in the selection list remain in the Index. Starting from the highest-ranked non-component in the selection list, companies are added to the Index until the final component count of 30 is reached.
    • A company's weight in the Index is based on its net dividend yield. Each component's weight is capped at 15%.
Fund Overview
Ticker FDD
Fund Type Foreign Equity Income
Investment Advisor First Trust Advisors L.P.
Investor Servicing Agent Bank of New York
CUSIP 33735T109
Intraday NAV FDDIV
Fiscal Year-End 09/30
Exchange NYSE Arca
Inception 8/27/2007
Inception Price $30.00
Inception NAV $30.00
Gross Expense Ratio
(3/31/2010)		 2.10%
Net Expense Ratio 0.60%
Rebalance Frequency ANNUAL
Marginable Yes
Options No
Short Sell Yes
Pursuant to contract, First Trust has agreed to waive fees and/or pay fund expenses to prevent the net expense ratio of the fund from exceeding 0.60% per year, at least until May 15, 2011.
Bid/Ask Midpoint and NAV History (Since Inception)
 
Past performance is not indicative of future results.
Current Fund Data (as of 9/1/2010)
Closing Share Price $12.70
Bid/Ask Midpoint $12.72
Closing NAV $12.74
Bid/Ask Discount 0.17%
Total Net Assets $6,410,525
Common Shares Outstanding 503,334
Dividend Frequency Quarterly
Dividend per Share Amt1 $0.2966
Daily Volume 375
Average 30-Day Daily Volume 9,255
Closing Share Price 52-Week High/Low $15.09 / $11.05
Closing NAV 52-Week High/Low $15.00 / $11.30
Number of Stocks 31
Sector Breakdown (as of 9/1/2010)
Consumer Discretionary 5.10%
Energy 2.01%
Financials 43.15%
Health Care 7.87%
Industrials 6.80%
Materials 3.35%
Telecommunication Services 17.53%
Utilities 14.19%
Top 10 Holdings (as of 9/1/2010)
Holdings Percent (%)
Man Group Plc 7.59
Provident Financial PLC 4.71
Royal & Sun Alliance Insurance Group Plc 4.54
United Utilities Group Plc 4.54
Catlin Group Ltd 4.36
Enel SpA 4.31
Deutsche Telekom AG 4.19
AstraZeneca Plc 4.16
Belgacom S.A. 3.72
Banco de Sabadell SA 3.67
Top Country Breakdown (as of 9/1/2010)
Country Percent (%)
United Kingdom 36.81
Germany 10.72
France 8.80
The Netherlands 8.70
Switzerland 7.44
Italy 7.22
Spain 6.84
Bermuda 4.41
Belgium 3.77
Norway 2.01
Fund Characteristics (as of 7/30/2010) 2,3
30-Day SEC Yield 5.53%
Distribution Rate 9.06%
Median Market Cap. $9,543
Maximum Market Cap. $106,873
Minimum Market Cap. $1,709
Price/Earnings 9.65
Price/Book 1.51
Price/Cash Flow 4.97
Price/Sales 0.84
Number of Days Bid/Ask Midpoint Above NAV
Quarter Ended 0-49
Basis Points		 50-99
Basis Points		 100-199
Basis Points		 >=200
Basis Points
6/30/2010 3 5 2 6
3/31/2010 12 5 1 0
12/31/2009 11 8 7 3
9/30/2009 13 13 19 8
Number of Days Bid/Ask Midpoint Below NAV
Quarter Ended 0-49
Basis Points		 50-99
Basis Points		 100-199
Basis Points		 >=200
Basis Points
6/30/2010 19 12 12 4
3/31/2010 14 15 14 0
12/31/2009 13 14 7 1
9/30/2009 7 4 0 0

The price used to calculate market return is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange, on which shares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated.
Month End Performance   (as of 7/30/2010) 
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception4
 Fund Performance *
NAV 1.45% -5.75% 11.48% N/A N/A N/A -21.03%
After Tax Held 0.57% -6.57% 10.13% N/A N/A N/A -22.40%
After Tax Sold 0.88% -3.79% 7.41% N/A N/A N/A -17.86%
Market Price 0.64% -5.83% 9.96% N/A N/A N/A -21.27%
 Index Performance **
STOXX® Europe Select Dividend 30 Index 1.08% -6.10% 12.62% -20.03% -3.62% N/A -20.46%
MSCI Europe Index -2.68% -7.02% 6.79% -11.22% 1.77% N/A -10.77%
STOXX® Europe 600 Index -2.62% -6.77% 7.28% -11.11% 2.11% N/A -10.62%
Quarter End Performance   (as of 6/30/2010) 
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception4
 Fund Performance *
NAV -10.76% -15.13% 10.68% N/A N/A N/A -24.42%
After Tax Held -11.54% -15.87% 9.34% N/A N/A N/A -25.77%
After Tax Sold -7.00% -9.83% 6.98% N/A N/A N/A -20.45%
Market Price -12.65% -16.45% 7.59% N/A N/A N/A -25.06%
 Index Performance **
STOXX® Europe Select Dividend 30 Index -10.26% -14.75% 12.19% -23.38% -5.19% N/A -23.65%
MSCI Europe Index -15.19% -16.72% 5.70% -15.03% 0.27% N/A -14.46%
STOXX® Europe 600 Index -15.21% -16.55% 6.16% -14.93% 0.60% N/A -14.33%
5-Year Statistics (as of 7/30/2010) 
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
STOXX® Europe Select Dividend 30 Index 23.53% -5.45 0.97 -0.18 0.92
MSCI Europe Index 22.35% -0.35 0.99 0.04 1.00
STOXX® Europe 600 Index 22.47% --- --- 0.05 ---
* Performance data quoted represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate and shares when sold or redeemed, may be worth more or less than their original cost. You can obtain performance information which is current through the most recent month-end by visiting ftportfolios.com.
After Tax Held returns represent return after taxes on distributions. Assumes shares have not been sold. After Tax Sold returns represent the return after taxes on distributions and the sale of fund shares. Returns do not represent the returns you would receive if you traded shares at other times. Market Price returns are based on the midpoint of the bid/ask spread. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative. The fund's performance reflects fee waivers and expense reimbursements, absent which performance would have been lower.
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.
The gross expense ratio for this fund is 2.10%. Pursuant to contract, First Trust has agreed to waive fees and/or pay fund expenses to prevent the net expense ratio of the fund from exceeding 0.60% per year, at least until May 15, 2011. 		** Past performance is not a guarantee of future results.Performance information for the STOXX® Europe Select Dividend 30 Index is for illustrative purposes only and does not represent actual fund performance. No representation is being made that any investment will achieve performance similar to that shown.The Index does not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the performance shown. Indexes are unmanaged and an investor cannot invest directly in an index. All index returns assume that dividends are reinvested when they are received.

Standard Deviation is a measure of price variability (risk).
Alpha is an indication of how much an investment outperforms or underperforms on a risk-adjusted basis relative to its benchmark.
Beta is a measure of price variability relative to the market.
Sharpe Ratio is a measure of excess reward per unit of volatility.
Correlation is a measure of the similarity of performance.

The STOXX® Europe 600 Index represents large, mid and small capitalization companies across 18 countries of the European region.

The MSCI Europe Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of 16 developed markets in Europe.
Footnotes
1 Most recent distribution paid or declared through today's date. Subject to change in the future.
2 30-day SEC yield is calculated by dividing the net investment income per share earned during the most recent 30-day period by the maximum offering price per share on the last day of the period.
Distribution rate is calculated by dividing the most recent annualized distribution paid or declared by the market price.
3 All market capitalization numbers are in US$ Millions.
4 Inception Date is 8/27/2007

Downloads and Links to Recently Posted Fund Information
• First Trust Exchange-Traded Fund II 19a-1 Notice - 6/30/2010
• Prospectus
• Statement of Additional Information
• Summary Prospectus
• First Trust Exchange-Traded Fund II 19a-1 Notice - 12/31/2009
• Recap of Capital Gains Distributions for 2009 – 12/31/2009
• Link to SEC Filings
• Click here to view all the downloads for this fund.

You should consider the fund's investment objectives, risks, and charges and expenses carefully before investing. You can download a prospectus or contact First Trust Portfolios, L.P. at 1-800-621-1675 to request a prospectus, which contains this and other information about the fund. Read it carefully before you invest.

Risk Considerations:
The fund's shares will change in value, and you could lose money by investing in the fund. One of the principal risks of investing in the fund is market risk.Market risk is the risk that a particular stock owned by the fund, fund shares or stocks in general may fall in value.

The fund's return may not match the return of the STOXX® Europe Select Dividend 30 Index.The fund may not be fully invested at times. Securities held by the fund will generally not be bought or sold in response to market fluctuations and the securities may be issued by companies concentrated in a particular industry.The fund may invest in small capitalization and mid capitalization companies.Such companies may experience greater price volatility than larger,more established companies.

Investors buying or selling fund shares on the secondary market may incur customary brokerage commissions. Investors who sell fund shares may receive less than the share's net asset value. Shares may be sold throughout the day on the exchange through any brokerage account. However, shares may only be redeemed directly from the fund by authorized participants, in very large creation/redemption units.

An investment in a fund 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 Fund is classified as "non-diversified." A non-diversified fund generally may invest a larger percentage of its assets in the securities of a smaller number of issuers. As a result, the Fund may be more susceptible to the risks associated with these particular companies, or to a single economic, political or regulatory occurrence affecting these companies.

The information in the prospectus is not complete and may be changed.We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. The prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

The STOXX Europe Select Dividend 30 Index and the trademarks used in the index name are the intellectual property of STOXX Limited, Zurich, Switzerland and/or its licensors. The index is used under license from STOXX. The ETF based on the index is in no way sponsored, endorsed, sold or promoted by STOXX and/or its licensors and neither STOXX nor its licensors shall have any liability with respect thereto.

Not FDIC Insured * Not Bank Guaranteed * May Lose Value
 
 
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
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