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First Trust ISE Chindia Index Fund (FNI)
Investment Objective/Strategy - The First Trust ISE Chindia 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 ISE ChIndia Index™.
There can be no assurance that the Fund's investment objectives will be achieved.
  • Establish the total population of companies that are domiciled in either India or China and whose shares or ADRs are listed on a U.S. securities exchange.
  • Remove companies that do not meet the component eligibility criteria which include minimum market capitalization and trading volume requirements.
  • Rank the remaining stocks by their liquidity score. (Rank all eligible stocks separately by market cap and three month average daily dollar volume. Sum the ranks for each stock to get a liquidity score.)
  • Select the top 25 stocks from each country by liquidity score. If less than 25 stocks are available for a country, then continue selecting stocks from the other country until a maximum of 50 stocks are selected.
  • Weight according to the following methodology:
    • top three ranked stocks in each country are weighted at 7% each.
    • the next three in each country are weighted at 4% each.
    • the next three in each country are weighted at 2% each and the remaining stocks are equally weighted.
  • The ISE ChIndia IndexTM is rebalanced on the application of the above model on a semi-annual basis.
Fund Overview
TickerFNI
Fund TypeGlobal Equity
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon
CUSIP33733A102
Intraday NAVFNIIV
Fiscal Year-End12/31
ExchangeNYSE Arca
Inception5/8/2007
Inception Price$20.00
Inception NAV$20.00
Rebalance FrequencySemi-Annual
Gross Expense Ratio*0.66%
Net Expense Ratio*0.60%
* As of 12/31/2013
Expenses are capped contractually at 0.60% per year, at least until April 30, 2014.
Current Fund Data (as of 4/16/2014)
Closing NAV1$28.39
Closing Share Price2$28.33
Bid/Ask Midpoint$28.37
Bid/Ask Discount0.09%
Total Net Assets$65,299,254
Outstanding Shares2,300,002
Daily Volume7,121
Average 30-Day Daily Volume12,806
Closing Share Price 52-Week High/Low$31.85 / $19.90
Closing NAV 52-Week High/Low$31.82 / $19.90
Number of Holdings49
Fund Characteristics (as of 3/31/2014)7
Median Market Cap.$4,325
Maximum Market Cap.$221,543
Minimum Market Cap.$347
Price/Earnings21.37
Price/Book3.25
Price/Cash Flow11.45
Price/Sales1.96
Top Holdings (as of 4/17/2014)
Holding Percent
ICICI Bank Limited (ADR) 8.21%
Wipro Ltd. (ADR) 7.69%
Qihoo 360 Technology Co. Ltd. (ADR) 7.66%
Michael Kors Holdings Limited 7.22%
Infosys Limited (ADR) 6.43%
Baidu, Inc. (ADR) 6.01%
Tata Motors Limited (ADR) 4.69%
HDFC Bank Ltd. (ADR) 4.51%
Ctrip.com International, Ltd. (ADR) 4.14%
Dr. Reddy's Laboratories Limited (ADR) 4.13%

Holdings are subject to change.

Bid/Ask Midpoint and NAV History (Since Inception)
Past performance is not indicative of future results.
Distribution Information
Dividend per Share Amt3$0.0629
30-Day SEC Yield (as of 3/31/2014)40.22%
12-Month Distribution Rate (as of 3/31/2014)50.93%
Index Yield (as of 3/31/2014)60.81%
Bid/Ask Midpoint vs. NAV (as of 3/31/2014)
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
3/31/2014 18 0 0 0
12/31/2013 52 0 0 0
9/30/2013 7 0 0 0
6/30/2013 2 0 0 0
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
3/31/2014 43 0 0 0
12/31/2013 12 0 0 0
9/30/2013 57 0 0 0
6/30/2013 61 1 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.

Top Sector Exposure (as of 4/17/2014)
Information Technology 46.58%
Consumer Discretionary 24.27%
Financials 14.45%
Health Care 5.54%
Telecommunication Services 4.77%
Energy 2.81%
Utilities 0.83%
Industrials 0.75%
Month End Performance (as of 3/31/2014)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception8
Fund Performance *
NAV 3.09% 3.09% 37.90% 4.60% 22.50% N/A 6.63%
After Tax Held 3.00% 3.00% 37.23% 4.03% 21.99% N/A 6.24%
After Tax Sold 1.75% 1.75% 21.39% 3.26% 18.25% N/A 5.05%
Market Price 2.80% 2.80% 38.07% 4.57% 22.49% N/A 6.62%
Index Performance **
ISE ChIndia Index™ 3.21% 3.21% 38.56% 4.97% 23.13% N/A 7.21%
MSCI Emerging Markets Index -0.43% -0.43% -1.21% -2.86% 14.48% N/A 2.40%
Russell 3000® Index 1.97% 1.97% 22.61% 14.61% 21.93% N/A 5.82%
Quarter End Performance (as of 3/31/2014)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception8
Fund Performance *
NAV 3.09% 3.09% 37.90% 4.60% 22.50% N/A 6.63%
After Tax Held 3.00% 3.00% 37.23% 4.03% 21.99% N/A 6.24%
After Tax Sold 1.75% 1.75% 21.39% 3.26% 18.25% N/A 5.05%
Market Price 2.80% 2.80% 38.07% 4.57% 22.49% N/A 6.62%
Index Performance **
ISE ChIndia Index™ 3.21% 3.21% 38.56% 4.97% 23.13% N/A 7.21%
MSCI Emerging Markets Index -0.43% -0.43% -1.21% -2.86% 14.48% N/A 2.40%
Russell 3000® Index 1.97% 1.97% 22.61% 14.61% 21.93% N/A 5.82%
3-Year Statistics (as of 3/31/2014)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
FNI 26.05% 9.13 1.18 0.28 0.88
MSCI Emerging Markets Index 19.50% --- 1.00 -0.08 1.00
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.

*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.

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.

**Performance information for the ISE ChIndia Index™ is for illustrative purposes only and does not represent actual fund performance. 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.

The gross expense ratio for this fund is 0.66%. Expenses are capped contractually at 0.60% per year, at least until April 30, 2014.

The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets.

The Russell 3000® Index is comprised of the 3000 largest and most liquid stocks based and traded in the U.S.

Footnotes
1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's shares outstanding.
2 Fund shares are purchased and sold on an exchange at their share price rather than net asset value (NAV), which may cause the shares to trade at a price greater than NAV (premium) or less than NAV (discount).
3 Most recent distribution paid or declared through today's date. Subject to change in the future.
4 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.
5 12-Month Distribution Rate is calculated by dividing the sum of the fund's trailing 12-month ordinary distributions paid or declared by the NAV price. Distribution Rates May Vary.
6 Index yield represents the weighted average trailing 12-month dividend of the constituents of the ISE ChIndia Index(TM)
7 All market capitalization numbers are in USD$ Millions.
8 Inception Date is 5/8/2007

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

ETF Characteristics

The fund lists and principally trades its shares on the NYSE Arca, Inc.

The fund's return may not match the return of the ISE ChIndia Index™.  Securities held by the fund will generally not be bought or sold in response to market fluctuations.

The fund may not be fully invested at times. Investors buying or selling fund shares on the secondary market may incur customary brokerage commissions. Market prices may differ to some degree from the net asset value of the shares. 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, unlike mutual funds, shares may only be redeemed directly from the fund by authorized participants, in very large creation/redemption units.

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 may invest in securities 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.

An investment in the fund should be made with an understanding of the risks specific to issuers located in China and India. China's emerging market economy may be subject to over-extension of credit, currency devaluations and restrictions, decreased exports, economic recession, a reversal of economic liberalization, political unrest or changes in China's trading status. A deterioration of the relationship with the United States could also have negative implications on issuers from China.

The emerging market economy of India is subject to additional risks including over-extension of credit, currency devaluations and restrictions, decreased exports and economic recession, infrastructure problems, a large and growing fiscal deficit and stress due to overpopulation. In addition, India's businesses may be affected by political uncertainty and a perceived inefficient bureaucracy.

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 First Trust ISE Chindia Index Fund is not sponsored, endorsed, sold or promoted by the International Securities Exchange (ISE). ISE makes no representation or warranty, express or implied, to the owners of the fund or any member of the public regarding the advisability of trading in the fund. ISE's only relationship to First Trust is the licensing of certain trademarks and trade names of ISE and of the ISE ChIndia IndexTM which is determined, composed and calculated by ISE without regard to First Trust or the fund.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value
 
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