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First Trust US IPO Index Fund (FPX)
Investment Objective/Strategy - The First Trust US IPO Index Fund is an exchange-traded index fund. The investment objective of the fund is to replicate as closely as possible, before fees and expenses, the price and yield of the IPOX-100 U.S. Index.
 
There can be no assurance that the Fund's investment objectives will be achieved.
  • The IPOX-100 U.S. Index is a modified value-weighted price index measuring the performance of the top 100 companies ranked quarterly by market capitalization in the IPOX Global Composite Index.
  • The index utilizes a 10% capping on all constituents and includes the 100 largest, typically best performing and most liquid U.S. public offerings ("IPOs") in the IPOX Global Composite Index.
  • The index is a rules based value-weighted index measuring the average performance of U.S. IPOs during the first 1000 trading days. Index constituents are selected based on quantitative initial screens.
  • The index is reconstituted and adjusted quarterly.
Benefits of the IPOX-100 Index ETF
  • Systematic exposure to U.S. Equity Capital and Private Equity Activity and the growth and innovativeness of the U.S. economy via a semi-passive indexing approach.
  • Based on well researched, totally disciplined and transparent index methodology. The U.S. IPOX-100 Index has historically captured around 85% of total market capitalization created through U.S. IPO activity during the past four years. Tilt towards mid- and large-cap stocks.
  • Investment tool for buy-and-hold investors seeking timely and systematic IPO exposure as well as active market participants due to dynamic index properties.
Fund Overview
Ticker FPX
Fund Type Growth
Investment Advisor First Trust Advisors L.P.
Investor Servicing Agent Bank of New York
CUSIP 336920103
Intraday NAV XPT
Fiscal Year-End 12/31
Exchange NYSE Arca
Inception 4/12/2006
Inception Price $20.00
Inception NAV $20.00
Gross Expense Ratio
(6/30/2009)		 1.74%
Net Expense Ratio 0.60%
Rebalance Frequency QUARTERLY
Marginable Yes
Options Yes
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, 2010.
Bid/Ask Midpoint and NAV History (Since Inception)
 
Past performance is not indicative of future results.
Current Fund Data (as of 2/8/2010)
Closing Share Price $19.01
Bid/Ask Midpoint $18.95
Closing NAV $18.94
Bid/Ask Premium 0.05%
Total Net Assets $10,417,676
Common Shares Outstanding 550,002
Dividend Frequency Semi-Annual
Dividend per Share Amt1 $0.2600
Daily Volume 946
Average 30-Day Daily Volume 5,353
Closing Share Price 52-Week High/Low $20.62 / $11.36
Closing NAV 52-Week High/Low $20.71 / $11.38
Number of Stocks 100
Sector Breakdown (as of 2/8/2010)
Consumer Discretionary 17.13%
Consumer Staples 16.66%
Energy 7.57%
Financials 6.08%
Health Care 9.71%
Industrials 8.50%
Information Technology 29.69%
Materials 1.87%
Telecommunication Services 1.42%
Utilities 1.37%
Top 10 Holdings (as of 2/8/2010)
Holdings Percent (%)
Visa, Inc. 10.13
Philip Morris International Inc. 9.55
MasterCard, Inc. 6.30
Covidien Plc 5.30
Viacom Inc. (Class B) 3.64
Time Warner Cable, Inc. 3.35
Spectra Energy Corporation 2.88
Lorillard, Inc. 2.56
Tyco Electronics Ltd. 2.43
Western Union Company 2.40

Fund Characteristics (as of 1/29/2010) 3
Median Market Cap. $2,306
Maximum Market Cap. $86,987
Minimum Market Cap. $676
Price/Earnings 16.89
Price/Book 2.77
Price/Cash Flow 9.59
Price/Sales 1.70
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
12/31/2009 28 0 0 0
9/30/2009 30 1 0 0
6/30/2009 28 2 0 0
3/31/2009 23 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
12/31/2009 36 0 0 0
9/30/2009 33 0 0 0
6/30/2009 30 3 0 0
3/31/2009 36 2 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 1/29/2010) 
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception2
 Fund Performance *
NAV 7.08% -3.24% 50.83% -4.66% N/A N/A 0.01%
After Tax Held 6.60% -3.24% 49.95% -4.99% N/A N/A -0.26%
After Tax Sold 4.61% -2.10% 33.03% -4.12% N/A N/A -0.15%
Market Price 6.97% -3.24% 49.17% -4.64% N/A N/A 0.00%
 Index Performance **
IPOX-100 U.S. Index 7.22% -3.16% 51.94% -4.09% 7.02% N/A 0.63%
Russell 3000® Index 4.78% -3.60% 35.05% -7.16% 0.57% N/A -2.67%
Quarter End Performance   (as of 12/31/2009) 
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception2
 Fund Performance *
NAV 8.19% 44.93% 44.93% -2.34% N/A N/A 0.90%
After Tax Held 7.71% 44.08% 44.08% -2.67% N/A N/A 0.62%
After Tax Sold 5.32% 29.17% 29.17% -2.18% N/A N/A 0.60%
Market Price 8.14% 44.96% 44.96% -2.32% N/A N/A 0.89%
 Index Performance **
IPOX-100 U.S. Index 8.28% 45.97% 45.97% -1.76% 7.34% N/A 1.51%
Russell 3000® Index 5.90% 28.34% 28.34% -5.42% 0.76% N/A -1.76%
3-Year Statistics (as of 1/29/2010) 
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
First Trust US IPO Index Fund 24.62% 4.70 1.13 -0.21 0.94
Russell 3000® Index 20.65% --- --- -0.43 ---
*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. The after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements.
The gross expense ratio for this fund is 1.74%. 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, 2010. 		**Past performance is not a guarantee of future results. Performance information for The U.S. IPOX-100 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 — A measure of price variability (risk).
Alpha - An indication of how much an investment outperforms or underperforms on a risk-adjusted basis relative to its benchmark.
Beta - A measure of price variability relative to the market.
Sharpe Ratio - A measure of excess reward per unit of volatility.
Correlation - A measure the similarity of performance.

The Russell 3000 Index is composed of 3000 large U.S. companies, as determined by market capitalization.

The S&P 500 Index is an unmanaged index of 500 stocks used to measure large-cap U.S. stock market performance.
Footnotes
1 Most recent distribution paid or declared through today's date. Subject to change in the future.
2 Inception Date is 4/12/2006
3 All market capitalization numbers are in US$ Millions.

Downloads and Links to Recently Posted Fund Information
• FPX Recap of Capital Gains Distributions for 2009 – 12/31/2009
• First Trust Exchange-Traded Fund 19a-1 Notice - 12/31/2009
• First Trust Advisors L.P. Announces Distributions for Exchange-Traded Funds - 12/21/2009
• Exchange-Traded Funds advised by First Trust Advisors L.P. Announce Distributions - 6/22/2009
• FPX Recap of Capital Gains Distributions for 2008 - 12/23/2008
• FPX Declares Distributions 12/22/2008
• Exchange-Traded Funds Begin Trading on NYSE Arca, Inc. - 11/6/2008
• Transfer of Exchange-Traded Fund Securities from American Stock Exchange to NYSE Arca 10/6/2008
• FPX Semi-Annual Report for the period ending June 30, 2009
• ETF Quarterly Performance Report
• Prospectus
• 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 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. 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 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.

The fund is concentrated in stocks of companies in the financials sector. You should be aware that an investment in a portfolio which is concentrated in a particular sector 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, increased competition from new entrants in the field, and potential increased regulation.

This fund is concentrated in stocks in the consumer products sector which involves additional risks, including limited diversification. The companies engaged in the consumer products sector 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.

IPOX is a registered/pending trademark of IPOX Schuster LLC. IPOX IPO Indexes and Derivatives (patent pending).

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.

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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