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First Trust Technology AlphaDEX® Fund (FXL)
Investment Objective/Strategy - The First Trust Technology AlphaDEX® 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 StrataQuant® Technology Index.
 
There can be no assurance that the Fund's investment objectives will be achieved.
  • The StrataQuant® Technology Index is an "enhanced" index developed, maintained and sponsored by the NYSE Euronext or its affiliates ("NYSE Euronext") which employs the AlphaDEX® stock selection methodology to select stocks from the Russell 1000® Index. Prior to the acquisition of the American Stock Exchange LLC (“AMEX”) by NYSE Euronext, the index was developed, maintained and sponsored by the AMEX.
  • The NYSE Euronext constructs the StrataQuant® Technology Index by ranking the stocks which are members of the Russell 1000® Index on growth factors including three, six and 12-month price appreciation, sales to price and one year sales growth, and, separately, on value factors including book value to price, cash flow to price and return on assets.
  • Stocks which Russell has classified solely as growth or value, receive their score using the above growth or value factors respectively.
  • Stocks which Russell allocates between both growth and value receive their best score between the growth and value factors.
  • The NYSE Euronext then ranks those stocks contained in the the technology sector (the members of the Russell 1000® Technology Index) according to their score. The bottom 25% is eliminated and the top 75% is selected for the StrataQuant® Technology Index.
  • The selected stocks are divided into quintiles based on their rankings and the top ranked quintiles receive a higher weight within the index. The stocks are equally-weighted within each quintile.
  • The index is reconstituted and rebalanced quarterly.
    • Fund Overview
    Ticker FXL
    Fund Type Technology
    Investment Advisor First Trust Advisors L.P.
    Investor Servicing Agent Bank of New York
    CUSIP 33734X176
    Intraday NAV FXLIV
    Fiscal Year-End 07/31
    Exchange NYSE Arca
    Inception 5/8/2007
    Inception Price $20.00
    Inception NAV $20.00
    Gross Expense Ratio
    (7/31/2009)    		 1.26%
    Net Expense Ratio 0.70%
    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 0.70% per year, at least until March 31, 2010.
    Bid/Ask Midpoint and NAV History (Since Inception)
     
    Past performance is not indicative of future results.
    Current Fund Data (as of 2/5/2010)
    Closing Share Price $16.49
    Bid/Ask Midpoint $16.47
    Closing NAV $16.47
    Bid/Ask Discount 0.03%
    Total Net Assets $28,081,973
    Common Shares Outstanding 1,705,000
    Dividend Frequency Semi-Annual
    Daily Volume 31,610
    Average 30-Day Daily Volume 26,915
    Closing Share Price 52-Week High/Low $18.28 / $8.74
    Closing NAV 52-Week High/Low $18.26 / $8.79
    Number of Stocks 84
    Top 10 Holdings (as of 2/8/2010)
    Holdings Percent (%)
    Seagate Technology 2.31
    Cree, Inc. 2.30
    Compuware Corporation 2.27
    SAIC, Inc. 2.24
    Cognizant Technology Solutions Corporation 2.23
    SBA Communications Corp. (Class A) 2.18
    Crown Castle International Corp. 2.11
    SanDisk Corporation 2.10
    Computer Sciences Corporation 2.08
    Western Digital Corporation 2.08

    Fund Characteristics (as of 1/29/2010) 2
    Median Market Cap. $5,443
    Maximum Market Cap. $248,294
    Minimum Market Cap. $1,286
    Price/Earnings 21.12
    Price/Book 2.48
    Price/Cash Flow 10.02
    Price/Sales 1.38
    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 44 0 0 0
    9/30/2009 41 1 0 0
    6/30/2009 27 0 0 0
    3/31/2009 23 1 1 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 20 0 0 0
    9/30/2009 22 0 0 0
    6/30/2009 34 2 0 0
    3/31/2009 34 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
    Inception1
     Fund Performance *
    NAV 8.77% -8.03% 58.41% N/A N/A N/A -6.81%
    After Tax Held 8.77% -8.03% 58.41% N/A N/A N/A -6.81%
    After Tax Sold 5.70% -5.22% 37.96% N/A N/A N/A -5.74%
    Market Price 8.70% -8.08% 58.25% N/A N/A N/A -6.81%
     Index Performance **
    StrataQuant® Technology Index 8.93% -8.00% 59.72% N/A N/A N/A -5.95%
    Russell 1000® Technology Index 2.14% -8.66% 54.15% N/A N/A N/A N/A
    S&P 500 Information Technology Index 1.73% -8.43% 52.75% N/A N/A N/A -3.23%
    Russell 1000® Index 4.57% -3.60% 34.81% N/A N/A N/A -9.51%
    Quarter End Performance   (as of 12/31/2009) 
      3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
    Fund
    Inception1
     Fund Performance *
    NAV 11.09% 66.95% 66.95% N/A N/A N/A -4.04%
    After Tax Held 11.09% 66.95% 66.95% N/A N/A N/A -4.04%
    After Tax Sold 7.21% 43.51% 43.51% N/A N/A N/A -3.42%
    Market Price 11.15% 68.13% 68.13% N/A N/A N/A -4.02%
     Index Performance **
    StrataQuant® Technology Index 11.35% 68.49% 68.49% N/A N/A N/A -3.12%
    Russell 1000® Technology Index 10.99% 64.47% 64.47% N/A N/A N/A N/A
    S&P 500 Information Technology Index 10.70% 61.72% 61.72% N/A N/A N/A -0.06%
    Russell 1000® Index 6.07% 28.43% 28.43% N/A N/A N/A -8.52%
    *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 1.26%. 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 0.70% per year, at least until March 31, 2010.     		**Past performance is not a guarantee of future results. Performance information for the StrataQuant® Technology Index is for illustrative purposes only and does not represent the performance of any actual investment or fund. 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.

    The Russell 1000 Index is an unmanaged index used to measure the large-cap U.S. equity universe.
    The Russell 1000 Technology Index is an unmanaged index which includes the stocks in the technology sector of the Russell 1000 Index.
    Footnotes
    1 Inception Date is 5/8/2007
    2 All market capitalization numbers are in US$ Millions.

    Downloads and Links to Recently Posted Fund Information
    • FXL Recap of Capital Gains Distributions for 2009 – 12/31/2009
    • Exchange-Traded Funds advised by First Trust Advisors L.P. Announce Distributions - 6/22/2009
    • FXL Recap of Capital Gains Distributions for 2008 - 12/23/2008
    • 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
    • FXL Press Release 02/08/2008
    • FXL Annual Report for the period ending 7/31/2009
    • 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 StrataQuant® Technology 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 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.

    The fund is concentrated in stocks of companies in the technology 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 technology sector are subject to fierce competition, high research and development costs, and their products and services may be subject to rapid obsolescence.

    The StrataQuant® Technology Index is a trademark of NYSE Euronext and has been licensed for use by First Trust Portfolios L.P. The fund is not sponsored, endorsed, sold or promoted by NYSE Euronext and NYSE Euronext makes no representation or warranty regarding the advisability of investing in the fund or as to the result to be obtained by any person from use of the index in connection with the trading of the fund.

    Russell Investment Group is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of the Russell Investment Group.

    "AlphaDEX®" is a registered trademark of First Trust Portfolios L.P.

    A patent application with respect to the AlphaDEX® stock selection methodology is pending at the United States Patent and Trademark Office.

    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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