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First Trust NASDAQ® Clean Edge® Smart Grid Infrastructure Index Fund (GRID)
Investment Objective/Strategy - This exchange-traded fund seeks investment results that correspond generally to the price and yield, before the Fund's fees and expenses, of an equity index called the NASDAQ OMX® Clean Edge® Smart Grid Infrastructure IndexSM.
 
There can be no assurance that the Fund's investment objectives will be achieved.
  • The index is designed to track the performance of common stocks in the grid and electric energy infrastructure sector.The index includes companies that are primarily engaged and involved in electric grid, electric meters and devices, networks, energy storage and management, and enabling software used by the smart grid infrastructure sector.
  • To be included in the index, a security must meet certain criteria including being classified as a smart grid, electric infrastructure and/or other grid-related activities company according to Clean Edge, have a minimum float-adjusted worldwide market capitalization of $100 million, and have a minimum three-month average daily dollar trading volume of $500 thousand.
  • The index employs a modified market-capitalization weighting methodology. At each evaluation, the index securities are classified as Pure Play or Diversified. The Pure Play securities are given a collective weight of 80% and the Diversified securities are given a collective weight of 20% in the index.
  • The index is rebalanced quarterly and reconstituted semi-annually.
Fund Overview
Ticker GRID
Fund Type Global Equity
Investment Advisor First Trust Advisors L.P.
Investor Servicing Agent Bank of New York
CUSIP 33737A108
Intraday NAV GRIDIV
Fiscal Year-End 09/30
Exchange NASDAQ Stock Market
Inception 11/16/2009
Inception Price $30.00
Inception NAV $30.00
Gross Expense Ratio
(11/9/2009)		 0.74%
Net Expense Ratio 0.70%
Rebalance Frequency QUARTERLY
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 0.70% per year, at least until November 9, 2011.
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 $28.46
Bid/Ask Midpoint $28.40
Closing NAV $28.44
Bid/Ask Discount 0.13%
Total Net Assets $25,594,300
Common Shares Outstanding 900,002
Dividend Frequency Semi-Annual
Dividend per Share Amt1 $0.0120
Daily Volume 4,959
Average 30-Day Daily Volume 24,484
Closing Share Price 52-Week High/Low $33.50 / $28.46
Closing NAV 52-Week High/Low $33.34 / $28.44
Number of Stocks 28
Top 10 Holdings (as of 2/8/2010)
Holdings Percent (%)
NGK Insulators, Ltd. 8.32
Itron, Inc. 8.18
Quanta Services, Inc. 7.70
Schneider Electric S.A. 7.59
SMA Solar Technology AG 6.57
EnerNOC, Inc. 4.84
ITC Holdings Corporation 4.82
ESCO Technologies Inc. 3.92
General Cable Corporation 3.89
American Superconductor Corporation 3.87
Sector Breakdown (as of 2/8/2010)
Industrials 77.54%
Oil & Gas 6.58%
Technology 9.17%
Utilities 6.71%

Fund Characteristics (as of 1/29/2010) 2
Median Market Cap. $1,364
Maximum Market Cap. $171,212
Minimum Market Cap. $162
Price/Earnings 21.27
Price/Book 2.13
Price/Cash Flow 9.62
Price/Sales 1.18
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 26 2 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 1 0 1 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
Inception3
 Fund Performance *
NAV N/A -8.08% N/A N/A N/A N/A -2.06%
After Tax Held N/A N/A N/A N/A N/A N/A -2.08%
After Tax Sold N/A -5.25% N/A N/A N/A N/A -1.34%
Market Price N/A -8.45% N/A N/A N/A N/A -2.10%
 Index Performance **
NASDAQ OMX Clean Edge Smart Grid Infrastructure Index -0.42% -8.35% N/A N/A N/A N/A 0.87%
S&P 1500 Industrials Index 8.34% -1.89% N/A N/A N/A N/A -2.03%
Russell 3000® Index 4.78% -3.60% N/A N/A N/A N/A -2.36%
Quarter End Performance   (as of 12/31/2009) 
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception3
 Fund Performance *
NAV N/A N/A N/A N/A N/A N/A 6.54%
After Tax Held N/A N/A N/A N/A N/A N/A 6.53%
After Tax Sold N/A N/A N/A N/A N/A N/A 4.25%
Market Price N/A N/A N/A N/A N/A N/A 6.94%
 Index Performance **
NASDAQ OMX Clean Edge Smart Grid Infrastructure Index 9.26% N/A N/A N/A N/A N/A 10.05%
S&P 1500 Industrials Index 5.45% N/A N/A N/A N/A N/A -0.15%
Russell 3000® Index 5.90% N/A N/A N/A N/A N/A 1.29%
*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 0.74%. 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 0.70% per year, at least until November 09, 2011. 		**Past performance is not a guarantee of future results. Performance information for The NASDAQ OMX® Smart Grid Infrastructure IndexSM 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.

The S&P Composite 1500 Industrials Index is a capitalization-weighted index of companies classified by GICS as industrials within the S&P Composite 1500 Index.

The Russell 3000® Index is comprised of the 3000 largest and most liquid stocks based and traded in the U.S.
Footnotes
1 Most recent distribution paid or declared through today's date. Subject to change in the future.
2 All market capitalization numbers are in US$ Millions.
3 Inception Date is 11/16/2009

Downloads and Links to Recently Posted Fund Information
• GRID 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
• First Trust Advisors announces the First Trust NASDAQ® Clean Edge® Smart Grid Infrastructure Index Fund – 11/16/2009
• Statement of Additional Information
• Prospectus
• Summary 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 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.

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 NASDAQ OMX® Clean Edge® Smart Grid Infrastructure IndexSM.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.

This fund is concentrated in stocks in the industrials sector which involves additional risks, including limited diversification.The companies engaged in the industrials sector are subject to certain risks, including a deterioration in the general state of the economy, intense competition, domestic and international politics, excess capacity and changing spending trends.

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.

NASDAQ®,NASDAQ OMX®, and Clean Edge® are the registered trademarks (the "Marks") of The NASDAQ OMX Group, Inc. ("NASDAQ OMX") and Clean Edge, Inc. ("Clean Edge") respectively.NASDAQ OMX® and Clean Edge® are, collectively with their affiliates, the "Corporations". The Marks are licensed for use by First Trust Advisors L.P.The Fund has not been passed on by the Corporations as to its legality or suitability.The Fund is not issued, endorsed, sold or promoted by the Corporations.The Fund should not be construed in any way as investment advice by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUND.

The S&P Composite 1500 Industrials Index is a capitalization-weighted index of companies classified by GICS as industrials within the S&P Composite 1500 Index. The Russell 3000® Index is comprised of the 3000 largest and most liquid stocks based and traded in the U.S.

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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