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First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund (FFR)
Investment Objective/Strategy - First Trust FTSE EPRA/NAREIT Developed Markets Real Estate 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 FTSE EPRA/NAREIT Developed Index.
There can be no assurance that the Fund's investment objectives will be achieved.
  • The Index is designed to measure the stock performance of companies engaged in specific real estate activities of the North American, European and Asian real estate markets. Relevant real estate activities are defined as the ownership, trading and development of income-producing real estate.
  • The constituents of the Index are required to meet individual geographic criteria and are subject to size, liquidity, and free float screens.
  • The Index is a modified market capitalization weighted index, based on free float market capitalization. The Index is rebalanced and reconstituted quarterly.
Fund Overview
TickerFFR
Fund TypeGlobal REIT
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon
CUSIP33736N101
Intraday NAVFFRIV
Fiscal Year-End09/30
ExchangeNYSE Arca
Inception8/27/2007
Inception Price$50.00
Inception NAV$50.00
Rebalance FrequencyQuarterly
Gross Expense Ratio*0.71%
Net Expense Ratio*0.60%
* As of 3/31/2014
Expenses are capped contractually at 0.60% per year, at least until January 31, 2016.
Current Fund Data (as of 10/16/2014)
Closing NAV1$41.28
Closing Share Price2$41.03
Bid/Ask Midpoint$41.19
Bid/Ask Discount0.22%
Total Net Assets$109,384,817
Outstanding Shares2,650,002
Daily Volume48,112
Average 30-Day Daily Volume12,803
Closing Share Price 52-Week High/Low$44.50 / $38.12
Closing NAV 52-Week High/Low$44.32 / $38.42
Number of Holdings310
Fund Characteristics (as of 9/30/2014)8
Median Market Cap.$2,398
Maximum Market Cap.$50,910
Minimum Market Cap.$169
Price/Earnings19.69
Price/Book1.49
Price/Cash Flow17.16
Price/Sales5.54
Top Holdings (as of 10/17/2014)
Holding Percent
Simon Property Group, Inc. 4.50%
Mitsubishi Estate Company, Ltd. 2.26%
Mitsui Fudosan Company, Ltd. 2.26%
Public Storage 2.14%
Equity Residential 2.02%
Unibail-Rodamco SE 2.02%
Sun Hung Kai Properties Limited 1.94%
Health Care REIT, Inc. 1.77%
AvalonBay Communities, Inc. 1.69%
HCP, Inc. 1.68%

Holdings are subject to change.

Top Country Exposure (as of 10/17/2014)
Country Percent
United States 51.58%
Japan 12.12%
Hong Kong 7.71%
Australia 6.33%
United Kingdom 5.63%
Singapore 3.60%
Canada 3.54%
France 3.34%
Germany 1.43%
Sweden 0.97%
NAV History (Since Inception)
Past performance is not indicative of future results.
Overall Morningstar RatingTM (as of 9/30/2014)3

Among 173 funds in the Global Real Estate category. This fund was rated 3 stars/173 funds (3 years), 4 stars/149 funds (5 years).
Distribution Information
Dividend per Share Amt4$0.2629
30-Day SEC Yield (as of 9/30/2014)53.66%
12-Month Distribution Rate (as of 9/30/2014)62.68%
Index Yield (as of 9/30/2014)73.54%
Bid/Ask Midpoint vs. NAV (as of 9/30/2014)
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
9/30/2014 33 5 0 0
6/30/2014 47 14 0 0
3/31/2014 25 1 0 0
12/31/2013 53 1 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
9/30/2014 26 0 0 0
6/30/2014 2 0 0 0
3/31/2014 32 3 0 0
12/31/2013 10 0 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 Sub-Industry Exposure (as of 10/17/2014)
Diversified REITs 29.27%
Retail REITs 25.58%
Office REITs 11.95%
Residential REITs 11.32%
Healthcare REITs 7.31%
Industrial REITs 5.68%
Lodging/Resorts REITs 4.17%
Self Storage REITs 3.27%
Industrial/Office Mixed REITs 1.45%
Month End Performance (as of 9/30/2014)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception9
Fund Performance *
NAV -4.61% 6.60% 5.86% 14.90% 10.35% N/A 0.87%
After Tax Held -4.87% 5.84% 4.64% 13.40% 8.79% N/A -0.45%
After Tax Sold -2.61% 3.74% 3.31% 11.03% 7.49% N/A 0.08%
Market Price -4.95% 6.47% 6.03% 15.24% 10.19% N/A 0.89%
Index Performance **
FTSE EPRA/NAREIT Developed Index -4.43% 7.23% 6.71% 15.63% 11.26% N/A 1.77%
MSCI World REIT Index -3.29% 11.76% 10.08% 14.12% 11.75% N/A 0.83%
S&P Global REIT Index -4.07% 10.81% 9.71% 14.66% 12.11% N/A 1.71%
Quarter End Performance (as of 9/30/2014)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception9
Fund Performance *
NAV -4.61% 6.60% 5.86% 14.90% 10.35% N/A 0.87%
After Tax Held -4.87% 5.84% 4.64% 13.40% 8.79% N/A -0.45%
After Tax Sold -2.61% 3.74% 3.31% 11.03% 7.49% N/A 0.08%
Market Price -4.95% 6.47% 6.03% 15.24% 10.19% N/A 0.89%
Index Performance **
FTSE EPRA/NAREIT Developed Index -4.43% 7.23% 6.71% 15.63% 11.26% N/A 1.77%
MSCI World REIT Index -3.29% 11.76% 10.08% 14.12% 11.75% N/A 0.83%
S&P Global REIT Index -4.07% 10.81% 9.71% 14.66% 12.11% N/A 1.71%
3-Year Statistics (as of 9/30/2014)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
FFR 14.28% 1.01 0.98 1.02 0.97
MSCI World REIT Index 14.10% --- 1.00 0.98 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 FTSE EPRA/NAREIT Developed 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 0.71%. Expenses are capped contractually at 0.60% per year, at least until January 31, 2016.

The MSCI World REIT Index is a free float-adjusted market capitalization weighted index that is designed to measure the real estate investment trusts from 23 developed markets around the world.

The S&P Global REIT Index defines and measures the investable universe of publicly traded real estate investment trusts with constituents from 13 countries.

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
The Morningstar RatingTM is provided for those exchange-traded funds ("ETFs") with at least a three-year history. Ratings are based on the ETF's Morningstar Risk-Adjusted Return measure which accounts for variation in monthly performance, placing more emphasis on downward variations and rewarding consistent performance. An ETF's risk-adjusted return includes a brokerage commission estimate. This estimate is intended to reflect what an average investor would pay when buying or selling an ETF. PLEASE NOTE, this estimate is subject to change and the actual brokerage commission an investor pays may be higher or lower than this estimate. Morningstar compares each ETF's risk-adjusted return to the open-end mutual fund rating breakpoints for that category. Consistent with the open-end mutual fund ratings, the top 10% of ETFs in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. The overall rating for an ETF is based on a weighted average of the time-period ratings (e.g., the ETF's 3,5, and 10 year rating). The determination of an ETF's rating does not affect the retail open end mutual fund data published by Morningstar. Past performance is no guarantee of future results.
4 Most recent distribution paid or declared through today's date. Subject to change in the future.
5 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.
6 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.
7 Index yield represents the weighted average trailing 12-month dividend of the constituents of the FTSE EPRA/NAREIT Developed Index
8 All market capitalization numbers are in USD$ Millions.
9 Inception Date is 8/27/2007

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 FTSE EPRA/NAREIT Developed Index.  Securities held by the fund will generally not be bought or sold in response to market fluctuations.

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. There can be no assurance that the fund's investment objective will be achieved.

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 a fund containing securities of non-U.S. issuers is subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting non-U.S. issuers. The fund may invest in depositary receipts which may be less liquid than the underlying shares in their primary trading market.

The fund is subject to the risks associated with investing in real estate and REITs, which include fluctuations in the value of underlying properties, defaults by borrowers or tenants, market saturation, changes in general and local economic conditions, decreases in market rates for rents, increases in competition, property taxes, capital expenditures or operating expenses, dependency upon management skills, limited diversification, and other economic, political or regulatory occurrences. Increases in interest rates typically lower the present value of a REIT's future earnings stream, and may make financing property purchases and improvements more costly.

The fund is classified as "non-diversified" and may invest a relatively high percentage of its assets in a limited number of issuers. As a result, the fund may be more susceptible to a single adverse economic or regulatory occurrence affecting one or more of these issuers, experience increased volatility and be highly concentrated in certain issuers.

First Trust Advisors L.P. is the adviser to the fund. First Trust Advisors L.P. is an affiliate of First Trust Portfolios L.P., the fund's distributor.

The FTSE EPRA/NAREIT Developed Index is calculated by FTSE International Limited ("FTSE"). FTSE does not sponsor, endorse or promote the First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund. All copyright in the index values and constituent list vests in FTSE and/or its licensors. First Trust Advisors L.P. and the First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund has obtained full license from FTSE to use such copyright in the creation of the First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund. "FTSE®", "FT-SE®" and "Footsie®" are trademarks jointly owned by the London Stock Exchange Plc and the Financial Times Limited and are used by FTSE under license. "NAREIT®" is the trademark of the National Association of Real Estate Investment Trusts and "EPRA®" is the trademark of the European Public Real Estate Association and are used by FTSE under license.

©2014 Morningstar, Inc. All Rights Reserved. The Morningstar RatingTM information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

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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