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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
Ticker FNI
Fund Type Global Equity
Investment Advisor First Trust Advisors L.P.
Investor Servicing Agent Bank of New York
CUSIP 33733A102
Intraday NAV FNIIV
Fiscal Year-End 12/31
Exchange NYSE Arca
Inception 5/8/2007
Inception Price $20.00
Inception NAV $20.00
Gross Expense Ratio
(12/31/2009)		 0.73%
Net Expense Ratio 0.60%
Rebalance Frequency SEMIANNUAL
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, 2011.
Bid/Ask Midpoint and NAV History (Since Inception)
 
Past performance is not indicative of future results.
Current Fund Data (as of 7/29/2010)
Closing Share Price $21.93
Bid/Ask Midpoint $21.92
Closing NAV $21.92
Bid/Ask Discount 0.04%
Total Net Assets $130,446,913
Common Shares Outstanding 5,950,002
Dividend Frequency Semi-Annual
Dividend per Share Amt1 $0.1190
Daily Volume 21,376
Average 30-Day Daily Volume 69,041
Closing Share Price 52-Week High/Low $23.10 / $17.32
Closing NAV 52-Week High/Low $23.11 / $17.35
Number of Stocks 50
Sector Breakdown (as of 7/30/2010)
Consumer Discretionary 7.42%
Energy 13.10%
Financials 19.68%
Health Care 2.97%
Industrials 5.55%
Information Technology 36.17%
Materials 4.87%
Telecommunication Services 9.55%
Utilities 0.69%
Top 10 Holdings (as of 7/30/2010)
Holdings Percent (%)
HDFC Bank Ltd. (ADR) 7.49
Baidu, Inc. (ADR) 7.40
ICICI Bank Limited (ADR) 7.04
China Mobile (Hong Kong) Limited (ADR) 6.74
Infosys Technologies Limited (ADR) 6.74
PetroChina Company Limited (ADR) 6.72
Tata Motors Limited (ADR) 4.15
Wipro Ltd (ADR) 4.15
Sterlite Industries (India) Ltd. (ADR) 4.14
Ctrip.com International, Ltd. (ADR) 4.02

Fund Characteristics (as of 6/30/2010) 3
Median Market Cap. $2,077
Maximum Market Cap. $200,829
Minimum Market Cap. $358
Price/Earnings 17.19
Price/Book 2.44
Price/Cash Flow 9.24
Price/Sales 2.01
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
6/30/2010 22 1 0 0
3/31/2010 42 0 0 0
12/31/2009 50 0 0 0
9/30/2009 34 3 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
6/30/2010 40 0 0 0
3/31/2010 19 0 0 0
12/31/2009 14 0 0 0
9/30/2009 27 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.
Month End Performance   (as of 6/30/2010) 
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception2
 Fund Performance *
NAV -6.30% -2.73% 26.56% -1.26% N/A N/A 1.69%
After Tax Held -6.49% -2.93% 26.26% -1.54% N/A N/A 1.42%
After Tax Sold -4.09% -1.77% 17.26% -1.24% N/A N/A 1.27%
Market Price -6.34% -2.91% 26.46% -1.23% N/A N/A 1.70%
 Index Performance **
ISE ChIndia Index™ -6.11% -2.39% 27.40% -0.59% N/A N/A 2.38%
MSCI Emerging Markets Index -8.37% -6.17% 23.15% -2.50% N/A N/A -0.19%
Russell 3000® Index -11.32% -6.05% 15.72% -9.47% N/A N/A -9.08%
Quarter End Performance   (as of 6/30/2010) 
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception2
 Fund Performance *
NAV -6.30% -2.73% 26.56% -1.26% N/A N/A 1.69%
After Tax Held -6.49% -2.93% 26.26% -1.54% N/A N/A 1.42%
After Tax Sold -4.09% -1.77% 17.26% -1.24% N/A N/A 1.27%
Market Price -6.34% -2.91% 26.46% -1.23% N/A N/A 1.70%
 Index Performance **
ISE ChIndia Index™ -6.11% -2.39% 27.40% -0.59% N/A N/A 2.38%
MSCI Emerging Markets Index -8.37% -6.17% 23.15% -2.50% N/A N/A -0.19%
Russell 3000® Index -11.32% -6.05% 15.72% -9.47% N/A N/A -9.08%
3-Year Statistics (as of 6/30/2010) 
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
First Trust ISE Chindia Index Fund 41.03% 3.78 1.12 0.10 0.92
MSCI Emerging Markets Index 33.49% -10.67 0.55 --- 0.85
Russell 3000® Index 21.52% --- --- -0.48 ---
*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 fund shares have not been sold. After Tax Sold returns represent the return after taxes on distributions and the sale of fund shares. 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. Returns do not represent the returns you would receive if you traded shares at other times. 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 0.73%. 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, 2011. 		**Past performance is not a guarantee of future results. Performance information for the ISE Chindia 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 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.

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

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.
Footnotes
1 Most recent distribution paid or declared through today's date. Subject to change in the future.
2 Inception Date is 5/8/2007
3 All market capitalization numbers are in US$ Millions.

Downloads and Links to Recently Posted Fund Information
• First Trust Exchange-Traded Fund 19a-1 Notice - 6/30/2010
• Annual Report for the year ended December 31, 2009
• Recap of Capital Gains Distributions for 2009 – 12/31/2009
• 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 ISE ChIndia IndexTM.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.

An investment in the fund should also 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 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.

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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