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First Trust Taiwan AlphaDEX® Fund (FTW)
  • 2016 Estimated Capital Gain Distributions
    Certain First Trust Exchange-Traded Funds are expected to pay a long-term capital gain distribution in December.  For a list of exchange-traded funds expected to pay a long-term capital gain distribution, please click here.  Short-term capital gain distributions, if any, are expected to be nominal and are taxed like ordinary income.  Final determination of the source and tax status of all distributions paid in the current year are to be made after year-end and could differ from the expectations noted above. 
Investment Objective/Strategy - The First Trust Taiwan 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 the Fund's fees and expenses, of an equity index called the NASDAQ AlphaDEX® Taiwan Index.
There can be no assurance that the Fund's investment objectives will be achieved.
  • The NASDAQ AlphaDEX® Taiwan Index is an "enhanced" index created and administered by Nasdaq, Inc. ("Nasdaq") which employs the AlphaDEX® stock selection methodology to select stocks from the NASDAQ Taiwan Index that meet certain criteria.
  • Nasdaq constructs the NASDAQ AlphaDEX® Taiwan Index by ranking the eligible stocks from the NASDAQ Taiwan Index on growth factors including 3-, 6- 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. All stocks are ranked on the sum of ranks for the growth factors and, separately, all stocks are ranked on the sum of ranks for the value factors. A stock must have data for all growth and/or value factors to receive a rank for that style.
  • Each stock receives the best style rank from the previous step as its selection score.
  • The top 40 stocks based on the selection score determined in the previous step comprise the "selected stocks". 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.
  • Each stock is then tested in order of its selection score rank to check if the weight assigned to that stock is outside the sector weighting constraints, which are set at 15% above the benchmark weight.
    • If the weight assigned to the stock, when added with the weight assigned to all higher ranking stocks in its sector, is greater than the constraint, then the stock's weight is lowered to the highest rank in the next quintile. Stocks previously lower in rank then move up one rank. Such stocks in the lowest quintile that violate a constraint are removed from the portfolio and replaced by the highest scoring stock not originally selected, subject to sector constraints. This process continues until all the sector weightings meet the constraint.
  • The index is reconstituted and rebalanced semi-annually.
Fund Overview
TickerFTW
Fund TypeInternational Equity
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBrown Brothers Harriman
CUSIP33737J257
ISINUS33737J2574
Intraday NAVFTWIV
Fiscal Year-End12/31
ExchangeNasdaq
Inception2/14/2012
Inception Price$30.00
Inception NAV$30.00
Rebalance FrequencySemi-Annual
Expense Ratio0.80%
Current Fund Data (as of 12/6/2016)
Closing NAV1$31.19
Closing Share Price2$31.13
Bid/Ask Midpoint$31.33
Bid/Ask Premium0.42%
Total Net Assets$3,119,510
Outstanding Shares100,002
Daily Volume225
Average 30-Day Daily Volume254
Closing Share Price 52-Week High/Low$33.63 / $24.92
Closing NAV 52-Week High/Low$33.79 / $25.62
Number of Holdings40
Fund Characteristics (as of 11/30/2016)8
Maximum Market Cap.$148,661
Median Market Cap.$5,463
Minimum Market Cap.$2,173
Price/Earnings13.73
Price/Book1.31
Price/Cash Flow7.52
Price/Sales0.55
Top Holdings (as of 12/6/2016)
Holding Percent
Lite-On Technology Corporation 4.63%
FOXCONN Technology Co., Ltd. 4.48%
Far Eastern New Century Corporation 4.04%
Catcher Technology Co., Ltd. 4.02%
Quanta Computer Inc. 3.89%
President Chain Store Corporation 3.81%
United Microelectronics Corporation 3.66%
Pegatron Corporation 3.63%
Hon Hai Precision Industry Co., Ltd. 3.55%
China Life Insurance Co., Ltd. 3.45%

Holdings are subject to change.

NAV History (Since Inception)
Past performance is not indicative of future results.
Overall Morningstar RatingTM (as of 11/30/2016)3

Among 93 funds in the China Region category. This fund was rated 5 stars/93 funds (3 years).
Distribution Information
Dividend per Share Amt4$1.0058
30-Day SEC Yield (as of 10/31/2016)53.14%
12-Month Distribution Rate (as of 10/31/2016)63.12%
Index Yield (as of 10/31/2016)73.91%
Bid/Ask Midpoint vs. NAV (as of 9/30/2016)
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
9/30/2016 12 5 5 0
6/30/2016 7 3 0 0
3/31/2016 16 3 3 1
12/31/2015 19 11 1 1
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
9/30/2016 25 14 3 0
6/30/2016 17 25 11 1
3/31/2016 17 14 6 1
12/31/2015 14 11 7 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 Sector Exposure (as of 12/6/2016)
Information Technology 54.63%
Financials 18.35%
Consumer Staples 7.28%
Telecommunication Services 6.77%
Materials 4.46%
Consumer Discretionary 4.45%
Industrials 4.06%
Month End Performance (as of 11/30/2016)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception9
Fund Performance *
Net Asset Value (NAV) -0.96% 11.78% 9.61% 2.94% N/A N/A 3.39%
After Tax Held -2.25% 10.32% 8.18% 1.82% N/A N/A 2.34%
After Tax Sold -0.51% 6.70% 5.47% 1.74% N/A N/A 2.14%
Market Price -0.52% 12.66% 9.18% 2.91% N/A N/A 3.40%
Index Performance **
NASDAQ AlphaDEX® Taiwan Index -0.71% 12.55% 11.16% N/A N/A N/A N/A
MSCI Taiwan Index 1.92% 20.08% 19.14% 5.55% N/A N/A 5.78%
NASDAQ Taiwan Index 1.38% 18.66% 18.12% 4.25% N/A N/A N/A
S&P Taiwan BMI Index 0.71% 16.21% 15.54% 3.26% N/A N/A 4.48%
Quarter End Performance (as of 9/30/2016)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception9
Fund Performance *
Net Asset Value (NAV) 10.07% 16.21% 10.90% 4.54% N/A N/A 4.39%
After Tax Held 8.63% 14.69% 9.46% 3.40% N/A N/A 3.29%
After Tax Sold 5.70% 9.17% 6.17% 2.96% N/A N/A 2.89%
Market Price 11.28% 17.77% 12.92% 4.90% N/A N/A 4.52%
Index Performance **
NASDAQ AlphaDEX® Taiwan Index 10.91% 16.37% 12.53% N/A N/A N/A N/A
MSCI Taiwan Index 11.71% 21.18% 22.67% 6.87% N/A N/A 6.20%
NASDAQ Taiwan Index 11.67% 20.08% 22.38% 5.60% N/A N/A N/A
S&P Taiwan BMI Index 11.08% 18.21% 20.98% 4.78% N/A N/A 5.03%
3-Year Statistics (as of 11/30/2016)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
FTW 15.36% -0.20 1.04 0.24 0.91
MSCI Taiwan Index 13.93% 2.20 1.02 0.43 0.98
NASDAQ Taiwan Index 13.42% 0.97 1.00 0.35 1.00
S&P Taiwan BMI Index 13.40% --- 1.00 0.28 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 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. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative.

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 NASDAQ AlphaDEX® Taiwan Index is for illustrative purposes only and does not represent actual fund performance.
Indexes do 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.

On July 14, 2015, the fund's underlying index changed from the Defined Taiwan Index to the NASDAQ AlphaDEX® Taiwan Index. Therefore, the fund's performance and historical returns shown for the periods prior to this date are not necessarily indicative of the performance that the fund, based on its current index, would have generated.

The expense ratio for this fund is 0.80%.

MSCI Taiwan Index - The Index measures the performance of Taiwan's equity market.

NASDAQ Taiwan Index - The Index is a float adjusted market capitalization-weighted index designed to track the performance of securities assigned to Taiwan.

S&P Taiwan BMI Index - The Index is a comprehensive, rules-based index measuring performance of Taiwan's equity market.

Footnotes
1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's outstanding shares .
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 for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product 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 Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
4 Most recent distribution paid or declared to today's date. Subject to change in the future. There is no guarantee that the fund will declare dividends.
5 The 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 and includes the effects of fee waivers and expense reimbursements, if applicable.
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 NASDAQ AlphaDEX® Taiwan Index.
8 All market capitalization numbers are in USD$ Millions.
9 Inception Date is 2/14/2012

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 Nasdaq Stock Market LLC.

The fund's return may not match the return of the NASDAQ AlphaDEX® Taiwan 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. If the fund's authorized participants are unable to proceed with creation/redemption orders and no other authorized participant is able to step forward to create or redeem, fund shares may trade at a discount to the fund's net asset value and possibly face delisting.

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 securities issued by companies concentrated in a particular industry. 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. These risks may be heightened for securities of companies located in, or with significant operations in, emerging market countries.

Taiwan is a small island state with few raw material resources and limited land area and thus it relies heavily on imports for its commodity needs. Any fluctuations or shortages in the commodity markets could have a negative impact on the Taiwanese economy. Rising labor costs and increasing environmental consciousness have led some labor-intensive industries to relocate to countries with cheaper work forces, and continued labor outsourcing may adversely affect the Taiwanese economy. Taiwan's economy is intricately linked with economies of other Asian countries, which are often emerging market economies that often experience over-extensions of credit, frequent and pronounced currency fluctuations, devaluations and restrictions, rising unemployment and fluctuations in inflation. Political and social unrest in other Asian countries could cause further economic and market uncertainty in Taiwan. A reduction in purchases of Taiwanese products and services or negative changes in the economies of Japan, China, and the U.S. would likely have an adverse impact on the Taiwanese economy. Taiwan's history of political contention with China has resulted in ongoing tensions, including the continual risk of military conflict with China. These tensions may materially affect the Taiwanese economy and securities markets.

The fund may invest in depositary receipts which may be less liquid than the underlying shares in their primary trading market. The fund may effect a portion of creations and redemptions for cash, rather than in-kind securities. As a result, the fund may be less tax-efficient.

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 NASDAQ AlphaDEX® Taiwan Index (the "Index") is a trademark of Nasdaq, Inc. and has been licensed for use by First Trust Portfolios L.P. AlphaDEX® is a trademark owned by First Trust Portfolios L.P. and has been licensed to Nasdaq, Inc. for use in the name of the Index. The First Trust Taiwan AlphaDEX® Fund is not sponsored, endorsed, sold or promoted by Nasdaq, Inc. and Nasdaq, Inc. makes no representation or warranty regarding the advisability of investing in the First Trust Taiwan AlphaDEX® Fund or as to the result to be obtained by any person from use of the Index in connection with the trading of the First Trust Taiwan AlphaDEX® Fund.

"AlphaDEX®" is a registered trademark of First Trust Portfolios L.P. First Trust Portfolios L.P. has obtained a patent for the AlphaDEX® stock selection methodology from the United States Patent and Trademark Office.

©2016 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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