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First Trust NASDAQ® Clean Edge® Smart Grid Infrastructure Index Fund (GRID)
Investment Objective/Strategy - The First Trust NASDAQ® Clean Edge® Smart Grid Infrastructure Index Fund is an exchange-traded fund. The 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 worldwide market capitalization of $100 million, have a minimum free float of 20%, 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
TickerGRID
Fund TypeGlobal Equity
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon
CUSIP33737A108
Intraday NAVGRIDIV
Fiscal Year-End09/30
ExchangeNASDAQ Stock Market
Inception11/16/2009
Inception Price$30.00
Inception NAV$30.00
Rebalance FrequencyQuarterly
Gross Expense Ratio*1.10%
Net Expense Ratio*0.70%
* As of 3/31/2014
Expenses are capped contractually at 0.70% per year, at least until January 31, 2016.
Current Fund Data (as of 7/24/2014)
Closing NAV1$36.95
Closing Share Price2$37.04
Bid/Ask Midpoint$36.95
Bid/Ask Discount0.01%
Total Net Assets$12,932,527
Outstanding Shares350,002
Daily Volume247
Average 30-Day Daily Volume3,157
Closing Share Price 52-Week High/Low$39.73 / $32.00
Closing NAV 52-Week High/Low$39.38 / $31.71
Number of Holdings38
Fund Characteristics (as of 6/30/2014)7
Median Market Cap.$3,105
Maximum Market Cap.$268,243
Minimum Market Cap.$103
Price/Earnings19.65
Price/Book2.12
Price/Cash Flow12.07
Price/Sales0.96
Top Holdings (as of 7/24/2014)
Holding Percent
Quanta Services, Inc. 8.27%
ABB Ltd. 8.11%
Red Electrica Corporacion S.A. 8.05%
ITC Holdings Corporation 7.92%
Schneider Electric S.A. 7.90%
Badger Meter, Inc. 4.15%
ESCO Technologies Inc. 4.02%
General Cable Corporation 3.91%
Itron, Inc. 3.89%
Prysmian SpA 3.68%

Holdings are subject to change.

Bid/Ask Midpoint and NAV History (Since Inception)
Past performance is not indicative of future results.
Distribution Information
Dividend per Share Amt3$0.2982
30-Day SEC Yield (as of 6/30/2014)41.39%
12-Month Distribution Rate (as of 6/30/2014)51.34%
Index Yield (as of 6/30/2014)61.85%
Bid/Ask Midpoint vs. NAV (as of 6/30/2014)
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
6/30/2014 49 0 0 0
3/31/2014 46 8 0 0
12/31/2013 42 4 0 0
9/30/2013 8 9 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
6/30/2014 14 0 0 0
3/31/2014 6 1 0 0
12/31/2013 13 5 0 0
9/30/2013 34 13 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 Sector Exposure (as of 7/24/2014)
Industrials 73.18%
Utilities 17.99%
Technology 3.68%
Oil & Gas 3.13%
Consumer Goods 2.02%
Month End Performance (as of 6/30/2014)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception8
Fund Performance *
NAV -2.35% 4.87% 21.16% 5.75% N/A N/A 6.08%
After Tax Held -2.69% 4.36% 20.46% 5.20% N/A N/A 5.64%
After Tax Sold -1.33% 2.76% 11.98% 4.16% N/A N/A 4.53%
Market Price -2.43% 4.46% 21.54% 5.71% N/A N/A 6.08%
Index Performance **
NASDAQ® Clean Edge® Green Energy IndexSM -2.18% 5.25% 22.28% 6.71% N/A N/A 7.00%
MSCI World Industrials Index 3.20% 3.02% 25.10% 10.84% N/A N/A 13.22%
S&P Composite 1500 Industrials Index 3.80% 4.08% 28.90% 16.30% N/A N/A 18.09%
Russell 3000® Index 4.87% 6.94% 25.22% 16.46% N/A N/A 16.06%
Quarter End Performance (as of 6/30/2014)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception8
Fund Performance *
NAV -2.35% 4.87% 21.16% 5.75% N/A N/A 6.08%
After Tax Held -2.69% 4.36% 20.46% 5.20% N/A N/A 5.64%
After Tax Sold -1.33% 2.76% 11.98% 4.16% N/A N/A 4.53%
Market Price -2.43% 4.46% 21.54% 5.71% N/A N/A 6.08%
Index Performance **
NASDAQ® Clean Edge® Green Energy IndexSM -2.18% 5.25% 22.28% 6.71% N/A N/A 7.00%
MSCI World Industrials Index 3.20% 3.02% 25.10% 10.84% N/A N/A 13.22%
S&P Composite 1500 Industrials Index 3.80% 4.08% 28.90% 16.30% N/A N/A 18.09%
Russell 3000® Index 4.87% 6.94% 25.22% 16.46% N/A N/A 16.06%
3-Year Statistics (as of 6/30/2014)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
GRID 17.97% -12.17 1.21 0.38 0.86
MSCI World Industrials Index 15.50% -6.93 1.15 0.72 0.95
S&P Composite 1500 Industrials Index 15.73% -2.22 1.16 1.02 0.94
Russell 3000® Index 12.85% --- 1.00 1.23 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 NASDAQ® Clean Edge® Green Energy IndexSM 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 1.10%. Expenses are capped contractually at 0.70% per year, at least until January 31, 2016.

The MSCI World Industrials Index is a free float-adjusted market capitalization weighted index that is designed to measure the industrials sector performance of 23 developed markets around the world.

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 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 Most recent distribution paid or declared through today's date. Subject to change in the future.
4 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.
5 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.
6 Index yield represents the weighted average trailing 12-month dividend of the constituents of the NASDAQ® Clean Edge® Green Energy Index(SM)
7 All market capitalization numbers are in USD$ Millions.
8 Inception Date is 11/16/2009

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® Clean Edge® Green Energy IndexSM.  Securities held by the fund will generally not be bought or sold in response to market fluctuations.

The fund may not be fully invested at times. 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.

The fund may invest in small capitalization and mid capitalization companies. Such companies may experience greater price volatility than larger, more established companies.

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.

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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