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First Trust ISE Global Engineering and Construction Index Fund (FLM)
Investment Objective/Strategy - First Trust ISE Global Engineering and Construction 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 the Fund's fees and expenses, of the ISE Global Engineering and Construction Index.
There can be no assurance that the Fund's investment objectives will be achieved.
  • The index specifically targets companies that are engaged in large civil and capital projects such as infrastructure, utilities, transportation, telecommunications, commercial, residential, and commerce facilities and whose roles are within the engineering, designing, planning, consulting, project managing, and/or constructing of these projects.To be included in the index, a company must receive at least 70% of revenues from these types of services and projects based on the reportable segment/division from its most recent annual report.
  • The companies must meet market capitalization and weighting concentration requirements for inclusion in the index.
  • The index uses a linear-based capitalization-weighted methodology for the group of companies.The resulting linear weight distribution prevents a few large component stocks from dominating the index while allowing smaller companies to adequately influence index performance.
  • Index components are reviewed semi-annually for eligibility, and the weights are re-set according to that distribution.
Fund Overview
TickerFLM
Fund TypeForeign Equity
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon
CUSIP33736M103
Intraday NAVFLMIV
Fiscal Year-End09/30
ExchangeNYSE Arca
Inception10/13/2008
Inception Price$30.00
Inception NAV$30.00
Rebalance FrequencySemi-Annual
Gross Expense Ratio*0.91%
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 7/29/2014)
Closing NAV1$52.85
Closing Share Price2$52.76
Bid/Ask Midpoint$52.72
Bid/Ask Discount0.24%
Total Net Assets$23,780,891
Outstanding Shares450,002
Daily Volume5
Average 30-Day Daily Volume1,595
Closing Share Price 52-Week High/Low$54.49 / $43.59
Closing NAV 52-Week High/Low$54.53 / $43.60
Number of Holdings64
Fund Characteristics (as of 6/30/2014)7
Median Market Cap.$3,042
Maximum Market Cap.$44,001
Minimum Market Cap.$395
Price/Earnings16.38
Price/Book1.57
Price/Cash Flow10.30
Price/Sales0.38
Top Holdings (as of 7/29/2014)
Holding Percent
Aecom Technology Corp. 3.24%
ACS, Actividades de Construccion y Servicios, S.A. 3.07%
Balfour Beatty Plc 2.98%
China Railway Group Ltd. 2.88%
WS Atkins Plc 2.84%
China Communications Construction Company Ltd. 2.79%
AMEC Plc 2.78%
Arcadis N.V. 2.62%
Koninklijke Boskalis Westminster NV 2.61%
Chiyoda Corporation 2.57%

Holdings are subject to change.

Top Country Exposure (as of 7/29/2014)
Country Percent
Japan 25.64%
United States 17.55%
United Kingdom 12.69%
The Netherlands 10.11%
Spain 5.86%
China 5.68%
France 4.92%
Sweden 3.12%
Hong Kong 2.52%
Norway 2.38%
Bid/Ask Midpoint and NAV History (Since Inception)
Past performance is not indicative of future results.
Distribution Information
Dividend per Share Amt3$0.4791
30-Day SEC Yield (as of 6/30/2014)41.13%
12-Month Distribution Rate (as of 6/30/2014)51.53%
Index Yield (as of 6/30/2014)61.99%
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 31 0 0 0
3/31/2014 21 0 0 0
12/31/2013 35 0 0 0
9/30/2013 13 0 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 31 1 0 0
3/31/2014 36 4 0 0
12/31/2013 29 0 0 0
9/30/2013 46 5 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 7/29/2014)
Industrials 92.69%
Energy 7.31%
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 1.80% 4.16% 27.46% 7.40% 10.82% N/A 12.18%
After Tax Held 1.40% 3.74% 26.60% 6.65% 10.12% N/A 11.50%
After Tax Sold 1.02% 2.36% 15.53% 5.35% 8.25% N/A 9.45%
Market Price 1.78% 3.56% 27.73% 7.24% 10.81% N/A 12.14%
Index Performance **
ISE Global Engineering and Construction Index 2.03% 4.59% 28.75% 8.55% 11.90% N/A 14.15%
MSCI World Industrials Index 3.20% 3.02% 25.10% 10.84% 17.29% N/A 14.12%
Russell 3000® Index 4.87% 6.94% 25.22% 16.46% 19.33% N/A 15.47%
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 1.80% 4.16% 27.46% 7.40% 10.82% N/A 12.18%
After Tax Held 1.40% 3.74% 26.60% 6.65% 10.12% N/A 11.50%
After Tax Sold 1.02% 2.36% 15.53% 5.35% 8.25% N/A 9.45%
Market Price 1.78% 3.56% 27.73% 7.24% 10.81% N/A 12.14%
Index Performance **
ISE Global Engineering and Construction Index 2.03% 4.59% 28.75% 8.55% 11.90% N/A 14.15%
MSCI World Industrials Index 3.20% 3.02% 25.10% 10.84% 17.29% N/A 14.12%
Russell 3000® Index 4.87% 6.94% 25.22% 16.46% 19.33% N/A 15.47%
3-Year Statistics (as of 6/30/2014)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
FLM 19.63% -12.12 1.32 0.44 0.86
MSCI World Industrials Index 15.50% -6.93 1.15 0.72 0.95
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 ISE Global Engineering and Construction 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 0.91%. 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 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 ISE Global Engineering and Construction Index
7 All market capitalization numbers are in USD$ Millions.
8 Inception Date is 10/13/2008

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 ISE Global Engineering and Construction Index.  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 microcap, small capitalization and mid capitalization companies. Such companies may experience greater price volatility than larger, more established companies.

The fund invests in the securities of companies in the industrials sector which includes companies in the engineering and construction business. General risks of these companies include the general state of the economy, intense competition, consolidation, domestic and international politics, excess capacity and consumer demand and spending trends. In addition, they may also be significantly affected by overall capital spending levels, economic cycles, technical obsolescence, delays in modernization, labor relations, government regulations and e-commerce initiatives.

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.

The First Trust ISE Global Engineering and Construction 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 the ISE and of the ISE Global Engineering and Construction Index which is determined, composed and calculated by ISE without regard to First Trust or 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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