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First Trust High Income ETF (FTHI)
  • 2014 Estimated Capital Gain Distributions
    The First Trust Exchange-Traded Funds are not expecting to pay long-term capital gain distributions during the remainder of 2014.  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 indicated above.
Investment Objective/Strategy - The Fund's primary investment objective is to provide current income. The Fund's secondary investment objective is to provide capital appreciation. The Fund will pursue its objectives by investing in large cap equity securities listed on U.S. exchanges and by utilizing an "option strategy" consisting of writing (selling) U.S. exchange-traded covered call options on the Standard & Poor's 500 Index (the "Index"). Under normal market conditions, the Fund invests primarily in large cap equity securities listed on U.S. exchanges. The Fund will also employ an option strategy in which it will write U.S. exchange-traded covered call options on the Index in order to seek additional cash flow in the form of premiums on the options that may be distributed to shareholders on a monthly basis. A premium is the income received by an investor who sells or writes an option contract to another party. The market value of the option strategy may be up to 20% of the Fund's overall net asset value.
There can be no assurance that the Fund's investment objectives will be achieved.
Fund Overview
TickerFTHI
Fund TypeEquity Income
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBrown Brothers Harriman
CUSIP33738R308
Intraday NAVFTHIIV
Fiscal Year-End09/30
ExchangeNASDAQ Stock Market
Inception1/6/2014
Inception Price$20.00
Inception NAV$19.93
Expense Ratio0.85%
Current Fund Data (as of 12/18/2014)
Closing NAV1$20.56
Closing Share Price2$20.46
Bid/Ask Midpoint$20.59
Bid/Ask Premium0.11%
Total Net Assets$4,112,597
Outstanding Shares200,002
Daily Volume5,827
Average 30-Day Daily Volume1,956
Closing Share Price 52-Week High/Low$21.53 / $19.00
Closing NAV 52-Week High/Low$20.73 / $18.84
Number of Holdings143
Fund Characteristics (as of 11/28/2014)6
Median Market Cap.$29,336
Maximum Market Cap.$671,202
Minimum Market Cap.$1,583
Price/Earnings16.25
Price/Book2.71
Price/Cash Flow10.28
Price/Sales1.73
% Portfolio with Call Options65.30%
Average Time Until Expiration of Calls44 Days
Average Call Moneyness2.76%
Market cap and price ratio statistics are for the equity portion of the fund and exclude cash and options. Moneyness is how much an option contract's strike price is in-the-money (ITM) or out-of-the-money (OTM) expressed as a percentage of the price of the option contract's underlying asset.
Top Holdings (as of 12/18/2014)
Holding Percent
Apple Inc. 3.78%
Altria Group, Inc. 2.54%
Exxon Mobil Corporation 2.54%
Verizon Communications Inc. 2.52%
Johnson & Johnson 2.49%
Texas Instruments Incorporated 2.49%
Wal-Mart Stores, Inc. 2.48%
General Electric Company 2.46%
Merck & Co., Inc. 2.43%
United Parcel Service, Inc. (Class B) 2.14%

Holdings are subject to change.

NAV History (Since Inception)
Past performance is not indicative of future results.
Distribution Information
Dividend per Share Amt3$0.0850
30-Day SEC Yield (as of 11/28/2014)41.52%
Distribution Rate (as of 11/28/2014)54.96%
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 25 0 0 0
6/30/2014 42 0 0 0
3/31/2014 18 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 39 0 0 0
6/30/2014 20 1 0 0
3/31/2014 39 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 Sector Exposure (as of 12/18/2014)
Information Technology 22.00%
Consumer Staples 16.66%
Health Care 15.53%
Industrials 12.16%
Consumer Discretionary 11.01%
Energy 9.15%
Financials 8.71%
Materials 3.36%
Telecommunication Services 2.54%
Utilities 0.20%
Month End Performance (as of 11/28/2014)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception7
Fund Performance *
NAV 1.40% N/A N/A N/A N/A N/A 6.98%
After Tax Held 0.85% N/A N/A N/A N/A N/A 5.33%
After Tax Sold 0.79% N/A N/A N/A N/A N/A 3.92%
Market Price 1.64% N/A N/A N/A N/A N/A 6.98%
Index Performance
CBOE S&P 500 BuyWrite Monthly Index -3.50% N/A N/A N/A N/A N/A 4.50%
Quarter End Performance (as of 9/30/2014)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception7
Fund Performance *
NAV 0.13% N/A N/A N/A N/A N/A 4.66%
After Tax Held -0.42% N/A N/A N/A N/A N/A 3.41%
After Tax Sold 0.07% N/A N/A N/A N/A N/A 2.63%
Market Price -0.02% N/A N/A N/A N/A N/A 4.66%
Index Performance
CBOE S&P 500 BuyWrite Monthly Index 0.80% N/A N/A N/A N/A N/A 6.57%

*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.

The expense ratio for this fund is 0.85%.

The CBOE S&P 500 BuyWrite Index is a benchmark index designed to track the performance of a hypothetical buy-write strategy on the S&P 500 Index. It is a passive total return index based on buying an S&P 500 stock index portfolio, and writing (or selling) the near-term S&P 500 Index covered call option.

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 Distribution rate is calculated by dividing the most recent annualized distribution paid or declared by the Net Asset Value. Distribution rates may vary.
6 All market capitalization numbers are in USD$ Millions.
7 Inception Date is 1/6/2014

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.

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 security owned by the fund, fund shares or securities in general may fall in value. The fund is subject to management risk because it is an actively managed portfolio. In managing the fund's investment portfolio, the advisor will apply investment techniques and risk analyses that may not have the desired result. There can be no assurance that the fund's investment objectives will be achieved.

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 use of options and other derivatives can lead to losses because of adverse movements in the price or value of the underlying asset, index or rate, which may be magnified by certain features of the derivatives. These risks are heightened when the fund's portfolio managers use derivatives to enhance the fund's returns or as a substitute for a position or security, rather than solely to hedge (or offset) the risk of a position or security held by the fund.

The option positions employed may present additional risk. When selling a call option, the fund will receive a premium; however, this premium may not be enough to offset a loss incurred by the fund if the index level at the expiration of the call option is above the strike price by an amount equal to or greater than the premium. The value of an option may be adversely affected if the market for the option becomes less liquid or smaller, and will be affected by changes in the value and dividend rates of the stock or the index subject to the option, an increase in interest rates, a change in the actual and perceived volatility of the stock market and the common stock or the index and the remaining time to expiration. Additionally, the value of an option does not increase or decrease at the same rate as the underlying stock(s) or the index.

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 currently has fewer assets than larger funds, and like other relatively new funds, large inflows and outflows may impact the fund's market exposure for limited periods of time.

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.

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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