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Multi-Asset Diversified Income Index Fund (MDIV)
Investment Objective/Strategy - The Multi-Asset Diversified Income 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 an equity index called the NASDAQ Multi-Asset Diversified Income Index.
There can be no assurance that the Fund's investment objectives will be achieved.
  • The fund will normally invest at least 90% of its net assets (plus the amount of any borrowings for investment purposes) in the common stocks and/or depositary receipts (25%), real estate investment trusts (“REITs”) (20%), preferred securities (20%), master limited partnerships (“MLPs”) (20%) and an exchange-traded fund (15%) that comprise the Index (each an “Index Segment”). The percentages provided reflect the approximate percentages of each of the index segments included in the index as of each quarterly rebalance. The percentages will vary from these amounts between rebalances of the index.
  • Each segment has its own set of eligibility criteria.
  • Every security in the index is U.S.-listed and meets stringent eligibility criteria based on liquidity, size, volatility and yield.
  • The index is rebalanced quarterly.
Fund Overview
TickerMDIV
Fund TypeMulti Asset Income
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBrown Brothers Harriman
CUSIP33738R100
Intraday NAVMDIVIV
Fiscal Year-End09/30
ExchangeNASDAQ Stock Market
Inception8/13/2012
Inception Price$20.00
Inception NAV$19.98
Rebalance FrequencyQuarterly
Expense Ratio0.60%
Acquired fund fees and expenses of 0.08% are excluded from the Expense Ratio.
Current Fund Data (as of 10/29/2014)
Closing NAV1$21.68
Closing Share Price2$21.68
Bid/Ask Midpoint$21.67
Bid/Ask Discount0.08%
Total Net Assets$836,943,890
Outstanding Shares38,600,002
Daily Volume324,665
Average 30-Day Daily Volume260,404
Closing Share Price 52-Week High/Low$22.40 / $20.48
Closing NAV 52-Week High/Low$22.37 / $20.45
Number of Holdings123
Fund Characteristics (as of 9/30/2014)7
Median Market Cap.$3,537
Maximum Market Cap.$204,008
Minimum Market Cap.$647
Price/Earnings15.68
Price/Book1.55
Price/Cash Flow5.97
Price/Sales2.04
Top Holdings (as of 10/30/2014)
Holding Percent
iShares iBoxx $ High Yield Corporate Bond ETF 15.48%
CYS Investments, Inc. 1.60%
PennyMac Mortgage Investment Trust 1.53%
American Capital Mortgage Investment Corporation 1.48%
Annaly Capital Management Inc. 1.25%
Atlas Resource Partners Lp 1.23%
Chimera Investment Corporation 1.23%
MFA Financial, Inc. 1.17%
Two Harbors Investment Corp. 1.14%
Capstead Mortgage Corporation 1.13%

Holdings are subject to change.

NAV History (Since Inception)
Past performance is not indicative of future results.
Distribution Information
Dividend per Share Amt3$0.1012
30-Day SEC Yield (as of 9/30/2014)45.81%
12-Month Distribution Rate (as of 9/30/2014)55.76%
Index Yield (as of 9/30/2014)66.48%
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 55 0 0 0
6/30/2014 59 1 0 0
3/31/2014 41 1 0 0
12/31/2013 51 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
9/30/2014 8 1 0 0
6/30/2014 2 1 0 0
3/31/2014 19 0 0 0
12/31/2013 13 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.

Fund Composition (as of 10/30/2014)
Dividend Paying Equities 27.06%
REITs 20.65%
MLPs 18.73%
Preferred Securities 18.03%
High Yield Corporate Bond ETFs 15.53%
Month End Performance (as of 9/30/2014)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception8
Fund Performance *
NAV -2.61% 7.65% 10.17% N/A N/A N/A 9.14%
After Tax Held -3.21% 5.71% 7.46% N/A N/A N/A 6.71%
After Tax Sold -1.47% 4.32% 5.72% N/A N/A N/A 5.91%
Market Price -2.48% 7.70% 10.27% N/A N/A N/A 9.18%
Index Performance **
NASDAQ Multi-Asset Diversified Income IndexSM -2.41% 8.10% 10.81% N/A N/A N/A 9.83%
Dow Jones U.S. Select Dividend IndexSM -3.20% 6.35% 15.34% N/A N/A N/A 16.95%
S&P 500 Index 1.13% 8.34% 19.73% N/A N/A N/A 19.83%
Quarter End Performance (as of 9/30/2014)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception8
Fund Performance *
NAV -2.61% 7.65% 10.17% N/A N/A N/A 9.14%
After Tax Held -3.21% 5.71% 7.46% N/A N/A N/A 6.71%
After Tax Sold -1.47% 4.32% 5.72% N/A N/A N/A 5.91%
Market Price -2.48% 7.70% 10.27% N/A N/A N/A 9.18%
Index Performance **
NASDAQ Multi-Asset Diversified Income IndexSM -2.41% 8.10% 10.81% N/A N/A N/A 9.83%
Dow Jones U.S. Select Dividend IndexSM -3.20% 6.35% 15.34% N/A N/A N/A 16.95%
S&P 500 Index 1.13% 8.34% 19.73% N/A N/A N/A 19.83%

*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 Multi-Asset Diversified Income 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 expense ratio for this fund is 0.60%.

The S&P 500 Index is an unmanaged index of 500 stocks used to measure large-cap U.S. stock market performance.

The Dow Jones U.S. Select Dividend IndexSM consists of 100 widely-traded, dividend-paying stocks derived from the Dow Jones U.S. Total Market IndexSM.

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 Multi-Asset Diversified Income Index(SM)
7 All market capitalization numbers are in USD$ Millions.
8 Inception Date is 8/13/2012

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 Multi-Asset Diversified Income IndexSM.  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.

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. There can be no assurance that the fund's investment objective will be achieved.

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. The fund may invest in depositary receipts which may be less liquid than the underlying shares in their primary trading market.

REITs are subject to certain risks, including changes in the real estate market, vacancy rates and competition, volatile interest rates and economic recession.

MLPs are subject to certain risks, including price and supply fluctuations caused by international politics, energy conservation, taxes, price controls, and other regulatory policies of various governments.

Preferred securities combine some of the characteristics of both common stocks and bonds. Preferred securities are typically subordinated to bonds and other debt instruments in a company's capital structure, in terms of priority to corporate income, and therefore will be subject to greater credit risk than those debt instruments. Preferred securities are also subject to credit risk, interest rate risk and income risk.

High-yield securities, or "junk" bonds, are subject to greater market fluctuations and risk of loss than securities with higher ratings, and therefore, may be highly speculative. These securities are issued by companies that may have limited operating history, narrowly focused operations, and/or other impediments to the timely payment of periodic interest and principal at maturity. The market for high-yield securities is smaller and less liquid than that for investment grade securities.

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.

Nasdaq®, OMX®, Nasdaq OMX® and NASDAQ Multi-Asset Diversified Income IndexSM are registered trademarks and service marks of The NASDAQ OMX Group, Inc. (which with its affiliates is referred to as the "Corporations") and 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 CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUND.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value
 
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