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First Trust High Yield Opportunities 2027 Term Fund (FTHY)
Investment Objective/Strategy - First Trust High Yield Opportunities 2027 Term Fund ("the Fund") is a diversified, closed-end management investment company. The investment objective of the Fund is to provide current income. Under normal market conditions, the Fund will seek to achieve its investment objective by investing at least 80% of its Managed Assets in high yield debt securities of any maturity that are rated below investment grade at the time of purchase or unrated securities determined by the Advisor to be of comparable quality. High yield debt securities include U.S. and non-U.S. corporate debt obligations and senior, secured floating rate loans ("Senior Loans"). Securities rated below investment grade are commonly referred to as "junk" or "high yield" securities and are considered speculative with respect to the issuer's capacity to pay interest and repay principal. There can be no assurance that the Fund will achieve its investment objective or that the Fund's investment strategies will be successful.
There can be no assurance that the Fund's investment objectives will be achieved. The Fund may not be appropriate for all investors.
Fund Overview
Fund TypeHigh Yield Bond
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBNY Mellon Investment Servicing (US) Inc.
Fiscal Year-End05/31
Inception Price$20.00
Inception NAV$20.00
Current Fund Data (as of 3/4/2021)
Closing NAV1$21.23
Closing Market Price2$19.85
Discount to Net Asset Value (NAV)6.50%
Total Managed Assets$1,060,735,608
Common Shares Outstanding36,726,034
Dividend FrequencyMonthly
Dividend Per Share Amt3$0.1194
Distribution Rate47.22%
Daily Volume55,280
Average 30-Day Daily Volume138,919
Closing Market Price 52-Week High/Low$21.72 / $19.40
Closing NAV 52-Week High/Low$21.53 / $20.00
Expense Ratios (as of 11/30/2020)
Annual ExpensesPercent of
Net Assets
Percent of
Management Fees1.71%1.34%
Other Expenses
Total Operating Expenses1.88%1.47%
Leverage Costs0.29%0.23%
Total Annual Expenses2.17%1.70%
Top 10 Issuers (as of 1/31/2021)8
Holding Percent
Endo, LLC 3.50%
Asurion, LLC 3.29%
Bausch Health Companies, Inc. (Valeant) 3.19%
CEMEX, S.A.B de C.V. 2.77%
Mallinckrodt International Finance S.A. 2.48%
athenahealth, Inc. (VVC Holding Corp.) 2.47%
Tenet Healthcare Corp. 2.35%
iHeartCommunications, Inc. 2.22%
PG&E Corp. 2.04%
Sinclair Television Group, Inc. 2.04%
S&P Ratings (as of 1/31/2021)8
  S&P Rating Percent
BBB 1.51%
BBB- 0.31%
BB+ 1.74%
BB 4.24%
BB- 7.98%
B+ 14.41%
B 26.59%
B- 18.87%
CCC+ 18.08%
CCC 2.61%
CCC- 0.57%
D 2.48%
NR 0.61%
The ratings are by Standard & Poor's except where otherwise indicated. A credit rating is an assessment provided by a nationally recognized statistical rating organization (NRSRO) of the creditworthiness of an issuer with respect to debt obligations except for those debt obligations that are only privately rated. Ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest). Investment grade is defined as those issuers that have a long-term credit rating of BBB- or higher. "NR" indicates no rating. The credit ratings shown relate to the creditworthiness of the issuers of the underlying securities in the Fund, and not to the Fund or its shares. Credit ratings are subject to change.
Portfolio Characteristics (as of 3/4/2021)8
Weighted Average Effective Duration52.87 Years
Weighted Average Maturity5.63 Years
Weighted Average Price$102.56
Weighted Average Coupon5.83%
Weighted Average Yield-To-Maturity66.45%
Weighted Average Yield-to-Worst5.75%
Market Price and NAV History (Since Inception)
Past performance is not indicative of future results.
% Premium/Discount (Since Inception)
Leverage Information (as of 3/4/2021)7
Total Net Assets with Leverage$1,060,735,608
Amount Attributable to Common Shares$779,735,608
Amount Attributable to Preferred Shares$0
Amount Attributable to Other Borrowings$281,000,000
Leverage (% of Total Adjusted Net Assets)26.49%
Asset Class (as of 1/31/2021)8
  Asset Percent
High Yield 65.86%
Senior Loan 33.85%
Other 0.29%
Industry Breakdown (as of 1/31/2021)8
Industry Percent
Health Care Providers & Services 15.18%
Software 12.81%
Media 12.10%
Pharmaceuticals 10.19%
Hotels, Restaurants & Leisure 9.88%
Insurance 5.18%
Diversified Consumer Services 4.45%
Entertainment 3.75%
Building Products 2.77%
Health Care Technology 2.73%
Diversified Telecommunication Services 2.71%
Electric Utilities 2.19%
Containers & Packaging 1.69%
Diversified Financial Services 1.51%
Specialty Retail 1.51%
Communications Equipment 1.23%
Automobiles 1.10%
Food & Staples Retailing 1.10%
Food Products 0.91%
Aerospace & Defense 0.83%
Auto Components 0.81%
Commercial Services & Supplies 0.73%
Machinery 0.73%
Airlines 0.61%
Professional Services 0.58%
Independent Power and Renewable Electricity Producers 0.53%
Construction Materials 0.51%
Construction & Engineering 0.41%
Capital Markets 0.34%
Consumer Finance 0.32%
Technology Hardware, Storage, & Peripherals 0.23%
Personal Products 0.14%
Life Sciences Tools & Services 0.12%
Household Products 0.06%
Electrical Equipment 0.03%
Interactive Media & Services 0.03%
Performance (as of 2/28/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund Performance *
Net Asset Value (NAV) 2.38% 0.69% N/A N/A N/A N/A 10.70%
Market Price 1.55% -2.02% N/A N/A N/A N/A 2.56%

*Total return is the combination of reinvested dividend, capital gain, and return of capital distributions, if any, at prices obtained by the Dividend Reinvestment Plan, and changes in the NAV and Market Price. The NAV total return takes into account the fund's total annual expenses and does not reflect sales load. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative. Past performance is not indicative of future results.

1 The fund's NAV is calculated by dividing the value of all the fund's assets, less all liabilities, by the total number of common shares outstanding.
2 Fund shares are purchased and sold on an exchange at their market 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 to today's date. Subject to change in the future. There is no guarantee that the fund will declare dividends.
4 Distribution rates are calculated by annualizing the most recent distribution paid or declared through today's date and then dividing by the most recent market price. The distribution consists of the sum of net investment income, net realized short-term capital gains, net realized long-term capital gains, and return of capital. Distribution rates may vary. Any distribution adjustment will not be reflected until after the declaration date for the next distribution. See the fund's 19a-1 Notices, if any, located under the "News & Literature" section of the website for estimates of distribution sources. Final determination of the source and tax status of all distributions paid in the current year will be made after year-end.
5 A measure of a bond's sensitivity to interest rate changes that reflects the change in a bond's price given a change in yield. It accounts for the likelihood of changes in the timing of cash flows in response to interest rate movements.
6 The annualized return that would be earned on a debt security if held to maturity, weighted by the value of each debt security in the fund's portfolio. The calculation does not include the effect of fund fees and expenses.
7 Leverage is a technique where a closed-end fund's manager borrows assets at one rate and invests the proceeds from the borrowed assets at another rate, seeking to increase yield and total return. Use of leverage can result in additional risk and cost, and can magnify the effect of any losses.
8 Market value information used in calculating the percentages is based upon trade date plus one recording of transactions, which can differ from regulatory financial reports (Forms N-CSR and N-PORT Part F) that are based on trade date recording of security transactions. Holdings are subject to change.
9 Inception Date is 6/25/2020

Risk Considerations

Investment return and market value of an investment in the fund will fluctuate. Shares, when sold, may be worth more or less than their original cost.

The outbreak of the respiratory disease designated as COVID-19 in December 2019 has caused significant volatility and declines in global financial markets, which have caused losses for investors. The COVID-19 pandemic may last for an extended period of time, and will continue to impact the economy for the foreseeable future.

The fund will typically invest in securities rated below investment grade, which are commonly referred to as "junk" or "high yield" securities and considered speculative because of the credit risk of their issuers. Such issuers are more likely than investment grade issuers to default on their payments of interest and principal owed to the fund, and such defaults could reduce the fund's NAV and income distributions. An economic downturn would generally lead to a higher non-payment rate, and a high yield security may lose significant market value before a default occurs. Moreover, any specific collateral used to secure a high yield security may decline in value or become illiquid, which would adversely affect the high yield security’s value.

The debt securities in which the fund invests are subject to certain risks, including issuer risk, reinvestment risk, prepayment risk, credit risk, and interest rate risk. Issuer risk is the risk that the value of fixed-income securities may decline for a number of reasons which directly relate to the issuer. Reinvestment risk is the risk that income from the fund's portfolio will decline if the fund invests the proceeds from matured, traded or called bonds at market interest rates that are below the fund portfolio's current earnings rate. Prepayment risk is the risk that, upon a prepayment, the actual outstanding debt on which the fund derives interest income will be reduced. Credit risk is the risk that an issuer of a security will be unable or unwilling to make dividend, interest and/or principal payments when due and that the value of a security may decline as a result. Interest rate risk is the risk that fixed-income securities will decline in value because of changes in market interest rates.

Senior Loans are structured as floating rate instruments in which the interest rate payable on the obligation fluctuates with interest rate changes. As a result, the yield on Senior Loans will generally decline in a falling interest rate environment, causing the fund to experience a reduction in the income it receives from a Senior Loan. In addition, the market value of Senior Loans may fall in a declining interest rate environment and may also fall in a rising interest rate environment if there is a lag between the rise in interest rates and the reset. Many Senior Loans have a minimum base rate, or floor (typically, a "LIBOR floor"), which will be used if the actual base rate is below the minimum base rate. To the extent the fund invests in such Senior Loans, the fund may not benefit from higher coupon payments during periods of increasing interest rates as it otherwise would from investments in Senior Loans without any floors until rates rise to levels above the LIBOR floors. As a result, the fund may lose some of the benefits of incurring leverage. Specifically, if the fund's Borrowings have floating dividend or interest rates, its costs of leverage will increase as rates increase. In this situation, the fund will experience increased financing costs without the benefit of receiving higher income. This in turn may result in the potential for a decrease in the level of income available for dividends or distributions to be made by the fund.

A second lien loan may have a claim on the same collateral pool as the first lien or it may be secured by a separate set of assets. Second lien loans are typically secured by a second priority security interest or lien on specified collateral securing the Borrower's obligation under the interest and present a greater degree of investment risk. These loans are also subject to the risk that Borrower cash flow and property securing the loan may be insufficient to meet scheduled payments after giving effect to those loans with a higher priority. These loans also have greater price volatility than those loans with a higher priority and may be less liquid. However, second lien loans often pay interest at higher rates than first lien loans reflecting such additional risks.

The fund intends to terminate on or about the Termination Date. Because the assets of the fund will be liquidated in connection with the termination, the fund may be required to sell portfolio securities when it otherwise would not, including at times when market conditions are not favorable, which may cause the fund to lose money. The fund is not a “target term” fund and its primary objective is to provide high current income. As a result, the fund may not return the fund’s initial public offering price of $20.00 per share at its termination.

Use of leverage can result in additional risk and cost, and can magnify the effect of any losses.

The risks of investing in the fund are spelled out in the prospectus, shareholder report and other regulatory filings.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
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