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First Trust Bloomberg Emerging Market Democracies ETF (EMDM)
Investment Objective/Strategy - The First Trust Bloomberg Emerging Market Democracies ETF (the "Fund") seeks investment results that correspond generally to the price and yield, before fees and expenses, of an equity index called the Bloomberg Emerging Market Democracies Index (the "Index"). The Fund will normally invest at least 80% of its net assets (plus any borrowings for investment purposes) in the common stocks, depositary receipts, preferred shares, real estate investment trusts ("REITs"), and other securities that comprise the Index. The Fund, using a replication strategy, attempts to replicate, before fees and expenses, the performance of the Index. The Index is owned and was developed and sponsored by Bloomberg Index Services Limited (the "Index Provider").
There can be no assurance that the Fund's investment objectives will be achieved.
Index Description According to the Index Provider
  • The Bloomberg Emerging Market Democracies Index is constructed to track the performance of companies within emerging market countries that meet minimum political rights and civil liberties standards to qualify as Electoral Democracies according to Freedom House. Freedom House is a non-profit, majority U.S. government funded organization in Washington, D.C., that conducts research and advocacy on democracy, political freedom, and human rights.
  • Eligible securities must be common stocks, depositary receipts, preferred shares, real estate investment trusts (“REITs”), and other securities that comprise the Bloomberg Emerging Markets Large & Mid Cap universe.
  • Each security must meet the market capitalization and liquidity standards of the index and belong to a country that is considered an Electoral Democracy.
  • To be classified as an Electoral Democracy according to data from Freedom House, a country must have:
    • A score of 7 or better in the Electoral Process subcategory;
    • An overall Political Rights score of 20 or better;
    • An overall Civil Liberties score of 30 or better.
  • Of the securities eligible for selection, the index includes the top 100 companies ranked by free-float market capitalization.
    • Selected securities are weighted in the index based on a combination of a modified free-float market capitalization and the total score assigned by Freedom House for the issuer’s country.
    • Aggregate exposure to a single country is capped at 15% at the time of rebalance. Any excess weight from capping a country is then redistributed proportionally to the remaining uncapped country weights.
  • The index is reconstituted annually and rebalanced semi-annually.
Fund Overview
TickerEMDM
Fund TypeEmerging Market Equity
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon Corp
CUSIP33734X754
ISINUS33734X7545
Intraday NAVEMDMIV
Fiscal Year-End09/30
ExchangeNYSE Arca
Inception3/2/2023
Inception Price$19.81
Inception NAV$19.81
Rebalance FrequencySemi-Annual
Expense Ratio*0.75%
* As of 2/1/2024
Current Fund Data (as of 7/15/2024)
Closing NAV1$24.24
Closing Market Price2$24.19
Bid/Ask Midpoint$24.20
Bid/Ask Discount0.17%
30-Day Median Bid/Ask Spread30.29%
Total Net Assets$8,482,960
Outstanding Shares350,002
Daily Volume923
Average 30-Day Daily Volume1,316
Closing Market Price 52-Week High/Low$24.43 / $19.19
Closing NAV 52-Week High/Low$24.28 / $19.07
Number of Holdings (excluding cash)100
Top Holdings (as of 7/15/2024)*
Holding Percent
Taiwan Semiconductor Manufacturing Company Ltd. 11.81%
Samsung Electronics Co., Ltd. 7.75%
Naspers Limited (Class N) 6.30%
FirstRand Limited 4.37%
Grupo Mexico, S.A.B. de C.V. (Class B) 3.47%
Standard Bank Group Limited 3.14%
Petroleo Brasileiro S.A. (Petrobras) (Preference Shares) 3.08%
Powszechna Kasa Oszczednosci Bank Polski S.A. 2.92%
Capitec Bank Holdings Limited 2.67%
America Movil, S.A.B. de C.V. (Class B) 2.36%

* Excluding cash.  Holdings are subject to change.

NAV History (Since Inception)
Past performance is not indicative of future results.
Distribution Information
Dividend per Share Amt (as of 7/16/2024)4$0.1766
30-Day SEC Yield (as of 6/28/2024)51.97%
12-Month Distribution Rate (as of 6/28/2024)61.95%
Index Yield (as of 6/28/2024)73.53%
Fund Characteristics (as of 6/28/2024)8
Maximum Market Cap.$771,116
Median Market Cap.$30,170
Minimum Market Cap.$5,544
Price/Earnings12.21
Price/Book1.87
Price/Cash Flow8.93
Price/Sales1.78
Top Country Exposure (as of 7/15/2024)
Country Percent
Taiwan 17.60%
South Africa 16.56%
India 15.43%
South Korea 14.41%
Mexico 12.89%
Brazil 12.75%
Poland 7.04%
Hungary 1.94%
Philippines 1.38%
Bid/Ask Premium/Discount (as of 7/15/2024)
  2023 Q1 2024 Q2 2024 Q3 2024
Days Traded at Premium 209 60 59 8
Days Traded at Discount 0 1 4 2
Top Sector Exposure (as of 7/15/2024)
Financials 33.24%
Information Technology 27.20%
Consumer Discretionary 9.47%
Materials 8.18%
Energy 6.84%
Consumer Staples 5.91%
Communication Services 3.73%
Industrials 3.55%
Health Care 1.23%
Utilities 0.65%
Hypothetical Growth of $10,000 Since Inception (as of 7/15/2024) *
Tracking Index: Bloomberg Emerging Market Democracies Index

Month End Performance (as of 6/28/2024)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception9
Fund Performance *
Net Asset Value (NAV) 3.26% 3.79% 11.97% N/A N/A N/A 15.19%
After Tax Held 2.94% 3.44% 11.04% N/A N/A N/A 14.09%
After Tax Sold 1.93% 2.24% 7.05% N/A N/A N/A 11.13%
Market Price 2.53% 3.42% 11.33% N/A N/A N/A 15.14%
Index Performance **
Bloomberg Emerging Market Democracies Index 3.89% 4.68% 14.34% N/A N/A N/A 17.46%
MSCI Emerging Markets Index 5.29% 7.49% 12.55% N/A N/A N/A 11.15%
Quarter End Performance (as of 6/28/2024)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception9
Fund Performance *
Net Asset Value (NAV) 3.26% 3.79% 11.97% N/A N/A N/A 15.19%
After Tax Held 2.94% 3.44% 11.04% N/A N/A N/A 14.09%
After Tax Sold 1.93% 2.24% 7.05% N/A N/A N/A 11.13%
Market Price 2.53% 3.42% 11.33% N/A N/A N/A 15.14%
Index Performance **
Bloomberg Emerging Market Democracies Index 3.89% 4.68% 14.34% N/A N/A N/A 17.46%
MSCI Emerging Markets Index 5.29% 7.49% 12.55% N/A N/A N/A 11.15%

*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 determined by using the midpoint of the national best bid offer price ("NBBO") as of the time that the fund's NAV is calculated. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative.

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 each listed index is for illustrative purposes only and does not represent actual fund performance. Indexes do 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.

MSCI Emerging Markets Index - The Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets.

Footnotes
1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's outstanding shares.
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 The median bid-ask spread is calculated by identifying the national best bid and national best offer ("NBBO") for the fund as of the end of each 10 second interval during each trading day of the last 30 calendar days and dividing the difference between each such bid and offer by the midpoint of the NBBO. The median of those values is identified and that value is expressed as a percentage rounded to the nearest hundredth.
4 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.
5 The 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 and includes the effects of fee waivers and expense reimbursements, if applicable.
6 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.
7 Index yield represents the weighted average trailing 12-month dividend of the constituents of the Bloomberg Emerging Market Democracies Index.
8 All market capitalization numbers are in USD$ Millions.
9 Inception Date is 3/2/2023

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.

Risk Considerations

You could lose money by investing in a fund. An investment in a fund is not a deposit of a bank and is not insured or guaranteed. There can be no assurance that a fund's objective(s) will be achieved. Investors buying or selling shares on the secondary market may incur customary brokerage commissions. Please refer to each fund's prospectus and Statement of Additional Information for additional details on a fund's risks. The order of the below risk factors does not indicate the significance of any particular risk factor.

Some Asian economies are highly dependent on trade with other countries and there is a high concentration of market capitalization and trading volume in a small number of Asian issuers as well as a high concentration of investors and financial intermediaries. Certain Asian countries experience expropriation and nationalization of assets, confiscatory taxation, currency manipulation, political instability, armed conflict and social instability as a result of religious, ethnic, socio-economic and/or political unrest. In particular, escalated tensions involving North Korea could have severe adverse effect on Asian economies. Recent developments between the U.S. and China have heightened concerns of increased tariffs and restrictions on trade.

Unlike mutual funds, shares of the fund may only be redeemed directly from a fund by authorized participants in very large creation/redemption units. If a fund's authorized participants are unable to proceed with creation/redemption orders and no other authorized participant is able to step forward to create or redeem, fund shares may trade at a premium or discount to a fund's net asset value and possibly face delisting and the bid/ask spread may widen.

A fund that effects all or a portion of its creations and redemptions for cash rather than in-kind may be less tax-efficient.

Changes in currency exchange rates and the relative value of non-US currencies may affect the value of a fund's investments and the value of a fund's shares.

Current market conditions risk is the risk that a particular investment, or shares of the fund in general, may fall in value due to current market conditions. As a means to fight inflation, the Federal Reserve and certain foreign central banks have raised interest rates and expect to continue to do so, and the Federal Reserve has announced that it intends to reverse previously implemented quantitative easing. Recent and potential future bank failures could result in disruption to the broader banking industry or markets generally and reduce confidence in financial institutions and the economy as a whole, which may also heighten market volatility and reduce liquidity. Ongoing armed conflicts between Russia and Ukraine in Europe and among Israel, Hamas and other militant groups in the Middle East, have caused and could continue to cause significant market disruptions and volatility within the markets in Russia, Europe, the Middle East and the United States. The hostilities and sanctions resulting from those hostilities have and could continue to have a significant impact on certain fund investments as well as fund performance and liquidity. The COVID-19 global pandemic, or any future public health crisis, and the ensuing policies enacted by governments and central banks have caused and may continue to cause significant volatility and uncertainty in global financial markets, negatively impacting global growth prospects.

A fund is susceptible to operational risks through breaches in cyber security. Such events could cause a fund to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss.

Depositary receipts may be less liquid than the underlying shares in their primary trading market and distributions may be subject to a fee. Holders may have limited voting rights, and investment restrictions in certain countries may adversely impact their value.

Investments in emerging market securities are generally considered speculative and involve additional risks relating to political, economic and regulatory conditions.

Equity securities may decline significantly in price over short or extended periods of time, and such declines may occur in the equity market as a whole, or they may occur in only a particular country, company, industry or sector of the market.

Financial services companies are subject to the adverse effects of economic recession, currency exchange rates, government regulation, decreases in the availability of capital, volatile interest rates, portfolio concentration in geographic markets, industries or products, and competition from new entrants in their fields of business.

An index fund will be concentrated in an industry or a group of industries to the extent that the index is so concentrated. A fund with significant exposure to a single asset class, or the securities of issuers within the same country, state, region, industry, or sector may have its value more affected by an adverse economic, business or political development than a broadly diversified fund.

A fund may be a constituent of one or more indices or models which could greatly affect a fund's trading activity, size and volatility.

There is no assurance that the index provider or its agents will compile or maintain the index accurately. Losses or costs associated with any index provider errors generally will be borne by a fund and its shareholders.

Information technology companies are subject to certain risks, including rapidly changing technologies, short product life cycles, fierce competition, aggressive pricing and reduced profit margins, loss of patent, copyright and trademark protections, cyclical market patterns, evolving industry standards and regulation and frequent new product introductions.

Since securities that trade on non-U.S. exchanges are closed when a fund's primary listing is open, there are likely to be deviations between the current price of an underlying security and the last quoted price from the closed foreign market, resulting in premiums or discounts to a fund's NAV.

Large capitalization companies may grow at a slower rate than the overall market.

The economies of Latin American countries have in the past experienced considerable difficulties, including high inflation rates, high interest rates, high unemployment, government overspending and political instability. International economic conditions, particularly those in the United States, Europe and Asia, as well as world prices for oil and other commodities may also influence the development of Latin American economies. Many Latin American countries are highly reliant on the exportation of commodities and their economies may be significantly impacted by fluctuations in commodity prices and the global demand for certain commodities.

Market risk is the risk that a particular security, or shares of a fund in general may fall in value. Securities are subject to market fluctuations caused by such factors as general economic conditions, political events, regulatory or market developments, changes in interest rates and perceived trends in securities prices. Shares of a fund could decline in value or underperform other investments as a result. In addition, local, regional or global events such as war, acts of terrorism, spread of infectious disease or other public health issues, recessions, natural disasters or other events could have significant negative impact on a fund.

A fund faces numerous market trading risks, including the potential lack of an active market for fund shares due to a limited number of market makers. Decisions by market makers or authorized participants to reduce their role or step away in times of market stress could inhibit the effectiveness of the arbitrage process in maintaining the relationship between the underlying values of a fund's portfolio securities and a fund's market price.

Large inflows and outflows may impact a new fund's market exposure for limited periods of time.

An index fund's return may not match the return of the index for a number of reasons including operating expenses, costs of buying and selling securities to reflect changes in the index, and the fact that a fund's portfolio holdings may not exactly replicate the index.

A fund classified as "non-diversified" may invest a relatively high percentage of its assets in a limited number of issuers. As a result, a 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.

Securities of non-U.S. issuers are subject to additional risks, including currency fluctuations, political risks, withholding, lack of liquidity, lack of adequate financial information, and exchange control restrictions impacting non-U.S. issuers.

A fund and a fund's advisor may seek to reduce various operational risks through controls and procedures, but it is not possible to completely protect against such risks. The fund also relies on third parties for a range of services, including custody, and any delay or failure related to those services may affect the fund's ability to meet its objective.

A fund that invests in securities included in or representative of an index will hold those securities regardless of investment merit and the fund generally will not take defensive positions in declining markets.

Preferred securities combine some of the characteristics of both common stocks and bonds. Preferred stocks are typically subordinated to other debt instruments in terms of priority to corporate income, and therefore will be subject to greater credit risk than those debt instruments.

The market price of a fund's shares will generally fluctuate in accordance with changes in the fund's net asset value ("NAV") as well as the relative supply of and demand for shares on the exchange, and a fund's investment advisor cannot predict whether shares will trade below, at or above their NAV.

Real Estate Investment Trusts ("REITs") are subject to the risks of investing in real estate, including, but not limited to, changes in the real estate market, vacancy rates and competition, volatile interest rates and economic recession. Increases in interest rates typically lower the present value of a REIT's future earnings stream and may make financing property purchases and improvements more costly. The value of a fund will generally decline when investors in REIT stocks anticipate or experience rising interest rates.

Taiwan is an emerging market and demonstrates significantly higher volatility from time to time. Taiwan's ongoing tensions with China may materially affect the Taiwanese economy. Also, the Taiwanese economy is export-oriented and dependent upon an open-world trade regime.

Trading on an exchange may be halted due to market conditions or other reasons. There can be no assurance that a fund's requirements to maintain the exchange listing will continue to be met or be unchanged.

First Trust Advisors L.P. (FTA) is the adviser to the First Trust fund(s). FTA is an affiliate of First Trust Portfolios L.P., the distributor of the fund(s).

“Bloomberg®” and the indices licensed herein (the “Indices”) are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator of the Indices (collectively, “Bloomberg”) and have been licensed for use for certain purposes by First Trust Advisors L.P. (the “Licensee”). Bloomberg is not affiliated with the Licensee, and Bloomberg does not approve, endorse, review, or recommend the financial products referenced herein (the “Financial Products”). Bloomberg does not guarantee the timeliness, accurateness, or completeness of any data or information relating to the Indices or the Financial Products.

CUSIP identifiers have been provided by CUSIP Global Services, managed on behalf of the American Bankers Association by FactSet Research Systems Inc. and are not for use or dissemination in a manner that would serve as a substitute for any CUSIP service. The CUSIP Database, ©2024 CUSIP Global Services. "CUSIP" is a registered trademark of the American Bankers Association.

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.
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