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First Trust Strategic Income ETF (FDIV)
Investment Objective/Strategy - The First Trust Strategic Income ETF is an actively managed exchange-traded fund. The primary investment objective of the Fund is to seek risk-adjusted income. The Fund's secondary investment objective is capital appreciation.
There can be no assurance that the Fund's investment objectives will be achieved.
Fund Overview
TickerFDIV
Fund TypeMulti Asset Income
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon
Portfolio Manager/Sub-AdvisorFirst Trust Global Portfolios Limited, Energy Income Partners, LLC, Stonebridge Advisors LLC, Richard Bernstein Advisors LLC
CUSIP33739Q309
ISINUS33739Q3092
Intraday NAVFDIVIV
Fiscal Year-End10/31
ExchangeNasdaq
Inception8/13/2014
Inception Price$50.00
Inception NAV$50.00
Gross Expense Ratio*1.26%
Net Expense Ratio*0.87%
* As of 3/1/2021
First Trust has contractually agreed to reimburse acquired fund fees and expenses of the shares of investment companies held by the fund, provided that the investment companies are advised by the fund’s investment advisor. The agreement will remain in place until at least March 1, 2022, or until its termination at the direction of the Trust's Board of Trustees. Please see the Fees and Expenses of the Fund section in the fund's prospectus for more details.
Current Fund Data (as of 7/23/2021)
Closing NAV1$49.96
Closing Market Price2$50.00
Bid/Ask Midpoint$50.01
Bid/Ask Premium0.09%
30-Day Median Bid/Ask Spread30.48%
Total Net Assets$62,444,345
Outstanding Shares1,250,002
Daily Volume4,421
Average 30-Day Daily Volume16,406
Closing Market Price 52-Week High/Low$51.28 / $43.92
Closing NAV 52-Week High/Low$51.09 / $44.00
Number of Holdings (excluding cash)171
Top Holdings (as of 7/23/2021)*
Holding Percent
First Trust Senior Loan Fund 18.63%
First Trust Preferred Securities and Income ETF 12.14%
First Trust Emerging Markets Local Currency Bond ETF 10.02%
First Trust Low Duration Opportunities ETF 5.04%
First Trust Institutional Preferred Securities and Income ETF 4.06%
iShares JPMorgan USD Emerging Markets Bond ETF 3.43%
Enterprise Products Partners L.P. 1.54%
First Trust Long Duration Opportunities ETF 1.35%
Magellan Midstream Partners, L.P. 1.24%
IDACORP, Inc. 1.18%

* 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 7/26/2021)4$0.1550
30-Day SEC Yield (as of 6/30/2021)53.84%
Unsubsidized 30-Day SEC Yield (as of 6/30/2021)63.40%
12-Month Distribution Rate (as of 6/30/2021)73.96%
Distribution Rate (as of 6/30/2021)83.71%
Fund Characteristics (as of 6/30/2021)9
Maximum Market Cap.$192,291
Median Market Cap.$9,086
Minimum Market Cap.$309
Bid/Ask Premium/Discount (as of 7/23/2021)
  2020 Q1 2021 Q2 2021 Q3 2021
Days Traded at Premium 74 16 55 10
Days Traded at Discount 179 45 8 6
Fund Composition (as of 7/23/2021)
Dividend Paying Equities 28.09%
High-yield Bonds and Senior Loans 18.79%
Preferred Securities 16.34%
MLPs 13.68%
International Sovereign Bonds 13.60%
Mortgage-related Securities 8.44%
Other 1.06%
Hypothetical Growth of $10,000 Since Inception (as of 7/23/2021) *


Month End Performance (as of 6/30/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception10
Fund Performance *
Net Asset Value (NAV) 3.41% 6.60% 16.38% 5.18% 4.31% N/A 4.21%
After Tax Held 3.01% 5.72% 14.42% 3.35% 2.51% N/A 2.44%
After Tax Sold 2.02% 3.89% 9.61% 3.15% 2.49% N/A 2.41%
Market Price 3.69% 6.71% 16.28% 5.16% 4.41% N/A 4.21%
Index Performance **
Bloomberg Barclays U.S. Aggregate Bond Index 1.83% -1.60% -0.33% 5.34% 3.03% N/A 3.28%
Russell 3000® Index 8.24% 15.11% 44.16% 18.73% 17.89% N/A 14.37%
Blended Benchmark 5.49% 11.67% 23.44% 7.37% 5.94% N/A 4.81%
Quarter End Performance (as of 6/30/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception10
Fund Performance *
Net Asset Value (NAV) 3.41% 6.60% 16.38% 5.18% 4.31% N/A 4.21%
After Tax Held 3.01% 5.72% 14.42% 3.35% 2.51% N/A 2.44%
After Tax Sold 2.02% 3.89% 9.61% 3.15% 2.49% N/A 2.41%
Market Price 3.69% 6.71% 16.28% 5.16% 4.41% N/A 4.21%
Index Performance **
Bloomberg Barclays U.S. Aggregate Bond Index 1.83% -1.60% -0.33% 5.34% 3.03% N/A 3.28%
Russell 3000® Index 8.24% 15.11% 44.16% 18.73% 17.89% N/A 14.37%
Blended Benchmark 5.49% 11.67% 23.44% 7.37% 5.94% N/A 4.81%
3-Year Statistics (as of 6/30/2021)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
FDIV 11.99% -1.07 0.81 0.37 0.97
Bloomberg Barclays U.S. Aggregate Bond Index 3.49% 3.64 0.04 1.15 0.15
Russell 3000® Index 19.43% 9.73 1.18 0.91 0.87
Blended Benchmark 14.31% --- 1.00 0.47 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 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. 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.

**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.

Bloomberg Barclays U.S. Aggregate Bond Index - The Index covers the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, MBS, ABS, and CMBS.

Russell 3000® Index - The Index is comprised of the 3000 largest and most liquid stocks based and traded in the U.S.

Blended Benchmark - The Benchmark is equally weighted to include these six indexes: the Alerian MLP Index, Dow Jones U.S. Select Dividend Index, ICE BofA Fixed Rate Preferred Securities Index, ICE BofA U.S. High Yield Index,Bloomberg Barclays EM USD Aggregate Index and Bloomberg Barclays U.S. MBS Index. The Alerian MLP Index is a float-adjusted, capitalization-weighted index, whose constituents earn the majority of their cash flow from midstream activities involving energy commodities. The Dow Jones U.S. Select Dividend Index consists of 100 widely-traded, dividend-paying stocks derived from the Dow Jones U.S. Total Market Index. The ICE BofA Fixed Rate Preferred Securities Index tracks the performance of fixed-rate U.S. dollar denominated preferred securities issued in the U.S. domestic market. The ICE BofA U.S. High Yield Index tracks the performance of U.S. dollar denominated below investment grade corporate debt publicly issued in the U.S. domestic market. The Bloomberg Barclays EM USD Aggregate Index is a flagship hard currency Emerging Markets debt bench mark that includes USD denominated debt from sovereign, quasi-sovereign, and corporate EM issuers. The Bloomberg Barclays U.S. MBS Index measures the performance of investment grade fixed-rate mortgage-backed pass-through securities of GNMA, FNMA, and FHLMC. The Blended Benchmark returns are calculated by using the monthly return of the six indices during each period shown above. At the beginning of each month the six indices are rebalanced to a 16.66 percentage weighting for each to account for divergence from that percentage weighting the occurred during the course of each month. The monthly returns are then compounded for each period shown above, giving the performance of the Blended Benchmark for each period shown above.

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 The unsubsidized 30-day SEC yield is calculated the same as the 30-day SEC yield, however it excludes contractual fee waivers and expense reimbursements.
7 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.
8 Distribution Rate is calculated by dividing the fund's most recent ordinary distribution paid or declared, on an annualized basis, by the NAV price. Distribution rates may vary.
9 All market capitalization numbers are in USD$ Millions.
10 Inception Date is 8/13/2014

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.

Risk Considerations

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 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 discount to a fund's net asset value and possibly face delisting.

A fund's shares will change in value, and you could lose money by investing in a fund. One of the principal risks of investing in a fund is market risk. Market risk is the risk that a particular stock owned by a fund, fund shares or stocks in general may fall in value. There can be no assurance that a fund's investment objective will be achieved. 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. While the development of vaccines has slowed the spread of the virus and allowed for the resumption of "reasonably" normal business activity in the United States, many countries continue to impose lockdown measures in an attempt to slow the spread. Additionally, there is no guarantee that vaccines will be effective against emerging variants of the disease.

In managing a fund's investment portfolio, the portfolio managers will apply investment techniques and risk analyses that may not have the desired result.

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

A fund may be subject to the risk that a counterparty will not fulfill its obligations which may result in significant financial loss to a fund.

Covenant-lite loans contain fewer maintenance covenants than traditional loans and may not include terms that allow the lender to monitor the financial performance of the borrower and declare a default if certain criteria are breached. This may hinder a fund's ability to mitigate problems and increase a fund's exposure to losses on such investments.

A fund's covered call strategy may limit its ability to distribute dividends eligible for treatment as qualified dividend income and to distribute dividends eligible for the dividends-received deduction for corporate shareholders.

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.

As the use of Internet technology has become more prevalent in the course of business, funds have become more susceptible to potential operational risks through breaches in cyber security.

Certain securities are subject to call, credit, inflation, income, interest rate, extension and prepayment risks. These risks could result in a decline in a security's value and/or income, increased volatility as interest rates rise or fall and have an adverse impact on a fund's performance.

Depositary receipts may be less liquid than the underlying shares in their primary trading market.

The use of OTC derivatives including futures, options and forward contracts, 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.

A fund's investment in dividend-paying securities may cause a fund to underperform similar funds that do not consider an issuer's track record of paying dividends.

A fund may invest in the shares of other ETFs, which involves additional expenses that would not be present in a direct investment in the underlying funds. In addition, a fund's investment performance and risks may be related to the investment performance and risks of the underlying funds.

The market value of floating rate securities 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. Income earned by a fund on floating rate and fixed-to-floating rate securities may decline due to lower coupon payments on floating-rate securities.

High yield securities, or "junk" bonds, are less liquid and are subject to greater market fluctuations and risk of loss than securities with higher ratings, and therefore, are considered to be highly speculative.

Hybrid capital securities are subject to the risks of equity securities and debt securities. The claims of holders of hybrid capital securities of an issuer are generally subordinated to those of holders of traditional debt securities in bankruptcy, and thus hybrid capital securities may be more volatile and subject to greater risk than traditional debt securities.

To the extent a fund invests in floating or variable rate obligations that use the London Interbank Offered Rate ("LIBOR") as a reference interest rate, it is subject to LIBOR Risk. The United Kingdom's Financial Conduct Authority, which regulates LIBOR, will cease making LIBOR available as a reference rate over a phase-out period that will begin immediately after December 31, 2021. The unavailability or replacement of LIBOR may affect the value, liquidity or return on certain fund investments and may result in costs incurred in connection with closing out positions and entering into new trades. Any potential effects of the transition away from LIBOR on a fund or on certain instruments in which a fund invests can be difficult to ascertain, and they may vary depending on a variety of factors, and they could result in losses to a fund.

Certain fund investments may be subject to restrictions on resale, trade over-the-counter or in limited volume, or lack an active trading market. Illiquid securities may trade at a discount and may be subject to wide fluctuations in market value.

Master limited partnerships (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. In addition, there is the risk that MLPs could be taxed as corporations, resulting in decreased returns from such MLPs.

Mortgage-related securities are more susceptible to adverse economic, political or regulatory events that affect the value of real estate. They are also subject to the risk that the rate of mortgage prepayments decreases, which extends the average life of a security and increases the interest rate exposure.

There are no government or agency guarantees of payments in securities offered by non-government issuers, therefore they are subject to the credit risk of the issuer. Non-agency securities often trade "over-the-counter" and there may be a limited market for them making them difficult to value.

Securities of non-U.S. issuers are 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.

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.

High portfolio turnover may result in higher levels of transaction costs and may generate greater tax liabilities for shareholders.

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.

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

Companies that issue loans tend to be highly leveraged and thus are more susceptible to the risks of interest deferral, default and/or bankruptcy. Loans are usually rated below investment grade but may also be unrated. As a result, the risks associated with these loans are similar to the risks of high yield fixed income instruments. The senior loan market has seen a significant increase in loans with weaker lender protections which may impact recovery values and/or trading levels in the future.

A fund with significant exposure to a single asset class, country, region, industry, or sector may be more affected by an adverse economic or political development than a broadly diversified fund.

Securities of small- and mid-capitalization companies may experience greater price volatility and be less liquid than larger, more established companies.

Investments in sovereign bonds involve special risks because the governmental authority that controls the repayment of the debt may be unwilling or unable to repay the principal and/or interest when due. In times of economic uncertainty, the prices of these securities may be more volatile than those of corporate debt or other government debt obligations.

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

Due to the lack of centralized information and trading, and variations in lot sizes of certain debt securities, the valuation of debt securities may carry more uncertainty and risk than that of publicly traded 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.

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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