First Trust Morningstar Dividend Leaders Index Fund (FDL)
Investment Objective/Strategy - The First Trust Morningstar Dividend Leaders Index Fund is an exchange-traded index fund. The investment objective of the Fund is to replicate as closely as possible, before fees and expenses, the price and yield of the Morningstar® Dividend Leaders IndexSM.
There can be no assurance that the Fund's investment objectives will be achieved.
  • The index consists of stocks listed on one of the three major exchanges, NYSE, NYSE Amex or Nasdaq, that have shown dividend consistency and dividend sustainability. Real Estate Investment Trusts (REITs) are not included.
  • Through the application of Morningstar's proprietary multi-step screening process, a universe is identified. The top 100 stocks, based on dividend yield, are selected for the index.
  • The individual holdings are weighted based on each security's shares outstanding, free float factor, and annual indicated dividend per share. The weighting of each holding is capped to enhance portfolio diversification.
  • The index is reconstituted once annually each June and rebalanced four times annually in March, June, September and December.
Fund Overview
TickerFDL
Fund TypeEquity Income
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon
CUSIP336917109
ISINUS3369171091
Intraday NAVFDLIV
Fiscal Year-End12/31
ExchangeNYSE Arca
Inception3/9/2006
Inception Price$20.00
Inception NAV$20.00
Rebalance FrequencyQuarterly
Gross Expense Ratio*0.46%
Net Expense Ratio*0.45%
* As of 5/1/2020
Expenses are capped contractually at 0.45% per year, at least until April 30, 2021.
Current Fund Data (as of 5/29/2020)
Closing NAV1$25.48
Closing Market Price2$25.43
Bid/Ask Midpoint$25.45
Bid/Ask Discount0.10%
Total Net Assets$1,303,051,364
Outstanding Shares51,150,002
Daily Volume312,157
Average 30-Day Daily Volume332,944
Closing Market Price 52-Week High/Low$32.68 / $19.15
Closing NAV 52-Week High/Low$32.68 / $19.19
Number of Holdings (excluding cash)99
Fund Characteristics (as of 5/29/2020)9
Maximum Market Cap.$237,438
Median Market Cap.$5,577
Minimum Market Cap.$439
Price/Earnings15.06
Price/Book1.38
Price/Cash Flow6.83
Price/Sales0.83
Top Holdings (as of 5/29/2020)*
Holding Percent
Exxon Mobil Corporation 10.26%
AT&T Inc. 8.71%
Chevron Corporation 7.35%
Verizon Communications Inc. 7.21%
AbbVie Inc. 5.50%
Philip Morris International Inc. 4.82%
Wells Fargo & Company 4.56%
Broadcom Inc. 4.40%
International Business Machines Corporation 4.38%
Altria Group, Inc. 4.37%

* Excluding cash.  Holdings are subject to change.

NAV History (Since Inception)
Past performance is not indicative of future results.
Overall Morningstar RatingTM (as of 4/30/2020)3

Among 1,104 funds in the Large Value category. This fund was rated 2 stars/1,104 funds (3 years), 4 stars/953 funds (5 years), 4 stars/696 funds (10 years) based on risk adjusted returns.
Distribution Information
Dividend per Share Amt (as of 6/1/2020)4$0.2900
30-Day SEC Yield (as of 4/30/2020)55.60%
Unsubsidized 30-Day SEC Yield (as of 4/30/2020)65.58%
12-Month Distribution Rate (as of 4/30/2020)75.12%
Index Yield (as of 4/30/2020)86.31%
For funds with certain equity strategies, due to the negative economic impact across many industries caused by the recent COVID-19 outbreak, certain of the issuers of the securities included in the fund may elect to reduce the amount of dividends and/or distributions paid in the future. As a result, the "12-Month Distribution Rate," which is based on the fund's trailing 12-month ordinary distributions, will likely be higher, and in some cases significantly higher, than the actual 12-month distribution rate achieved by the fund.
Bid/Ask Midpoint vs. NAV (as of 3/31/2020)
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
3/31/2020 38 0 0 0
12/31/2019 56 0 0 0
9/30/2019 45 0 0 0
6/30/2019 52 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
3/31/2020 24 0 0 0
12/31/2019 8 0 0 0
9/30/2019 19 0 0 0
6/30/2019 10 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 5/29/2020)
Energy 24.45%
Communication Services 16.36%
Consumer Staples 11.14%
Information Technology 9.84%
Financials 8.81%
Health Care 8.09%
Utilities 8.05%
Consumer Discretionary 6.96%
Industrials 3.50%
Materials 2.80%
Month End Performance (as of 4/30/2020)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception10
Fund Performance *
Net Asset Value (NAV) -17.75% -21.99% -14.18% -0.42% 4.58% 9.57% 5.54%
After Tax Held -18.18% -22.40% -15.71% -1.98% 3.00% 7.99% 4.01%
After Tax Sold -10.53% -13.04% -8.28% -0.91% 2.87% 7.04% 3.68%
Market Price -17.85% -22.09% -14.29% -0.46% 4.55% 9.55% 5.53%
Index Performance **
Morningstar® Dividend Leaders IndexSM -17.68% -21.91% -13.76% 0.07% 5.10% 10.13% 6.06%
S&P 500 Index -9.26% -9.29% 0.86% 9.04% 9.12% 11.69% 8.27%
Quarter End Performance (as of 3/31/2020)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception10
Fund Performance *
Net Asset Value (NAV) -30.57% -30.57% -22.63% -4.55% 2.86% 8.30% 4.70%
After Tax Held -30.93% -30.93% -24.01% -6.05% 1.30% 6.73% 3.18%
After Tax Sold -18.10% -18.10% -13.18% -3.89% 1.63% 6.02% 3.03%
Market Price -30.52% -30.52% -22.57% -4.53% 2.87% 8.30% 4.71%
Index Performance **
Morningstar® Dividend Leaders IndexSM -30.53% -30.53% -22.23% -4.07% 3.37% 8.85% 5.22%
S&P 500 Index -19.60% -19.60% -6.98% 5.10% 6.73% 10.53% 7.40%
3-Year Statistics (as of 4/30/2020)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
FDL 18.33% -8.76 1.00 -0.03 0.91
S&P 500 Index 16.79% --- 1.00 0.48 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 based on the midpoint of the bid/ask spread 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. 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 Morningstar® Dividend Leaders IndexSM 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.

S&P 500 Index - The Index is an unmanaged index of 500 stocks used to measure large-cap U.S. stock market performance.
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 Morningstar RatingTM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
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 Index yield represents the weighted average trailing 12-month dividend of the constituents of the Morningstar® Dividend Leaders Index(SM).
9 All market capitalization numbers are in USD$ Millions.
10 Inception Date is 3/9/2006

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 NYSE Arca, Inc.

The fund's return may not match the return of the Morningstar® Dividend Leaders 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. If the 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 the fund's net asset value and possibly face delisting.

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 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 impact of this COVID-19 pandemic may be short term or may last for an extended period of time, and in either case could result in a substantial economic downturn or recession.

The fund may invest in securities issued by companies concentrated in a particular sector which involves additional risks including limited diversification.

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.

Morningstar® and Morningstar® Dividend Leaders Index℠ are registered trademarks and service marks of Morningstar, Inc. (“Morningstar”) and have been licensed for use by First Trust on behalf of the Fund. The Fund is not sponsored, endorsed, issued, sold or promoted by Morningstar and Morningstar makes no representation regarding the advisability of investing in the Fund.

©2020 Morningstar, Inc. All Rights Reserved. The Morningstar RatingTM information contained herein: (1) is proprietary to Morningstar;(2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value