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First Trust Emerging Markets Local Currency Bond ETF (FEMB)
Investment Objective/Strategy - The investment objective of the Fund is to seek maximum total return and current income. Under normal market conditions, the Fund seeks to achieve its investment objective by investing at least 80% of its net assets (including investment borrowings) in bonds, notes and bills issued or guaranteed by issuers in emerging market countries ("Debt Instruments") that are denominated in the local currency of the issuer.
There can be no assurance that the Fund's investment objectives will be achieved.
Fund Overview
TickerFEMB
Fund TypeEmerging Market Bonds
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBrown Brothers Harriman
Portfolio Manager/Sub-AdvisorFirst Trust Global Portfolios Limited
CUSIP33739P202
ISINUS33739P2020
Intraday NAVFEMBIV
Fiscal Year-End10/31
ExchangeNasdaq
Inception11/4/2014
Inception Price$50.00
Inception NAV$50.00
Expense Ratio0.85%
Current Fund Data (as of 7/23/2021)
Closing NAV1$34.13
Closing Market Price2$34.21
Bid/Ask Midpoint$34.22
Bid/Ask Premium0.25%
30-Day Median Bid/Ask Spread30.58%
Total Net Assets$283,292,650
Outstanding Shares8,300,002
Daily Volume24,051
Average 30-Day Daily Volume60,608
Closing Market Price 52-Week High/Low$38.58 / $33.85
Closing NAV 52-Week High/Low$38.29 / $33.97
Number of Holdings (excluding cash)53
Top Holdings (as of 7/23/2021)*
Holding Percent
NOTA DO TESOURO NACIONAL N/C, 10%, due 01/01/2027 5.77%
REPUBLIC OF SOUTH AFRICA N/C, 10.50%, due 12/21/2026 5.17%
NOTA DO TESOURO NACIONAL 10%, due 01/01/2025 4.66%
INDONESIA GOVERNMENT N/C, 8.375%, due 03/15/2034 3.93%
REPUBLIC OF SOUTH AFRICA N/C, 8.875%, due 02/28/2035 3.68%
ASIAN DEVELOPMENT BANK N/C, 6.20%, due 10/06/2026 3.62%
POLAND GOVERNMENT BOND N/C, 2.75%, due 04/25/2028 3.39%
TITULOS DE TESORERIA B N/C, 7.75%, due 09/18/2030 3.26%
BONOS TESORERIA PESOS N/C, 4.70%, due 09/01/2030 3.25%
HUNGARY GOVERNMENT BOND N/C, 6.75%, due 10/22/2028 3.16%

* Excluding cash.  Holdings are subject to change.

Top Country Exposure (as of 7/23/2021)
Country Percent
Brazil 14.88%
South Africa 12.37%
Indonesia 9.25%
Colombia 8.90%
Mexico 8.69%
Chile 7.29%
Philippines 5.62%
Peru 5.15%
Malaysia 3.90%
Romania 3.72%
NAV History (Since Inception)
Past performance is not indicative of future results.
Distribution Information
Dividend per Share Amt (as of 7/26/2021)4$0.1590
30-Day SEC Yield (as of 6/30/2021)55.30%
12-Month Distribution Rate (as of 6/30/2021)65.68%
Distribution Rate (as of 6/30/2021)75.63%
Fund Characteristics (as of 6/30/2021)
Weighted Average Effective Duration85.27 Years
Weighted Average Maturity7.37 Years
Weighted Average Coupon6.72%
Maturity Exposure (as of 6/30/2021)
Years Percent
0 - 3 Years 8.75%
3 - 5 Years 13.59%
5 - 7 Years 29.30%
7 - 10 Years 25.15%
10 - 15 Years 15.53%
15+ Years 5.32%
Cash 2.36%
Currency Exposure (as of 6/30/2021)
Exposure Percent
ZAR 13.72%
MXN 12.27%
BRL 11.98%
RUB 10.60%
IDR 9.98%
COP 9.64%
INR 8.26%
CLP 6.56%
PEN 4.64%
RON 4.33%
PHP 4.18%
MYR 3.78%
TRY 3.38%
CNY 3.30%
KRW 2.75%
HUF 2.49%
CZK 2.47%
PLN 1.51%
ILS 0.93%
THB 0.62%
USD -17.39%
Bid/Ask Premium/Discount (as of 7/23/2021)
  2020 Q1 2021 Q2 2021 Q3 2021
Days Traded at Premium 122 48 47 12
Days Traded at Discount 131 13 16 4
Credit Quality (as of 6/30/2021)
Cash 2.36%
AAA 6.07%
AA 2.47%
AA- 1.90%
A+ 6.11%
A 7.12%
A- 7.47%
BBB+ 10.18%
BBB 12.38%
BBB- 12.48%
BB 13.43%
BB- 18.03%
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.
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
Inception9
Fund Performance *
Net Asset Value (NAV) 2.94% -5.68% 6.59% 2.93% 1.67% N/A 0.10%
After Tax Held 2.34% -6.72% 4.20% 0.62% -0.70% N/A -2.18%
After Tax Sold 1.74% -3.36% 3.89% 1.26% 0.25% N/A -0.92%
Market Price 3.11% -5.77% 6.90% 3.16% 1.69% N/A 0.11%
Index Performance **
Bloomberg Barclays Emerging Markets Local Currency Government - 10% Country Capped Index 3.17% -3.64% 5.83% 4.63% 3.43% N/A 1.60%
Quarter End Performance (as of 6/30/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception9
Fund Performance *
Net Asset Value (NAV) 2.94% -5.68% 6.59% 2.93% 1.67% N/A 0.10%
After Tax Held 2.34% -6.72% 4.20% 0.62% -0.70% N/A -2.18%
After Tax Sold 1.74% -3.36% 3.89% 1.26% 0.25% N/A -0.92%
Market Price 3.11% -5.77% 6.90% 3.16% 1.69% N/A 0.11%
Index Performance **
Bloomberg Barclays Emerging Markets Local Currency Government - 10% Country Capped Index 3.17% -3.64% 5.83% 4.63% 3.43% N/A 1.60%
3-Year Statistics (as of 6/30/2021)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
FEMB 12.26% -2.27 1.25 0.19 0.98
Bloomberg Barclays Emerging Markets Local Currency Government - 10% Country Capped Index 9.55% --- 1.00 0.38 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.

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 Emerging Markets Local Currency Government - 10% Country Capped Index - The Index measures the performance of local currency Emerging Markets debt but caps country exposure to a maximum of 10%.

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 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.
8 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.
9 Inception Date is 11/4/2014

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.

The differences in yield between debt securities of different credit quality may increase which may reduce the market value of a fund's debt securities.

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.

The use of listed and OTC derivatives, including 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. These risks are heightened when a fund's portfolio managers use derivatives to enhance a fund's returns or as a substitute for a position or security, rather than solely to hedge (or offset) the risk of a position or security held by a fund.

Forward foreign currency exchange contracts involve certain risks, including the risk of failure of the counterparty to perform its obligations under the contract and the risk that the use of forward contracts may not serve as a complete hedge because of an imperfect correlation between movements in the prices of the contracts and the prices of the currencies hedged.

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.

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

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.

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, 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.

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.

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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