First Trust Short Duration Managed Municipal ETF (FSMB)

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Fund Summary

Investment Objective/Strategy - The First Trust Short Duration Managed Municipal ETF seeks to provide federally tax-exempt income consistent with capital preservation. 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 municipal debt securities that pay interest that is exempt from regular federal income taxes.

There can be no assurance that the Fund's investment objectives will be achieved.

Fund Overview

Ticker	FSMB
Fund Type	Tax-Free Fixed Income
Investment Advisor	First Trust Advisors L.P.
Investor Servicing Agent	Brown Brothers Harriman
CUSIP	33739P830
ISIN	US33739P8308
Intraday NAV	FSMBIV
Fiscal Year-End	07/31
Exchange	NYSE Arca
Inception	11/1/2018
Inception Price	$20.00
Inception NAV	$20.00
Gross Expense Ratio*	0.55%
Net Expense Ratio*	0.45%

* As of 12/1/2020

First Trust has contractually agreed to waive management fees of 0.10% of average daily net assets until November 30, 2021.

Current Fund Data (as of 2/26/2021)

Closing NAV¹	$20.74
Closing Market Price²	$20.76
Bid/Ask Midpoint	$20.75
Bid/Ask Premium	0.05%
30-Day Median Bid/Ask Spread³	0.14%
Total Net Assets	$82,972,441
Outstanding Shares	4,000,002
Daily Volume	17,639
Average 30-Day Daily Volume	44,541
Closing Market Price 52-Week High/Low	$20.93 / $19.42
Closing NAV 52-Week High/Low	$20.93 / $19.55
Number of Holdings (excluding cash)	254

Top Holdings (as of 2/26/2021)*

Holding	Percent
NEWARK NJ N/C, 3.50%, due 07/27/2021	1.85%
HOUSTON TX ARPT SYS REVENUE N/C, 5%, due 07/15/2027	1.81%
TENDER OPTION BOND TRUST RECPTS Variable rate, due 06/15/2038	1.75%
MIDDLESEX CNTY NJ CTFS PARTN 5%, due 10/15/2031	1.57%
ARIZONA ST INDL DEV AUTH REV B/C, 5%, due 05/01/2027	1.50%
UNIV OF CONNECTICUT CT N/C, 5%, due 11/01/2026	1.45%
NEW JERSEY ST N/C, 5%, due 06/01/2025	1.43%
ALABAMA FEDERAL AID HIGHWAY FIN AUTH 5%, due 09/01/2030	1.39%
MICHIGAN ST FIN AUTH REVENUE 5%, due 07/01/2028	1.30%
COCONINO CNTY AZ POLL CONTROL CORP Variable rate, due 09/01/2032	1.25%

* Excluding cash. Holdings are subject to change.

Top State Exposure (as of 1/29/2021)

State	Percent
Texas	9.10%
New York	7.92%
Florida	7.35%
Pennsylvania	7.14%
New Jersey	6.76%
Illinois	6.49%
Arizona	4.33%
Connecticut	4.15%
Georgia	3.89%
California	3.84%

NAV History (Since Inception)

Past performance is not indicative of future results.

Distribution Information

Dividend per Share Amt (as of 3/2/2021)⁴	$0.0250
30-Day SEC Yield (as of 1/29/2021)⁵	0.54%
Unsubsidized 30-Day SEC Yield (as of 1/29/2021)⁶	0.44%
Taxable Equivalent 30-Day SEC Yield (as of 1/29/2021)⁷	0.91%
12-Month Distribution Rate (as of 1/29/2021)⁸	1.73%
Distribution Rate (as of 1/29/2021)⁹	1.52%
Taxable Equivalent Annualized Distribution Rate (as of 1/29/2021)¹⁰	2.57%

For funds with certain equity strategies, due to the negative economic impact across many industries caused by the 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.

Fund Characteristics (as of 1/29/2021)

Net Weighted Average Effective Duration (Includes Short Positions)¹¹	2.64 Years
Weighted Average Effective Duration (Long Positions)¹¹	2.73 Years
Net Weighted Average Modified Duration¹²	2.65 Years
Weighted Average Effective Maturity	4.12 Years
Weighted Average Price	$109.74
Weighted Average Coupon	4.15%
Short Position - US Treasury Futures	-0.95%

Portfolio information statistics exclude cash and other assets and liabilities.

Maturity Exposure (as of 1/29/2021)

Years	Percent
0 - 0.99 Years	17.37%
1 - 1.99 Years	10.28%
2 - 2.99 Years	13.30%
3 - 3.99 Years	11.16%
4 - 4.99 Years	17.16%
5 - 5.99 Years	5.67%
6 - 6.99 Years	6.60%
7 - 7.99 Years	5.59%
8 - 8.99 Years	1.97%
9 - 9.99 Years	3.89%
10 - 14.99 Years	6.25%
15 - 19.99 Years	0.58%
Cash	0.18%

Bid/Ask Premium/Discount (as of 2/26/2021)

	2020	Q1 2021	Q2 2021	Q3 2021
Days Traded at Premium	191	31	---	---
Days Traded at Discount	62	7	---	---

Credit Quality (as of 1/29/2021)

Cash	0.18%
AAA	2.68%
AA	27.66%
A	30.70%
BBB	17.75%
BB	6.66%
B	0.64%
NR	8.94%
SP-1+ (short-term)	0.62%
SP-1/MIG1 (short-term)	0.62%
SP-2/MIG2 (short-term)	3.55%

The credit quality information presented reflects the ratings assigned by one or more nationally recognized statistical rating organizations (NRSROs), including Standard & Poor's Ratings Group, a division of the McGraw Hill Companies, Inc., Moody's Investors Service, Inc., Fitch Ratings or a comparably rated NRSRO. For situations in which a security is rated by more than one NRSRO and ratings are not equivalent, the highest ratings are used. Sub-investment grade ratings are those rated BB+/Ba1 or lower. Investment grade ratings are those rated BBB-/Baa3 or higher. 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.

Top Sector Exposure (as of 1/29/2021)

GO-UNLTD	11.61%
INSURED	9.91%
GAS	8.85%
HOSPITAL	7.29%
COP	7.10%
SPECIAL ASSESSMENT	6.98%
EDUCATION	6.54%
UTILITY	6.13%
DEDICATED TAX	5.07%
CCRC	5.05%

Month End Performance (as of 1/29/2021)

	3 Month	YTD	1 Year	3 Year	5 Year	10 Year	Since Fund Inception¹³
Fund Performance *
Net Asset Value (NAV)	1.75%	0.51%	3.11%	N/A	N/A	N/A	3.93%
After Tax Held	1.59%	0.46%	2.37%	N/A	N/A	N/A	3.10%
After Tax Sold	1.04%	0.30%	1.83%	N/A	N/A	N/A	2.65%
Market Price	1.75%	0.46%	3.11%	N/A	N/A	N/A	3.95%

Index Performance **
Bloomberg Barclays Municipal Short (1-5) Year Index	0.72%	0.23%	2.38%	N/A	N/A	N/A	3.52%

Quarter End Performance (as of 12/31/2020)

	3 Month	YTD	1 Year	3 Year	5 Year	10 Year	Since Fund Inception¹³
Fund Performance *
Net Asset Value (NAV)	1.23%	3.47%	3.47%	N/A	N/A	N/A	3.84%
After Tax Held	1.06%	2.71%	2.71%	N/A	N/A	N/A	3.01%
After Tax Sold	0.73%	2.05%	2.05%	N/A	N/A	N/A	2.58%
Market Price	1.27%	3.52%	3.52%	N/A	N/A	N/A	3.89%

Index Performance **
Bloomberg Barclays Municipal Short (1-5) Year Index	0.33%	2.83%	2.83%	N/A	N/A	N/A	3.55%

*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 Municipal Short (1-5) Year Index - The index measures the performance of municipal bonds with time to maturity of more than one year and less than five years.

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	The taxable equivalent yield is for illustrative purposes only. This information illustrates approximately what you would have to earn on taxable investments to equal the tax-exempt yield using the highest federal tax bracket and Medicare tax for 2021. This information is based on present law as of the date of publication and does not account for any proposed changes in tax rates. This information does not account for limitations on deductions, the alternative minimum tax or taxes other than Federal personal income tax and Medicare tax.
⁸	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.
⁹	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.
¹⁰	The taxable equivalent annualized distribution rate is for illustrative purposes only. This information illustrates approximately what you would have to earn on taxable investments to equal the tax-exempt annualized distribution rate using the highest federal tax bracket and Medicare tax for 2021. This information is based on present law as of the date of publication and does not account for any proposed changes in tax rates. This information does not account for limitations on deductions, the alternative minimum tax or taxes other than Federal personal income tax and Medicare tax.
¹¹	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.
¹²	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. In contrast to effective duration, modified duration assumes that the timing of cash flows remain constant.
¹³	Inception Date is 11/1/2018

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.

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. The fund is subject to management risk because it is an actively managed portfolio. In managing the fund's investment portfolio, the advisor will apply investment techniques and risk analyses that may not have the desired result. There can be no assurance that the fund's investment objectives will be achieved.

The fund is subject to market risk. Market risk is the risk that a particular security owned by the fund or shares of the fund in general may fall in value. The values of municipal securities held by the fund may be adversely affected by local political and economic conditions and developments. 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.

Municipal bonds are subject to numerous additional risks, including credit risk, credit spread risk, income risk, inflation risk, interest rate risk, extension risk, call risk, zero coupon bond risk, valuation risk, and political and economic risk. 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. Credit spread risk is the risk that credit spreads may increase, which may reduce the market values of the fund's securities. Income risk is the risk that income from the fund's fixed income investments could decline during periods of falling interest rates. Inflation risk is the risk that the value of assets or income from investments will be less in the future as inflation decreases the value of money. Interest rate risk is the risk that the value of the securities in the fund will decline because of rising market interest rates. Extension risk is the risk that, when interest rates rise, certain obligations will be paid off by the issuer (or obligor) more slowly than anticipated, causing the value of these securities to fall. Call risk is the risk that performance could be adversely impacted if an issuer calls higher-yielding debt instruments held by the fund. Zero coupon bond risk is the risk that zero coupon bonds may be highly volatile as interest rates rise or fall because they do not pay interest on a current basis. Valuation risk is the risk that, due to the lack of centralized information and trading, the valuation of fixed income securities may carry more uncertainty and risk than that of publicly traded securities. Political and economic risk is the risk that the values of municipal securities held by the fund may be adversely affected by local political and economic conditions and developments. Adverse conditions in an industry significant to a local economy could have a correspondingly adverse effect on the financial condition of local issuers.

Income from municipal bonds held by the fund could be declared taxable because of, among other things, unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of a bond issuer. The fund has no limit as to the amount that can be invested in alternative minimum tax bonds. All or a portion of the fund's otherwise exempt-interest dividends may be taxable to those shareholders subject to the federal alternative minimum tax.

Inventories of municipal securities have decreased in recent years, lessening the ability to make a market in these securities. This reduction in market making capacity has the potential to decrease the fund's ability to buy or sell municipal securities, and increase price volatility and trading costs.

Custodial receipt trusts may issue inverse floater securities in which the fund may invest. Inverse floater securities may be leveraged and their market values may be more volatile than other types of fixed-income instruments. In addition, distributions paid to the fund on its inverse floaters will be reduced or even eliminated as short-term municipal interest rates rise and will increase as short-term municipal interest rates fall.

As the use of Internet technology has become more prevalent in the course of business, the fund has become more susceptible to potential operational risks through breaches in cyber security. Such events could cause the fund to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss.

If the fund has lower average daily trading volumes, it may rely on a small number of third-party market makers to provide a market for the purchase and sale of shares. Any trading halt or other problem relating to the trading activity of these market makers could result in a dramatic change in the spread between the fund's net asset value and the price at which the fund's shares are trading.

The fund is subject to industrial development bond risk which is the risk that to the extent that the industrial development sector continues to represent a significant portion of the fund, the fund will be sensitive to changes in, and its performance may depend to a greater extent on, the overall condition of the industrial development sector.

The payment of principal and interest of a pre-refunded bond is funded from securities held in a designated escrow account where such securities are obligations of and carry the full faith and credit of the U.S. Treasury. The securities held in the escrow fund do not guarantee the price of the bond.

Private activity bonds, issued by municipalities or other public authorities, can have a substantially different credit profile than the municipality or public authority and may be negatively impacted by conditions affecting either the general credit of the use of the private activity project or the project itself.

The fund may invest in distressed municipal securities and many distressed securities are illiquid or trade in low volumes and thus may be more difficult to value.

High-yield securities, or "junk" bonds, are subject to greater market fluctuations and risk of loss than securities with higher ratings, and therefore, may be highly speculative. These securities are issued by companies that may have limited operating history, narrowly focused operations, and/or other impediments to the timely payment of periodic interest and principal at maturity. The market for high-yield securities is smaller and less liquid than that for investment-grade securities.

Participation interests in municipal leases pose special risks because many leases and contracts contain "non-appropriation" clauses that provide that the governmental issuer has no obligation to make future payments under the lease or contract unless money is appropriated for this purpose by the appropriate legislative body.

The fund will, under most circumstances, effect a portion of creations and redemptions for cash, rather than in-kind securities. As a result, the fund may be less tax-efficient.

The fund currently has fewer assets than larger funds, and like other relatively new funds, large inflows and outflows may impact the fund's market exposure for limited periods of time.

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.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value