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First Trust Hedged BuyWrite Income ETF (FTLB)
Investment Objective/Strategy - The Fund's investment objective is to provide current income. The Fund will pursue its objective by investing in equity securities listed on U.S. exchanges of all market capitalizations and by utilizing an "option strategy" consisting of buying U.S. exchange-traded put options on the Standard & Poor's 500 Index (the "Index") and writing (selling) U.S. exchange-traded covered call options on the Index. Under normal market conditions, the Fund invests primarily in equity securities listed on U.S. exchanges of all market capitalizations. The Fund will also employ an option strategy in which it will write U.S. exchange-traded covered call options on the Index in order to seek additional cash flow in the form of premiums on the options. A premium is the income received by an investor who sells an option contract to another party. These premiums may be distributed to shareholders on a monthly basis or used to purchase U.S. exchange-traded put options on the Index that seek to provide the Fund with downside protection and which are expected to reduce the Fund's price sensitivity to declining markets. The market value of the option strategy may be up to 20% of the Fund's overall net asset value.
There can be no assurance that the Fund's investment objectives will be achieved.
Fund Overview
Fund TypeEquity Income
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBrown Brothers Harriman
Fiscal Year-End09/30
Inception Price$19.93
Inception NAV$19.93
Expense Ratio0.85%
Current Fund Data (as of 4/13/2021)
Closing NAV1$20.87
Closing Market Price2$20.88
Bid/Ask Midpoint$20.88
Bid/Ask Premium0.05%
30-Day Median Bid/Ask Spread30.34%
Total Net Assets$7,305,408
Outstanding Shares350,002
Daily Volume24,850
Average 30-Day Daily Volume7,665
Closing Market Price 52-Week High/Low$21.38 / $18.83
Closing NAV 52-Week High/Low$21.42 / $18.90
Number of Holdings (excluding cash)271
Top Holdings (as of 4/13/2021)*
Holding Percent
Apple Inc. 4.47%
Microsoft Corporation 4.01%
Arrow Electronics, Inc. 2.74%
Cardinal Health, Inc. 2.67%
Amazon.com, Inc. 2.61%
MGM Resorts International 2.60%
The Bank of New York Mellon Corporation 2.51%
Vertiv Holdings Co 2.51%
Berry Global Group, Inc. 2.50%
Campbell Soup Company 2.44%

* 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 4/14/2021)4$0.0550
30-Day SEC Yield (as of 3/31/2021)51.11%
12-Month Distribution Rate (as of 3/31/2021)63.17%
Distribution Rate (as of 3/31/2021)73.17%
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 3/31/2021)8
Maximum Market Cap.$2,012,893
Median Market Cap.$6,833
Minimum Market Cap.$503
Price/Cash Flow12.75
Market cap and price ratio statistics are for the equity portion of the fund and exclude cash and options.
Portfolio Options Information (as of 3/31/2021)
% Portfolio with Call Options68.70%
Average Time Until Expiration of Calls49 Days
Average Call Moneyness (ITM)2.81%
% Portfolio with Put Options53.43%
Average Time Until Expiration of Puts235 Days
Average Put Moneyness (OTM)12.98%
Moneyness is how much an option contract's strike price is in-the-money (ITM) or out-of-the-money (OTM) expressed as a percentage of the price of the option contract's underlying asset.
Bid/Ask Premium/Discount (as of 4/13/2021)
  2020 Q1 2021 Q2 2021 Q3 2021
Days Traded at Premium 86 30 6 ---
Days Traded at Discount 167 31 2 ---
Top Sector Exposure (as of 4/13/2021)
Information Technology 18.04%
Financials 17.88%
Health Care 17.01%
Consumer Discretionary 11.75%
Communication Services 9.94%
Materials 9.16%
Energy 6.40%
Industrials 6.03%
Consumer Staples 4.05%
Real Estate 1.93%
Month End Performance (as of 3/31/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund Performance *
Net Asset Value (NAV) 3.59% 3.59% 11.54% 1.42% 4.23% N/A 3.85%
After Tax Held 3.25% 3.25% 10.06% 0.14% 2.91% N/A 2.47%
After Tax Sold 2.12% 2.12% 6.79% 0.54% 2.68% N/A 2.34%
Market Price 3.85% 3.85% 10.63% 1.37% 4.23% N/A 3.86%
Index Performance **
CBOE S&P 500 95-110 Collar IndexSM 3.77% 3.77% 28.80% 17.13% 14.24% N/A 10.36%
S&P 500 Index 6.17% 6.17% 56.35% 16.78% 16.29% N/A 13.60%
Quarter End Performance (as of 3/31/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund Performance *
Net Asset Value (NAV) 3.59% 3.59% 11.54% 1.42% 4.23% N/A 3.85%
After Tax Held 3.25% 3.25% 10.06% 0.14% 2.91% N/A 2.47%
After Tax Sold 2.12% 2.12% 6.79% 0.54% 2.68% N/A 2.34%
Market Price 3.85% 3.85% 10.63% 1.37% 4.23% N/A 3.86%
Index Performance **
CBOE S&P 500 95-110 Collar IndexSM 3.77% 3.77% 28.80% 17.13% 14.24% N/A 10.36%
S&P 500 Index 6.17% 6.17% 56.35% 16.78% 16.29% N/A 13.60%
3-Year Statistics (as of 3/31/2021)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
FTLB 10.34% -9.09 0.63 0.04 0.67
CBOE S&P 500 95-110 Collar IndexSM 11.08% --- 1.00 1.35 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.

CBOE S&P 500 95-110 Collar IndexSM - The Index is a benchmark index designed to provide investors with insights as to how one might protect an investment in S&P 500 stocks against market declines at a reduced cost. This strategy accepts a ceiling or cap on S&P 500 gains in return for a floor on S&P 500 losses by holding the stocks in the S&P 500 Index, buying three-month S&P 500 put options to protect this S&P 500 portfolio from market decreases and selling one-month S&P 500 call options to help finance the cost of the put options.

S&P 500 Index - The Index is an unmanaged index of 500 stocks used to measure large-cap U.S. stock market performance.

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 All market capitalization numbers are in USD$ Millions.
9 Inception Date is 1/6/2014

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.

ETF Characteristics

The fund lists and principally trades its shares on The Nasdaq Stock Market LLC.

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. 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 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.

The fund may invest in small capitalization and mid capitalization companies. Such companies may experience greater price volatility than larger, more established companies.

An investment in a fund containing securities of non-U.S. issuers is 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. The fund may invest in depositary receipts which may be less liquid than the underlying shares in their primary trading market.

The use of options and other derivatives 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 the fund's portfolio managers use derivatives to enhance the 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 the fund.

The option positions employed may present additional risk. When selling a call option, the fund will receive a premium; however, this premium may not be enough to offset a loss incurred by the fund if the index level at the expiration of the call option is above the strike price by an amount equal to or greater than the premium. The value of an option may be adversely affected if the market for the option becomes less liquid or smaller, and will be affected by changes in the value and dividend rates of the stock or the index subject to the option, an increase in interest rates, a change in the actual and perceived volatility of the stock market and the common stock or the index and the remaining time to expiration. Additionally, the value of an option does not increase or decrease at the same rate as the underlying stock(s) or the index.

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.

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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