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First Trust Indxx Innovative Transaction & Process ETF (LEGR)
Investment Objective/Strategy - The First Trust Indxx Innovative Transaction & Process ETF, seeks investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of an index called the Indxx Blockchain Index (the "Index"). The Fund will normally invest at least 90%of its net assets (including investment borrowings) in common stocks and depositary receipts that comprise the Index. The Index is designed to track the performance of companies that are either actively using, investing in, developing, or have products that are poised to benefit from blockchain technology and/or the potential for increased efficiency that it provides to various business processes. The index seeks to include only companies that have devoted material resources to the use of blockchain technologies. The Index is owned and is developed, maintained and sponsored by Indxx, LLC (the "Index Provider").
There can be no assurance that the Fund's investment objectives will be achieved.
  • The Indxx Blockchain Index tracks the performance of exchange-listed companies across the globe that are either actively using, investing in, developing, or have products that are poised to benefit from blockchain technology. The index seeks to include only companies that have devoted material resources to the use of blockchain technologies.
  • Each security in the index must meet certain eligibility criteria based on liquidity, size and trading minimums.
  • Eligible securities are classified into the following three categories:
    • Tier One: Active Enablers – Companies actively developing blockchain technology products or systems for their own internal use and for the sale and support of other companies; companies that are direct service providers for blockchain technology; or, companies that have business models that rely on delivering products or services that use blockchain technology. Companies in this category are assigned a score of 1.
    • Tier Two: Active Users – Companies that are using blockchain technology that is generally supported by an Active Enabler or have at least one use or test case of using blockchain technology. Companies in this category are assigned a score of 2.
    • Tier Three: Active Explorers – Companies that have publicly disclosed that they are active in exploring the incorporation of blockchain technology into their business or have a press release on their website or a news article stating that they have started working on the blockchain technology space. These companies do not have at least one use case or test case on blockchain technology and are not currently directly incorporating blockchain technology into their business. Companies in this category are assigned a score of 3.
  • Companies with a score of 1 or 2 are selected for the index and weighted with Active Enablers receiving 50% and Active Users receiving 50%. The selected companies are weighted equally within each category. The index is capped at 100 constituents.
  • A maximum weighting of 0.50% is applied to constituents in the Active Enabler category with a market cap of less than $500 million, as well as a 20 day and 3 month average daily turnover volume of less than $3 million.
  • The Index is rebalanced and reconstituted semi-annually.
Fund Overview
TickerLEGR
Fund TypeTechnology
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBrown Brothers Harriman
CUSIP33741X201
ISINUS33741X2018
Intraday NAVLEGRIV
Fiscal Year-End09/30
ExchangeNasdaq
Inception1/24/2018
Inception Price$29.99
Inception NAV$29.99
Rebalance FrequencySemi-Annual
Expense Ratio0.65%
Current Fund Data (as of 10/14/2021)
Closing NAV1$43.49
Closing Market Price2$43.46
Bid/Ask Midpoint$43.53
Bid/Ask Premium0.09%
30-Day Median Bid/Ask Spread30.37%
Total Net Assets$136,991,523
Outstanding Shares3,150,002
Daily Volume11,277
Average 30-Day Daily Volume21,460
Closing Market Price 52-Week High/Low$44.05 / $30.71
Closing NAV 52-Week High/Low$43.88 / $30.84
Number of Holdings (excluding cash)100
Top Holdings (as of 10/14/2021)*
Holding Percent
Sberbank of Russia PJSC (ADR) 1.46%
Gazprom PJSC (ADR) 1.43%
salesforce.com, inc. 1.39%
Oracle Corporation 1.33%
Advanced Micro Devices, Inc. 1.31%
International Business Machines Corporation 1.30%
VMware, Inc. 1.30%
Wipro Limited (ADR) 1.29%
Telefonaktiebolaget LM Ericsson (Class B) 1.28%
Microsoft Corporation 1.27%

* 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 10/16/2021)4$0.1672
30-Day SEC Yield (as of 9/30/2021)52.22%
12-Month Distribution Rate (as of 9/30/2021)61.34%
Index Yield (as of 9/30/2021)72.43%
Fund Characteristics (as of 9/30/2021)9
Maximum Market Cap.$2,118,598
Median Market Cap.$93,567
Minimum Market Cap.$29,834
Price/Earnings13.33
Price/Book1.53
Price/Cash Flow9.14
Price/Sales1.90
Top Country Exposure (as of 10/14/2021)
Country Percent
United States 33.91%
China 12.17%
India 7.07%
Germany 6.77%
France 4.89%
Japan 4.42%
United Kingdom 4.39%
Switzerland 2.92%
Russia 2.90%
Spain 2.47%
Bid/Ask Premium/Discount (as of 10/14/2021)
  2020 Q1 2021 Q2 2021 Q3 2021
Days Traded at Premium 79 58 63 62
Days Traded at Discount 174 3 0 2
Top Sector Exposure (as of 10/14/2021)
Financials 39.05%
Information Technology 32.22%
Consumer Discretionary 8.90%
Communication Services 6.77%
Industrials 4.77%
Utilities 2.75%
Energy 2.46%
Materials 1.59%
Consumer Staples 1.49%
Hypothetical Growth of $10,000 Since Inception (as of 10/14/2021) *
Tracking Index: Indxx Blockchain Index

Month End Performance (as of 9/30/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception10
Fund Performance *
Net Asset Value (NAV) 0.16% 13.38% 36.13% 13.34% N/A N/A 11.30%
After Tax Held 0.00% 12.87% 35.38% 12.60% N/A N/A 10.61%
After Tax Sold 0.09% 7.92% 21.38% 10.06% N/A N/A 8.52%
Market Price 0.16% 13.70% 36.70% 13.34% N/A N/A 11.38%
Index Performance **
Indxx Blockchain Index 0.71% 14.50% 38.00% 14.49% N/A N/A 12.43%
S&P 500 Index 0.58% 15.92% 30.00% 15.99% N/A N/A 14.08%
Quarter End Performance (as of 9/30/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception10
Fund Performance *
Net Asset Value (NAV) 0.16% 13.38% 36.13% 13.34% N/A N/A 11.30%
After Tax Held 0.00% 12.87% 35.38% 12.60% N/A N/A 10.61%
After Tax Sold 0.09% 7.92% 21.38% 10.06% N/A N/A 8.52%
Market Price 0.16% 13.70% 36.70% 13.34% N/A N/A 11.38%
Index Performance **
Indxx Blockchain Index 0.71% 14.50% 38.00% 14.49% N/A N/A 12.43%
S&P 500 Index 0.58% 15.92% 30.00% 15.99% N/A N/A 14.08%
3-Year Statistics (as of 9/30/2021)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
LEGR 20.32% -2.28 1.02 0.66 0.94
S&P 500 Index 18.81% --- 1.00 0.82 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.

**Performance information for the Indxx Blockchain Index 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 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 Index yield represents the weighted average trailing 12-month dividend of the constituents of the Indxx Blockchain Index.
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 1/24/2018

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.

Risk Considerations

A fund's return may not match the return of its underlying index. A fund invests in securities included in the index regardless of investment merit and the securities held by a 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 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.

Blockchain technology is an entirely new and relatively untested technology and may never be implemented to a scale that provides identifiable economic benefit to the companies included in the index. Blockchain systems could be vulnerable to fraud. There is little regulation of blockchain technology and because blockchain technology systems may operate across many national boundaries and regulatory jurisdictions, it is possible that it may be subject to widespread and inconsistent regulation. The values of the companies included in the index may not be a reflection of their connection to blockchain technology, but may be based on other business operations. Currently, blockchain technology is primarily used for the recording of transactions in digital currency, which are extremely speculative, unregulated and volatile. Because digital assets registered in a blockchain do not have a standardized exchange, like a stock market, there is less liquidity for such assets and greater possibility of fraud or manipulation

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.

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

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

There is no assurance that the index provider or its agents will compile or maintain the index accurately.

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.

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

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.

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.

Indxx and Indxx Blockchain Index (“Index”) are trademarks of Indxx, LLC (“Indxx”) and have been licensed for use for certain purposes by First Trust. The Fund is not sponsored, endorsed, sold or promoted by Indxx and Indxx makes no representation regarding the advisability of trading in such product. The Index is determined, composed and calculated by Indxx without regard to First Trust or the Fund.

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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