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
Fund TypeTechnology
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBrown Brothers Harriman
Fiscal Year-End09/30
Inception Price$29.99
Inception NAV$29.99
Rebalance FrequencySemi-Annual
Expense Ratio0.65%
Current Fund Data (as of 8/10/2020)
Closing NAV1$31.78
Closing Market Price2$31.93
Bid/Ask Midpoint$31.91
Bid/Ask Premium0.42%
Total Net Assets$39,720,658
Outstanding Shares1,250,002
Daily Volume4,084
Average 30-Day Daily Volume9,126
Closing Market Price 52-Week High/Low$33.68 / $21.51
Closing NAV 52-Week High/Low$33.67 / $22.13
Number of Holdings (excluding cash)99
Fund Characteristics (as of 7/31/2020)7
Maximum Market Cap.$1,585,155
Median Market Cap.$41,153
Minimum Market Cap.$6,414
Price/Cash Flow10.37
Top Holdings (as of 8/10/2020)*
Holding Percent
Advanced Micro Devices, Inc. 2.49%
NVIDIA Corporation 2.44%
PayPal Holdings, Inc. 2.36%, Inc. 2.22%
Telefonaktiebolaget LM Ericsson (Class B) 2.21%
Taiwan Semiconductor Manufacturing Company Ltd. (ADR) 1.94%, Inc. (ADR) 1.90%
SAP SE 1.87%
Infosys Limited (ADR) 1.85%
Xilinx, Inc. 1.82%

* Excluding cash.  Holdings are subject to change.

Top Country Exposure (as of 8/10/2020)
Country Percent
United States 36.26%
China 7.53%
France 6.53%
India 6.26%
Germany 5.27%
Switzerland 5.17%
Japan 4.99%
United Kingdom 3.34%
South Korea 3.10%
Finland 2.72%
NAV History (Since Inception)
Past performance is not indicative of future results.
Distribution Information
Dividend per Share Amt (as of 8/11/2020)3$0.1432
30-Day SEC Yield (as of 7/31/2020)42.35%
12-Month Distribution Rate (as of 7/31/2020)51.76%
Index Yield (as of 7/31/2020)62.06%
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 6/30/2020)
Number of Days Bid/Ask Midpoint Above NAV
Quarter Ended 0-49
Basis Points
Basis Points
Basis Points
Basis Points
6/30/2020 19 0 0 0
3/31/2020 12 0 0 0
12/31/2019 8 0 0 0
9/30/2019 12 0 0 0
Number of Days Bid/Ask Midpoint Below NAV
Quarter Ended 0-49
Basis Points
Basis Points
Basis Points
Basis Points
6/30/2020 41 3 0 0
3/31/2020 45 4 1 0
12/31/2019 56 0 0 0
9/30/2019 51 1 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 8/10/2020)
Information Technology 46.04%
Financials 30.86%
Consumer Discretionary 7.54%
Communication Services 5.13%
Industrials 4.95%
Utilities 2.47%
Materials 1.65%
Consumer Staples 1.36%
Month End Performance (as of 7/31/2020)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund Performance *
Net Asset Value (NAV) 14.95% -2.16% 4.93% N/A N/A N/A 3.13%
After Tax Held 14.73% -2.40% 4.14% N/A N/A N/A 2.47%
After Tax Sold 8.84% -1.29% 2.89% N/A N/A N/A 2.10%
Market Price 15.32% -2.28% 4.80% N/A N/A N/A 3.08%
Index Performance **
Indxx Blockchain Index 15.22% -1.55% 5.68% N/A N/A N/A 4.09%
S&P 500 Index 12.87% 2.38% 11.96% N/A N/A N/A 7.94%
Quarter End Performance (as of 6/30/2020)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund Performance *
Net Asset Value (NAV) 18.25% -7.56% -0.47% N/A N/A N/A 0.85%
After Tax Held 18.01% -7.79% -1.22% N/A N/A N/A 0.19%
After Tax Sold 10.80% -4.48% -0.28% N/A N/A N/A 0.37%
Market Price 17.68% -7.97% -0.74% N/A N/A N/A 0.67%
Index Performance **
Indxx Blockchain Index 17.86% -7.37% 0.25% N/A N/A N/A 1.66%
S&P 500 Index 20.54% -3.08% 7.51% N/A N/A N/A 5.81%

*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.

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.

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 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.
4 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.
5 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.
6 Index yield represents the weighted average trailing 12-month dividend of the constituents of the Indxx Blockchain Index.
7 All market capitalization numbers are in USD$ Millions.
8 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.

ETF Characteristics

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

The fund's return may not match the return of the Indxx Blockchain Index.  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 industry or sector, which involves additional risks including limited diversification. The fund may invest in small capitalization and mid capitalization companies. Such companies may experience greater price volatility than larger, more established companies.

The prices of equity securities fluctuate for several reasons, including changes in investors' perceptions of the financial condition of an issuer or the general condition of the relevant stock market, such as market volatility, or when political or economic events affecting the issuers occur.

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.

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. These risks may be heightened for securities of companies located in, or with significant operations in, emerging market countries. The fund may invest in depositary receipts which may be less liquid than the underlying shares in their primary trading market. Changes in currency exchange rates and the relative value of non-U.S. currencies will affect the value of the fund's investment and the value of fund shares.

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.

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.

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.

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.

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