First Trust Flexible Municipal High Income ETF (MFLX)

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Fund Summary

Investment Objective/Strategy - The First Trust Flexible Municipal High Income ETF (the "Fund") (formerly First Trust Municipal CEF Income Opportunity ETF) seeks to provide current income. Under normal market conditions, the Fund seeks to achieve its investment objective by investing at least 80% of its net assets (plus any investment borrowings) in municipal debt securities that pay interest that is exempt from regular federal income taxes. Municipal debt securities are generally issued by or on behalf of states, territories or possessions of the United States and the District of Columbia and their political subdivisions, agencies, authorities and other instrumentalities. The Fund may invest in a range of municipal securities, including, but not limited to, municipal lease obligations (and certificates of participation in such obligations),municipal general obligation bonds, municipal revenue bonds, municipal notes, municipal cash equivalents, private activity bonds (including without limitation industrial development bonds), and pre-refunded and escrowed to maturity bonds.

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

Fund Overview

Ticker	MFLX
Fund Type	Tax-Free Fixed Income
Investment Advisor	First Trust Advisors L.P.
Investor Servicing Agent	Bank of New York Mellon Corp
CUSIP	33740F508
ISIN	US33740F5089
Intraday NAV	MFLXIV
Fiscal Year-End	08/31
Exchange	Nasdaq
Inception	9/27/2016
Inception Price	$20.05
Inception NAV	$20.05
Expense Ratio*	0.83%

* As of 4/15/2023

The Investment Advisor has implemented fee breakpoints, which reduce the fund's investment management fee at certain assets levels. Please see the fund's Statement of Additional Information for full details.

Current Fund Data (as of 9/29/2023)

Closing NAV¹	$15.85
Closing Market Price²	$15.74
Bid/Ask Midpoint	$16.01
Bid/Ask Premium	0.98%
30-Day Median Bid/Ask Spread³	2.85%
Total Net Assets	$11,886,745
Outstanding Shares	750,002
Daily Volume	225
Average 30-Day Daily Volume	1,780
Closing Market Price 52-Week High/Low	$17.40 / $15.31
Closing NAV 52-Week High/Low	$16.98 / $15.45
Number of Holdings (excluding cash)	62

Top Holdings (as of 9/29/2023)*

Holding	Percent
LONG BEACH CA ARPT REVENUE 5%, due 06/01/2037	2.79%
CHICAGO IL BRD OF EDU N/C, 5%, due 12/01/2030	2.60%
MISSISSIPPI ST BUSINESS FIN CORP Variable rate, due 05/01/2028	2.56%
DUTCHESS CNTY NY LOCAL DEV CORP N/C, 5%, due 10/01/2040	2.46%
SAN FRANCISCO CITY & CNTY CA PUB UTIL COMMN 4%, due 11/01/2042	2.44%
MONTGOMERY CNTY OH HOSP REVENUE 4%, due 08/01/2041	2.28%
OHIO ST HGR EDUCTNL FAC COMMN 5%, due 02/01/2035	2.25%
MIAMI-DADE CNTY FL AVIATION REV 5%, due 10/01/2040	2.24%
ILLINOIS ST FIN AUTH ACADEMIC FACS 5%, due 10/01/2034	2.20%
NEW YORK ST DORM AUTH REVENUES 5%, due 05/01/2038	2.19%

* Excluding cash. Holdings are subject to change.

Overall Fund Characteristics (as of 8/31/2023)

Weighted Average Option-Adjusted Duration¹¹	8.00 Years
Weighted Average Leverage Option-Adjusted Duration¹²	8.16 Years
Weighted Average Effective Maturity	15.31 Years

This represents the municipal and closed-end fund holdings in the Fund and includes data for third-party closed-end funds held in the Fund which is publicly available from the fund sponsor as of the date stated above. For CEFs, most publicly available data may represent a period different from the "as of date" identified above.

Municipal Bond Fund Characteristics (as of 8/31/2023)

Weighted Average Option-Adjusted Duration¹¹	8.02 Years
Weighted Average Leverage Option-Adjusted Duration¹²	8.02 Years
Weighted Average Effective Maturity	15.44 Years

This represents the characteristics of the municipal bonds held within the Fund as of the date stated above.

Closed-End Fund Characteristics (as of 8/31/2023)

Weighted Average Option-Adjusted Duration¹¹	7.44 Years
Weighted Average Leverage Option-Adjusted Duration¹²	11.41 Years
Weighted Average Effective Maturity	12.34 Years

This represents the closed-end fund holdings in the Fund and includes data for third-party closed-end funds held in the Fund which is publicly available from the fund sponsor as of the date stated above. For CEFs, most publicly available data may represent a period different from the "as of date" identified above.

Municipal Bond Top State Exposure (as of 8/31/2023)

State	Percent
California	11.69%
Ohio	10.74%
Florida	10.41%
Illinois	9.17%
Oregon	6.68%
Puerto Rico	6.15%
Colorado	5.73%
New York	4.41%
Kansas	4.30%
Texas	4.19%

This represents the municipal bond holdings in the Fund as of the date stated above.

NAV History (Since Inception)

Past performance is not indicative of future results.

Overall Morningstar Rating^TM (as of 8/31/2023)⁴

Among 152 funds in the Muni National Long category. This fund was rated 3 stars/152 funds (3 years), 4 stars/136 funds (5 years) based on risk adjusted returns.

Distribution Information

Dividend per Share Amt (as of 10/1/2023)⁵	$0.0500
30-Day SEC Yield (as of 8/31/2023)⁶	3.52%
Taxable Equivalent 30-Day SEC Yield (as of 8/31/2023)⁷	5.95%
12-Month Distribution Rate (as of 8/31/2023)⁸	3.88%
Distribution Rate (as of 8/31/2023)⁹	3.66%
Taxable Equivalent Annualized Distribution Rate (as of 8/31/2023)¹⁰	6.18%

Fund Composition (as of 8/31/2023)

	Percent
Muni Bonds	95.94%
CEF	4.06%

Overall Credit Quality (as of 8/31/2023)

Credit Quality	Percent
CASH	0.94%
AAA	2.35%
AA	15.08%
A	31.54%
BBB	10.25%
BB	8.82%
B	1.88%
CCC-D	0.01%
N/R	29.13%

The ratings above represent the municipal bond and closed-end fund holdings in the Fund and includes data for third-party closed-end funds held in the Fund which is publicly available from the fund sponsor as of the date stated above. For CEFs, most publicly available data may represent a period different from the "as of date" identified above. The ratings for the Municipal Bond portion of the fund reflect the ratings assigned by one or more nationally recognized statistical rating organizations (NRSROs), including S&P Global Ratings, 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. The ratings for the CEF portion of the Fund are provided by Morningstar. 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.

Municipal Bond Credit Quality (as of 8/31/2023)

Credit Quality	Percent
CASH	0.98%
AAA	2.13%
AA	14.25%
A	31.65%
BBB	10.18%
BB	9.01%
B	1.93%
N/R	29.87%

The ratings above represent the ratings of the municipal bonds held within the Fund as of the date stated above. The ratings presented reflect the ratings assigned by one or more nationally recognized statistical rating organizations (NRSROs), including S&P Global Ratings, a subsidiary of S&P Global 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. 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.

Closed-End Fund Credit Quality (as of 8/31/2023)

Credit Quality	Percent
AAA	7.57%
AA	34.73%
A	29.15%
BBB	11.83%
BB	4.29%
B	0.75%
CCC-D	0.16%
N/R	11.52%

The ratings above represent the ratings of the closed-end fund holdings in the Fund and includes data for third-party closed-end funds held in the Fund which is publicly available from the fund sponsor as of the date stated above. For CEFs, most publicly available data may represent a period different from the "as of date" identified above. The ratings for the CEF portion of the Fund are provided by Morningstar. 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.

Bid/Ask Premium/Discount (as of 9/29/2023)

	2022	Q1 2023	Q2 2023	Q3 2023
Days Traded at Premium	64	26	33	6
Days Traded at Discount	187	36	29	57

Weighted Avg Premium/Discount¹³

Current Weighted Average Premium Discount Information (as of 9/29/2023)

Current	-0.55%
52-Week Average	-0.46%
52-Week High	-0.33%
52-Week Low	-0.56%

Hypothetical Growth of $10,000 Since Inception (as of 9/28/2023) *

Month End Performance (as of 8/31/2023)

	3 Month	YTD	1 Year	3 Year	5 Year	10 Year	Since Fund Inception¹⁴
Fund Performance *
Net Asset Value (NAV)	0.54%	3.13%	1.48%	-1.43%	1.81%	N/A	0.72%
After Tax Held	0.54%	3.13%	1.48%	-1.44%	1.80%	N/A	0.72%
After Tax Sold	0.69%	2.92%	2.45%	-0.16%	2.28%	N/A	1.40%
Market Price	-0.62%	1.82%	0.19%	-1.94%	1.47%	N/A	0.49%

Index Performance **
Bloomberg Municipal Bond Index	-0.06%	1.59%	1.70%	-1.32%	1.52%	N/A	1.35%
Blended Benchmark	0.41%	2.56%	1.13%	-0.42%	1.97%	N/A	2.13%
Bloomberg Municipal Long Bond (22+) Index	-0.55%	2.66%	1.45%	-2.75%	1.05%	N/A	1.09%
First Trust Municipal Closed-End Fund Total Return Index	-1.08%	-2.08%	-7.35%	-4.85%	0.04%	N/A	-0.42%

Quarter End Performance (as of 6/30/2023)

	3 Month	YTD	1 Year	3 Year	5 Year	10 Year	Since Fund Inception¹⁴
Fund Performance *
Net Asset Value (NAV)	1.08%	3.88%	3.32%	0.10%	2.12%	N/A	0.85%
After Tax Held	1.08%	3.88%	3.32%	0.09%	2.11%	N/A	0.85%
After Tax Sold	1.03%	3.11%	3.57%	1.02%	2.51%	N/A	1.50%
Market Price	0.90%	3.90%	3.27%	-0.05%	2.04%	N/A	0.80%

Index Performance **
Bloomberg Municipal Bond Index	-0.10%	2.67%	3.19%	-0.58%	1.84%	N/A	1.55%
Blended Benchmark	0.77%	3.55%	3.04%	0.59%	2.34%	N/A	2.33%
Bloomberg Municipal Long Bond (22+) Index	0.67%	4.96%	3.84%	-1.52%	1.59%	N/A	1.45%
First Trust Municipal Closed-End Fund Total Return Index	-1.30%	0.69%	-3.14%	-2.74%	0.90%	N/A	-0.02%

3-Year Statistics (as of 8/31/2023)

	Standard Deviation	Alpha	Beta	Sharpe Ratio	Correlation
MFLX	10.25%	1.22	0.96	-0.24	0.91
Bloomberg Municipal Bond Index	6.17%	-0.29	0.62	-0.44	0.99
Bloomberg Municipal Long Bond (22+) Index	9.78%	---	1.00	-0.40	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 each listed 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.

On April 14, 2022 the fund converted from the First Trust Municipal CEF Income Opportunity ETF to the First Trust Flexible Municipal High Income ETF. Therefore, the fund's performance and historical returns shown for the periods prior to this date are not necessarily indicative of the performance that the fund would have generated.

Bloomberg Municipal Bond Index - The Index is a rules-based, market-value-weighted index engineered for the long-term tax-exempt bond market.

Blended Benchmark - The Benchmark consists of a 50/50 blend of the Bloomberg Municipal High Yield Bond Index, which includes state and local general obligation bonds and revenue bonds and is a measure of the non-investment grade and non-rated USD-denominated tax exempt bond market, and the Bloomberg Municipal Bond Index, which is a rules-based, market-value-weighted index engineered for the long-term tax-exempt bond market. The Blended Benchmark returns are calculated by using the monthly returns of the two indices during each period shown above. At the beginning of each month the two indices are rebalanced to a 50/50 ratio to account for divergence from that ratio that occurred during the course of each month. The monthly returns are then compounded for each period shown above, giving the performance for the Blended Benchmark for each period shown above.

Bloomberg Municipal Long Bond (22+) Index - The Index covers the USD-denominated long-term tax exempt bond market and has four main sectors: state and local general obligation bonds, revenue bonds, insured bonds and prerefunded bonds.

First Trust Municipal Closed-End Fund Total Return Index - The Index is a cap weighted index (based on NAV) designed to provide a broad representation of the national municipal closed-end fund universe. Funds included in the index trade on an U.S. Stock Exchange and have a market cap of at least $100 million.

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	The Morningstar Rating^TM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
⁵	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.
⁶	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.
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 2023. 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 2023. 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 and is adjusted for option provisions.
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 that is adjusted for option provisions and the leveraging process.
¹³	A premium occurs when an underlying fund's market price is higher than its NAV, and a discount occurs when an underlying fund's market price is lower than its NAV.
¹⁴	Inception Date is 9/27/2016

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

You could lose money by investing in a fund. An investment in a fund is not a deposit of a bank and is not insured or guaranteed. There can be no assurance that a fund's objective(s) will be achieved. Investors buying or selling shares on the secondary market may incur customary brokerage commissions. Please refer to each fund's prospectus and Statement of Additional Information for additional details on a fund's risks. The order of the below risk factors does not indicate the significance of any particular risk factor.

All or a portion of a fund's otherwise exempt- interest dividends may be taxable to those shareholders subject to the federal and state alternative minimum tax.

Unlike mutual funds, shares of the fund 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 premium or discount to a fund's net asset value and possibly face delisting and the bid/ask spread may widen.

During periods of falling interest rates if an issuer calls higher-yielding debt instruments, a fund may be forced to invest the proceeds at lower interest rates, likely resulting in a decline in the fund's income.

A fund that effects all or a portion of its creations and redemptions for cash rather than in-kind may be less tax-efficient.

Because the shares of CEFs cannot be redeemed upon demand, shares of many CEFs will trade on exchanges at market prices rather than net asset value, which may cause the shares to trade at a price greater than NAV (premium) or less than NAV (discount). A fund that invests in the shares of CEFs involves additional expenses that would not be present in a direct investment in the underlying funds. In addition, a fund's investment performance and risks will be related to the investment performance and risks of the underlying funds. CEFs may utilize leverage and the fund may be indirectly exposed to leverage.

An issuer or other obligated party of a debt security may be unable or unwilling to make dividend, interest and/or principal payments when due and the value of a security may decline as a result.

Ratings assigned by a credit rating agency are opinions of such entities, not absolute standards of credit quality and they do not evaluate risks of securities. Any shortcomings or inefficiencies in the process of determining credit ratings may adversely affect the credit ratings of the securities held by a fund and their perceived or actual credit risk.

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.

Current market conditions risk is the risk that a particular investment, or shares of the fund in general, may fall in value due to current market conditions. As a means to fight inflation, the Federal Reserve and certain foreign central banks have raised interest rates and expect to continue to do so, and the Federal Reserve has announced that it intends to reverse previously implemented quantitative easing. Recent and potential future bank failures could result in disruption to the broader banking industry or markets generally and reduce confidence in financial institutions and the economy as a whole, which may also heighten market volatility and reduce liquidity. In February 2022, Russia invaded Ukraine which has caused and could continue to cause significant market disruptions and volatility within the markets in Russia, Europe, and the United States. The hostilities and sanctions resulting from those hostilities have and could continue to have a significant impact on certain fund investments as well as fund performance and liquidity. The COVID-19 global pandemic, or any future public health crisis, and the ensuing policies enacted by governments and central banks have caused and may continue to cause significant volatility and uncertainty in global financial markets, negatively impacting global growth prospects.

Custodial receipt trusts may hold inverse floater securities, which would subject a fund to the inverse floaters risks.

A fund is susceptible to operational risks through breaches in cyber security. Such events could cause a fund to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss.

Investments in debt securities subject the holder to the credit risk of the issuer and the value of debt securities will generally change inversely with changes in interest rates. In addition, debt securities generally do not trade on a securities exchange making them less liquid and more difficult to value.

Distressed securities are speculative and often illiquid or trade in low volumes and thus may be more difficult to value and pose a substantial risk of default.

Extension risk is the risk that, when interest rates rise, certain obligations will be paid off by the issuer (or other obligated party) more slowly than anticipated, causing the value of these debt securities to fall. Rising interest rates tend to extend the duration of debt securities, making their market value more sensitive to changes in interest rates.

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's income may decline when interest rates fall or if there are defaults in its portfolio.

Industrial development bonds are normally secured only by the revenues from the project and are not general obligations of the issuer or otherwise secured by state or local government tax receipts.

As inflation increases, the present value of a fund's assets and distributions may decline.

Interest rate risk is the risk that the value of the debt securities in a fund's portfolio will decline because of rising interest rates. Interest rate risk is generally lower for shorter term debt securities and higher for longer-term debt securities.

Inverse floating rate securities are a type of debt instrument that has a coupon rate that varies inversely with a benchmark rate. Inverse floaters create effective leverage and will typically be more volatile and involve greater risk than the fixed rate municipal bonds underlying the inverse floaters.

The portfolio managers of an actively managed portfolio will apply investment techniques and risk analyses that may not have the desired result.

Market risk is the risk that a particular security, or shares of a fund in general may fall in value. Securities are subject to market fluctuations caused by such factors as general economic conditions, political events, regulatory or market developments, changes in interest rates and perceived trends in securities prices. Shares of a fund could decline in value or underperform other investments as a result. In addition, local, regional or global events such as war, acts of terrorism, spread of infectious disease or other public health issues, recessions, natural disasters or other events could have significant negative impact on a fund.

A fund faces numerous market trading risks, including the potential lack of an active market for fund shares due to a limited number of market makers. Decisions by market makers or authorized participants to reduce their role or step away in times of market stress could inhibit the effectiveness of the arbitrage process in maintaining the relationship between the underlying values of a fund's portfolio securities and a fund's market price.

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 values of municipal securities may be adversely affected by local political and economic conditions and developments. Income from municipal securities 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 an issuer.

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

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. The fund also relies on third parties for a range of services, including custody, and any delay or failure related to those services may affect the fund's ability to meet its objective.

High portfolio turnover may result in higher levels of transaction costs and may generate greater tax liabilities for shareholders.

The securities held in an escrow fund pledged to pay the principal and interest of a pre-refunded bond do not guarantee the price of the bond.

The market price of a fund's shares will generally fluctuate in accordance with changes in the fund's net asset value ("NAV") as well as the relative supply of and demand for shares on the exchange, and a fund's investment advisor cannot predict whether shares will trade below, at or above their NAV.

Prepayment risk is the risk that the issuer of a debt security will repay principal prior to the scheduled maturity date. Debt securities allowing prepayment may offer less potential for gains during a period of declining interest rates, as a fund may be required to reinvest the proceeds of any prepayment at lower interest rates.

Private activity bonds can have a substantially different credit profile than the municipality or public authority that issued them and may be negatively impacted by conditions affecting the general credit of the private enterprise or the project itself.

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.

Trading on an exchange may be halted due to market conditions or other reasons. There can be no assurance that a fund's requirements to maintain the exchange listing will continue to be met or be unchanged.

A fund may hold securities or other assets that may be valued on the basis of factors other than market quotations. This may occur because the asset or security does not trade on a centralized exchange, or in times of market turmoil or reduced liquidity. Portfolio holdings that are valued using techniques other than market quotations, including "fair valued" assets or securities, may be subject to greater fluctuation in their valuations from one day to the next than if market quotations were used. There is no assurance that a fund could sell or close out a portfolio position for the value established for it at any 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.

©2023 Morningstar, Inc. All Rights Reserved. The Morningstar Rating^TM information contained herein: (1) is proprietary to Morningstar;(2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

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