First Trust Indxx Aerospace & Defense ETF (MISL)
Investment Objective/Strategy - The First Trust Indxx Aerospace & Defense ETF (the "Fund") seeks investment results that correspond generally to the price and yield, before fees and expenses, of an equity index called the Indxx US Aerospace & Defense Index (the "Index"). Under normal market conditions, the Fund will invest at least 80% of its net assets (plus any borrowings for investment purposes) in the common stocks that comprise the Index.
There can be no assurance that the Fund's investment objectives will be achieved.
Index Description According to the Index Provider
  • The index begins with a universe of U.S. companies engaged in business activities associated with certain aerospace and defense sub-themes, as identified by the index provider.
  • To be eligible for inclusion in the index, companies must derive at least 50% of revenues from business activities in one or more of the following sub-themes:
    • Advanced Aerospace and Defense - This includes: Hypersonic, Directed Energy, Space Technologies, Unmanned Aerial Vehicle/Advanced Air Mobility, Autonomous, Cybersecurity and C5ISR Systems.
    • Traditional Aerospace and Defense - Includes companies that manufacture construction materials, electronics, and telecommunications equipment used in the manufacture of aircraft for both defense and commercial aviation.
  • A total of 50 will be selected and assigned weights based on market capitalization.
    • A single security cap of 8% is applied to securities and the extra weight is redistributed amongst the uncapped securities. The aggregate weight of securities with weights greater than or equal to 5% must not exceed 45%.
  • The index is rebalanced quarterly and reconstituted semi-annually.
Fund Overview
TickerMISL
Fund TypeAerospace & Defense
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon Corp
CUSIP33733E831
ISINUS33733E8315
Intraday NAVMISLIV
Fiscal Year-End12/31
ExchangeNYSE Arca
Inception10/25/2022
Inception Price$20.79
Inception NAV$20.79
Rebalance FrequencyQuarterly
Expense Ratio*0.60%
* As of 5/1/2024
Current Fund Data (as of 6/14/2024)
Closing NAV1$27.83
Closing Market Price2$27.77
Bid/Ask Midpoint$27.83
Bid/Ask Premium0.00%
30-Day Median Bid/Ask Spread (as of 6/13/2024)30.25%
Total Net Assets$65,396,628
Outstanding Shares2,350,002
Daily Volume5,305
Average 30-Day Daily Volume19,935
Closing Market Price 52-Week High/Low$28.81 / $21.33
Closing NAV 52-Week High/Low$28.76 / $21.32
Number of Holdings (excluding cash)34
Top Holdings (as of 6/14/2024)*
Holding Percent
TransDigm Group Incorporated 8.05%
The Boeing Company 7.94%
RTX Corporation 7.90%
Lockheed Martin Corporation 7.72%
General Dynamics Corporation 7.69%
Howmet Aerospace Inc. 4.68%
HEICO Corporation 4.46%
Leidos Holdings, Inc. 4.34%
L3Harris Technologies Inc. 4.07%
Woodward, Inc. 3.75%

* 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 6/15/2024)4$0.0385
30-Day SEC Yield (as of 5/31/2024)50.36%
12-Month Distribution Rate (as of 5/31/2024)60.65%
Index Yield (as of 5/31/2024)71.34%
Fund Characteristics (as of 5/31/2024)8
Maximum Market Cap.$143,101
Median Market Cap.$7,497
Minimum Market Cap.$263
Price/Earnings29.47
Price/Book3.74
Price/Cash Flow20.37
Price/Sales1.86
Bid/Ask Premium/Discount (as of 6/14/2024)
  2023 Q1 2024 Q2 2024 Q3 2024
Days Traded at Premium 223 56 41 ---
Days Traded at Discount 27 5 13 ---
Top Industry Exposure (as of 6/14/2024)
Aerospace & Defense 83.71%
Professional Services 15.40%
Diversified Telecommunication Services 0.89%
Hypothetical Growth of $10,000 Since Inception (as of 6/13/2024) *
Tracking Index: Indxx US Aerospace & Defense Index

Month End Performance (as of 5/31/2024)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception9
Fund Performance *
Net Asset Value (NAV) 8.91% 12.85% 35.21% N/A N/A N/A 22.99%
After Tax Held 8.85% 12.79% 34.80% N/A N/A N/A 22.71%
After Tax Sold 5.28% 7.61% 20.81% N/A N/A N/A 17.62%
Market Price 8.96% 12.81% 35.23% N/A N/A N/A 22.96%
Index Performance **
Indxx US Aerospace & Defense Index 9.09% 13.14% 36.05% N/A N/A N/A 23.69%
S&P 500® Index 3.91% 11.30% 28.19% N/A N/A N/A 23.64%
S&P Composite 1500® Aerospace & Defense Index 9.82% 9.58% 25.37% N/A N/A N/A 17.91%
Quarter End Performance (as of 3/28/2024)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception9
Fund Performance *
Net Asset Value (NAV) 6.87% 6.87% 21.78% N/A N/A N/A 21.29%
After Tax Held 6.81% 6.81% 21.41% N/A N/A N/A 20.99%
After Tax Sold 4.07% 4.07% 12.88% N/A N/A N/A 16.23%
Market Price 6.83% 6.83% 21.74% N/A N/A N/A 21.26%
Index Performance **
Indxx US Aerospace & Defense Index 7.06% 7.06% 22.54% N/A N/A N/A 21.99%
S&P 500® Index 10.56% 10.56% 29.88% N/A N/A N/A 26.15%
S&P Composite 1500® Aerospace & Defense Index 3.22% 3.22% 12.11% N/A N/A N/A 15.28%

*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.

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

S&P Composite 1500® Aerospace & Defense Index - The Index is acapitalization-weighted index of companies classified by GICS as aerospace anddefense within the S&P Composite 1500 Index.

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 US Aerospace & Defense Index.
8 All market capitalization numbers are in USD$ Millions.
9 Inception Date is 10/25/2022

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.

The companies involved in the aerospace and defense industries are subject to fierce competition, consolidation, adverse political and government developments, substantial research and development costs, limited numbers of potential customers and excess capacity and spending trends. Their products and services may be subject to rapid obsolescence.

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.

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. Ongoing armed conflicts between Russia and Ukraine in Europe and among Israel, Hamas and other militant groups in the Middle East, have caused and could continue to cause significant market disruptions and volatility within the markets in Russia, Europe, the Middle East 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.

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.

Equity securities may decline significantly in price over short or extended periods of time, and such declines may occur in the equity market as a whole, or they may occur in only a particular country, company, industry or sector of the market.

An index fund will be concentrated in an industry or a group of industries to the extent that the index is so concentrated. A fund with significant exposure to a single asset class, or the securities of issuers within the same country, state, region, industry, or sector may have its value more affected by an adverse economic, business or political development than a broadly diversified fund.

A fund may be a constituent of one or more indices or models 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. Losses or costs associated with any index provider errors generally will be borne by a fund and its shareholders.

Industrials and producer durables companies are subject to certain risks, including the general state of the economy, intense competition, consolidation, domestic and international politics, excess capacity and consumer demand and spending trends. They may also be significantly affected by overall capital spending levels, economic cycles, technical obsolescence, delays in modernization, labor relations, and government regulations.

Large capitalization companies may grow at a slower rate than the overall market.

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.

An index fund's return may not match the return of the index for a number of reasons including operating expenses, costs of buying and selling securities to reflect changes in the index, and the fact that a fund's portfolio holdings may not exactly replicate the index.

A fund classified as "non-diversified" may invest a relatively high percentage of its assets in a limited number of issuers. As a result, a 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.

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.

A fund that invests in securities included in or representative of an index will hold those securities regardless of investment merit and the fund generally will not take defensive positions in declining markets.

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

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.

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

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.

First Trust Advisors L.P. (FTA) is the adviser to the First Trust fund(s). FTA is an affiliate of First Trust Portfolios L.P., the distributor of the fund(s).

Indxx and Indxx US Aerospace & Defense Index (“Index”) are trademarks of Indxx, Inc. (“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.

CUSIP identifiers have been provided by CUSIP Global Services, managed on behalf of the American Bankers Association by FactSet Research Systems Inc. and are not for use or dissemination in a manner that would serve as a substitute for any CUSIP service. The CUSIP Database, ©2024 CUSIP Global Services. "CUSIP" is a registered trademark of the American Bankers Association.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value