First Trust SMID Cap Rising Dividend Achievers ETF (SDVY)
Investment Objective/Strategy - The First Trust SMID Cap Rising Dividend Achievers ETF, seeks investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of an index called the Nasdaq US Small Mid Cap Rising Dividend Achievers™ Index (the "Index"). The Fund will normally invest at least 90% of its net assets (including investment borrowings) in securities that comprise the Index. The Index is composed of the securities of 100 small and mid cap companies with a history of raising their dividends and exhibit the characteristics to continue to do so in the future ("Index Securities"). The Index is designed to provide access to a portfolio of small and mid capitalization income producing securities.
There can be no assurance that the Fund's investment objectives will be achieved.
  • The index begins with the stocks in the Nasdaq US Mid Cap Index and the Nasdaq US Small Cap Index and eliminates those companies classified as a Real Estate Investment Trust by the Industry Classification Benchmark.
  • To be eligible for inclusion in the index, companies must have:
    • a minimum three-month average daily dollar trading volume of $2 million.
    • a minimum market cap of $500 million.
    • paid a dividend in the trailing twelve-month period greater than the dividend paid in the trailing twelve-month period three and five years prior.
    • positive earnings per share in the most recent fiscal year greater than the earnings per share three fiscal years prior.
    • a cash to debt ratio greater than 25%.
    • a trailing twelve-month period payout ratio no greater than 65%.
  • Eligible securities are ranked by a combined factor of dollar dividend increase over the previous five year period, current dividend yield, and payout ratio.
  • The 100 eligible securities with the lowest aggregated rank are selected for inclusion in the index, subject to a maximum of 30% from any one sector and 75% from the mid cap or small cap size classification.
  • The index stocks are equally weighted initially and on each rebalancing effective date. The index is reconstituted annually and rebalanced quarterly.
Fund Overview
TickerSDVY
Fund TypeSmall Cap and Mid Cap Equity
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBrown Brothers Harriman
CUSIP33741X102
ISINUS33741X1028
Intraday NAVSDVYIV
Fiscal Year-End09/30
ExchangeNasdaq
Inception11/1/2017
Inception Price$19.94
Inception NAV$19.94
Rebalance FrequencyQuarterly
Expense Ratio0.60%
Current Fund Data (as of 9/24/2018)
Closing NAV1$21.56
Closing Share Price2$21.64
Bid/Ask Midpoint$21.53
Bid/Ask Discount0.17%
Total Net Assets$4,312,559
Outstanding Shares200,002
Daily Volume250
Average 30-Day Daily Volume679
Closing Share Price 52-Week High/Low$21.96 / $19.71
Closing NAV 52-Week High/Low$22.02 / $19.67
Number of Holdings100
Fund Characteristics (as of 8/31/2018)6
Maximum Market Cap.$15,720
Median Market Cap.$4,855
Minimum Market Cap.$849
Price/Earnings15.12
Price/Book2.24
Price/Cash Flow11.45
Price/Sales1.13
Top Holdings (as of 9/24/2018)
Holding Percent
Arch Coal, Inc. 1.04%
Donaldson Company, Inc. 1.02%
InterDigital, Inc. 1.02%
j2 Global, Inc. 1.02%
Morningstar, Inc. 1.02%
Old Dominion Freight Line, Inc. 1.02%
Primerica, Inc. 1.02%
Sanderson Farms, Inc. 1.02%
Steelcase Inc. 1.02%
Teradyne, Inc. 1.02%

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 9/25/2018)3$0.0713
30-Day SEC Yield (as of 8/31/2018)41.04%
Index Yield (as of 8/31/2018)51.85%
Bid/Ask Midpoint vs. NAV (as of 6/30/2018)
Number of Days Bid/Ask Midpoint Above NAV
Quarter Ended 0-49
Basis Points
50-99
Basis Points
100-199
Basis Points
>=200
Basis Points
6/30/2018 37 0 0 0
3/31/2018 33 2 0 0
12/31/2017 16 2 0 0
Number of Days Bid/Ask Midpoint Below NAV
Quarter Ended 0-49
Basis Points
50-99
Basis Points
100-199
Basis Points
>=200
Basis Points
6/30/2018 27 0 0 0
3/31/2018 26 0 0 0
12/31/2017 22 0 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 9/24/2018)
Financials 31.03%
Industrials 27.98%
Consumer Discretionary 18.82%
Information Technology 10.11%
Consumer Staples 5.03%
Materials 5.00%
Energy 1.04%
Telecommunication Services 0.99%
Month End Performance (as of 8/31/2018)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception7
Fund Performance *
Net Asset Value (NAV) 4.40% 5.22% N/A N/A N/A N/A 10.34%
After Tax Held 4.29% 4.99% N/A N/A N/A N/A 9.97%
After Tax Sold 2.49% 2.95% N/A N/A N/A N/A 5.84%
Market Price 4.36% 5.02% N/A N/A N/A N/A 10.19%
Index Performance **
Nasdaq US Small Mid Cap Rising Dividend Achievers™ Index 4.57% 5.69% N/A N/A N/A N/A 10.98%
S&P 1000 Index 6.68% 11.59% N/A N/A N/A N/A 16.06%
Quarter End Performance (as of 6/29/2018)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception7
Fund Performance *
Net Asset Value (NAV) 0.43% -0.13% N/A N/A N/A N/A 4.73%
After Tax Held 0.33% -0.35% N/A N/A N/A N/A 4.37%
After Tax Sold 0.25% -0.08% N/A N/A N/A N/A 2.68%
Market Price 0.43% -0.08% N/A N/A N/A N/A 4.83%
Index Performance **
Nasdaq US Small Mid Cap Rising Dividend Achievers™ Index 0.59% 0.19% N/A N/A N/A N/A 5.20%
S&P 1000 Index 5.66% 5.27% N/A N/A N/A N/A 9.49%

*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 Nasdaq US Small Mid Cap Rising Dividend Achievers™ 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 1000 Index - The Index combines the S&P MidCap 400 Index and the S&P SmallCap 600 Index to form an investable benchmark for the mid- to small-cap segment of the U.S. equity market.

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 share 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 Index yield represents the weighted average trailing 12-month dividend of the constituents of the Nasdaq US Small Mid Cap Rising Dividend Achievers(TM) Index.
6 All market capitalization numbers are in USD$ Millions.
7 Inception Date is 11/1/2017

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 Nasdaq US Small Mid Cap Rising Dividend Achievers™ 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 stock owned by the fund, fund shares or stocks in general may fall in value. There can be no assurance that the fund's investment objective will be achieved.

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.

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.

The fund may invest in securities issued by companies concentrated in a particular industry. The fund may invest in small capitalization and mid capitalization companies. Such companies may experience greater price volatility than larger, more established companies.

There is no guarantee that the issuers of the securities in the portfolio will declare dividends in the future or that, if declared, they will either remain at current levels or increase over time.

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. Such events could cause the funds to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss.

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.

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.

Nasdaq® and Nasdaq US Small Mid Cap Rising Dividend Achievers Index are registered trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the "Corporations") and are licensed for use by First Trust Advisors L.P. The fund has not been passed on by the Corporations as to its legality or suitability. The fund is not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUND.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value