First Trust TCW Unconstrained Plus Bond ETF (UCON)
  • 2021 Estimated Capital Gain Distributions
    Certain First Trust Exchange-Traded Funds are expected to pay a short term and/or long-term capital gain distribution in December. For a list of exchange-traded funds expected to pay a capital gain distribution, please click here. Final determination of the source and tax status of all distributions paid in the current year are to be made after year-end and could differ from the expectations noted above.
Investment Objective/Strategy - The investment objective of the First Trust TCW Unconstrained Plus Bond ETF is to seek to maximize long-term total return. Under normal market conditions, the Fund invests at least 80% of its net assets (including investment borrowings) in a portfolio of fixed income securities. The Fund's investment sub-advisor, TCW Investment Management Company LLC ("TCW" or the "Sub-Advisor"), manages the Fund's portfolio in an "unconstrained" manner, meaning that its investment universe is not limited to the securities of any particular index and it has discretion to invest in fixed income securities of any type or credit quality, including up to 70% of its net assets in high yield (or "junk") securities, up to 60% of its net assets in securities issued by issuers with significant ties to emerging market countries and up to 50% of its net assets in securities denominated in non-U.S. currencies. Additionally, under normal market conditions, the Fund's average portfolio duration will vary from between 0 to 10 years. Duration is a measure of the expected price volatility of a fixed income security as a result of changes in market rates of interest.
There can be no assurance that the Fund's investment objectives will be achieved.
Fund Overview
TickerUCON
Fund TypeNon-Traditional Bond
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon Corp
Portfolio Manager/Sub-AdvisorTCW Investment Management Company LLC
CUSIP33740F888
ISINUS33740F8885
Intraday NAVUCONIV
Fiscal Year-End08/31
ExchangeNYSE Arca
Inception6/4/2018
Inception Price$25.00
Inception NAV$25.00
Gross Expense Ratio*0.86%
Net Expense Ratio*0.76%
* As of 1/4/2021
First Trust has contractually agreed to waive management fees of 0.10% of average daily net assets until December 31, 2021.
Current Fund Data (as of 11/29/2021)
Closing NAV1$26.27
Closing Market Price2$26.37
Bid/Ask Midpoint$26.33
Bid/Ask Premium0.23%
30-Day Median Bid/Ask Spread30.04%
Total Net Assets$774,883,818
Outstanding Shares29,500,002
Daily Volume83,212
Average 30-Day Daily Volume219,305
Closing Market Price 52-Week High/Low$26.83 / $26.26
Closing NAV 52-Week High/Low$26.77 / $26.25
Number of Holdings (excluding cash)779
Top Holdings (as of 11/29/2021)*
Holding Percent
Fannie Mae or Freddie Mac TBA, 2.50%, due 10/01/2051 5.04%
Fannie Mae or Freddie Mac TBA, 2%, due 10/01/2051 4.66%
U.S. Treasury Bill, 0%, due 01/06/2022 4.45%
U.S. Treasury Bill, 0%, due 12/09/2021 3.60%
U.S. Treasury Bill, 0%, due 02/03/2022 2.76%
U.S. Treasury Bill, 0%, due 01/25/2022 2.73%
U.S. Treasury Bill, 0%, due 01/20/2022 2.12%
U.S. Treasury Bill, 0%, due 12/14/2021 1.78%
U.S. Treasury Bill, 0%, due 12/02/2021 1.52%
JAPAN TREASURY DISC BILL 0%, due 02/28/2022 1.00%

* Excluding cash.  Holdings are subject to change.

NAV History (Since Inception)
Past performance is not indicative of future results.
Overall Morningstar RatingTM (as of 10/31/2021)4

Among 303 funds in the Nontraditional Bond category. This fund was rated 4 stars/303 funds (3 years) based on risk adjusted returns.
Distribution Information
Dividend per Share Amt (as of 11/30/2021)5$0.0400
30-Day SEC Yield (as of 10/29/2021)61.12%
Unsubsidized 30-Day SEC Yield (as of 10/29/2021)71.02%
12-Month Distribution Rate (as of 10/29/2021)82.31%
Distribution Rate (as of 10/29/2021)92.05%
Fund Characteristics (as of 10/29/2021)
Weighted Average Effective Duration101.90 Years
Weighted Average Maturity4.24 Years
Maturity Exposure (as of 10/29/2021)
Years Percent
0 - 0.99 Years 23.70%
1 - 2.99 Years 11.10%
3 - 4.99 Years 17.50%
5 - 6.99 Years 17.00%
7 - 9.99 Years 22.60%
10 - 19.99 Years 5.10%
20 Years & Over 3.00%
Fund Composition (as of 10/29/2021)
Percent
Non-Agency MBS 19.50%
Cash & Equivalents 18.90%
Investment Grade Credit 14.40%
ABS 11.90%
CMBS 11.60%
Agency MBS 9.40%
High Yield Credit 8.80%
Emerging Market Credit 5.50%
Bid/Ask Premium/Discount (as of 11/29/2021)
  2020 Q1 2021 Q2 2021 Q3 2021
Days Traded at Premium 169 61 63 64
Days Traded at Discount 84 0 0 0
Credit Quality (as of 10/29/2021)
Government/Agency 32.70%
AAA 7.90%
AA+ 0.60%
AA 2.30%
AA- 2.00%
A+ 0.60%
A 2.40%
A- 3.50%
BBB+ 4.30%
BBB 6.40%
BBB- 5.40%
BB+ 2.50%
BB 2.50%
BB- 2.70%
B+ 1.70%
B 2.70%
B- 1.60%
CCC+ 0.70%
CCC 4.40%
CCC- 3.10%
CC 6.00%
C 2.00%
D 2.00%
The credit quality and ratings information presented above reflect the ratings assigned by one or more nationally recognized statistical rating organizations (NRSROs), including Standard & Poor's Rating Group, a division of the McGraw Hill Companies, 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 the ratings are not equivalent, the lowest ratings are used. Sub-investment grade ratings are those rated BB+/Ba1 or lower. Investment grade ratings are those rated BBB-/Baa3 or higher. 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. U.S. Treasury, U.S. Agency and U.S. Agency mortgage-backed securities appear under "Government/Agency". Credit ratings are subject to change.
Hypothetical Growth of $10,000 Since Inception (as of 11/29/2021) *


Month End Performance (as of 10/29/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception11
Fund Performance *
Net Asset Value (NAV) -0.17% 1.01% 3.25% 4.88% N/A N/A 4.68%
After Tax Held -0.39% 0.24% 2.24% 3.61% N/A N/A 3.42%
After Tax Sold -0.10% 0.60% 1.92% 3.20% N/A N/A 3.05%
Market Price -0.09% 1.01% 3.48% 4.89% N/A N/A 4.75%
Index Performance **
ICE BofA US Dollar 3-Month Deposit Offered Rate Average Index 0.03% 0.15% 0.18% 1.31% N/A N/A 1.44%
Quarter End Performance (as of 9/30/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception11
Fund Performance *
Net Asset Value (NAV) 0.37% 1.34% 3.92% 4.92% N/A N/A 4.90%
After Tax Held 0.14% 0.63% 2.87% 3.64% N/A N/A 3.63%
After Tax Sold 0.22% 0.79% 2.31% 3.22% N/A N/A 3.22%
Market Price 0.33% 1.26% 3.87% 5.00% N/A N/A 4.95%
Index Performance **
ICE BofA US Dollar 3-Month Deposit Offered Rate Average Index 0.03% 0.14% 0.19% 1.38% N/A N/A 1.47%
3-Year Statistics (as of 10/29/2021)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
UCON 4.34% -1.54 28.73 0.84 -0.01
ICE BofA US Dollar 3-Month Deposit Offered Rate Average Index 0.31% --- 1.00 1.41 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. The fund's performance reflects fee waivers and expense reimbursements, absent which performance would have been lower.

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.

**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.

ICE BofA US Dollar 3-Month Deposit Offered Rate Average Index - The Index is a 3-month average of the interest rate that the banks in the index, determined by the ICE Benchmark Administration, pay when they borrow on an unsecured basis.

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 RatingTM 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 unsubsidized 30-day SEC yield is calculated the same as the 30-day SEC yield, however it excludes contractual fee waivers and expense reimbursements.
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 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. It accounts for the likelihood of changes in the timing of cash flows in response to interest rate movements.
11 Inception Date is 6/4/2018

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

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.

In managing a fund's investment portfolio, the portfolio managers will apply investment techniques and risk analyses that may not have the desired result.

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

A fund may be subject to the risk that a counterparty will not fulfill its obligations which may result in significant financial loss to a fund.

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.

Certain securities are subject to call, credit, inflation, income, interest rate, extension and prepayment risks. These risks could result in a decline in a security's value and/or income, increased volatility as interest rates rise or fall and have an adverse impact on a fund's performance.

The use of listed and OTC derivatives, including futures, options, swap agreements and forward contracts, can lead to losses because of adverse movements in the price or value of the underlying asset, index or rate, which may be magnified by certain features of the derivatives. These risks are heightened when a fund's portfolio managers use derivatives to enhance a fund's returns or as a substitute for a position or security, rather than solely to hedge (or offset) the risk of a position or security held by a fund.

The market value of floating rate securities may fall in a declining interest rate environment and may also fall in a rising interest rate environment if there is a lag between the rise in interest rates and the reset. Income earned by a fund on floating rate securities may decline due to lower coupon payments on floating-rate securities.

High yield securities, or "junk" bonds, 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 may be a constituent of one or more indices which could greatly affect a fund's trading activity, size and volatility.

To the extent a fund invests in floating or variable rate obligations that use the London Interbank Offered Rate ("LIBOR") as a reference interest rate, it is subject to LIBOR Risk. The United Kingdom's Financial Conduct Authority, which regulates LIBOR, will cease making LIBOR available as a reference rate over a phase-out period that will begin immediately after December 31, 2021. The unavailability or replacement of LIBOR may affect the value, liquidity or return on certain fund investments and may result in costs incurred in connection with closing out positions and entering into new trades. Any potential effects of the transition away from LIBOR on a fund or on certain instruments in which a fund invests can be difficult to ascertain, and they may vary depending on a variety of factors, and they could result in losses to a fund.

Certain fund investments may be subject to restrictions on resale, trade over-the-counter market or in limited volume, or lack an active trading market. Illiquid securities may trade at a discount and may be subject to wide fluctuations in market value.

Mortgage-related securities are more susceptible to adverse economic, political or regulatory events that affect the value of real estate. They are also subject to the risk that the rate of mortgage prepayments decreases, which extends the average life of a security and increases the interest rate exposure.

There are no government or agency guarantees of payments in securities offered by non-government issuers, therefore they are subject to the credit risk of the issuer. Non-agency securities often trade "over-the-counter" and there may be a limited market for them making them difficult to value.

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.

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

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.

The purchase of TBA ("to be announced") securities may give rise to investment leverage and increase a fund's volatility. In addition, default by, or bankruptcy of, a counterparty to a TBA transaction would expose a fund to possible losses.

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.

Due to the lack of centralized information and trading, and variations in lot sizes of certain debt securities, the valuation of debt securities may carry more uncertainty and risk than that of publicly traded securities.

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.

©2021 Morningstar, Inc. All Rights Reserved. The Morningstar RatingTM 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.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value