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First Trust/Confluence Small Cap Value Fund (FOVAX)
Investment Objective/Strategy - The Fund seeks to provide long-term capital appreciation by investing, under normal market conditions, at least 80% of its net assets (including investment borrowings) in equity securities of U.S. listed companies with small market capitalizations at the time of investment.
There can be no assurance that the Fund's investment objectives will be achieved. The Fund may not be appropriate for all investors.
Fund Overview
Fund TypeSmall-Cap Value
Investment AdvisorFirst Trust Advisors L.P.
Portfolio Manager/Sub-AdvisorConfluence Investment Management LLC
Share ClassClass A
Fiscal Year-End10/31
Inception Date2/24/2011
Minimum Investment Amount$2,500
Minimum Subsequent Investment Amount$50
Maximum Initial Sales Charge5.50%
Gross Expense Ratio*2.66%
Net Expense Ratio*1.60%
* As of 3/2/2020
Pursuant to contract, First Trust has agreed to waive fees and/or pay fund expenses to prevent the net expense ratio of any class of shares of the fund from exceeding 1.35% per year, excluding 12b-1 distribution and service fees, acquired fund fees and expenses and certain other expenses as described in the prospectus, through 2/28/2021, and to not exceed 1.70% per year from 3/01/2021 through 2/28/2030. Net expense ratio shown above includes 12b-1 service fees, acquired fund fees and certain other expenses as described in the prospectus.
Current Fund Data (as of 4/6/2020)
Net Asset Value1$23.01
Total Net Assets$22,401,704
Outstanding Shares161,307
NAV 52-Week High/Low$33.53 / $20.25
Fund Characteristics (as of 3/31/2020)3,4
Maximum Market Cap.$10,269
Median Market Cap.$874
Minimum Market Cap.$210
Price/Cash Flow12.36
Top 10 Holdings (as of 2/28/2020)4
Holding Percent
Cannae Holdings, Inc. 5.52%
frontdoor, Inc. 5.37%
I3 Verticals, Inc., Class A 4.38%
RE/MAX Holdings, Inc., Class A 3.98%
Kadant, Inc. 3.93%
Allied Motion Technologies, Inc. 3.92%
Avanos Medical, Inc. 3.92%
Healthcare Services Group, Inc. 3.66%
James River Group Holdings Ltd. 3.64%
Northwest Natural Holding Co. 3.58%
NAV History (Since Inception)
Past performance is not indicative of future results.
Distribution Information
Dividend FrequencySemi-Annual
Dividend per Share Amt (as of 4/7/2020)2$3.7825
Industry Breakdown (as of 2/28/2020)4
  Industry Percent
Machinery 10.91%
Health Care Equipment & Supplies 8.73%
Insurance 7.22%
Electrical Equipment 6.36%
Banks 6.05%
Equity Real Estate Investment Trusts 5.97%
Diversified Financial Services 5.51%
Diversified Consumer Services 5.37%
IT Services 4.38%
Real Estate Management & Development 3.98%
Commercial Services & Supplies 3.66%
Gas Utilities 3.58%
Water Utilities 3.58%
Paper & Forest Products 3.23%
Electronic Equipment, Instruments & Components 3.12%
Health Care Providers & Services 3.09%
Pharmaceuticals 3.04%
Capital Markets 2.98%
Air Freight & Logistics 2.73%
Textiles, Apparel & Luxury Goods 2.63%
Professional Services 2.61%
Hotels, Restaurants & Leisure 1.27%
Month End Performance (as of 3/31/2020)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund Performance *
Without Sales Charge -27.05% -27.05% -19.30% -2.82% 1.74% N/A 5.99%
With Sales Charge -31.06% -31.06% -23.73% -4.64% 0.59% N/A 5.33%
Index Performance **
Russell 2000® Value Index -35.66% -35.66% -29.64% -9.51% -2.42% N/A 3.58%
Russell 2000® Index -30.61% -30.61% -23.99% -4.64% -0.25% N/A 5.51%
Quarter End Performance (as of 3/31/2020)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund Performance *
Without Sales Charge -27.05% -27.05% -19.30% -2.82% 1.74% N/A 5.99%
With Sales Charge -31.06% -31.06% -23.73% -4.64% 0.59% N/A 5.33%
Index Performance **
Russell 2000® Value Index -35.66% -35.66% -29.64% -9.51% -2.42% N/A 3.58%
Russell 2000® Index -30.61% -30.61% -23.99% -4.64% -0.25% N/A 5.51%

*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. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative.

**Index performance information is for illustrative purposes only. Indexes do not charge management fees or brokerage expenses and no such fees or expenses were deducted from the performance shown. All Index returns assume that dividends are reinvested when they are received. Indexes are unmanaged and an investor cannot invest directly in an index.

Russell 2000® Value Index - The Index measures the performance of the small-cap segment of the U.S. equity universe. It includes those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. The Index is constructed to provide a comprehensive and unbiased barometer for the small-cap value segment.

Russell 2000® Index - The Index is comprised of the smallest 2000 companies in the Russell 3000 Index.

1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's outstanding shares .
2 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.
3 All market capitalization numbers are in USD$ Millions.
4 Market value information used in calculating the percentages is based upon trade date plus one recording of transactions, which can differ from regulatory financial reports (Forms N-CSR and N-PORT Part F) that are based on trade date recording of security transactions. Holdings are subject to change.
5 Inception Date is 2/24/2011

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.

The Fund is subject to the following risks:

You could lose money by investing in the Fund. An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.

Because the Fund invests in equity securities, the value of the Fund's shares will fluctuate with changes in the value of these equity securities.

The Fund is subject to market risk which is the risk that a particular security owned by the Fund or shares of the Fund in general may fall in value.

The Fund may invest in securities issued by companies concentrated in a particular industry or sector which involves additional risks including limited diversification.

There can be no assurance that the securities held by the Fund will stay within the Fund's intended market capitalization range.

Growth stocks tend to be more volatile than other types of stocks and their prices may fluctuate more dramatically than the overall stock market.

The intrinsic value of a stock with value characteristics may not be fully recognized by the market for a long time or a stock judged to be undervalued may actually be appropriately priced at a low level.

The Fund focuses its investments on securities that are believed to be undervalued or inexpensive relative to other investments which may involve additional risks. Disciplined adherence to a "value" investment mandate during periods in which that style is "out of favor" can result in significant underperformance relative to overall market indices and other investment vehicles that pursue growth and/or flexible style investments.

The Fund may invest in Business Development Companies ("BDCs") which may carry risks similar to those of a private equity or venture capital fund. Shares of BDCs are not redeemable at the option of the shareholder and may trade in the market at a discount to their net asset value. BDCs held by the Fund may employ leverage which subjects BDCs to increased risks.

Real estate investment trusts ("REITs") and other real estate related companies are subject to certain risks, including changes in the real estate market, vacancy rates and competition, volatile interest rates and economic recession.

The Fund may invest in investment companies, including closed-end funds (CEFs) and exchange-traded funds (ETFs), which involves additional expenses that would not be present in a direct investment in the underlying investment companies. Also, the investment companies are subject to the risks of the underlying securities that they hold. CEFs may employ leverage which subjects the CEFs to additional risks. CEFs and ETFs may frequently trade at a discount to their net asset value.

The Fund invests in small capitalization companies. Such companies may experience greater price volatility than larger, more established companies.

The Fund normally invests at least 80% of its assets in Small-Cap Companies. Because the market capitalization is measured at the time of its initial purchase, the Fund will not be forced to sell a stock because the stock has exceeded or fallen below the market capitalization range.

The Fund currently has fewer assets than larger funds, and like other smaller funds, large inflows and outflows may impact the Fund's market exposure for limited periods of 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 risk through breaches in cyber security.

Please see the Fund's prospectus for a complete description of the risks of investing in the Fund.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial advisors are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
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