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First Trust/Dow Jones Dividend & Income Allocation Portfolio
Investment Objective/Strategy - The First Trust/Dow Jones Dividend & Income Allocation Portfolio (the "Fund") seeks to provide total return by allocating among dividend-paying stocks and investment grade bonds.
There can be no assurance that the Fund's investment objectives will be achieved.
The Fund seeks to achieve its investment objective by investing, under normal market conditions, approximately 40-60% of its net assets in equity securities and approximately 40-60% of its net assets in fixed income securities at the time of purchase. Under normal market conditions, at the time of purchase at least 80% of the Fund's net assets (including investment borrowings) will be invested in securities of issuers included in a Dow Jones index. The equity portion of the portfolio will be derived from a quantitative process that seeks to provide total return through investing generally in dividend paying stocks included in the Dow Jones U.S. Total Stock Market IndexSM.The Fund's investment advisor reserves the right to over-weight, under-weight or exclude certain securities from the portfolio that would otherwise be selected pursuant to the quantitative process in certain instances.
The fixed income component seeks to provide income and preserve capital through investing in a diversified investment grade bond portfolio. Investment grade bonds are those bonds rated "BBB-" or higher by Standard & Poor's Financial Services LLC or Fitch, Inc. or "Baa3" or higher by Moody's Investors Service, Inc. at the time of purchase. Under normal market conditions, at the time of purchase approximately 80% of the net assets of the Fund allocated to corporate bonds will be invested in: investment grade bonds included in the Dow Jones Equal Weight U.S. Issued Corporate Bond IndexSM and other investment grade bonds of issuers whose securities are included in the Bond Index; and investment grade bonds of issuers included in the Dow Jones Composite Average. The Fund may also invest in U.S. government and agency securities, including mortgage-backed securities. The Fund may, at certain times, also hold exchange-traded funds that invest in investment grade corporate bonds and U.S. government bonds in lieu of investing directly in bonds.
The Fund offers its shares only to separate accounts of insurance companies that offer variable annuity and variable life insurance products.
Fund Overview
Fiscal Year-End12/31
Inception Date5/1/2012
Inception NAV$10.00
Gross Expense Ratio
Net Expense Ratio1.20%
Expenses are capped contractually at 1.20% per year, at least through May 01, 2024.
Current Fund Data (as of 12/5/2023)
Net Asset Value1$12.89
Dividend FrequencySemi-Annual
NAV 52-Week High/Low$13.30 / $11.83
Asset Type Breakdown (as of 10/31/2023)2
  Asset Percent
Fixed-Income 54.66%
Equity 45.00%
Cash and Other 0.34%
Top Equity Holdings (as of 10/31/2023)2
Holding Percent
Dollar General Corp. 0.37%
Chemed Corp. 0.36%
General Dynamics Corp. 0.36%
Verizon Communications, Inc. 0.36%
Cigna (The) Group 0.35%
Globe Life, Inc. 0.35%
Humana Inc 0.35%
International Seaways, Inc. 0.35%
Microsoft Corp. 0.35%
Northrop Grumman Corp. 0.35%
Please note: The above holdings are as of a % of Total Investments
Equity Sector Breakdown (as of 10/31/2023)2
  Sector Percent
Financials 32.48%
Industrials 29.32%
Consumer Discretionary 8.95%
Consumer Staples 8.36%
Health Care 7.21%
Information Technology 4.16%
Materials 2.87%
Communication Services 2.27%
Energy 2.27%
Utilities 1.45%
Real Estate 0.66%
NAV History (Since Inception)
Past performance is not indicative of future results.
Top Fixed-Income Holdings by Issuer (as of 10/31/2023)2
Issuer Percent
Bank of America Corp. 3.68%
Morgan Stanley 3.13%
United States Treasury 3.11%
JPMorgan Chase & Co. 2.34%
Duke Energy Corp. 2.23%
Pfizer Investment Enterprises Pte. Ltd. 2.18%
Goldman Sachs Group (The), Inc. 2.14%
Amgen, Inc. 1.90%
Oracle Corp. 1.71%
T-Mobile USA, Inc. 1.50%
Please note: The above holdings are as of a % of Total Investments
Fixed-Income Credit Ratings Breakdown (as of 10/31/2023)2
  Credit Rating Percent
AAA 5.44%
AA+ 0.88%
AA 1.13%
AA- 15.88%
A+ 13.26%
A 14.46%
A- 12.43%
BBB+ 14.59%
BBB 13.92%
BBB- 6.50%
NR 1.51%
The credit quality and ratings information presented above 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 the ratings are not equivalent, the highest 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. Credit ratings are subject to change.
Month End Performance (as of 10/31/2023)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund Performance *
Fund Performance -7.32% -1.78% 0.86% 2.34% 4.11% 5.49% 6.07%
Index Performance **
Bloomberg US Corporate Investment Grade Index -5.23% -1.86% 2.77% -5.48% 0.85% 1.89% 2.08%
Russell 3000® Index -9.08% 9.41% 8.38% 9.19% 10.23% 10.52% 11.65%
Blended Benchmark -7.17% 3.71% 5.67% 1.84% 5.75% 6.35% 6.98%
Quarter End Performance (as of 9/29/2023)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund Performance *
Fund Performance -2.56% 0.45% 8.46% 3.34% 3.62% 5.99% 6.32%
Index Performance **
Bloomberg US Corporate Investment Grade Index -3.09% 0.02% 3.65% -4.93% 0.93% 2.23% 2.26%
Russell 3000® Index -3.25% 12.39% 20.46% 9.38% 9.14% 11.28% 12.01%
Blended Benchmark -3.15% 6.11% 11.99% 2.21% 5.28% 6.89% 7.25%

*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.

Fund expenses and return figures do not reflect the deduction of sales charges or other expenses associated with variable products. If such fees were included, expenses would be higher and the performance would be lower. The Fund's performance reflects fee waivers and expense reimbursements, absent which performance would have been lower.

**Indexes are unmanaged and an investor cannot invest directly in an index. Any Benchmarks or Indexes shown reflect no deduction for fees, expenses, or taxes.

Bloomberg US Corporate Investment Grade Index - The Index measures the performance of investment grade U.S. corporate bonds. The index includes all publicly issued, dollar-denominated corporate bonds with a minimum of $250 million par outstanding that are investment grade-rated (Baa3/BBB- or higher). The index excludes bonds having less than one year to final maturity as well as floating rate bonds, non-registered private placements, structured notes, hybrids, and convertible securities.

Russell 3000® Index - The Index is comprised of the 3000 largest and most liquid stocks based and traded in the U.S.

Blended Benchmark - The Benchmark return is a 50/50 split between the Russell 3000® Index and the Bloomberg U.S. Corporate Investment Grade Index returns. Blended Benchmark returns are calculated by using the monthly return 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.

1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's outstanding shares.
2 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.
3 Inception Date is 5/1/2012

You should consider the fund's investment objectives, risks, and charges and expenses carefully before investing. You can download a prospectus or contact First Trust Portfolios, L.P. at 1-800-621-1675 to request a prospectus, which contains this and other information about the fund. Read it carefully before you invest.

Risk Considerations

The Fund’s shares will change in value and 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. There can be no assurance that the Fund’s investment objective will be achieved.

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. 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 could have a significant impact on certain fund investments as well as fund performance. The COVID-19 global pandemic 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. While vaccines have been developed, there is no guarantee that vaccines will be effective against future variants of the disease. 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. Actively managed funds are subject to the risk that the advisor or sub-advisor will apply investment techniques that may not have the desired result. Equity securities fluctuate for a variety of reasons including investors’ perceptions of the financial condition of an issuer or the general condition of the relevant stock market. Financial services companies are subject to the adverse effects of economic recession, government regulation, decreases in the availability of capital, volatile interest rates, and competition from new entrants in their fields of business. Industrials companies are subject to risks including the general state of the economy, exchange rates, commodity prices, intense competition, consolidation, domestic and international politics, government regulation, import controls, excess capacity, consumer demand and spending trends. The Fund invests in small-capitalization and mid-capitalization companies. Such companies may experience greater price volatility than larger, more established companies. Certain securities held by the Fund are subject to credit risk, call risk, income risk, inflation risk, interest rate risk, prepayment risk, and extension risk. Credit risk is the risk that an issuer of a security will be unable or unwilling to make dividend, interest and/or principal payments when due and that the value of a security may decline as a result. Credit risk is heightened for floating rate loans because companies that issue such loans tend to be highly leveraged and thus are more susceptible to the risks of interest deferral, default and/or bankruptcy. Call risk is the risk that if an issuer calls higher-yielding debt instruments held by the Fund, performance could be adversely impacted. Income risk is the risk that income from the Fund's fixed-income investments could decline during periods of falling interest rates. Inflation risk is the risk that the value of assets of income from investments will be less in the future as inflation decreases the value of money. Interest rate risk is the risk that the value of the fixed-income securities in the Fund will decline because of rising market interest rates. Prepayment risk is the risk that during periods of falling interest rates, an issuer may exercise its right to pay principal on an obligation earlier than expected. This may result in a decline in the Fund's income. Generally, rising interest rates tend to extend the duration of fixed rate mortgage-related securities, making them more sensitive to changes in interest rates. Debt securities generally do not trade on a securities exchange making them generally less liquid and more difficult to value than common stock. While securities issued or guaranteed by U.S. federal government agencies are backed by the full faith and credit of the U.S. Department of the Treasury, securities issued by government sponsored entities are solely the obligation of the issuer and generally do not carry any guarantee from the U.S. government. 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. There is no guarantee that the issuers of the Fund’s equity securities will declare dividends in the future or that, if declared, they will either remain at current levels or increase over time. The risks of owning an exchange-traded fund (ETF) generally reflect the risks of owning the underlying securities, although lack of liquidity in an ETF could result in it being more volatile and ETFs have management fees that increase their costs. The Fund may hold certain investments that may be subject to restrictions on resale, trade over-the-counter or in limited volume, or lack an active trading market. The Fund may not be able to sell or close out of such investments at favorable times or prices (or at all). Illiquid securities may trade at a discount than more liquid investments and may be subject to wide fluctuations in market value. Mortgage-related securities, including mortgage-backed securities, are more susceptible to adverse economic, political or regulatory events that affect the value of real estate. Mortgage-related securities are 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.

For additional risk factors see the Fund’s prospectus.

The Fund offers its shares only to separate accounts of insurance companies that offer variable annuity and variable life insurance products

The Dow Jones U.S. Total Stock Market IndexSM, Dow Jones Equal Weight U.S. Issued Corporate Bond IndexSM and Dow Jones Composite Average are products of S&P Dow Jones Indices LLC (“SPDJI”), and have been licensed for use by First Trust Advisors L.P. Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by First Trust Advisors L.P. The First Trust/Dow Jones Dividend & Income Allocation Portfolio is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates and none of such parties make any representation regarding the advisability of investing in such product nor do they have any liability for any errors, omissions, or interruptions of the Dow Jones U.S. Total Stock Market IndexSM, Dow Jones Equal Weight U.S. Issued Corporate Bond IndexSM and Dow Jones Composite Average.

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, ©2023 CUSIP Global Services. "CUSIP" is a registered trademark of the American Bankers Association.

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 professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
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