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Share Classes
Class I
Class II
First Trust Multi Income Allocation Portfolio
Investment Objective/Strategy - The First Trust Multi Income Allocation Portfolio's (the “Fund”) primary investment objective is to maximize current income, with a secondary objective of capital appreciation.
There can be no assurance that the Fund's investment objectives will be achieved.
The Fund seeks to achieve its objectives through diversified exposure to nine income generating asset classes: dividend-paying stocks, preferred stocks, energy infrastructure companies and master limited partnerships ("MLPs"), real estate investment trusts ("REITs"), high yield or "junk" bonds, floating rate loans, corporate bonds, mortgage-backed securities and Treasury Inflation Protected Securities ("TIPS"). The Fund is actively managed by First Trust Advisors L.P. (“First Trust” or the “Advisor”); and implementing the strategy involves multiple portfolio managers.
The Advisor will tactically adjust allocation weights in a manner deemed to offer attractive levels of total return relative to the level of expected risk. The Advisor intends to adjust asset allocation weights quarterly but may do so more or less frequently depending upon market conditions. The maximum weight of any asset class, at the time of adjustment, will be 20%. The minimum weight of any asset class, at the time of adjustment, will be 5%.
The Fund may, at certain times, invest in exchange-traded funds ("ETFs") that generally provide exposure to the nine asset classes in lieu of investing directly in such assets classes. Certain of the ETFs may be advised by First Trust, as a result, First Trust will also earn advisory fees on the underlying ETFs.
In general, the U.S. dollar-denominated fixed income securities in which the Fund invests may be issued by U.S. and non- U.S. issuers, of any credit quality, including high yield securities. The high yield securities in which the Fund invests are rated below investment grade at the time of purchase or unrated and deemed by the Advisor to be of comparable quality, commonly referred to as "junk" bonds. The Fund also invests in the equity securities of domestic and foreign issuers listed on a U.S. or foreign securities exchange and non-U.S. securities that are listed on a U.S. securities exchange in the form of American Depository Receipts ("ADRs") and Global Depository Receipts ("GDRs") (collectively, "Depository Receipts"). The Fund may invest in equity securities issued by small, mid or large capitalization companies.
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 Date5/1/2014
Inception NAV$10.00
Gross Expense Ratio
(5/1/2019)
2.36%
Net Expense Ratio1.10%
Expenses are capped contractually at 1.20% per year, at least until May 01, 2020.
Current Fund Data (as of 10/11/2019)
Net Asset Value1$11.36
Dividend FrequencySemi-Annual
NAV 52-Week High/Low$11.45 / $9.93
NAV History (Since Inception)
Past performance is not indicative of future results.
Month End Performance (as of 9/30/2019)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception2
Fund Performance *
Fund Performance 2.51% 13.87% 7.46% 4.86% 4.68% N/A 4.60%
Index Performance **
Bloomberg Barclays U.S. Aggregate Bond Index 2.27% 8.52% 10.30% 2.92% 3.38% N/A 3.33%
Russell 3000® Index 1.16% 20.09% 2.92% 12.83% 10.44% N/A 10.54%
Broad Blended Benchmark 1.86% 13.29% 7.79% 7.02% 6.37% N/A 6.36%
Multi Asset Class Blended Benchmark 1.51% 13.88% 6.08% 5.14% 4.32% N/A 4.55%
Quarter End Performance (as of 9/30/2019)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception2
Fund Performance *
Fund Performance 2.51% 13.87% 7.46% 4.86% 4.68% N/A 4.60%
Index Performance **
Bloomberg Barclays U.S. Aggregate Bond Index 2.27% 8.52% 10.30% 2.92% 3.38% N/A 3.33%
Russell 3000® Index 1.16% 20.09% 2.92% 12.83% 10.44% N/A 10.54%
Broad Blended Benchmark 1.86% 13.29% 7.79% 7.02% 6.37% N/A 6.36%
Multi Asset Class Blended Benchmark 1.51% 13.88% 6.08% 5.14% 4.32% N/A 4.55%

*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 Barclays U.S. Aggregate Bond Index - The Index covers the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, MBS, ABS, and CMBS.

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

Broad Blended Benchmark - The Benchmark return is split between the Bloomberg Barclays U.S. Aggregate Bond Index (60%) and the Russell 3000® Index (40%).

Multi Asset Class Blended Benchmark - The Benchmark is weighted to include nine indexes: Russell 3000 Index (15%), ICE BofAML Fixed Rate Preferred Securities Index (8%), Alerian MLP Index (15%), S&P U.S. REIT Index (15%), ICE BofAML U.S. High Yield Index (8%), S&P/LSTA Leveraged Loan Index (15%), Bloomberg Barclays U.S. Corporate Investment Grade Index (8%), ICE BofAML U.S. MBS Index (8%), ICE BofAML U.S. Inflation-Linked Treasury Index (8%). The Russell 3000® Index is comprised of the 3000 largest and most liquid stocks based and traded in the U.S. The ICE BofAML Fixed Rate Preferred Securities Index tracks the performance of fixed-rate U.S. dollar denominated preferred securities issued in the U.S. domestic market. The Alerian MLP Index is a composite of the 50 most prominent energy master limited partnerships calculated using a float-adjusted market capitalization methodology. The S&P U.S. REIT Index defines and measures the investable universe of publicly traded real estate investment trusts domiciled in the U.S. The ICE BofAML U.S. High Yield Index tracks the performance of U.S. dollar denominated below investment grade corporate debt publicly issued in the U.S. domestic market. The S&P/LSTA Leveraged Loan Index is a market value-weighted index designed to measure the performance of the U.S. leverage loan market based upon market weightings, spreads, and interest payments. The Bloomberg Barclays U.S. Corporate Investment Grade 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. The ICE BofAML U.S. MBS Index measures the performance of investment grade fixed-rate mortgage-backed pass-through securities of GNMA, FNMA, and FHLMC. The ICE BofAML U.S. Inflation-Linked Treasury Index is an unmanaged index comprised of U.S. Treasury Inflation Protected Securities with at least $1 billion in outstanding face value and a remaining term to final maturity of greater than one year.

Footnotes
1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's outstanding shares .
2 Inception Date is 5/1/2014

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.

The Fund is subject to market risk. Market risk is the risk that a particular security owned by the Fund or shares of the Fund in general may fall in value. 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. The Fund invests 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 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. 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. Companies that issue bank loans tend to be highly leveraged and thus are more susceptible to the risk of interest deferral, default and/or bankruptcy. Senior floating rate loans, in which the Fund may invest, are usually rated below investment grade but may also be unrated. As a result, the risks associated with these senior floating rate loans are similar to the risks of high-yield fixed income instruments. 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. These securities are issued by companies that may have limited operating history, narrowly focused operations and/or other impediments to the timely payment of periodic interest or principal at maturity. Covenant-lite loans contain fewer or no maintenance covenants which may hinder the Fund's ability to reprice credit risk associated with the borrower. This may reduce the Fund's ability to mitigate potential loss especially during a downturn in the credit cycle. Debt securities generally do not trade on a securities exchange making them generally less liquid and more difficult to value than common stock. 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. The Fund contains securities of non-U.S. issuers and is subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting non-U.S. issuers. These risks may be heightened for securities of companies located in, or with significant operations in, emerging market countries. Changes in currency exchange rates and the relative value of non-US currencies may affect that value of the Fund's investments and the value of the Fund's shares. Depositary receipts may be less liquid than the underlying shares in their primary trading market. 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. Purchasing securities in a TBA Transaction may give rise to investment leverage and may increase the Fund's volatility. Default by, or bankruptcy of, a counterparty to a TBA Transaction would expose the Fund to possible losses because of an adverse market action, expenses or delays in connection with the purchase or sale of the pools specified in such transaction. Energy infrastructure companies may be directly affected by energy commodity prices, especially those companies which own the underlying energy commodity. A decrease in the production or availability of commodities or a decrease in the volume of such commodities available for transportation, processing, storage or distribution may adversely impact the financial performance of energy infrastructure companies. An investment in MLP Units involves risks which differ from an investment in common stock of a corporation. Holders of MLP units have limited control and voting rights. In addition, there is the risk that an MLP could be taxed as a corporation, resulting in decreased returns from such MLP. Rising interest rates could adversely impact the financial performance of MLPs, MLP-related entities and energy companies. The Fund may be subject to additional risks pertaining to currency, interest rates and derivatives. 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. Preferred securities are typically subordinated to bonds and other debt instruments in a company's capital structure, in terms of priority to corporate income, and therefore will be subject to greater credit risk than those debt instruments. The Fund invests in Real Estate Investment Trusts (REITs). Companies involved in the real estate industry are subject to changes in the real estate market, vacancy rates and competition, volatile interest rates and economic recession. TIPS are inflation-indexed fixed-income securities issued by the U.S. Department of Treasury and are subject to the same risks as other fixed-income investments. In a falling inflationary environment, both interest payments and the value of the TIPS will decline. The Fund currently has fewer assets than larger funds, and like other relatively small 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 risks through breaches in cyber security.

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.
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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