Alternative Income Portfolio, Series 26
Ticker Symbol: FGNLEX
|Business Development Companies (20%)
||Apollo Investment Corporation
||Ares Capital Corporation
||Hercules Capital, Inc.
||Main Street Capital Corporation
||PennantPark Floating Rate Capital Ltd.
||Solar Capital Ltd.
||TCP Capital Corp.
|Closed-End Funds (20%)
||Cohen & Steers MLP Income and Energy Opportunity Fund, Inc.
||Eaton Vance Risk-Managed Diversified Equity Income Fund
||The Gabelli Equity Trust Inc.
||Guggenheim Credit Allocation Fund
||John Hancock Income Securities Trust
||John Hancock Tax-Advantaged Global Shareholder Yield Fund
||KKR Income Opportunities Fund
||Prudential Global Short Duration High Yield Fund, Inc.
||Templeton Global Income Fund
||Virtus Total Return Fund Inc.
|Dividend-Paying Companies (20%)
||Altria Group, Inc.
||Ameriprise Financial, Inc.
||Best Buy Co., Inc.
||Eaton Corporation Plc
||The Home Depot, Inc.
||Honeywell International Inc.
||International Business Machines Corporation
||Principal Financial Group, Inc.
||Royal Caribbean Cruises Ltd.
||Texas Instruments Incorporated
||Union Pacific Corporation
||United Technologies Corporation
|MLP Closed-End Funds (20%)
||Center Coast MLP & Infrastructure Fund
||ClearBridge Energy MLP Opportunity Fund Inc.
||ClearBridge Energy MLP Total Return Fund Inc.
||Cohen & Steers Limited Duration Preferred and Income Fund, Inc.
||Fiduciary/Claymore MLP Opportunity Fund
||Goldman Sachs MLP Income Opportunities Fund
||Kayne Anderson Energy Development Company
||Kayne Anderson MLP Investment Company
||Nuveen Energy MLP Total Return Fund
||Tortoise MLP Fund, Inc.
|Real Estate Investment Trusts (20%)
||Highwoods Properties, Inc.
||Host Hotels & Resorts, Inc.
||Mid-America Apartment Communities, Inc.
||National Health Investors, Inc.
||Physicians Realty Trust
||Prospect Capital Corporation
||Simon Property Group, Inc.
||Xenia Hotels & Resorts, Inc.
* As of the close of business on 12/20/17.
Market values are for reference only and are not indicative of your individual
|Not FDIC Insured Not Bank Guaranteed May Lose Value
|Initial Date of Deposit
|Initial Public Offering Price
||$10.00 per Unit
| Portfolio Ending Date
|Estimated Net First Year Distribution per Unit*
|Estimated Net Subsequent Year Distribution per Unit*
|Fee Accounts Cash CUSIP
|Fee Accounts Reinvestment CUSIP
*The estimates are based on annualizing the most
recent dividends declared by the issuers of the
securities included in the portfolio. The estimated net
annual distribution for the subsequent year is expected
to be less than the amount for the first year because a
portion of the securities included in the portfolio will be
sold during the first year to pay for organization costs,
the deferred sales charge and the creation and
development fee. There is no guarantee that the issuers
of the securities included in the portfolio will declare
dividends in the future or that, if declared, they will
remain at current levels or increase over time.
|Sales Charges (based on a $10 public offering
|Transactional Sales Charges:
|Creation & Development Fee: ||
|Maximum Sales Charge:||
The deferred sales charge will be deducted in three monthly installments commencing
When the public offering price is less than or equal to $10.00 per unit, there will be no initial sales charge. If
the price exceeds $10.00 per unit, you will pay an initial sales charge.
|Maximum Sales Charge:
The maximum sales charge for investors in fee accounts consists of the creation and development fee.
Investors in fee accounts are not assessed any transactional sales charges. Standard accounts sales charges
apply to units purchased as an ineligible asset.
The creation and development fee is a charge of $.050 per unit collected at the end of the initial offering
period. If the price you pay exceeds $10 per unit, the creation and development fee will be less than 0.50%;
if the price you pay is less than $10 per unit, the creation and development fee will exceed 0.50%.
In addition to the sales charges listed, UITs are subject to annual operating expenses and organization costs.
You should carefully consider the portfolio investment objective, risks,
and charges and expenses before investing. Contact your financial advisor or
call First Trust Portfolios, L.P. at 1.800.621.1675 to request a prospectus,
which contains this and other information about the portfolio. Read it carefully
before you invest.
An investment in this unmanaged unit investment trust should be made with an understanding of the risks involved with an investment in a portfolio of common stocks and closed-end funds.
Common stocks are subject to certain risks, such as an economic recession and the possible deterioration of either the financial condition of the issuers of the equity securities or the general condition of the stock market.
Closed-end funds are subject to various risks, including management's ability to meet the fund's investment objective, and to manage the fund's portfolio when the underlying securities are redeemed or sold, during periods of market turmoil and as investors' perceptions regarding the funds or their underlying investments change. Unlike open-end funds, which trade at prices based on a current determination of the fund's net asset value, closed-end funds frequently trade at a discount to their net asset value in the secondary market. Certain closed-end funds may employ the use of leverage, which increases the volatility of such funds.
Certain of the securities in the portfolio are issued by closed-end
investment companies which have been elected to be treated as Business
Development Companies (BDCs). An investment in BDCs is subject to various risks,
including management’s ability to meet the BDC’s investment objective, and to
manage the BDC’s portfolio during periods of market turmoil. BDCs may trade in
the market at a discount to their net asset value. BDCs may employ the use of
leverage which subjects the BDC to increased risks.
Certain of the common stocks are issued by, and certain of the closed-end
funds invest in REITs. Companies involved in the real estate industry are
subject to changes in the real estate market, vacancy rates, competition,
volatile interest rates and economic recession.
Certain of the closed-end funds invest in high-yield securities or "junk" bonds. Investing in high-yield securities should be viewed as speculative and you
should review your ability to assume the risks associated with investments that utilize such bonds. High-yield securities are subject to numerous risks
including higher interest rates, economic recession, deterioration of the junk bond market, possible downgrades and defaults of interest and/or principal.
High-yield security prices tend to fluctuate more than higher rated bonds and are affected by short-term credit developments to a greater degree.
Certain of the closed-end funds invest in MLPs. Investments in MLPs are
subject to the risks generally applicable to companies in the energy and natural
resources sectors, including commodity pricing risk, supply and demand risk,
depletion risk and exploration risk. U.S. taxing authorities could challenge the
trust’s treatment of the MLPs for federal income tax purposes. These tax risks
could have a negative impact on the after-tax income available for distribution
by the MLPs and/or the value of the trust’s investments.
Certain of the closed-end funds and certain of
the common stocks invest in securities issued
by foreign issuers. An investment in a portfolio
which includes securities issued by foreign
entities should be made with an
understanding of the additional risks involved,
including currency and interest rate
fluctuations, nationalization or other adverse
political or economic developments, lack of
liquidity of certain foreign markets,
withholding, the lack of adequate financial
information, and exchange control restrictions
impacting foreign issuers.
Certain of the funds invest in senior loans. The
yield on closed-end funds which invest in
senior loans will generally decline in a falling
interest rate environment and increase in a
rising interest rate environment. Senior loans
are generally below investment grade quality
("junk" bonds). An investment in senior loans
involves the risk that the borrowers may
default on their obligations to pay principal or
interest when due.
Certain of the closed-end funds invest in
floating-rate securities. A floating-rate
security is an instrument in which the
interest rate payable on the obligation
fluctuates on a periodic basis based upon
changes in an interest rate benchmark. As a
result, the yield on such a security will
generally decline in a falling interest rate
environment, causing the trust to
experience a reduction in the income it
receives from such securities.
It is important to note that an investment can be made in the underlying funds directly rather than through the trust. These direct investments can be
made without paying the trust's sales charge, operating expenses and organizational costs.
An investment in a portfolio containing small-cap and mid-cap companies is
subject to additional risks, as the share prices of small-cap companies and
certain mid-cap companies are often more volatile than those of larger companies
due to several factors, including limited trading volumes, products, financial
resources, management inexperience and less publicly available information.
For a discussion of additional risks of investing in the trust see the “Risk
Factors” section of the prospectus.
The value of the securities held by the trust may be subject to steep
declines or increased volatility due to changes in performance or perception of
This UIT is a buy and hold strategy and investors should consider their
ability to hold the trust until maturity. There may be tax consequences unless
units are purchased in an IRA or other qualified plan.