FT High Income Model Portfolio, 2nd Qtr 2019
Ticker Symbol: FLPORX
|7 Holdings (As of Day of Deposit)
|U.S. SHORT MATURITY
||First Trust Enhanced Short Maturity ETF
||First Trust Low Duration Opportunities ETF
|U.S. CORPORATE – HIGH YIELD
||First Trust Senior Loan Fund
||First Trust Tactical High Yield ETF
|U.S. OPPORTUNISTIC CORE
||First Trust TCW Opportunistic Fixed Income ETF
|INTERNATIONAL – EMERGING MARKETS
||First Trust Emerging Markets Local Currency Bond ETF
|HYBRID FIXED INCOME
||First Trust Preferred Securities and Income ETF
* As of the close of business on 3/28/19.
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
|Historical 12-Month Distribution Rate of Trust Holdings:*
|Fee Accounts Cash CUSIP
|Fee Accounts Reinvestment CUSIP
*There is no guarantee the issuers of the securities included in the trust will declare dividends or
distributions in the future. The historical distribution rate of the securities included in the trust is
for illustrative purposes only and is not indicative of the trust’s distribution rate. The historical
distribution rate is calculated by dividing the weighted average of the trailing twelve month
distributions paid by the securities included in the portfolio by the trust’s offering price and is
reduced to account for the effects of fees and expenses which will be incurred when investing in a
trust. Distributions may include realized short term capital gains, realized long-term capital gains
and/or return of capital. Certain of the issuers may have reduced their dividends or distributions
over the prior twelve months. The distribution rate paid by the trust may be higher or lower than
the amount shown above due to certain factors that may include, but are not limited to, a change
in the dividends or distributions paid by issuers, actual expenses incurred, or the sale of securities
in the portfolio.
|Trust Specifics (As Of The Close Of Business On 3/28/19)
|Weighted Average Maturity:1
|Weighted Average Effective Duration:2
|1Weighted average maturity represents the average amount of time remaining until the bonds
held in the underlying ETFs mature, taking into account each bond’s weight within the ETFs
based on its market value. This figure is based on approximately 67.5% of the portfolio as certain
funds have either not provided maturity data or don’t invest in bonds.
|2Weighted average effective duration is a measure of a portfolio’s sensitivity to interest rate
changes that reflects the change in its 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. The net weighted
average effective duration, which includes short positions, is used for LMBS and HYLS.
|3As of the Initial Date of Deposit. Credit ratings are weighted averages of the funds’ underlying
holdings. The modifiers “+” or “-” are not included for purposes of the credit rating distribution. A
credit rating is an assessment provided by an nationally recognized statistical rating organization
(NRSRO), including Standard & Poor’s Rating Group, of the creditworthiness of an issuer with
respect to its debt obligations. Ratings are measured highest to lowest on a scale that generally
ranges from AAA to D for long-term ratings and A-1+ to C for short-term ratings. Investment
grade is defined as those issuers that have a long-term credit rating of BBB- or higher or a shortterm
credit rating of A-3 or higher. “NR” indicates no rating. The credit ratings shown relate to
the creditworthiness of the issuers of the underlying securities in the funds, and not to the funds
or their shares. U.S. Treasury, U.S. Agency and U.S. Agency mortgage-backed securities appear
under Government. Credit ratings are subject to change.
|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
In addition to the sales charges listed, UITs are subject to annual operating expenses and organization costs.
You should consider the portfolio's investment objective, risks, and
charges and expenses carefully 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 owning ETFs and fixed income securities.
ETFs 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 ETFs 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, ETFs
frequently trade at a discount from their net asset value in the
secondary market. Certain of the ETFs may employ the use of
leverage, which increases the volatility of such funds.
All of the ETFs invest in investment grade securities. Investment
grade securities are subject to numerous risks including higher
interest rates, economic recession, deterioration of the
investment grade market or investors’ perception thereof,
possible downgrades and defaults of interest and/or principal.
Certain of the ETFs invest in senior loans. The yield on ETFs
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 ETFs 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 which utilize such securities.
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 securities and are affected by short-term
credit developments to a greater degree.
Certain of the ETFs invest in floating-rate securities. 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.
Certain of the ETFs invest in limited duration bonds. Limited
duration bonds are subject to interest rate risk, which is the risk
that the value of a security will fall if interest rates increase.
While limited duration bonds are generally subject to less
interest rate sensitivity than longer duration bonds, there can
be no assurance that interest rates will not rise during the life of
Certain of the ETFs invest in securities of foreign issuers which
are subject to additional risks, including currency fluctuations,
political risks, withholding, the lack of adequate financial
information, and exchange control restrictions impacting
foreign issuers. Risks associated with investing in foreign
securities may be more pronounced in emerging markets where
the securities markets are substantially smaller, less developed,
less liquid, less regulated, and more volatile than the U.S. and
developed foreign markets.
Certain of the ETFs invest in common stocks. 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
Certain of the ETFs invest in money market or similar securities
as a defensive measure when the fund’s investment advisor
anticipates unusual market or other conditions. If market
conditions improve while a fund has invested in these
securities, the potential gain from the market upswing may be
reduced, limiting the fund’s opportunity to achieve its
Certain of the ETFs invest in mortgage-backed securities. Rising
interest rates tend to extend the duration of mortgage-backed
securities, making them more sensitive to changes in interest
rates, and may reduce the market value of the securities. In
addition, mortgage-backed securities are subject to
prepayment risk, the risk that borrowers may pay off their
mortgages sooner than expected, particularly when interest
Certain of the ETFs invest in U.S. Treasury obligations which are
subject to numerous risks including higher interest rates,
economic recession and deterioration of the bond market or
investors’ perceptions thereof.
One of the ETFs invest in preferred securities. Preferred
securities are equity securities of the issuing company which
pay income in the form of dividends. Preferred securities are
typically subordinated to bonds and other debt instruments in a
company’s capital structure, and therefore will be subject to
greater credit risk than those debt instruments.
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.
Although this portfolio terminates in approximately 15 months,
the strategy is long-term. Investors should consider their ability
to pursue investing in successive portfolios, if available. There
may be tax consequences unless units are purchased in an IRA
or other qualified plan.
As the use of Internet technology has become more prevalent in
the course of business, the trust has become more susceptible
to potential operational risks through breaches in cyber security.
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 the issuers.
For a discussion of additional risks of investing in the trust see
the “Risk Factors” section of the prospectus.