Interest Rate Hedge Portfolio, Series 126
Ticker Symbol: FOUSZX
|35 Holdings (As of Day of Deposit)
|Closed-End Funds (60%)
||AllianzGI Equity & Convertible Income Fund
||Calamos Dynamic Convertible and Income Fund
||CBRE Clarion Global Real Estate Income Fund
||ClearBridge MLP & Midstream Total Return Fund Inc.
||Cohen & Steers Total Return Realty Fund, Inc.
||Kayne Anderson Midstream/Energy Fund, Inc.
||MFS Intermediate Income Trust
||Neuberger Berman MLP & Energy Income Fund Inc.
||Nuveen Energy MLP Total Return Fund
||Putnam Master Intermediate Income Trust
||Putnam Premier Income Trust
||Salient Midstream & MLP Fund
||Templeton Global Income Fund
||Western Asset Inflation-Linked Income Fund
||Western Asset Inflation-Linked Opportunities & Income Fund
|Common Stocks (40%)
||Ameriprise Financial, Inc.
||Best Buy Co., Inc.
||Cisco Systems, Inc.
||Delta Air Lines, Inc.
||Honeywell International Inc.
||Lockheed Martin Corporation
||LyondellBasell Industries N.V.
||Omnicom Group Inc.
||T. Rowe Price Group, Inc.
||TE Connectivity Ltd.
||UnitedHealth Group Incorporated
||Walgreens Boots Alliance, Inc.
* As of the close of business on 8/15/19.
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:*
|Historical 12-Month Distribution Per Unit:*
|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 12-month distribution per unit and historical 12-month
distribution rate of the securities included in the trust are for illustrative purposes only and are not
indicative of the trust’s distribution or distribution rate. The historical 12-month distribution per
unit is based on the weighted average of the trailing twelve month distributions paid by the
securities included in the portfolio. The historical 12-month distribution rate is calculated by
dividing the historical 12-month distributions by the trust’s offering price. The historical 12-month
distribution and rate are 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 per unit and 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.
|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 $10.00 per unit, the creation and development fee will be less than 0.50%;
if the price you pay is less than $10.00 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 the fund’s net
asset value, closed-end funds frequently
trade at a discount to their net asset value
in the secondary market. Certain of the
closed-end funds in the portfolio employ
the use of leverage, which increases the
volatility of such funds.
Certain of the closed-end funds invest in convertible securities. Convertible securities are bonds, preferred stocks and other securities that pay a fixed rate of interest (or dividends) and will repay principal at a fixed date in the future. However, these securities may be converted into a specific number of common stocks at a specified time. As such, an investment in convertible securities entails some of the risks associated with both common stocks and bonds.
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
investment grade securities. Investment grade securities are subject to numerous risks including
higher interest rates, economic recession, deterioration of the investment grade security market
or investors’ perception thereof, possible downgrades and defaults of interest and/or principal.
Certain of the closed-end funds 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 rise during the life of the trust.
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 invest in options. Options are subject to various risks including
that their value may be adversely affected if the market for the option becomes less liquid or
smaller. In addition, options will be affected by changes in the value and dividend rates of the
stock subject to the option, an increase in interest rates, a change in the actual and perceived
volatility of the stock market and the common stock and the remaining time to expiration.
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 and competition, volatile interest rates and economic recession.
Certain of the closed-end funds invest in
TIPS. TIPS are subject to numerous risks
including changes in interest rates,
economic recession and deterioration of
the bond market or investors’ perception
Certain of the closed-end funds 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.
An investment in foreign equities should be made with an understanding of the additional risks
involved with foreign issuers, such as currency fluctuations, political risk, withholding, the lack
of adequate financial information, and exchange control restrictions impacting foreign issuers.
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
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.
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
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.
For a discussion of additional risks of investing in the trust see the “Risk Factors” section of