Aerospace & Defense Portfolio, Series 36
As the name implies, the aerospace and defense industry serves two main markets:
Aerospace
Largely comprised of companies involved in the production, sale, and service of
commercial aircraft. Air travel has increased substantially in the last year. In April 2022, checkpoint
travel numbers averaged more than 150% of April 2021 air travel and climbed over 90% of April
2019 travel numbers.1
Defense
Dependent on a nation’s need for military weapons and systems designed to operate
on land, sea, and in the air. The United States military is unquestionably the dominant force in
the world. Defense spending is expected to increase around the globe, as nations continue to
strengthen their militaries in response to heightened geopolitical tensions.2
1 TSA
2 Deloitte, 2022 Aerospace and Defense Industry Outlook
Portfolio Objective
This unit investment trust seeks above-average capital appreciation; however, there is
no assurance the objective will be met.
| Not FDIC Insured • Not Bank Guaranteed • May Lose Value |
You should carefully consider the portfolio's investment objectives,
risks, and charges and expenses before investing. Contact your financial professional
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.
Risk Considerations
An investment in this unmanaged unit investment trust should be made with an understanding of the risks involved with owning common stocks, 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.
You should be aware that an investment that is concentrated in stocks in the industrials sector involves additional risks, including limited diversification. The companies engaged in the industrials sector are subject to certain
risks, including a deterioration in the general state of the economy, intense competition, domestic and international politics, excess capacity and changing spending trends.
The companies involved in the aerospace and defense industries are subject to fierce competition, consolidation, adverse political and government developments, substantial research and development costs, limited numbers
of potential customers and excess capacity and spending trends. Their products and services may be subject to rapid obsolescence.
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 available information.
Large capitalization companies may grow at a slower rate than the overall market.
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 cybersecurity.
In February 2022, Russia invaded Ukraine which has caused and could continue to cause significant market disruptions and volatility within the markets in Russia, Europe, and the United States. The hostilities and sanctions resulting from those hostilities could have a significant impact on certain investments as well as performance.
The COVID-19 global pandemic has caused significant volatility and declines in global financial markets,
causing losses for investors. The development of vaccines has slowed the spread of the virus and allowed
for the resumption of “reasonably” normal business activity in the United States, although many countries
continue to impose lockdown measures. Additionally, there is no guarantee that vaccines will be effective
against emerging variants of the disease.
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 qualified plan.