American Recovery Portfolio, Series 1
As of recent, many good, quality companies have declined in the stock market. We believe that
a great deal of these companies remain good, solid companies with long-term fundamentals in
place, creating the potential for opportunity. History has shown, more often than not that the
best time to buy stocks is when prices are down and pessimism overshadows fundamentals.
The American Recovery Portfolio is a unit investment trust that invests in common stocks across
the following sectors: communication services, consumer discretionary, health care, industrials
and information technology. Our goal with this portfolio is to choose well-capitalized companies
with strong market positions. One important advantage that well-capitalized companies enjoy
over others is that they have the potential to provide their stockholders with a greater degree of
stability and performance over time.
Through our selection process, we seek to find companies with the following qualities:
- Well-capitalized with strong balance sheets;
- Skilled management;
- High liquidity;
- Ability to generate earnings growth; and
- Record of financial strength and profit growth.
This unit investment trust seeks above-average capital appreciation; however, there is no
assurance the objective will be met.
Consider The Following
- Communication Services | This sector includes media and entertainment companies. With the spread of COVID-19, the Coronavirus, in the first quarter of 2020, it is anticipated that digital media
consumption will increase as people spend more time at home. Consumption is expected to increase across social media, over-the-top video and online gaming.1
- Consumer Discretionary | This sector has been feeling the impact of the most recent pandemic as people cancel trips and avoid leisure activities. The sector is dominated by companies that
produce products and services that consumers often do without when they are under financial stress or worried about the state of the economy. Prior to the COVID-19 pandemic, the U.S. labor market
was strong with healthy consumer balance sheets which may help this sector going forward.
- Health Care | We believe, at the time of portfolio selection, that the health care sector is attractively valued with solid fundamentals, which has helped maintain its more non-cyclical properties
amid the current increased volatility. Within the sector, we see the outlook for accelerating innovation and increasing consolidation as a potential benefit to the biotechnology industry.
- Information Technology | The top priority for the White House is to ensure the safety and health of the American people. Cutting edge technology companies and major online platforms will
play a crucial role in this effort. The U.S. government is actively pursuing several technology companies about how they can use location data collected from Americans’ phones to combat COVID-19,
including tracking whether people are keeping one another at safe distances to curtail the outbreak.2
2 The Washington Post
|Not FDIC Insured Not Bank Guaranteed May Lose Value
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 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.
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.
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.
Local, regional or global events such as war, acts of terrorism, spread of infectious diseases or other public health issues, recessions, or other events could have a significant negative impact on the portfolio and its investments.
Such events may affect certain geographic regions, countries, sectors and industries more significantly than others. The recent outbreak of a respiratory disease designated as COVID-19 was first detected in China in December
2019. The global economic impact of the COVID-19 outbreak is impossible to predict but is expected to disrupt manufacturing, supply chains and sales in affected areas, negatively impact global economic growth prospects,
and could result in a substantial economic downturn or recession.
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