S&P Dividend Aristocrats Target 25 Portfolio, 4th Quarter 2023 Series
The S&P Dividend Aristocrats Target 25 Portfolio in a unit investment trust which is based on the S&P 500 Dividend Aristocrats
Index and invests in companies from the index. The index consists of companies from the S&P 500 Index that have increased
dividends every year for at least 25 consecutive years. The index captures companies with a history of providing sustainable
dividend income and capital appreciation potential, both key factors in total return. The objective of the portfolio is to identify
companies with the potential to provide total return through a combination of dividend income and capital appreciation; however,
there is no assurance the objective will be met. The strategy is based on these steps:
- Begin with the stocks that comprise the S&P 500 Dividend Aristocrats Index. Regulated investment companies, limited
partnerships and business development companies are not eligible for selection.
- Rank each stock on three equally weighted factors:
- Debt-to-equity. Compares a company's long-term debt to their stockholder's equity. Higher
levels of this ratio are associated with higher risk, lower levels with lower risk.
- Price-to-cash flow. Measures the cost of a company's stock for every dollar of cash flow
generated. A lower, but positive, ratio indicates investors are paying less for the cash flow generated
which can be a sign of value.
- Return-on-assets. Compares a company's net income to its total assets. The ratio shows how
efficiently a company generates net income from its assets.
- Purchase an approximately equally weighted portfolio of the 25 stocks with the best overall
ranking on the three factors with a maximum of seven stocks from any one of the major Global
Industry Classification Standard (GICS) market sectors.
It is important to note that the past performance of the strategy is hypothetical and it is not
indicative of the future performance of the S&P Dividend Aristocrats Target 25 Portfolio.
Not FDIC Insured Not Bank Guaranteed May Lose Value
||Average Annual Total Returns*
|Annual Total Returns
Past performance is no guarantee of future results and the actual current performance of the portfolio may be lower or higher than the hypothetical performance of the
strategy. Hypothetical returns for the strategy in certain years were significantly higher than the returns of the S&P 500 Index. Hypothetical strategy returns were the result
of certain market factors and events which may not be replicated in the future. You can obtain performance information which is current through the most recent month-end
by calling First Trust Portfolios L.P. at 1-800-621-1675 option 2. Investment return and principal value of the portfolio will fluctuate causing units of the portfolio, when
redeemed, to be worth more or less than their original cost.
Simulated strategy returns are hypothetical, meaning that they
do not represent actual trading, and, thus, may not reflect
material economic and market factors, such as liquidity
constraints, that may have had an impact on actual decision
making. The hypothetical performance is the retroactive
application of the strategy designed with the full benefit of
hindsight. Strategy returns reflect a sales
charge of 1.85% and estimated annual operating expenses of 0.185%, plus organization costs, but not
taxes or commissions paid by the portfolio to purchase
securities. Returns assume that dividends are reinvested
monthly. Actual portfolio performance will vary from that of
investing in the strategy stocks because it may not be invested
equally in these stocks and may not be fully invested at all
times. It is important to note that the strategy may
underperform the S&P 500 Index in certain years and may
produce negative results.
Standard Deviation is a measure of price variability (risk). A
higher degree of variability indicates more volatility and
therefore greater risk.
You should consider the portfolio's investment objectives, risks, and
charges and expenses carefully 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.
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
You should be aware that the portfolio is concentrated in stocks in the industrials sector which 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.
An investment in a portfolio containing 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.
Securities of non-U.S. issuers are subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting non-U.S. issuers.
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 ongoing effects of the COVID-19 global pandemic, or the potential impacts of any future public health crisis, may cause significant volatility and uncertainty in global financial markets. While vaccines have been developed, there is no guarantee that vaccines will be effective against future 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.
The S&P 500 Dividend Aristocrats Index is a product of S&P Dow Jones Indices LLC or its affiliates
("SPDJI") and has been licensed for use by First Trust Portfolios L.P. Standard & Poor's® and S&P® are registered trademarks of Standard & Poor's Financial Services LLC ("S&P"); Dow Jones® is a
registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and these trademarks
have been licensed for use by SPDJI and sublicensed for certain purposes by First Trust Portfolios
L.P. The S&P Dividend Aristocrats Target 25 Portfolio is not sponsored, endorsed, sold or promoted
by SPDJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any
representation regarding the advisability of investing in such product nor do they have any liability
for any errors, omissions, or interruptions of the S&P 500 Dividend Aristocrats Index.