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Biotechnology Portfolio, Series 49

Coming into 2020, health care sector stocks were dampened by concerns that the sector was an easy target for the populist impulses of both political parties in an election year, and that some version of price controls could follow. However, as the nation pulls together to battle COVID-19, health care stocks—especially biotechnology—are taking a leading role in providing solutions.

In the near term, hopes of producing anti-viral treatments, vaccines, and testing kits for the COVID-19 virus may buoy these stocks. But perhaps more importantly, in the long-run, we believe biotechnology and other health care stocks will become less likely political targets, having proven their importance to society, which may support the multiple expansion that has been lacking over the past few years.

Biotechnology has already had a significant impact on the diagnosis, treatment and prevention of diseases, and we believe further advances could potentially bring about radically new approaches to health care. Research and development has afforded many patients access to new and better medicines that are allowing them to maintain their normal lives, instead of being debilitated by a disease. In fact, some diseases once considered fatal have now evolved into “chronic diseases” that can be managed, due in large measure to advances in diagnostic procedures and new medicines developed by biotechnology and pharmaceutical companies.

Consider the following factors:

  • More than 250 biotechnology health care products and vaccines are currently available to patients, many for previously untreatable diseases.2
  • Biotechnology is becoming more involved in the agriculture sector. Agricultural biotechnology benefits farmers, consumers and the environment by increasing yields and farm income, decreasing pesticide applications and improving soil and water quality, and providing healthful foods for consumers. More than 13.3 million farmers globally use agricultural biotechnology.2
  • We believe the outlook for long-term investing remains quite encouraging due to promising drug launches, cost-cutting efforts, an aging population, increasing health care spending, increased merger & acquisition activity and expansion into emerging markets.

1,2 Biotechnology Innovation Organization



Portfolio Objective

This unit investment trust seeks above-average capital appreciation; however, there is no assurance the objective will be met.

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.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value

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 the portfolio is concentrated in biotechnology and pharmaceutical companies in the health care sector which involves additional risks, including limited diversification. The companies engaged in the biotechnology and pharmaceutical industries are subject to fierce competition, substantial research and development costs, governmental regulations, pricing constraints, and their products and services may be subject to rapid obsolescence. Biotechnology and pharmaceutical stocks have experienced extreme price and volume fluctuations that are often unrelated to their operating performance. In addition, health crises, such as a pandemic outbreak, can severely impact the health care industry in particular.

An investment in a portfolio containing equity securities of foreign issuers is subject to additional risks, including currency fluctuations, political risks, 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.

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.

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.

Large capitalization companies may grow at a slower rate than the overall market.

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 and negatively impact global economic growth prospects. The COVID-19 outbreak has also caused significant volatility and declines in global financial markets, which have caused losses for investors. The impact of the COVID-19 outbreak may be short term or may last for an extended period of time, and in either case 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.

Fund Cusip Information
30314A360 (Cash)
30314A378 (Reinvest)
30314A386 (Cash-Fee)
30314A394 (Reinvest-Fee)
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The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial advisors are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
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