Strategic Income Closed-End Portfolio, Series 66
The Multi-Sector Approach
The Strategic Income Closed-End Portfolio seeks to provide investors a high rate of current monthly income and diversification across various fixed income securities. To accomplish this, the portfolio is diversified across a broad range of closed-end funds that invest in U.S. and foreign taxable bonds. Because different sectors within the taxable debt market follow different cycles and react differently to changes in global economies and interest rates, spreading assets across this spectrum of securities has the potential to reduce the overall risk of the portfolio.
Unlike open-end mutual funds, closed-end funds maintain a relatively fixed pool
of investment capital. This allows portfolio managers to better adhere to their
investment philosophies through greater flexibility and control. In addition,
closed-end funds don't have to manage fund liquidity to meet potentially large
The portfolio offers investors diversification by investing in a broad range
of taxable debt closed-end funds that are further diversified across hundreds
of individual issues. Diversification does not guarantee a profit or protect
Closed-end funds are structured to generally provide a more stable income stream than other
managed investment products because they are not subjected to cash inflows and outflows,
which can dilute distributions over time. However, stable income cannot be assured.
The trust seeks a high rate of current monthly income, with capital appreciation as a secondary objective. There is, however, no assurance that the objectives of the portfolio will be achieved.
| Not FDIC Insured Not Bank Guaranteed May Lose Value
You should consider the portfolio's investment objectives, 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 associated with an investment in a portfolio of closed-end funds. 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 a current determination of the fund's net asset value, closed-end funds frequently trade at a discount from their net asset value in the secondary market. Certain closed-end funds in which the portfolio invests may employ the use of leverage which increases the volatility of such funds.
All 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 which utilize such securities. 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 securities and are affected by short-term credit developments to a greater degree.
All of the closed-end funds invest in securities issued by foreign issuers. Such securities are subject to certain risks, including currency and interest rate fluctuations, nationalization or other adverse political or economic developments, lack of liquidity of certain foreign markets, withholding, the lack of adequate financial information, and exchange control restrictions impacting foreign issuers. Risks associated with investing in foreign securities may be more pronounced in emerging markets where the securities markets are substantially smaller, less liquid, less regulated and more volatile than the U.S. and developed foreign markets.
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 not
rise during the life of the trust.
Certain of the closed-end funds invest in senior loan securities. The yield on closed-end funds which invest in senior loans will generally decline in a falling interest rate environment and increase in a rising interest rate environment. Senior loans are generally below investment grade quality ("junk" bonds). An investment in senior loans involves the risk that the borrowers may default on their obligations to pay principal or interest when due.
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 floating-rate securities.
A floating-rate security is an instrument in which the interest
rate payable on the obligation fluctuates on a periodic basis
based upon changes in an interest rate benchmark. As a result,
the yield on such a security will generally decline in a falling
interest rate environment, causing the trust to experience a
reduction in the income it receives from such securities.
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 the prospectus.
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 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.