Corporate High Income Portfolio, Series 26

Corporate Bond Basics

A corporate bond is a debt obligation issued by a corporation. Issuing bonds can be an alternative to offering equity ownership by issuing stock. Payments to bondholders have priority over payments to stockholders.

The Portfolio

The Corporate High Income Portfolio invests in a professionally selected portfolio of fixed-rate corporate bonds. The bonds selected for the trust will consist primarily of lower rated investment grade debt issues. Certain bonds held by the trust may be rated as investment grade by only one of either Standard & Poor's or Moody's and either unrated or below investment grade by the other. A bond's rating is based upon an evaluation by a credit rating organization of the corporation's credit history and ability to repay obligations.

Portfolio Objectives

The objectives of this unit investment trust are to distribute high current monthly income and to preserve capital by investing in a portfolio of corporate bonds. There is, however, no assurance that the objectives will be achieved.

Portfolio Summary

• Potential for high current monthly income.
• Diversified portfolio of corporate bonds.
• Estimated weighted average maturity of approximately 5 to 7 years.
• 2.50% up-front maximum sales charge. In addition to the sales charge, the trust is subject to annual operating expenses and organization costs.

Yield Spread Comparison

The chart below illustrates the difference in yield between the BofA Merrill Lynch 5-7 Year BBB U.S. Corporate Index and the BofA Merrill Lynch 5-7 Year U.S. Treasury Index.

You should carefully consider the portfolio's investment objectives, risks, and charges and expenses 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.

Risk Considerations:
An investment in this unmanaged unit investment trust should be made with an understanding of the risks associated with corporate bonds, including higher interest rates, economic recession, deterioration of the bond market or investors' perception thereof, possible downgrades and defaults of interest and/or principal.

Certain of the bonds in the trust are rated below investment grade. Investing in high-yield securities or “junk” bonds should be viewed as speculative and you should review your ability to assume the risks associated with investments that utilize such bonds. 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 bonds and are affected by short-term credit developments to a greater degree.

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.

An investment in a portfolio containing 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. Risks associated with investing in foreign securities may be more pronounced in emerging markets where the securities markets are substantially smaller, less developed, less liquid, less regulated, and more volatile than the U.S. and developed foreign markets.

Certain of the securities in the trust are issued by REITs. Companies involved in the real estate industry are subject to changes in the real estate market, vacancy rates and competition, volatile interest rates and economic recession.

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 cyber security.

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.