Capital Strength Portfolio, Series 63
Our goal with the Capital Strength 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
- Well-capitalized with strong balance sheets;
- Skilled management;
- High liquidity;
- Ability to generate earnings growth; and
- Record of financial strength and profit growth.
Why Cash Matters
Companies with sizeable cash positions tend to be mature companies that dominate their industries. A
company with a significant amount of cash on its balance sheet is attractive for many reasons. Cash
enables companies to bypass the credit markets and provides the means to:
- Make strategic cash-financed mergers and acquisitions;
- Begin to pay dividends or increase dividend payments to boost returns;
- Repurchase undervalued shares;
- Reinvest cash to grow their business;
- Improve their debt rating, thus reducing their cost of capital; and
- Fund research and development projects, even in a down market.
This unit investment trust seeks above-average capital appreciation; however, there is no
assurance the objective will be met.
|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 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.
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 stocks in both the health care and information
technology sectors which involves additional risks, including limited diversification. The companies
engaged in the health care sector are subject to fierce competition, high research and development costs,
governmental regulations, loss of patent protection, and changing consumer spending trends. In addition,
health crises, such as a pandemic outbreak, can severely impact the health care industry in particular. The
companies engaged in the information technology sector are subject to fierce competition, high research
and development costs, and their products and services may be subject to rapid obsolescence. Technology
company stocks, especially those which are Internet-related, may experience extreme price and volume
fluctuations that are often unrelated to their operating performance.
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.
Large capitalization companies may grow at a slower rate than the overall market.
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 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 COVID-19 global pandemic and the ensuing policies enacted by governments and central banks have caused and may continue to cause significant volatility and uncertainty in global financial markets. While the U.S. has resumed “reasonably” normal business activity, many countries continue to impose lockdown measures. Additionally, there is no guarantee that vaccines will be effective against emerging 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.