Dividend Edge Portfolio, Series 20
In today's low interest rate environment, investors may have the potential to achieve above-average yields through high dividend-paying stocks. Dividend-paying stocks can be used to capture yield
while retaining capital appreciation potential. The Dividend Edge Portfolio seeks to include high-quality dividend-paying companies that each currently have an indicated stock dividend yield that is
greater than the company's highest yielding senior unsecured debt with issuance of at least $250 million, a maturity between 5-10 years, and a S&P credit rating of BBB+ or higher.
Dividends have historically been one of the few constants in the world of investing, contributing nearly half of the stock market’s total returns. According to Ibbotson Associates, dividends have provided
approximately 40% of the 10.30% average annual total return on the S&P 500 Index, from 1926 through 2020. The S&P 500 Index is an unmanaged index of 500 stocks used to measure large-cap U.S.
stock market performance. The index cannot be purchased directly by investors. Past performance is no guarantee of future results.
This unit investment trust seeks above-average total return through a combination of
capital appreciation and dividend income; however, there is no assurance the
objective will be met.
Portfolio Selection Process
Through our selection process, we seek to find the
stocks that we believe have the best prospects for
above-average total return.
Identify the Universe
with all companies that have active corporate bonds.
Screen The Universe
select companies with an indicated stock dividend
yield that is greater than the company's highest
yielding senior unsecured debt with issuance of at
least $250 million, maturity between 5-10 years
and current S&P bond credit rating of BBB+ or
higher. In addition, we select those companies with
a market capitalization greater than $5 billion.
Select The Portfolio
step is to select the highest dividend-yielding stocks for the portfolio, subject to a maximum of
approximately 25% in a single sector.
|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.
Certain of the securities in the portfolio are issued by Real Estate Investment Trusts (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.
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.
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 cybersecurity.
The COVID-19 global pandemic has caused significant volatility and declines in global financial markets, causing losses for investors. The development of vaccines has slowed the spread of the virus and allowed for the
resumption of “reasonably” normal business activity in the United States, although 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.
Although this portfolio terminates in approximately 15 months, the strategy is long-term.
Investors should consider their ability to pursue investing in successive portfolios, if available.
There may be tax consequences unless units are purchased in an IRA or other qualified plan.