Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 


 

Digital Gaming Portfolio, Series 1

Over the years, gaming has evolved from single-player to multi-player and has become a popular way for friends and family to connect. It is estimated that three out of every four, or 244 million, U.S. consumers play video games, an increase of 32 million people since 2018.1 In the midst of the COVID-19 pandemic, this trend has continued to emerge in gaming engagement.

Consider The Following

  • Consumer spending on video gaming in the U.S. reached a record $11.6 billion in the second quarter of 2020, an increase of 30% compared to the second quarter of 2019. In addition, sales of video game content reached $10.2 billion in the second quarter of 2020, up 28% compared to the second quarter of 2019.2

  • The number of mobile gamers in the U.S. is anticipated to grow from 136.19 million in 2019 to 156.33 million in 2025.3

  • Revenue generated from digital games and interactive media worldwide was $115.0 billion in 2018 and $120.1 billion in 2019. That number is expected to grow to $124.8 billion in 2020.4

  • The video games market is the biggest market within digital media. Worldwide revenue for video games in 2019 was $83.1 billion and has the potential to reach $101.5 billion in 2025.5

Chart

Chart

Portfolio Objective

This unit investment trust seeks above-average capital appreciation by investing in companies involved in products and services related to digital gaming; however, there is no assurance the objective will be met.

Portfolio Selection Process

The selection process begins with an initial universe of Digital Gaming stocks that First Trust Analysts believe have significant business operations in digital gaming, have adequate liquidity for investment, and that trade on a major U.S. stock exchange. Industries included in this universe are Consumer Electronics, Interactive Home Entertainment, Interactive Media & Services, Semiconductors, Technology Hardware, Storage & Peripherals, and Systems Software.

The final portfolio is then selected by a team of equity analysts who evaluate each stock by examining its relative valuation and other qualitative factors such as competitive advantages, new products and quality of management.

Our selection process attempts to find the stocks with the best prospects for above-average capital appreciation by identifying those that meet our investment objectives, trade at attractive valuations, and, in our opinion, are likely to exceed market expectations of future cash flows.

The final portfolio is comprised of 15 approximately equally weighted Digital Gaming stocks.

1,2The NPD Group, Inc.

3,4,5Statista

Not FDIC Insured • Not Bank Guaranteed • May Lose Value

You should consider the portfolio's investment objective, 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.

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 stocks in both the communication services and information technology sectors which involves additional risks, including limited diversification. The companies engaged in the communication services sector are subject to rapidly changing technology, rapid product obsolescence, loss of patent protection, cyclical market patterns, governmental regulation, evolving industry standards and frequent new product introductions. Certain companies may be particularly susceptible to cybersecurity threats, which could have an adverse effect on their business. 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. There is no assurance that the projections stated herein will be realized.

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. 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.

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 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.

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.

 
The information in the prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. The prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
Printer Friendly Page Printer Friendly Page
 
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 professionals 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. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2020 All rights reserved.