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Target Diversified Dividend Portfolio, 3rd Quarter 2024 Series

The Strategy

This unit investment trust invests in a fixed portfolio of stocks for approximately 15 months. The stocks are selected by applying a disciplined investment strategy which adheres to pre-determined screens and factors.

The strategy is based on these steps:

  • Begin with all stocks traded on a U.S. exchange and screen for the following:

    • Minimum market capitalization of $250 million.

    • Minimum three month average daily trading volume of $1.5 million.

    • Minimum stock price of $5.

  • Eliminate REITs, ADRs, regulated investment companies and limited partnerships.

  • Select only those stocks with positive three year dividend growth.

  • Give the remaining stocks a weighted ranking on three factors:

    • Indicated dividend yield – 50%.

    • Price-to-book – 25%.

    • Payout ratio – 25%.

  • Purchase an approximately equally weighted portfolio consisting of four stocks from each of the major GICS® market sectors with the highest combined ranking on the three factors. The financials and real estate sectors are combined for the sector limit purpose.

It is important to note that the past performance of the strategy is hypothetical and it is not indicative of the future performance of the Target Diversified Dividend Portfolio.

Portfolio Objective

This unit investment trust seeks above-average total return; however, there is no assurance the objective will be met.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value

Mountain Chart

Average Annual Total Returns*
Russell 3000
Since 1995 10.37% 10.54%
25 years 7.74% 9.06%
20 years 9.65% 6.68%
15 years 13.82% 10.14%
10 years 11.46% 5.32%
5 years 15.14% 11.20%
3 years 8.52% 12.90%
*Through 12/29/23

Annual Total Returns
Year Russell 3000
1995 36.57% 28.09%
1996 21.63% 14.91%
1997 31.67% 25.90%
1998 24.11% 12.89%
1999 20.96% 17.47%
2000 -7.30% 19.75%
2001 -11.43% 29.55%
2002 -21.53% -10.45%
2003 31.02% 46.97%
2004 11.93% 20.46%
2005 6.10% 1.91%
2006 15.67% 15.35%
2007 5.16% -3.92%
2008 -37.32% -37.10%
2009 28.29% 40.71%
2010 16.93% 20.14%
2011 1.00% 3.08%
2012 16.41% 10.70%
2013 33.55% 31.54%
2014 12.53% 5.11%
2015 0.48% -13.08%
2016 12.70% 15.79%
2017 21.10% 6.56%
2018 -5.24% -12.43%
2019 30.99% 25.95%
2020 20.88% -6.17%
2021 25.63% 24.84%
2022 -19.21% -2.95%
2023 25.91% 18.78%
6/28/24 13.55% -3.86%

Past performance is no guarantee of future results and the actual current performance of the portfolio may be lower or higher than the hypothetical performance of the strategy. Hypothetical returns for the strategy in certain years were significantly higher than the returns of the Russell 3000 Index. Hypothetical strategy returns were the result of certain market factors and events which may not be replicated in the future. You can obtain performance information which is current through the most recent month-end by calling First Trust Portfolios L.P. at 1-800-621-1675 option 2. Investment return and principal value of the portfolio will fluctuate causing units of the portfolio, when redeemed, to be worth more or less than their original cost.

Simulated strategy returns are hypothetical, meaning that they do not represent actual trading, and, thus, may not reflect material economic and market factors, such as liquidity constraints, that may have had an impact on actual decision making. The hypothetical performance is the retroactive application of the strategy designed with the full benefit of hindsight. Strategy returns reflect a sales charge of 1.85% and estimated annual operating expenses of 0.185%, plus organization costs, but not taxes or commissions paid by the portfolio to purchase securities. Returns assume that all dividends received during a year are reinvested monthly. Actual portfolio performance will vary from that of investing in the strategy stocks because it may not be invested equally in these stocks and may not be fully invested at all times. It is important to note that the strategy may underperform the Russell 3000 Index in certain years and may produce negative results.

The Russell 3000 Index is an unmanaged index used to measure the performance of the largest 3000 U.S. stocks based on total market capitalization. The index cannot be purchased directly by investors.

Standard Deviation is a measure of price variability (risk). A higher degree of variability indicates more volatility and therefore greater risk.

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.

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.

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.

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.

Ongoing armed conflicts between Russia and Ukraine in Europe and among Israel, Hamas and other militant groups in the Middle East, have caused and could continue to cause significant market disruptions and volatility within the markets in Russia, Europe, the Middle East 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 ongoing effects of the COVID-19 global pandemic, or the potential impacts of any future public health crisis, may cause significant volatility and uncertainty in global financial markets. While vaccines have been developed, there is no guarantee that vaccines will be effective against future 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.


CUSIP identifiers have been provided by CUSIP Global Services, managed on behalf of the American Bankers Association by FactSet Research Systems Inc. and are not for use or dissemination in a manner that would serve as a substitute for any CUSIP service. The CUSIP Database, ©2024 CUSIP Global Services. "CUSIP" is a registered trademark of the American Bankers Association.

Fund Cusip Information
30336F223 (Cash)
30336F231 (Reinvest)
30336F249 (Cash-Fee)
30336F256 (Reinvest-Fee)
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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.
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