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Select DSIP Portfolio, 1st Quarter 2021 Series

Regardless of the market environment, Wells Fargo Advisors believes dividends should be considered an important ingredient in an investor's overall investment plan. One way to seek to accomplish this goal is to buy a portfolio of companies with the potential to pass on a portion of their earnings to investors in the form of regular dividend increases.

The Importance Of Dividends

A company’s ability to consistently pay—and increase—dividends is an important sign of that company’s financial strength. Therefore, we believe investors who are seeking dividends through their investments should look for well-managed and financially sound companies with the potential to deliver solid returns. Companies that choose to reward stockholders with greater dividends (and many companies don’t) can give investors the potential to increase capital and produce attractive total returns over time. Of course, past performance is no guarantee of future results.

According to data from 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.*

Dividends are an important component of an overall portfolio. Companies that have initiated or consistently grown their dividends have provided strong returns to shareholders over the long term. The chart below shows dividend growers in the S&P 500 Index over the last 30 years.

Chart

Chart

 

Portfolio Objectives

This investment seeks to:

  • Provide an Attractive Stream of Income.
    A portfolio of stocks believed to have the potential to regularly raise dividends offers investors the potential for a growing income stream. Because companies are selected for this portfolio based on their potential to not only pay dividends, but also their ability to increase them, this strategy can provide a natural inflation hedge. Rising dividends have also demonstrated an ability to cushion the fall of stock prices, especially in a rising interest rate environment.

  • Reduce Volatility and Modify Risk.
    The DSIP Portfolio helps counteract volatility through diversification. The portfolio includes companies across various market capitalizations and sectors of the economy. Any stock inevitably is subject to general price fluctuation, but diversification can help smooth out overall portfolio returns. In addition, dividend payments may enhance the investment’s total return. However, diversification does not guarantee a profit or protect against a loss.
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.

Risk Considerations

An investment in this unmanaged unit investment trust should be made with an understanding of the risks involved with owning common stocks. The value of the securities held by the portfolio may be subject to declines or increased volatility due to changes in performance or perception of the issuers.

There may be tax consequences unless units are purchased in an IRA or other qualified plan.There are fees and sales charges associated with this investment. There is no assurance the objectives of this portfolio will be achieved.

The COVID-19 global pandemic has resulted in major disruptions to economies and markets around the world. Financial markets have experienced extreme volatility and severe losses, negatively impacting global economic growth prospects. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty and may exacerbate other political, social and economic risks.

While the life of this portfolio is 15 months, this strategy offers the best potential when participants invest over many years, so investors should consider their ability to pursue investing in successive portfolios, if available.

This portfolio contains a real estate investment trust, which is subject to additional risks, such as changes in the real estate market, vacancy rates and competition, volatile interest rates and economic recession.

A portfolio that contains securities in small-cap and mid-cap companies is subject to additional risks, as the share prices of small-cap and 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.

While Wells Fargo Advisors has carefully evaluated and approved the securities in this portfolio, it may choose for any reason not to recommend any or all of the securities for another purpose or at a later date. This may affect the value of your units.

Wells Fargo Advisors is the trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.

 
Fund Cusip Information
30317D841 (Cash)
30317D858 (Reinvest)
30317D866 (Cash-Fee)
30317D874 (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.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
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