Deep Value Dividend Opportunity Portfolio, Series 13
The Deep Value Dividend Opportunity Portfolio invests in 30 companies that have low estimated current year price-to-earnings (P/E) ratios in addition to above-average dividend yields. We believe
these companies may offer long-term investors an opportunity for capital appreciation and dividend income.
The Importance of P/E Ratios
The P/E ratio is considered the most common measure of a stock’s value. Stocks that have high P/E ratios
tend to be considered a higher risk investment than those with low P/E ratios, since a high P/E ratio often
signifies high earnings growth expectations. The current environment has led to certain companies being
undervalued, in our opinion. We believe there is opportunity in the U.S. stock market with the combination
of attractive valuations, rising earnings and ultra-low interest rates, which may benefit equities.
The Importance of Dividends
Dividends have historically been one of the few constants in the world of investing, and they
have had a significant impact on stock performance, contributing nearly half of the stock market’s
total return. According to Ibbotson Associates, dividends have provided approximately 41% of the
10.20% average annual total return on the S&P 500 Index from 1926 through 2019. Of course,
past performance is no guarantee of future results.
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.
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
We begin with the companies listed in the S&P 1500 Index.
Screen the Universe
We then evaluate the companies in the universe based on market-capitalization,
the ratio of each stock’s current price to its estimated current year earnings, its
dividend payout and dividend yield ratios. These screens are designed to identify stocks with a low P/E ratio and the ability to
sustain its dividend yield.
Select the Portfolio
The final step is to select the 30 stocks
for the portfolio subject to a maximum of approximately 30% in a single sector. The stocks are
approximately equally weighted within the portfolio.
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.
| 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 advisor
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.
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
One of the common stocks held by the trust is issued by a foreign entity. An investment in foreign securities
should be made with an understanding of the additional risks involved with foreign issuers, such as currency
and interest rate fluctuations, nationalization or other adverse political or economic developments, lack of
liquidity of certain foreign markets, withholding, the lack of adequate financial information, and exchange
control restrictions impacting foreign 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.
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.