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Election Portfolio, Series 16

In November 2016, the United States elected our 45th President. While most voters focus on the current state of affairs when casting their ballots in presidential elections, equity investors tend to concentrate on the impact the election will have on fiscal and monetary policy that can influence future economic growth. Since the 2016 election, we’ve seen a series of policy changes including deregulation and the passing of the most far-reaching tax reform since the 1980s.

In November 2018, the country completed the mid-term elections and the results produced a divided government with a Republican president, Republican majority U.S. Senate and Democrat majority U.S. House of Representatives. This shift in the balance of power in Congress could affect market performance and which sectors could have strong relative value and growth potential. Historically, looking back 60 years to the election of 1958, the S&P 500 Index has performed better during periods of divided government.1

1 Investor’s Business Daily

Divided Government

We anticipate the following sectors have the potential to perform well under the
current divided government:

  • Banks
  • Communication Services 
  • Consumer Discretionary
  • Health Care
  • Information Technology
  • U.S. Infrastructure

Portfolio Objective

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

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.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value

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 the information technology sector which involves additional risks, including limited diversification. 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.

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.

 
Fund Cusip Information
30314X584 (Cash)
30314X592 (Reinvest)
30314X600 (Cash-Fee)
30314X618 (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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