Energy Select Portfolio, Series 86
Energy is the vital force powering business, manufacturing, and the transportation of goods and services to serve the world’s economies. Energy supply and demand plays an increasingly vital role in
worldwide economic output. The challenge of developing clean fuel initiatives to make the most of traditional fossil fuels and investing in cutting edge research to identify new energy sources, like
hydrogen fuels and fusion technologies, becomes increasingly important.
Consider The Following
- Rising prices are driving U.S. crude oil production which is projected to reach pre-pandemic
levels in 2023, peak in the late 2020s, and stabilize over the long term. In addition, consumption
and production of natural gas is expected to grow through 2050, with approximately 25%
more natural gas produced than consumed in the U.S.11
- According to the U.S. Energy Information Administration (EIA), U.S. crude oil production is
estimated to average 11.8 million barrels per day (b/d) in 2022 and 12.3 million b/d in 2023.
- The EIA projects global consumption of petroleum and other liquids to reach approximately
101.0 million b/d in 2023.
This unit investment trust seeks above-average capital appreciation; 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 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.
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 an investment that is concentrated in stocks in the energy sector involves additional risks, including limited diversification. The
companies engaged in the energy sector are subject to certain risks, including price and supply fluctuations caused by international politics, energy
conservation, taxes, price controls, and other regulatory policies of various governments. Falling oil and gas prices may negatively impact the profitability
and business prospects of certain energy companies.
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.
In February 2022, Russia invaded Ukraine which has caused and could continue to cause significant market disruptions and volatility within the markets in Russia, Europe, 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 COVID-19 global pandemic and the ensuing policies enacted by governments and central banks have caused and may continue to cause significant volatility and uncertainty in global financial markets. While the U.S. has resumed “reasonably” normal business activity, many countries continue to impose lockdown measures. Additionally, there is no guarantee that vaccines will be effective against emerging 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.