The Dow® Target 5 Portfolio, 4th Quarter
The Dow® Target 5 4Q '22 - Term 1/9/24 (The Dow®
Target 5 Portfolio) is a unit investment trust which invests in a fixed portfolio
of stocks for approximately 15 months. The portfolio adheres to a simple strategy
of investing in an equally-weighted portfolio of the five lowest-priced of the
ten highest dividend-yielding stocks of the Dow Jones Industrial Average®
The strategy is based on three important elements:
- Higher Dividend Yields - Blue-chip stocks with higher dividend yields may
indicate that the stocks are out of favor or may be undervalued.
- Industry Leaders - The companies included in the DJIA® are some
of the most widely-held and well-capitalized companies in the world.
- Discipline - The strategy dictates what to buy, when to buy, and when to
sell. No emotional judgments are made and the strategy remains the same.
If this strategy had been applied since 1972, investors would have realized
higher total returns than by investing in the entire DJIA®. 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 Dow® Target 5 Portfolio. Although
this unit investment trust 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.
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
||Average Annual Total Returns*
|Annual Total Returns
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 DJIA®. 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 0.172%, 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 DJIA® in certain years and may produce negative results.
The DJIA® consists of 30 U.S. stocks chosen by the editors of The
Wall Street Journal as being representative of American industry. 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.
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.
In addition, The Dow® Target 5 Portfolio is a five-stock portfolio
and is subject to added risk due to its relative lack of diversification.
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.
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 has caused and may continue to cause significant volatility and declines 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.
The Dow Jones Industrial Average is a product of S&P Dow Jones Indices LLC or its affiliates ("SPDJI") and
has been licensed for use by First Trust Portfolios L.P. Standard & Poor's® and S&P® are registered
trademarks of Standard & Poor's Financial Services LLC ("S&P"); Dow Jones® is a registered trademark of
Dow Jones Trademark Holdings LLC ("Dow Jones"); and these trademarks have been licensed for use by
SPDJI and sublicensed for certain purposes by First Trust Portfolios L.P. The Dow® Target 5 Portfolio is not
sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates, and none of
such parties make any representation regarding the advisability of investing in such product nor do they
have any liability for any errors, omissions, or interruptions of the Dow Jones Industrial Average.