Financials Select Portfolio, Series 78

The financials sector covers a wide range of industries including banks, investment banking, brokerage, consumer finance and credit and insurance. Many of the firms included within this sector offer services including traditional banking, insurance underwriting, securities underwriting, investment brokerage and merchant banking.

Consider The Following

  • During the financial crisis of 2008, many banks had weak, overly levered balance sheets which contributed to the stock market crash. However, during the current COVID-19 pandemic, many banks have strong, asset heavy and highly liquid balance sheets. During this crisis, banks may have the opportunity to help the government in saving other sectors of the economy through loans and lines of credit.

  • We believe the trend that has perhaps had the most notable impact on this sector is industry consolidation, and that improved efficiency, lower operating costs and increased volume are a few of the benefits. We believe consolidation across the financials sector could continue to play an important role as institutions react to regulatory mandates and competitive opportunities both here in the U.S. and abroad.

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Portfolio Objective

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.

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 financials sector which involves additional risks, including limited diversification. The companies engaged in the financials sector are subject to the adverse effects of volatile interest rates, economic recession, decreases in the availability of capital, increased competition from new entrants in the field, and potential increased regulation.

An investment in a portfolio containing equity securities of foreign issuers is subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting foreign issuers.

An investment in a portfolio containing mid-cap companies is subject to additional risks, as the share prices of 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.

The COVID-19 global pandemic has caused significant volatility and declines in global financial markets, causing losses for investors. The development of vaccines has slowed the spread of the virus and allowed for the resumption of “reasonably” normal business activity in the United States, although 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.