Global Deep Value Dividend Portfolio, Series 22
The Global Deep Value Dividend Portfolio is a unit investment trust that invests in 50 companies that
have estimated low 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 Importance of Dividends
Corporations are not obligated to share their
earnings with stockholders, so dividends may be viewed as a sign of a company’s profitability as well as
management’s assessment of the future. Dividends have also had a significant impact on stock
performance. You should be aware that there is no guarantee that the issuers of the securities included
in the portfolio will declare dividends in the future or that, if declared, they will either remain at current
levels or increase over time.
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 by selecting stocks from the S&P 1500 Index (excluding
stocks of companies in developed (ex-U.S.) and emerging markets as determined by the Sponsor) and
developed (ex-U.S.) and emerging markets stocks that trade directly on a major U.S. stock exchange or
through an American Depositary Receipt.
Screen the Universe
We then evaluate the companies based on market capitalization,
the ratio of each stock’s current price to its estimated current year earnings and also its dividend payout
ratio. These screens are designed to identify well-capitalized 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 25 highest dividend-yielding stocks
from the S&P 1500 Index universe described above, 15 highest dividend-yielding foreign developed
market stocks and 10 highest dividend-yielding emerging market stocks for the portfolio. 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.
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. Risks associated with investing in foreign securities may be more pronounced
in emerging markets where the securities markets are substantially smaller, less liquid,
less regulated and more volatile than the U.S. and developed foreign markets.
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.
Because the portfolio is concentrated in companies headquartered in Europe, the portfolio may
present more risks than a portfolio which is broadly diversified over several regions. The United
Kingdom vote to leave the European Union and other recent rapid political and social change
throughout Europe make the extent and nature of future economic development in Europe and
the effect on securities issued by European issuers difficult to predict.
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.
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 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.
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 cyber security.