High Dividend Equity Allocation Portfolio, Series 27
Investing in dividend-paying stocks is a time-tested strategy for investors seeking income. Dividends
have traditionally been one of the few constants in the world of investing, helping to buffer volatility in
both good and bad markets and history has shown that, over the long-term, dividends provide a key
component of total return. As interest rates remain low, investors are turning their attention to dividend-paying stocks.
The High Dividend Equity Allocation Portfolio provides a convenient way to invest in a broad range of companies that we believe have shown a solid history of distributing dividends to shareholders.
Portfolio Selection Process
The trust invests in a diversified
portfolio of dividend-paying
common stocks of companies from
four distinct portfolio strategies
which are weighted based on the
Through our selection process we seek to find the companies that we believe have the best prospects for above-average total return.
Identify the universe
The first step in our selection process is to identify each
universe from which we will select the stocks for the four strategies. Each universe contains stocks
selected specifically for each component of the allocation. It should be noted that emerging markets
stocks are included in the universe of stocks from which the International High Dividend stocks are
selected and, if selected, would result in the portfolio having an exposure to emerging markets stocks in
excess of 10% of the portfolio. In addition, emerging markets companies are those which are
incorporated, headquartered or have a significant presence in an emerging market country.
Screen for dividend strength
The next step in our process is to evaluate companies based on multiple factors and eliminate those companies that do not meet our investment criteria. These criteria are designed to identify well-capitalized companies with above-average dividend yields and the ability to sustain current dividend levels.
Examine historical financial results
The next step in our process is to look for those companies that have earned a net cash flow return on investment that is above the average of their peers. Historically, companies that have increased their cash flows at a higher rate have rewarded shareholders with superior total returns.
Select companies with attractive valuations
The final step in our process is to select companies based on the fundamental analysis of our team of research analysts. The stocks selected for the portfolio are those that meet our investment objective, trade at attractive valuations and, in our opinion, are likely to exceed market expectations of future cash flows.
This unit investment trust seeks aboveaverage 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
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.
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.
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.
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.