High Dividend Equity Opportunity Portfolio, Series 4
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 contributing nearly half of the stock market’s total
returns historically. According to Ibbotson Associates, dividends have provided approximately 41% of the 10.16% average annual total return on the S&P 500 Index, from 1926 through 2017.1
A dividend is a payment from a company's earnings. Since corporations are not
obligated to share their earnings with stockholders, dividends may be viewed
as a sign of a company's profitability as well as management's assessment of
1 The S&P 500 Index is an unmanaged index of 500
stocks used to measure large-cap U.S. stock market
performance. The index cannot be purchased directly
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 with the companies listed in the S&P 1500 Index 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
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 for the Portfolio
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 objectives, trade at attractive valuations and,
in our opinion, are likely to exceed market expectations of future cash flows.
The objective of this unit investment trust is to provide investors the potential
for above-average total return through a combination of capital appreciation
and dividend income; however, there is no assurance the objective will be met.
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. The portfolio terminates approximately
two years from the initial date of deposit.
|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 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 consumer products sector
which involves additional risks, including limited diversification. The companies engaged in the
consumer products sector are subject to certain risks, including global competition, changing
government regulations and trade policies, currency fluctuations, and the financial and political
risks inherent in producing products for 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.
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.
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.
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.