Automated Quantitative Analysis, Series 20
The AQA® Portfolio, Series 20, contains a selection of stocks considered by AQA® to
be the most undervalued at the time the portfolio is selected. An “undervalued”
stock is a company selling at a price significantly below its intrinsic value, as
identified by AQA®. Its objective is to seek above-average capital appreciation over
its life, however, there is no assurance the investment objective will be met.
An investment in the AQA® Portfolio gives investors a portfolio of stocks selected
using an established methodology developed over three decades ago. Baird
believes quantitative analysis is the common language through which all public
companies may be compared, but what differentiates AQA® is the type of analysis
and the soundness of the methodology.
How AQA® Works
AQA® uses public filings of balance sheets and income statements to calculate a value
for each stock. Analysis of this data is automated through the AQA® software to
reproduce the recognition process of undervalued stocks at a faster rate than the
marketplace. Based on AQA®’s analysis of each ratio’s influence on price movement,
stocks are ranked according to the discrepancy between AQA®’s calculation of their
current worth and current market price. The companies calculated to be most
undervalued await investor recognition through an efficient market, over time.
Because the AQA® process accelerates the recognition of a stock’s worth, this portfolio
allows investors to own an AQA® undervalued selection of stocks that will offer capital
appreciation over time, in our opinion.
- Representation in a broad cross-section of American industry.
- More heavily weighted toward the capitalization group currently most out of favor.
- Well-run companies with what AQA® calculates to have proven value and which have been overlooked by
In the normal course of events, we would expect the average holding period of the
stocks in this portfolio (the average number of months it takes for a stock to move from
being undervalued to being efficiently priced) to coincide with the portfolio’s optimum
rate of return over time, and this is reflected in the two-year maturity of this portfolio.
|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 twoyear
unit investment trust (“UIT”) should be made with an understanding of the risks,
including the risk that the financial condition of the securities’ issuers, or the general condition of the stock market (and, therefore, the value of the
trust units) may worsen. The value of the securities held by the portfolio may be subject to declines or increased volatility due to changes in
performance or perception of the issuers. No program can predict with certainty which stocks will go up in price.
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.
You should be aware that the portfolio is concentrated in information technology company stocks and that a concentrated portfolio is subject to
additional risks, including limited diversification. The companies engaged in the 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
may experience extreme price and volume fluctuations that are often unrelated to their operating performance.
The portfolio contains securities of foreign issuers, which are subject to additional risks, including currency fluctuations, political risks, withholding, the
lack of adequate financial information, and exchange control restrictions impacting foreign issuers.
The portfolio contains securities in small-cap
companies which are subject to additional risks, as the share prices of small-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.
As the use of Internet technology has become more prevalent in the course of business, the trust has become more susceptible to potential risks
through breaches in cybersecurity.