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Innovative Health Care Portfolio, Series 11

Innovation is important to the success of any business, but may be most profound in the health care sector with the potential to improve the quality of life and life expectancy of millions. Innovation in the health care sector is accelerating. Advances include cutting edge gene and cell therapies, the use of artificial intelligence (AI), machine learning tools, the application of database systems, and other innovations from outside the industry. We believe transformative shifts within the health care sector are creating opportunities for companies that embrace innovation in today’s new era of technological and medical advances.

As researchers and companies work to apply the latest advances in lifesaving medical drugs and devices, the government has been working to streamline its drug and device approval process. According to the U.S. Food & Drug Administration (FDA), in 2021, the FDA approved 50 new drugs. The 5-year average for drug approvals is 51 per year, a decade ago that number was 24 per year.1 Statistics show a need for more efficiency in the health care system to prioritize early diagnoses and prevention of diseases:

Aging population – In 2019, there were 703 million persons aged 65 years or over globally. This number is anticipated to double to 1.5 billion by 2050, according to the United Nations Department of Economic and Social Affairs.

Prevalence of chronic disease – Cancer, heart disease and diabetes are amoung the leading causes of death and disability in the U.S., according to the Center for Disease Control.

The health care industry is undergoing fundamental transformations as a shift toward an aging population, prevalence of chronic diseases and advances in innovative technologies continue to increase health care demand and expenditures. According to Centers for Medicare & Medicaid Services, national health spending is anticipated to grow at an average annual rate of 5.4% for 2019-2028 and to reach $6.2 trillion by 2028.

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Access To Transforming Themes

The Innovative Health Care Portfolio provides access to health care companies that are involved in areas that we believe are driving innovation:

Robotic Surgery | Surgical robots are relied upon to assist human surgeons, aiding in procedures that require great precision. The global market for surgical robots is expected to experience a compound annual growth rate of 17.60%, from 2021-2028, according to Verified Market Research.

Rare Disease | According to the World Economic Forum, approximately 7,000 rare diseases have been identified and affect approximately 475 million people worldwide, but the vast majority of them have no specific treatment.

Gene and Cell Therapy | | This type of therapy targets DNA or RNA inside or outside of the body. In 2020, there were nearly 400 cell and gene therapies in development to target a broad range of diseases.2

Electronic Health Care | | The global electronic health records (EHR) market size was valued at $26.8 billion in 2020 and is anticipated to grow at a compound annual growth rate (CAGR) of 3.7% from 2021 to 2028. EHR solutions may play a key role in providing value based personalized health care and seek to provide the best outcome for patients by providing more effective clinical workflow, support for clinical decision making, patient safety, and ensuring fewer medical errors.3

Infectious Disease | Infectious diseases are caused by pathogenic microorganisms, such as bacteria, viruses, parasites or fungi; the diseases can be spread, directly or indirectly, from one person to another. Worldwide, the leading infectious disease is tuberculosis (TB) which is estimated to kill approximately 1.4 million each year.4 Investment in infectious disease has the potential to prevent needless deaths, dramatically reduce health care costs and improve the quality of life for millions.

Oncology | | The global oncology/cancer drugs market was valued at $135.49 billion in 2020, and is estimated to rise to $274.40 billion by 2030, growing at a CAGR of 7.5% from 2021 to 2030.5

Advanced Life Sciences | The combination of technology and health care, or life science, is a broad and growing sector of the economy. According to a report from Cushman & Wakefield, rapid technological advances and surging demand from an aging population are creating a positive environment for life sciences growth.

1  Nature.com
2  America’s Biopharmaceutical Companies
3  Grand View Research
4  TB Alliance
5  Allied Market Research

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 health care sector which involves additional risks, including limited diversification. The companies engaged in the health care sector are subject to fierce competition, high research and development costs, governmental regulations, loss of patent protection, and changing consumer spending trends. In addition, health crises, such as a pandemic outbreak, can severely impact the health care industry in particular.

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 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.

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.

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 information in the prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. The prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
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The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
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