Innovative Health Care Portfolio, Series 9
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 2020, the FDA approved 53 new drugs.
Together, over the past three years, drug approvals represent drug companies’ most productive
period in more than two decades.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 a report from Deloitte, between
2020 and 2024, global health care spending is anticipated to rise at a 3.9% compound annual
growth rate, considerably faster than the 2.8% recorded in 2015-2019.
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 11.52%, from 2020-2027, according to Research and Markets.
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
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 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 someone approximately every 22 seconds – about 1.4 million in 2019 alone.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 market is currently valued at $100 billion and is anticipated
to grow with a compound annual growth rate of 7.6% from 2020-2028, according to Quince
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 Chemical & Engineering News
2 America’s Biopharmaceutical Companies
3 Grand View Research
4 TB Alliance
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.
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.
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.