Low Volatility Portfolio, Series 18

The ebb and flow of markets can have a significant impact on a portfolio. For investors focused on long-term investment objectives, one way to potentially mitigate the adverse effects of market movements is to invest in relatively low-volatility stocks. Typically, these stocks do not have as dramatic price fluctuations (relative to other stocks), but change in value steadily over time.

The goal of the Low Volatility Portfolio is to provide investors with exposure to 50 well-capitalized companies which have displayed low price fluctuations over time while also retaining capital growth potential.

Portfolio Selection Process

Through our multi-factor selection process we seek to find the stocks that we believe have the best prospects for above-average capital appreciation.

Step 1: Fundamental Model Ranking

All stocks contained in the S&P 500 Index are ranked by the following equally weighted factors to determine an overall fundamental model rank::

• Price-to-book.
• Price-to-cash flow.
• Return on assets.

Step 2: Volatility Model Ranking

All stocks contained in the S&P 500 Index are ranked by long- and short-term volatility based on standard deviation of historical returns in order to determine each stock’s volatility model rank.

Step 3: Select Lowest Volatility Stocks

The top 100 stocks in the S&P 500 Index according to their volatility model rank are determined.

Step 4: Select Highest Fundamentally Ranked Stocks

The remaining stocks are ranked based on their fundamental model score and the top 50 stocks are selected for the portfolio subject to a maximum of 25% in any one sector. Stocks are equally weighted within the portfolio.

Portfolio Objective

This unit investment trust seeks above-average capital appreciation; however, there is no assurance the objective will be met.

You should carefully consider the portfolio's investment objective, risks, and charges and expenses 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.

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.

Certain of the securities in the portfolio are issued by Real Estate Investment Trusts (REITs). Companies involved in the real estate industry are subject to changes in the real estate market, vacancy rates and competition, volatile interest rates and economic recession.

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.

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 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.