S&P MidCap 400 Dividend Aristocrats 25 Portfolio, 4th Qtr 2022
The S&P MidCap 400 Dividend Aristocrats 25 Portfolio is a unit investment trust (UIT) which is based on the S&P MidCap 400 Dividend Aristocrats Index and invests in companies from the index. The
index is designed to measure the performance of U.S.-listed mid-sized companies within the S&P MidCap 400 Index that have increased dividends every year for at least 15 consecutive years. The index
captures companies with a history of providing sustainable dividend income and capital appreciation potential, both key factors in total return.
Why Invest In Companies With A History Of Growing Dividends?
Quality | Companies that have been able to consistently grow their dividend have a tendency
to be higher quality compared to those of the broader market in terms of earnings quality and
leverage, in our opinion. A company’s ability to reliably increase its dividend for years, or even
decades, can be an indication of its financial strength or discipline.
Buffer Against Market Volatility | Dividend growth companies may be attractive to investors
looking for disciplined companies that can endure difficult market and economic environments.
These companies typically feature healthy balance sheets and consistent cash flows that provide
plenty of capital to effectively operate their business and fund a growing dividend.
Address the Potential Risks Associated with Rising Rates | Unlike high dividend yield
strategies which tend to be concentrated in companies from certain sectors that could come under
pressure during periods of rising rates, dividend growth strategies tend to be more diversified and
able to provide increased exposure to sectors that could become more desirable with improving
economic activity and rising rates.
This unit investment trust seeks above-average total return through a combination of capital
appreciation and dividend income; 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 financials sector which involves additional risks, including limited diversification. The companies engaged in the financials sector are subject to the adverse
effects of volatile interest rates, economic recession, decreases in the availability of capital, increased competition from new entrants in the field, and potential increased regulation.
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.
In February 2022, Russia invaded Ukraine which has caused and could continue to cause significant market disruptions and volatility within the markets in Russia, Europe, and the United States. The hostilities and sanctions
resulting from those hostilities could have a significant impact on certain investments as well as performance.
The COVID-19 global pandemic has caused and may continue to cause significant volatility and declines in global financial markets. While the U.S. has resumed “reasonably” normal business activity, 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 unit investment trust 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 S&P MidCap 400 Dividend Aristocrats Index is a product of S&P Dow Jones Indices LLC or its affiliates ("SPDJI") and has been licensed for use by First Trust Portfolios L.P. Standard & Poor's® and S&P® are registered trademarks of
Standard & Poor's Financial Services LLC ("S&P"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and these trademarks have been licensed for use by SPDJI and sublicensed for
certain purposes by First Trust Portfolios L.P. The S&P MidCap 400 Dividend Aristocrats Portfolio is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates, and none of such parties make
any representation regarding the advisability of investing in such product nor do they have any liability for any errors, omissions, or interruptions of the S&P MidCap 400 Dividend Aristocrats Index.