MLP Closed-End Fund and Energy Portfolio, Series 62
The energy infrastructure of the United States provides the backbone of our economy and way of life.
Energy infrastructure includes an elaborate network of systems that transport, store, gather, process and
deliver crude oil, refined petroleum products, natural gas or electric power generation, including
renewable energy. The performance of companies in the energy infrastructure industry is not highly
correlated with the price of oil and other types of energy, but rather with the demand for energy. The
demand for energy generally increases steadily over time and is much less volatile than commodity
energy prices, which often results in steady, predictable cash flows for companies in these industries.1
1 Standard & Poor's
This unit investment trust seeks a high rate of current monthly income and growth of
principal; however, there is no assurance the objectives will be met.
The MLP Closed-End Fund and Energy Portfolio is a professionally selected unit investment trust which
invests approximately 50% in closed-end funds that invest in master limited partnerships (MLPs) from
the energy infrastructure industry. Approximately 50% of the portfolio invests in common stocks of
MLPs are limited partnerships that are publicly traded on a U.S. securities exchange. They combine the
tradability of common stocks with the corporate structure of a limited partnership. MLPs are traditionally
high cash flow businesses that pay out a majority of that cash to investors. Investing in MLPs through
closed-end funds provides an efficient alternative to investing directly in MLPs. Unlike individual
partnership investments, a closed-end fund provides one Form 1099 per shareholder at the end of the
year, rather than multiple K-1s and potential state filings.
The common stocks held in the portfolio generate cash flow through the gathering, processing,
transportation, storage, and distribution of oil and natural gas.
With continuing geo-political and long-term supply concerns, we believe this investment may represent
an attractive alternative for investors seeking oil and gas exposure and high current income potential.
- High current income potential
- Capital appreciation potential
|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 unit investment trust should be made with an
understanding of the risks involved with an investment in a portfolio of common
stocks and closed-end funds.
Common stocks are subject to certain risks, 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.
Closed-end funds are subject to various risks, including management's ability
to meet the fund's investment objective, and to manage the fund's portfolio
when the underlying securities are redeemed or sold, during periods of market
turmoil and as investors' perceptions regarding the funds or their underlying
investments change.Unlike open-end funds, which trade at prices based on a current
determination of the fund's net asset value, closed-end funds frequently trade
at a discount to their net asset value in the secondary market. Certain closed-end
funds may employ the use of leverage which increases the volatility of such
You should be aware that an investment that is concentrated in stocks in the energy sector involves additional risks, including limited diversification. The companies engaged in the energy sector, which includes MLPs, are subject to certain risks, including price and supply fluctuations caused by international politics, energy conservation, taxes, price controls, and other regulatory policies of various governments. U.S. taxing authorities could challenge the trust's treatment of the MLPs for federal tax purposes. These tax risks could have a negative impact on the after-tax income available for distribution by the MLPs and/or the value of the trust's investments.
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.
For a discussion of additional risks of investing in the trust see the "Risk Factors" section of the prospectus.
It is important to note that an investment can be made in the underlying funds directly rather than through the trust. These direct investments can be
made without paying the trust's sales charge, operating expenses and organizational costs.
Because the portfolio invests in securities issued by companies headquartered in Canada, the portfolio may present more risks than a portfolio which is
broadly diversified over several regions.
An investment in foreign equities should be made with an understanding of the additional risks involved with foreign issuers, such as currency
fluctuations, political risk, withholding, the lack of adequate financial information, and exchange control restrictions impacting foreign issuers.
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.
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 cyber security.
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.