Multi-Sector Income Portfolio, Series 50
The Multi-Sector Income Portfolio offers investors the potential for a lower-risk total return
alternative to investing solely in
stocks. To accomplish this, the
portfolio invests in high dividend-paying
equity securities diversified
among common stocks, Canadian
energy stocks and Real Estate
Investment Trusts (REITs) as well as in closed-end
funds (CEFs) which invest primarily in master limited partnerships (MLPs), equities and taxable
bonds. The portfolio is approximately weighted based on the allocation below.
Canadian Energy Stocks
The Canadian energy 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
The Importance of Dividends
Due to the fact that corporations are not obligated
to share their earnings with stockholders, dividends may be viewed as a sign of a company's profitability
as well as management's assessment of the future, in our opinion.
Dividends have had a significant impact on stock performance. Consider the historical effect
dividends have had on companies in the S&P 500 Index. According to Ibbotson Associates,
dividends have provided approximately 41% of the 10.20% average annual total return on the
S&P 500 Index from 1926 through 2019. The S&P 500 Index is an unmanaged index of 500 stocks
used to measure large-cap U.S. stock market performance. The index cannot be purchased directly
by investors. You should be aware that there is no guarantee that the issuers of the securities
included in the portfolio will declare dividends in the future or that, if declared, they will either
remain at current levels or increase over time.
Master Limited Partnerships
MLPs are limited partnerships that are publicly traded on a
U.S. securities exchange, which combine the tradeability 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. Unlike individual partnership investments, investing in MLPs through closed-end funds provides
investors with one Form 1099 per shareholder at the end of the year, rather than multiple K-1s and potential
Real Estate Investment Trusts
In investing, low correlation signifies that different investments have not performed in the same
way. A study by Ibbotson Associates found that REITs' low correlation to other investments is a key
factor for portfolio diversification.1 This makes a compelling case for the use of REITs to reduce
risks in a variety of investment portfolios.
This unit investment trust seeks a high rate of current monthly income and capital
appreciation. There is, however, no assurance that the objectives will be achieved.
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.
|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.
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 employ
the use of leverage, which increases the volatility of such 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.
The companies engaged in the energy sector 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. Falling oil and gas prices may negatively impact
the profitability and business prospects of certain energy companies.
Certain of the closed-end funds invest in MLPs. Investments in MLPs are subject to the risks
generally applicable to companies in the energy and natural resources sectors, including
commodity pricing risk, supply and demand risk, depletion risk and exploration risk. U.S. taxing
authorities could challenge the trust’s treatment of the MLPs for federal income 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 REIT securities is subject to additional risks, as 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.
Certain of the common stocks held by the trust are issued by companies headquartered in Canada
which involves additional risks. The Canadian market is relatively concentrated in issuers involved
in the production and distribution of natural resources and continued demands by the Province
of Quebec for sovereignty could significantly affect the Canadian market, particularly if such
demands are met.
An investment in a portfolio containing securities of foreign issuers is subject to certain risks,
including currency and interest rate fluctuations, nationalization or other adverse political or
economic developments, lack of liquidity of certain foreign markets, withholding, the lack of
adequate financial information, and exchange control restrictions impacting foreign issuers.
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.
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 recent outbreak of a respiratory disease designated as COVID-19 was first detected in China in December 2019. The global economic impact of the COVID-19 outbreak is impossible to predict but is expected to disrupt
manufacturing, supply chains and sales in affected areas and negatively impact global economic growth prospects. The COVID-19 outbreak has also caused significant volatility and declines in global financial markets, which
have caused losses for investors. The impact of the COVID-19 outbreak may be short term or may last for an extended period of time, and in either case could result in a substantial economic downturn or recession.
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.
For a discussion of additional risks of investing in the trust see the “Risk Factors” section of