Precious Metals Select Portfolio, Series 41
The world of precious metals is a rapidly changing, dynamic market that can be affected by a multitude
of domestic and geopolitical forces. Mining technology, supply and demand factors, and inflation all
combine to impact how the precious metals market will ultimately move. Furthermore, the various
components of the precious metals market can all react differently to the numerous political and
economic events that unfold and develop with increasing regularity.
Why Precious Metals?
Despite the complexity and diversity of elements that can interact, many investment professionals
recommend including precious metals as part of a properly diversified portfolio in an attempt to provide
potential capital appreciation, liquidity, and as a hedge against conventional assets. For many investors,
investing in the common stock of precious metals companies may offer one way to reduce the overall risk
in a properly diversified portfolio.
Federal deficit concerns, questions regarding global economic growth, and geopolitical issues
confronting not only the United States, but several countries abroad, have contributed to an increase in
the demand for precious metals assets. Additionally, since December 2008, the Federal Reserve has kept
the federal funds target rate very low in an attempt to boost the economy. As the United States
economy strengthens, so does the potential for rising inflation. This may encourage investors to
continue to shift assets into commodities such as gold, which is historically known for holding value
during times of rising inflation.
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 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 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 an investment that is concentrated in stocks of precious metals companies in the materials sector involves additional risks, including limited diversification. Companies in the precious metals industry are subject to risks associated with the exploration, development, and production of precious metals including competition for land, difficulties in obtaining required governmental approval to mine land, inability to raise adequate capital, increases in production costs and political unrest in nations where sources of precious metals are located. In addition, the price of gold and other precious metals is subject to wide fluctuations and may be influenced by limited markets, fabricator demand, expected inflation, return on assets, central bank demand and availability of substitutes.
A portfolio which is invested in 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. Risks associated with investing in foreign securities
may be more pronounced in emerging markets where the securities markets are
substantially smaller, less liquid, less regulated and more volatile than the
U.S. and developed foreign markets.
An investment in a portfolio containing small-cap and mid-cap
companies is subject to additional risks, as the share prices of smallcap
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.
Because the portfolio is concentrated in companies headquartered, or with a
significant presence, in Canada, the portfolio may present more risks than a
portfolio which is broadly diversified over several regions.
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.
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.