Preferred Income Portfolio, Series 97
The Preferred Income Portfolio is a unit investment trust that is diversified across preferred stocks and
trust preferred securities from several companies and because the portfolio remains fixed, you have the
confidence of knowing what you own.
This unit investment trust seeks a high rate of current income; however, there is no assurance the
objective will be met.
About Preferred Securities
- Preferred stocks are equity securities of the issuing company which pay income in the form of
- Trust preferred securities are securities issued by corporations, generally in the form of interestbearing
notes or preferred stocks, distributions on which are treated as interest, rather than
dividends, for federal tax purposes.
- Preferred securities typically have a yield advantage over common stocks as well as comparably
rated fixed income investments.
- Preferred securities are "senior securities" which have preference over common stocks, but not
debt, of an issuer.
|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 trust preferred securities,
such as an economic recession, volatile interest rates and the possible deterioration
of either the financial condition of the issuers of the trust preferred securities
or the general condition of the stock market.
You should be aware that the portfolio is concentrated in
preferred stocks and trust preferred securities issued by
companies in the financials sector which involves additional
risks, including limited diversification. The financials sector is
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 the potential for
increased regulation. Preferred stocks and trust preferred
securities are typically subordinated to bonds and other debt
instru ments in a company's capital structure, in terms of priority
to corporate income, and therefore will be subject to greater
credit risk than those debt instruments.
The portoflio is also concentrated in securities in
the utilities sector which involves additional risks,
including limited diversification. The companies
engaged in the utilities sector are subject to
certain risks, including price and supply
fluctuations caused by international politics,
energy conservation, taxes, and other regulatory
policies of various governments.
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
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.
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.
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.
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.