REIT Growth & Income Select, Series 41
A Real Estate Investment Trust (REIT) is a company that buys, develops and/or manages income-producing real estate such as apartments, shopping centers, offices and warehouses. In short, a REIT
is a corporation that pools the capital of many investors to purchase one or more forms of real estate. In September 2016, equity REITs moved from the Financials sector of the Global Industry
Classification Standard (GICS®) to a new, stand-alone Real Estate sector. This change reflected the growth in size and importance of real estate in the economy. Over the past 25 years, the total equity
market capitalization of listed U.S. Equity REITs has grown from $9 billion to over $1 trillion.1 Going forward, we believe the real estate sector may benefit from fiscal stimulus, possible regulatory
changes, economic growth, job growth and prospects for higher corporate profits.
This unit investment trust seeks dividend income and capital appreciation;
however, there is no assurance the objectives will be met. The portfolio terminates
approximately two years from the initial date of deposit.
Investing in REITs
Income- REITs are currently required to distribute at least 90% of their income annually as
dividends to shareholders. Historically, this has made REITs a significantly higher source of income versus
other equities and competitive with traditional fixed income investments. It should be noted that
dividends paid by REITs are generally not eligible for the reduced tax rates for qualified dividend income.
Diversification - The portfolio invests in a number of REITs offering diversification
among properties and regions.This type of diversification may help to reduce
some of the fluctuations in the real estate market as a result of economic downturns
or changes in supply and demand in a specific region or type of property.
Asset Allocation - A study by Ibbotson Associates
found that adding REITs to a portfolio of stocks, bonds, and cash is a key factor for portfolio
diversification.2 We believe this makes a compelling case for the use of REITs
to reduce risks in a variety of investment portfolios.
Liquidity- Compared to traditional, privately-held real estate, which may be difficult to sell, the
REITs in which this portfolio invests are traded on major stock exchanges, making them highly liquid.
Additionally, units of the portfolio may be redeemed on any business day at the redemption price.
Skilled Management- REIT investors also gain the advantage of skilled
management since REIT management teams tend to be experts within their specific
type of property or geographic location.
|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 the portfolio is concentrated in REITs which involves additional risks,
including limited diversification. Companies involved in the real estate industry are subject to
changes in the real estate market, vacancy rates and competition, volatile interest rates and
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
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.