Strategic Dividend Select Portfolio, Series 41
Dividends have traditionally been one of the few constants in the world of investing, helping
to buffer volatility in both good and bad markets and contributing nearly half of the stock
market’s total returns historically. 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
A dividend is a payment from a company’s earnings. 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.
1The 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.
This unit investment trust seeks above-average total return; however, there is no
assurance the objective will be met.
This unit investment trust
invests in dividend-paying
common stocks from three
distinct and, we believe,
complementary segments of
the market as well as closed-end
funds (CEFs) which invest in dividend-paying stocks. The portfolio is weighted based on the
- Dividend Strength - The stocks for this component of the portfolio are selected from the
Russell 3000 Index. Through our selection process, we seek to identify companies we consider well-capitalized
with strong balance sheets, with a record of financial strength and profit growth, a history of
dividend payments, and the ability to generate dividend growth.
- High Dividend - The stocks for this component of the portfolio are also selected from the
Russell 3000 Index. With this component, we seek to identify companies we consider well-capitalized
with above-average dividend yields and the ability to sustain current dividend levels.
- International High Dividend - These stocks are selected from a universe of foreign
companies that trade on a U.S. stock exchange either directly or through an American Depositary
Receipt. Our selection process seeks to identify companies we consider well-capitalized with above-average
dividend yields and the ability to sustain current dividend levels.
- Dividend & Income CEFs - This component is comprised of a pool of closed-end funds
which invest in dividend-paying common stocks. A portion of these closed-end funds, on an ongoing
basis, will sell covered call options. An option is considered “covered” when a closed-end fund owns the
equity securities against which the options are sold. Though call options can be used for many
investment purposes, they are typically used as a tool to potentially enhance returns, offer a current
yield to investors, and provide limited downside protection.
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.
|Not FDIC Insured Not Bank Guaranteed May Lose Value
An investment in this unmanaged unit investment trust should be made
with an understanding of the risks associated with an investment in a portfolio of common stocks and
closed-end funds which invest in common stocks and options.
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 of the closed-end funds employ the use of leverage, which increases the volatility of such funds.
Common stocks are subject to 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.
Certain of the closed-end funds invest in preferred stocks. Preferred stocks are equity securities of the issuing
company which pay income in the form of dividends. Preferred stocks are typically subordinated to bonds
and other debt instruments in a company’s capital structure, and therefore will be subject to greater credit
risk than those debt instruments.
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.
On January 31, 2020, the United Kingdom officially departed the European Union (commonly referred to as
“Brexit”). Brexit has led to volatility in global financial markets, in particular those of the United Kingdom
and across Europe, and may also lead to weakening in political, regulatory, consumer, corporate and financial
confidence in the United Kingdom and Europe.
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.
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
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.
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.
For a discussion of additional risks of investing in the Trust see the “Risk Factors” section of