Strategic Dividend Select Portfolio, Series 48
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 39% of the 10.46% 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 professional
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.
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.
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.
Approximately one year after the United Kingdom officially departed the European Union (commonly
referred to as “Brexit”), the United Kingdom and the European Union reached a trade agreement that became
effective on December 31, 2020. It is not currently possible to determine the extent of the impact the Brexit
trade agreement may have on the portfolio’s investments and this certainly could negatively impact current
and future economic conditions in the United Kingdom and other countries, which could negatively impact
the value of the portfolio’s investments.
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 COVID-19 global pandemic has caused significant volatility and declines in global financial markets,
causing losses for investors. The development of vaccines has slowed the spread of the virus and allowed
for the resumption of “reasonably” normal business activity in the United States, although many countries
continue to impose lockdown measures. Additionally, there is no guarantee that vaccines will be effective
against emerging variants of the disease.
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.
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
For a discussion of additional risks of investing in the Trust see the “Risk Factors” section of