SMid Capital Strength Opportunity Portfolio, Series 15
Because smaller companies are often less reliant on the capital markets for credit, they can be more nimble and better able to adjust in periods of economic change, than large companies.
Additionally, this results in generally better balance sheet integrity than large companies. The SMid Capital Strength Opportunity Portfolio invests in small and mid-size companies. These companies
are more likely to be in an earlier stage of their economic life cycle than mature large-cap companies. In addition, the ability to take advantage of share price discrepancies is likely to be greater with
smaller stocks than with more widely followed large-cap stocks. Our goal with the trust is to invest in undervalued companies with strong market positions that, in our opinion, have strong balance
sheets, skilled management, high liquidity, the ability to generate earnings growth, and a record of financial strength and profit growth.
This unit investment trust seeks above-average capital appreciation; however, there is
no assurance the objective will be met.
Portfolio Selection Process
Through our selection process we seek to find the stocks that we believe have the best prospects for
above-average capital appreciation.
Identify the Universe
We begin by selecting the companies listed in the S&P MidCap
400 and S&P SmallCap 600 Indexes.
Screen For Financial Strength
We then evaluate companies based on multiple
factors. These factors are designed to identify those stocks which exhibit strong fundamental
characteristics and to eliminate those that do not meet our investment criteria.
Examine Historical Financial Results
The next step in our process is to look
for those companies that have earned a net cash flow return on investment that is above the average of
their peers. Historically, companies that have increased their cash flows at a higher rate have rewarded
shareholders with superior total returns.
Select Companies with Attractive Valuations for the Portfolio
The final step in our
process is to select companies based on the fundamental analysis of our team of research analysts. The
stocks selected for the portfolio are those that meet our investment objective, trade at attractive
valuations, and in our opinion, are likely to exceed market expectations of future cash flows.
|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 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.
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 stocks in the information technology sector which involves additional risks, including limited diversification. The companies engaged in the information technology
sector are subject to fierce competition, high research and development costs, and their products and services may be subject to rapid obsolescence. Technology company stocks, especially those which are Internet-related,
may experience extreme price and volume fluctuations that are often unrelated to their operating performance.
One of the securities in the portfolio is issued by a foreign entity. 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.
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.
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.
Although this portfolio terminates in approximately 15 months, the strategy is long-term.
Investors should consider their ability to pursue investing in successive portfolios, if available.
There may be tax consequences unless units are purchased in an IRA or other qualified plan.