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Technology Dividend Buy-Write, Series 5

The Portfolio

Historically, technology companies have been recognized for their growth potential, paying little in dividends. Today, many technology companies have matured into companies with strong balance sheets and financial flexibility and are paying dividends, while continuing to reinvest in their businesses. According to S&P Dow Jones Indices as of 8/31/21, the technology sector now pays more in dividends than any other sector of the S&P 500 Index. There is, however, no guarantee that companies will declare dividends in the future or that, if declared, they will either remain at current levels or increase over time.

The Technology Dividend Buy-Write Portfolio is a unit investment trust which invests in a fixed portfolio of common stocks of dividend-paying technology companies, and simultaneously, the portfolio sells a Long-Term Equity AnticiPation Securities (LEAPS®) call option against each position. The writing (selling) of a call option generates income in the form of a premium paid by the option buyer. The portfolio invests this income in U.S. Treasury Notes and the interest received from the Notes is paid to unit holders periodically. You should be aware that a product which includes writing call options may not be suitable for all investors. It may not be appropriate for investors seeking above-average capital appreciation. Before investing, you should make sure you understand the risks of this type of product, and whether it suits your current financial objectives.

Portfolio Objectives

This unit investment trust seeks to provide income, with capital appreciation as a secondary objective. There is, however, no assurance that the objectives will be achieved. The portfolio terminates approximately sixteen months from the initial date of deposit.

Illustrative Market Scenarios

Stock prices increase above the LEAPS' exercise price: The LEAPS are exercised and the underlying stock shares are sold at the strike price. Profits are limited to the premium income received from writing the LEAPS, dividends received from the stocks prior to their sale from the portfolio, interest received from the U.S. Treasury Obligations, plus the difference between each stock's initial price and their strike price. Investors will forgo any dividends paid on the stocks subsequent to their sale from the portfolio and any gain in the underlying stock price after the stock is sold. It is important to note that writing covered calls limits the appreciation potential of the underlying securities.

Stock prices remain stable: The LEAPS expire worthless and the portfolio still owns the stock shares. Profits are limited to the premium income received from writing the LEAPS, plus dividends from the stocks, as well as interest received from the U.S. Treasury Obligations.

Stock prices decrease: The LEAPS expire worthless and the portfolio still owns the stock shares. The break even on the stocks is lowered by the premium income received from writing the LEAPS. In addition, the portfolio will receive dividends from the stocks, and interest from the U.S. Treasury Obligations.


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.

Risk Considerations
An investment in this unmanaged unit investment trust should be made with the understanding of the risks involved with common stocks, LEAPS, and U.S. Treasury notes.

Common stocks are subject to 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.

The value of U.S. Treasury notes will be adversely affected by decreases in bond prices and increases in interest rates.

The value of the LEAPS is deducted from the value of the portfolio assets when determining the value of a unit. As the value of the LEAPS increases, it has a more negative impact on the value of the units. The value of the LEAPS will also be affected by changes in the value and dividend rates of the underlying stocks, an increase in interest rates, a change in the actual and perceived volatility of the stock market and the stocks and the remaining time to expiration. Additionally, the value of the LEAPS does not increase or decrease at the same rate as the underlying stock. However, as the LEAPS approach their expiration date, their value increasingly moves with the price of the stock.

Options are subject to various risks including that their value may be adversely affected if the market for the option becomes less liquid or smaller. In addition, options will be affected by changes in the value and dividend rates of the stock subject to the option, an increase in interest rates, a change in the actual and perceived volatility of the stock market and the common stock and the remaining time to expiration.

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.

An investment in a portfolio which includes foreign securities should be made with an understanding of the additional risks involved, such as currency fluctuations, political risk, 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 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.

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 information in the prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. The prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
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The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
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