Preferred Income Portfolio, Series 98
The Preferred Income Portfolio is a unit investment trust that is diversified across preferred stocks and
trust preferred securities from several companies and because the portfolio remains fixed, you have the
confidence of knowing what you own.
About Preferred Securities
- Preferred stocks are equity securities of the issuing company which pay income in the form of dividends.
- Trust preferred securities are securities issued by corporations, generally in the form of interest-bearing
notes or preferred stocks, distributions on which are treated as interest, rather than dividends, for
federal tax purposes.
- Preferred securities typically have a yield advantage over common stocks as well as comparably rated
fixed income investments.
- Preferred securities are “senior securities” which have preference over common stocks, but not debt,
of an issuer.
This unit investment trust seeks a high rate of current income; however, there is no assurance the
objective will be met.
|Not FDIC Insured Not Bank Guaranteed May Lose Value
You should consider the portfolio's investment objective, 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 preferred stocks and trust preferred
securities, such as an economic recession, volatile
interest rates and the possible deterioration of
either the financial condition of the issuers of the
trust preferred securities or the general condition
of the stock market.
You should be aware that the portfolio is
concentrated in preferred stocks and trust
preferred securities issued by companies in the
financials sector which involves additional risks,
including limited diversification. The financials
sector is subject to the adverse effects of volatile
interest rates, economic recession, decreases in the
availability of capital, increased competition from
new entrants in the field, and the potential for
increased regulation. Preferred stocks and trust
preferred securities are typically subordinated to
bonds and other debt instru ments in a company’s
capital structure, in terms of priority to corporate
income, and therefore will be subject to greater
credit risk than those debt instruments.
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
Certain of the securities in the portfolio are issued
by Real Estate Investment Trusts (REITs).
Companies involved in the real estate industry are
subject to changes in the real estate market,
vacancy rates and competition, volatile interest
rates and economic recession.
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.
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 cyber security.
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
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.
There is no guarantee that the issuers of the
securities included in the portfolio will declare
distributions in the future or that, if declared, they
will remain at current levels or increase over time.