Cyclical Strength Portfolio, Series 27
Cyclical industries are those whose income, value, or earnings fluctuate widely according to variations in
the economy. Profits and share prices of companies in cyclical industries tend to follow the ups and
downs of the economy. When the economy is thriving, companies which sell or operate such things as
cars, airlines, hotels and expensive restaurants tend to perform well.
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
begin by selecting stocks of companies listed on
a U.S. securities exchange in the following five
sectors: consumer discretionary, energy,
industrials, information technology, and
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
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
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.
This unit investment trust seeks above-average capital appreciation; 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 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
You should be aware that the portfolio is concentrated in stocks in
both the industrials and information technology sectors which
involves additional risks, including limited diversification. The
companies engaged in the industrials sector are subject to certain
risks, including a deterioration in the general state of the economy,
intense competition, domestic and international politics, excess
capacity and changing spending trends. 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 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
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.
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.
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.