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Defensive Equity Portfolio, Series 63

Investors tend to gravitate toward less economically sensitive sectors when questions arise regarding sustained economic growth. Because of their unique combination of global exposure and historically defensive market characteristics, we believe that the consumer staples, health care and utilities sectors may represent an attractive opportunity for investors during times of uncertain economic growth. The portfolio invests approximately 50% in health care, 30% in consumer staples and 20% in utilities.

Consumer Staples

Consumer staples consist of food, beverages, household goods and personal products that most consumers use on a daily basis. Purchases of these products tend to be a relatively small portion of most consumers' yearly income, which keeps demand stable. Because of this stability, sales and earnings growth tend to remain fairly constant in up or down markets. We believe consumer staples represents an attractive sector for investors due to its non-cyclical nature and significant exposure to foreign demand.

Health Care

The health care industry has been responsible for numerous discoveries that have led to new drugs and products designed to better serve the masses, especially the aging population. These discoveries have improved the quality of life and the life expectancy of millions. In the last decade, biopharmaceutical companies have invested more than $1 trillion in research and development.1From 2021-2030, it is projected that health care spending will grow at an average rate of 5.1% annually. In addition, growth in health care spending is also anticipated to be 5.1% of GDP per year over the same period; as a result, the health care share of GDP is expected to be 19.6% in 2030, nearly the same as the 19.7% in 2020.2

Utilities

The utilities industry is regarded as a sector with the potential to provide investors with a high degree of stability while generating an above-average level of current income relative to other equities. Historically, utility stocks tend to hold up better than stocks from other sectors in declining markets. Because of these characteristics, utility company stocks are sometimes considered an alternative to traditional fixed-income investments. The global utilities market is anticipated to grow from $5,489 billion in 2021 to $5,970 billion in 2022. By 2026, it is estimated to reach $8,105 billion.3

1 PhRMA
2 CMS.gov
3 Business Wire

Portfolio Objective

This unit investment trust seeks above-average capital appreciation; however, there is no assurance the objective will be met.

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

Risk Considerations
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 both the consumer staples and health care sectors which involves additional risks, including limited diversification. The companies engaged in the consumer staples industry are subject to global competition, changing government regulations and trade policies, currency fluctuations, and the financial and political risks inherent in producing products for foreign markets. The companies engaged in the health care sector are subject to fierce competition, high research and development costs, governmental regulations, loss of patent protection, and changing consumer spending trends. In addition, health crises, such as a pandemic outbreak, can severely impact the health care industry in particular.

The portfolio also invests in utilities companies. The companies engaged in the utilities sector are subject to certain risks, including price and supply fluctuations caused by international politics, energy conservation, taxes, and other regulatory policies of various governments.

Securities of non-U.S. issuers are subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting non-U.S. issuers.

Large capitalization companies may grow at a slower rate than the overall market.

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.

In February 2022, Russia invaded Ukraine which has caused and could continue to cause significant market disruptions and volatility within the markets in Russia, Europe, and the United States. The hostilities and sanctions resulting from those hostilities could have a significant impact on certain investments as well as performance.

The COVID-19 global pandemic and the ensuing policies enacted by governments and central banks have caused and may continue to cause significant volatility and uncertainty in global financial markets. While the U.S. has resumed “reasonably” normal business activity, 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.

 

CUSIP identifiers have been provided by CUSIP Global Services, managed on behalf of the American Bankers Association by FactSet Research Systems Inc. and are not for use or dissemination in a manner that would serve as a substitute for any CUSIP service. The CUSIP Database, ©2022 CUSIP Global Services. "CUSIP" is a registered trademark of the American Bankers Association.

Fund Cusip Information
30328T322 (Cash)
30328T330 (Reinvest)
30328T348 (Cash-Fee)
30328T355 (Reinvest-Fee)
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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.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
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