European Deep Value Dividend Portfolio, Series 35
The European Deep Value Dividend Portfolio is a unit investment trust that invests in 30 European
companies that have low estimated current year price-to-earnings (P/E) ratios in addition to above-average
dividend yields. We believe these companies may offer long-term investors an opportunity for
capital appreciation and dividend income based on these factors.
Importance of P/E Ratios | The P/E ratio is considered the most common measure of a stock’s
value. Stocks that have high P/E ratios tend to be considered a higher risk investment than those
with low P/E ratios, since a high P/E ratio often signifies high earnings growth expectations.
Importance of Dividends | Corporations are not obligated to share their earnings with
stockholders. So, in our opinion, dividends may be viewed as a sign of a company’s profitability
as well as management’s assessment of the future. We believe that companies that have shown
a solid history of distributing dividends to shareholders are a wise choice for prudent investors to
consider as part of their overall investment plan.
Portfolio Selection Process
Through our selection process we seek to find the stocks that we believe have the best prospects for
above-average total return.
Identify the Universe | We begin with the companies listed in the STOXX Europe 600 Index.
Screen the Universe | We then evaluate the companies in the universe based on marketcapitalization,
the ratio of each stock’s current price to its estimated current year earnings, its
dividend payout and dividend yield ratios. These screens are designed to identify stocks with a
low P/E ratio and the ability to sustain its dividend yield.
Select the Portfolio | The final step is to select the 30 stocks for the portfolio subject to a
maximum of approximately 30% in a single sector. The stocks are approximately equally
weighted within the portfolio.
This unit investment trust seeks above-average total return through a combination of
capital appreciation and dividend 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 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.
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
Because the portfolio is concentrated in companies headquartered in Europe, with a significant percentage
of these companies headquartered or incorporated in the United Kingdom, it may present more risks than a
portfolio which is broadly diversified over several regions. The United Kingdom vote to leave the European Union
and other recent rapid political and social change throughout Europe make the extent and nature of future
economic development in Europe and the effect on securities issued by European issuers difficult to predict.
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.
The United Kingdom’s official departure from the European Union (commonly referred to as “Brexit”) led to volatility in global financial markets, in particular those of the United Kingdom and across Europe, and the weakening in political, regulatory, consumer, corporate and financial confidence in the United Kingdom and Europe. It is not currently possible to determine the extent of the impact that Brexit may have on the portfolio’s investments and this uncertainty could negatively impact current and future economic conditions in the United Kingdom and other countries, which could negatively impact the value of the portfolio’s investments.
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.
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.