American Agenda, Series 28
While most voters focus on the current state of affairs when casting their ballots in U.S. presidential
and midterm elections, equity investors tend to concentrate on the impact an election may have
on fiscal and monetary policy that can influence future economic growth. Seeing the big picture
can help investors to stay focused on long-term investment goals.
The outcome of U.S. elections can have an impact on different sectors and industries. Our analysts
at First Trust have identified certain areas of the market that we believe may offer strong relative
value and growth potential under the current administration.
- Aerospace & Defense | Aerospace is largely comprised of companies involved in the
production, sale, and service of commercial aircraft. Air travel has continued to increase with
average daily checkpoint travel numbers of nearly 2.4 million in 2023 compared to an average
of 1.6 million in 2021 and 2.1 million in 2022.1 The defense market is dependent on a nation’s need for
military weapons and systems designed to operate on land, sea, and in the air. The United
States military is unquestionably the dominant force in the world. Defense spending is
expected to increase around the globe, as nations continue to strengthen their militaries in
response to heightened geopolitical tensions.2
- Clean Energy | Clean energy is developed from renewable, zero-emissions sources, as well as energy that is stored through energy efficiency measures. As opposed to coal and oil, clean energy
does not pollute the atmosphere. The clean energy industry generates hundreds of billions in economic activity and is anticipated to grow rapidly in the coming years.3 The potential for economic
opportunity may exist for companies that invent, manufacture and export clean energy technologies.
- Energy | U.S. energy consumption is anticipated to increase through 2050 due to economic growth, population growth, and increased travel. In addition, with higher international demand, the
U.S. is expected to remain a net exporter of petroleum products and natural gas through 2050.4
- Financials | We believe the trend that has perhaps had the most notable impact on this sector is industry consolidation, and that improved efficiency, lower operating costs, and increased volume
are a few of the benefits. Consolidation across the financials sector could continue to play an important role as institutions react to regulatory mandates and competitive opportunities both here in
the U.S. and abroad.
- Health Care | From 2022-2031, it is projected that health care spending will grow at an average rate of 5.4% annually.5 In the last decade, biopharmaceutical companies have invested more than
$1 trillion in research and development. In addition, there are currently approximately 8,000 medicines in clinical development around the world. Of these, 70% have the potential to be first-in-class
treatments, which represents an entirely new approach to treating a disease.6
- Information Technology | Gartner forecasts worldwide IT spending to total approximately $5 trillion in 2024, an increase of 6.8% from 2023. In addition, global end-user spending on public cloud
services is anticipated to grow by 20.4% to reach approximately $678.8 billion in 2024, up from $563.6 billion in 2023.
- U.S. Infrastructure | Infrastructure is the foundation that connects U.S. businesses and enables communities to prosper. For decades, the U.S. has been under-investing in our infrastructure. To
close the nearly $2.6 trillion 10-year investment gap, meet future need, and restore our global competitive advantage, the U.S. must increase investment from all levels of government and the private
sector from approximately 2.5% to 3.5% of U.S. Gross Domestic Product by 2025.77
1 TSA
2 Deloitte, 2023 Aerospace and Defense Industry Outlook
3 U.S. Department of Energy
4 U.S. Energy Information Administration, Annual Energy Outlook 2023
5 CMS.gov
6 PhRMA
7 American Society of Civil Engineers
Portfolio Objective
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 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.
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 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 containing mid-cap companies is subject to additional risks, as the share prices of 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.
Ongoing armed conflicts between Russia and Ukraine in Europe and among Israel, Hamas and other militant groups in the Middle East, have caused and could continue to cause significant market disruptions and volatility
within the markets in Russia, Europe, the Middle East 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 ongoing effects of the COVID-19 global pandemic, or the potential impacts of any future public health crisis, may cause significant volatility and uncertainty in global financial markets. While vaccines have been developed,
there is no guarantee that vaccines will be effective against future 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.