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First Trust Bloomberg Artificial Intelligence ETF (FAI)
Investment Objective/Strategy - The First Trust Bloomberg Artificial Intelligence ETF (the "Fund") seeks investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of an index called the Bloomberg Artificial Intelligence Index (the "Index"). Under normal market conditions, the Fund will invest at least 80% of its net assets (plus any borrowings for investment purposes) in the securities that comprise the Index.
There can be no assurance that the Fund's investment objectives will be achieved.
Index Description According to the Index Provider
  • The Bloomberg Artificial Intelligence Index is constructed to track the performance of companies that develop or facilitate solutions such as deep learning, machine learning, natural language processing, and image and speech recognition utilizing data from Bloomberg Intelligence (“BI”).
  • The index begins with a universe of all the securities comprising the Bloomberg World Aggregate Universe within the Artificial Intelligence ecosystem, as determined by BI.
  • Companies are scored based on the sum of combined Revenue and Theme Assessments which reflect a company’s near-term revenue exposure to AI and, positioning and ability to execute within the AI competitive landscape, according to BI.
    • These companies are then assigned a Gold Tier or Silver Tier. Only companies within the Gold Tier, which have the highest exposure to AI, are eligible for index inclusion.
  • A company must belong to at least one or more of the following Exposure Categories within the Artificial Intelligence Ecosystem, as determined by BI:
    • Application Software – Companies that provide AI application software development
    • Infrastructure Software – Companies that provide AI infrastructure software development
    • Hyperscaler – Companies integral to AI proliferation across multiple business layers
    • Hardware – Companies that provide AI hardware and storage
    • Semiconductors – Companies that provide semiconductor solutions for AI
  • A security must also meet minimum issuer free float market capitalization and liquidity requirements, and be listed on a Bloomberg Global Equity Index (excluding the Shanghai or Shenzhen Stock Connect exchanges).
  • Securities are sorted by their Revenue Assessment in ascending order and by issuer free float market capitalization in descending order.
    • The top 50 securities in the sorted list are selected for inclusion in the index.
  • The securities are weighted according to a modified market capitalization that adjusts for their Revenue Assessment and issuer free float market capitalization.
  • The index is rebalanced and reconstituted quarterly.
Fund Overview
TickerFAI
Fund TypeTechnology
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon Corp
CUSIP33734X739
ISINUS33734X7396
Fiscal Year-End09/30
ExchangeNYSE Arca
Inception11/20/2024
Inception Price$29.84
Inception NAV$29.84
Rebalance FrequencyQuarterly
Total Expense Ratio*0.65%
* As of 11/21/2024
Current Fund Data (as of 12/11/2024)
Closing NAV1$32.04
Closing Market Price2$32.09
Bid/Ask Midpoint$32.10
Bid/Ask Premium0.19%
30-Day Median Bid/Ask Spread30.22%
Total Net Assets$1,602,103
Outstanding Shares50,002
Daily Volume1,762
Closing Market Price 52-Week High/Low$32.10 / $29.84
Closing NAV 52-Week High/Low$32.04 / $29.84
Number of Holdings (excluding cash)50
Top Holdings (as of 12/11/2024)*
Holding Percent
Amazon.com, Inc. 8.78%
Alphabet Inc. (Class A) 8.32%
NVIDIA Corporation 7.93%
Microsoft Corporation 7.68%
Meta Platforms Inc. (Class A) 7.54%
Palantir Technologies Inc. (Class A) 4.54%
ServiceNow, Inc. 4.44%
Adobe Incorporated 3.84%
Taiwan Semiconductor Manufacturing Company Ltd. 3.75%
Oracle Corporation 3.72%

* Excluding cash.  Holdings are subject to change.

NAV History (Since Inception)
Past performance is not indicative of future results.
Fund Characteristics (as of 11/29/2024)4
Maximum Market Cap.$3,385,743
Median Market Cap.$59,621
Minimum Market Cap.$2,205
Price/Earnings40.66
Price/Book9.39
Price/Cash Flow29.15
Price/Sales8.46
Top Country Exposure (as of 12/11/2024)
Country Percent
United States 87.44%
Taiwan 4.64%
The Netherlands 3.70%
Canada 2.14%
South Korea 0.90%
Australia 0.67%
Israel 0.30%
Japan 0.21%
Bid/Ask Premium/Discount (as of 12/11/2024)
  2023 Q1 2024 Q2 2024 Q3 2024
Days Traded at Premium --- --- --- ---
Days Traded at Discount --- --- --- ---
Top Industry Exposure (as of 12/11/2024)
Information Technology 74.56%
Communication Services 15.92%
Consumer Discretionary 8.81%
Industrials 0.71%
Month End Performance (as of 11/29/2024)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception5
Fund Performance *
Net Asset Value (NAV) N/A N/A N/A N/A N/A N/A 1.54%
After Tax Held N/A N/A N/A N/A N/A N/A 1.78%
After Tax Sold N/A N/A N/A N/A N/A N/A 1.05%
Market Price N/A N/A N/A N/A N/A N/A 1.78%
Index Performance **
Bloomberg Artificial Intelligence Index N/A N/A N/A N/A N/A N/A 1.58%
S&P 500® Index N/A N/A N/A N/A N/A N/A 1.99%
Quarter End Performance (as of 9/30/2024)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception5
Fund Performance *
Net Asset Value (NAV) N/A N/A N/A N/A N/A N/A N/A
After Tax Held N/A N/A N/A N/A N/A N/A N/A
After Tax Sold N/A N/A N/A N/A N/A N/A N/A
Market Price N/A N/A N/A N/A N/A N/A N/A
Index Performance **
Bloomberg Artificial Intelligence Index N/A N/A N/A N/A N/A N/A N/A
S&P 500® Index N/A N/A N/A N/A N/A N/A N/A

*Performance data quoted represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate and shares when sold or redeemed, may be worth more or less than their original cost.

After Tax Held returns represent return after taxes on distributions. Assumes shares have not been sold. After Tax Sold returns represent the return after taxes on distributions and the sale of fund shares. Returns do not represent the returns you would receive if you traded shares at other times. Market Price returns are determined by using the midpoint of the national best bid offer price ("NBBO") as of the time that the fund's NAV is calculated. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.

**Performance information for each listed index is for illustrative purposes only and does not represent actual fund performance. Indexes do not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the performance shown. Indexes are unmanaged and an investor cannot invest directly in an index.

S&P 500® Index - The Index is an unmanaged index of 500 companies used to measure large-cap U.S. stock market performance.

Footnotes
1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's outstanding shares.
2 Fund shares are purchased and sold on an exchange at their market price rather than net asset value (NAV), which may cause the shares to trade at a price greater than NAV (premium) or less than NAV (discount).
3 The median bid-ask spread is calculated by identifying the national best bid and national best offer ("NBBO") for the fund as of the end of each 10 second interval during each trading day of the last 30 calendar days and dividing the difference between each such bid and offer by the midpoint of the NBBO. The median of those values is identified and that value is expressed as a percentage rounded to the nearest hundredth.
4 All market capitalization numbers are in USD$ Millions.
5 Inception Date is 11/20/2024

You should consider the fund's investment objectives, risks, and charges and expenses carefully before investing. You can download a prospectus or summary prospectus, or contact First Trust Portfolios L.P. at 1-800-621-1675 to request a prospectus or summary prospectus which contains this and other information about the fund. The prospectus or summary prospectus should be read carefully before investing.

Risk Considerations

You could lose money by investing in a fund. An investment in a fund is not a deposit of a bank and is not insured or guaranteed. There can be no assurance that a fund's objective(s) will be achieved. Investors buying or selling shares on the secondary market may incur customary brokerage commissions. Please refer to each fund's prospectus and Statement of Additional Information for additional details on a fund's risks. The order of the below risk factors does not indicate the significance of any particular risk factor.

Artificial intelligence companies tend to be more volatile and they may have limited product lines, markets, financial resources or personnel and are subject to the risks of changes in business cycles, world economic growth, technological progress, costs of research and development, and government regulation. These companies are also heavily dependent on intellectual property rights, and challenges to or misappropriation of such rights could have a material adverse effect on such companies. Additionally, artificial intelligence technology could face increased regulatory scrutiny in the future, which may limit the development of this technology and impede the growth of companies that develop and/or utilize artificial intelligence.

Unlike mutual funds, shares of the fund may only be redeemed directly from a fund by authorized participants in very large creation/redemption units. If a fund's authorized participants are unable to proceed with creation/redemption orders and no other authorized participant is able to step forward to create or redeem, fund shares may trade at a premium or discount to a fund's net asset value and possibly face delisting and the bid/ask spread may widen.

Changes in currency exchange rates and the relative value of non-US currencies may affect the value of a fund's investments and the value of a fund's shares.

Current market conditions risk is the risk that a particular investment, or shares of the fund in general, may fall in value due to current market conditions. As a means to fight inflation, the Federal Reserve and certain foreign central banks have raised interest rates; however, the Federal Reserve has recently lowered interest rates and may continue to do so. Recent and potential future bank failures could result in disruption to the broader banking industry or markets generally and reduce confidence in financial institutions and the economy as a whole, which may also heighten market volatility and reduce liquidity. 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 have and could continue to have a significant impact on certain fund investments as well as fund performance and liquidity. The COVID-19 global pandemic, or any future public health crisis, 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, negatively impacting global growth prospects.

A fund is susceptible to operational risks through breaches in cyber security. Such events could cause a fund to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss.

Depositary receipts may be less liquid than the underlying shares in their primary trading market and distributions may be subject to a fee. Holders may have limited voting rights, and investment restrictions in certain countries may adversely impact their value.

Investments in emerging market securities are generally considered speculative and involve additional risks relating to political, economic and regulatory conditions.

Equity securities may decline significantly in price over short or extended periods of time, and such declines may occur in the equity market as a whole, or they may occur in only a particular country, company, industry or sector of the market.

An index fund will be concentrated in an industry or a group of industries to the extent that the index is so concentrated. A fund with significant exposure to a single asset class, or the securities of issuers within the same country, state, region, industry, or sector may have its value more affected by an adverse economic, business or political development than a broadly diversified fund.

A fund may be a constituent of one or more indices or models which could greatly affect a fund's trading activity, size and volatility.

There is no assurance that the index provider or its agents will compile or maintain the index accurately. Losses or costs associated with any index provider errors generally will be borne by a fund and its shareholders.

Information technology companies are subject to certain risks, including rapidly changing technologies, short product life cycles, fierce competition, aggressive pricing and reduced profit margins, loss of patent, copyright and trademark protections, cyclical market patterns, evolving industry standards and regulation and frequent new product introductions.

Since securities that trade on non-U.S. exchanges are closed when a fund's primary listing is open, there are likely to be deviations between the current price of an underlying security and the last quoted price from the closed foreign market, resulting in premiums or discounts to a fund's NAV.

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

Market risk is the risk that a particular security, or shares of a fund in general may fall in value. Securities are subject to market fluctuations caused by such factors as general economic conditions, political events, regulatory or market developments, changes in interest rates and perceived trends in securities prices. Shares of a fund could decline in value or underperform other investments as a result. In addition, local, regional or global events such as war, acts of terrorism, spread of infectious disease or other public health issues, recessions, natural disasters or other events could have significant negative impact on a fund.

A fund faces numerous market trading risks, including the potential lack of an active market for fund shares due to a limited number of market makers. Decisions by market makers or authorized participants to reduce their role or step away in times of market stress could inhibit the effectiveness of the arbitrage process in maintaining the relationship between the underlying values of a fund's portfolio securities and a fund's market price.

Mid capitalization companies may experience greater price volatility than larger, more established companies.

Large inflows and outflows may impact a new fund's market exposure for limited periods of time.

An index fund's return may not match the return of the index for a number of reasons including operating expenses, costs of buying and selling securities to reflect changes in the index, and the fact that a fund's portfolio holdings may not exactly replicate the index.

A fund classified as "non-diversified" may invest a relatively high percentage of its assets in a limited number of issuers. As a result, a fund may be more susceptible to a single adverse economic or regulatory occurrence affecting one or more of these issuers, experience increased volatility and be highly concentrated in certain issuers.

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

A fund and a fund's advisor may seek to reduce various operational risks through controls and procedures, but it is not possible to completely protect against such risks. The fund also relies on third parties for a range of services, including custody, and any delay or failure related to those services may affect the fund's ability to meet its objective.

A fund that invests in securities included in or representative of an index will hold those securities regardless of investment merit and the fund generally will not take defensive positions in declining markets.

The market price of a fund's shares will generally fluctuate in accordance with changes in the fund's net asset value ("NAV") as well as the relative supply of and demand for shares on the exchange, and a fund's investment advisor cannot predict whether shares will trade below, at or above their NAV.

Trading on an exchange may be halted due to market conditions or other reasons. There can be no assurance that a fund's requirements to maintain the exchange listing will continue to be met or be unchanged.

First Trust Advisors L.P. (FTA) is the adviser to the First Trust fund(s). FTA is an affiliate of First Trust Portfolios L.P., the distributor of the fund(s).

"Bloomberg®" and the indices licensed herein (the "Indices") are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited ("BISL"), the administrator of the Indices (collectively, "Bloomberg") and have been licensed for use for certain purposes by First Trust Advisors L.P. (the "Licensee"). Bloomberg is not affiliated with the Licensee, and Bloomberg does not approve, endorse, review, or recommend the financial products referenced herein (the "Financial Products"). Bloomberg does not guarantee the timeliness, accurateness, or completeness of any data or information relating to the Indices or the Financial Products.

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, ©2024 CUSIP Global Services. "CUSIP" is a registered trademark of the American Bankers Association.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value
 
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.
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