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First Trust Morningstar Dividend Leaders Index Fund (FDL)
Investment Objective/Strategy - The First Trust Morningstar Dividend Leaders Index Fund is an exchange-traded index fund. The investment objective of the Fund is to replicate as closely as possible, before fees and expenses, the price and yield of the Morningstar® Dividend Leaders IndexSM.
There can be no assurance that the Fund's investment objectives will be achieved.
  • The index consists of stocks listed on one of the three major exchanges, NYSE, NYSE Amex or Nasdaq, that have shown dividend consistency and dividend sustainability. Real Estate Investment Trusts (REITs) are not included.
  • Through the application of Morningstar's proprietary multi-step screening process, a universe is identified. The top 100 stocks, based on dividend yield, are selected for the index.
  • The individual holdings are weighted based on each security's shares outstanding, free float factor, and annual indicated dividend per share. The weighting of each holding is capped to enhance portfolio diversification.
  • The index is reconstituted once annually each June and rebalanced four times annually in March, June, September and December.
Fund Overview
TickerFDL
Fund TypeEquity Income
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon
CUSIP336917109
ISINUS3369171091
Intraday NAVFDLIV
Fiscal Year-End12/31
ExchangeNYSE Arca
Inception3/9/2006
Inception Price$20.00
Inception NAV$20.00
Rebalance FrequencyQuarterly
Gross Expense Ratio*0.46%
Net Expense Ratio*0.45%
* As of 5/1/2020
Expenses are capped contractually at 0.45% per year, at least until April 30, 2021.
Current Fund Data (as of 2/26/2021)
Closing NAV1$30.50
Closing Market Price2$30.53
Bid/Ask Midpoint$30.50
Bid/Ask Premium0.00%
30-Day Median Bid/Ask Spread30.03%
Total Net Assets$1,457,997,755
Outstanding Shares47,800,002
Daily Volume232,086
Average 30-Day Daily Volume226,908
Closing Market Price 52-Week High/Low$31.57 / $19.15
Closing NAV 52-Week High/Low$31.56 / $19.19
Number of Holdings (excluding cash)94
Top Holdings (as of 2/26/2021)*
Holding Percent
AT&T Inc. 8.81%
Verizon Communications Inc. 7.29%
AbbVie Inc. 7.14%
Philip Morris International Inc. 6.42%
Pfizer Inc. 5.84%
Altria Group, Inc. 5.61%
Broadcom Inc. 5.10%
International Business Machines Corporation 4.71%
Citigroup Inc. 4.10%
Dominion Energy, Inc. 2.51%

* Excluding cash.  Holdings are subject to change.

NAV History (Since Inception)
Past performance is not indicative of future results.
Distribution Information
Dividend per Share Amt (as of 3/2/2021)4$0.3677
30-Day SEC Yield (as of 1/29/2021)54.32%
Unsubsidized 30-Day SEC Yield (as of 1/29/2021)64.30%
12-Month Distribution Rate (as of 1/29/2021)74.54%
Index Yield (as of 1/29/2021)84.76%
For funds with certain equity strategies, due to the negative economic impact across many industries caused by the COVID-19 outbreak, certain of the issuers of the securities included in the fund may elect to reduce the amount of dividends and/or distributions paid in the future. As a result, the "12-Month Distribution Rate," which is based on the fund's trailing 12-month ordinary distributions, will likely be higher, and in some cases significantly higher, than the actual 12-month distribution rate achieved by the fund.
Fund Characteristics (as of 2/26/2021)9
Maximum Market Cap.$228,840
Median Market Cap.$10,021
Minimum Market Cap.$2,142
Price/Earnings20.06
Price/Book1.86
Price/Cash Flow10.76
Price/Sales1.82
Bid/Ask Premium/Discount (as of 2/26/2021)
  2020 Q1 2021 Q2 2021 Q3 2021
Days Traded at Premium 139 33 --- ---
Days Traded at Discount 114 5 --- ---
Top Sector Exposure (as of 2/26/2021)
Financials 23.43%
Communication Services 17.93%
Consumer Staples 13.78%
Utilities 13.37%
Health Care 13.12%
Information Technology 12.80%
Industrials 2.43%
Materials 1.88%
Consumer Discretionary 1.26%
Month End Performance (as of 1/29/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception10
Fund Performance *
Net Asset Value (NAV) 14.09% -1.25% -0.48% 2.85% 8.12% 10.29% 6.61%
After Tax Held 13.52% -1.25% -2.53% 1.08% 6.42% 8.65% 5.03%
After Tax Sold 8.34% -0.74% -0.45% 1.39% 5.55% 7.56% 4.51%
Market Price 13.97% -1.28% -0.51% 2.81% 8.12% 10.27% 6.60%
Index Performance **
Morningstar® Dividend Leaders IndexSM 14.24% -1.23% 0.10% 3.39% 8.69% 10.87% 7.14%
S&P 500 Index 14.05% -1.01% 17.25% 11.70% 16.16% 13.50% 9.71%
Quarter End Performance (as of 12/31/2020)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception10
Fund Performance *
Net Asset Value (NAV) 14.87% -4.42% -4.42% 3.82% 8.62% 10.40% 6.74%
After Tax Held 14.29% -6.38% -6.38% 2.03% 6.91% 8.75% 5.15%
After Tax Sold 8.80% -2.78% -2.78% 2.12% 5.95% 7.65% 4.61%
Market Price 14.96% -4.42% -4.42% 3.77% 8.62% 10.37% 6.73%
Index Performance **
Morningstar® Dividend Leaders IndexSM 15.04% -3.87% -3.87% 4.37% 9.19% 10.97% 7.28%
S&P 500 Index 12.15% 18.40% 18.40% 14.18% 15.22% 13.88% 9.84%
3-Year Statistics (as of 1/29/2021)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
FDL 19.71% -7.72 0.97 0.16 0.92
S&P 500 Index 18.65% --- 1.00 0.60 1.00
Standard Deviation is a measure of price variability (risk). Alpha is an indication of how much an investment outperforms or underperforms on a risk-adjusted basis relative to its benchmark.Beta is a measure of price variability relative to the market. Sharpe Ratio is a measure of excess reward per unit of volatility. Correlation is a measure of the similarity of performance.

*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. The fund's performance reflects fee waivers and expense reimbursements, absent which performance would have been lower.

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 the Morningstar® Dividend Leaders IndexSM 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 stocks 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 Most recent distribution paid or declared to today's date. Subject to change in the future. There is no guarantee that the fund will declare dividends.
5 The 30-day SEC yield is calculated by dividing the net investment income per share earned during the most recent 30-day period by the maximum offering price per share on the last day of the period and includes the effects of fee waivers and expense reimbursements, if applicable.
6 The unsubsidized 30-day SEC yield is calculated the same as the 30-day SEC yield, however it excludes contractual fee waivers and expense reimbursements.
7 12-Month Distribution Rate is calculated by dividing the sum of the fund's trailing 12-month ordinary distributions paid or declared by the NAV price. Distribution rates may vary.
8 Index yield represents the weighted average trailing 12-month dividend of the constituents of the Morningstar® Dividend Leaders Index(SM).
9 All market capitalization numbers are in USD$ Millions.
10 Inception Date is 3/9/2006

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.

ETF Characteristics

The fund lists and principally trades its shares on the NYSE Arca, Inc.

The fund's return may not match the return of the Morningstar® Dividend Leaders IndexSM.  Securities held by the fund will generally not be bought or sold in response to market fluctuations.

Investors buying or selling fund shares on the secondary market may incur customary brokerage commissions. Market prices may differ to some degree from the net asset value of the shares. Investors who sell fund shares may receive less than the share's net asset value. Shares may be sold throughout the day on the exchange through any brokerage account. However, unlike mutual funds, shares may only be redeemed directly from the fund by authorized participants, in very large creation/redemption units. If the 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 discount to the fund's net asset value and possibly face delisting.

Risk Considerations

The fund's shares will change in value and you could lose money by investing in the fund. One of the principal risks of investing in the fund is market risk. Market risk is the risk that a particular security owned by the fund, fund shares or securities in general may fall in value. There can be no assurance that the fund's investment objective will be achieved. The outbreak of the respiratory disease designated as COVID-19 in December 2019 has caused significant volatility and declines in global financial markets, which have caused losses for investors. The COVID-19 pandemic may last for an extended period of time, and will continue to impact the economy for the foreseeable future.

The fund may invest in securities issued by companies concentrated in a particular sector which involves additional risks including limited diversification.

The fund is classified as "non-diversified" and may invest a relatively high percentage of its assets in a limited number of issuers. As a result, the 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.

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

Morningstar® and Morningstar® Dividend Leaders Index℠ are registered trademarks and service marks of Morningstar, Inc. (“Morningstar”) and have been licensed for use by First Trust on behalf of the Fund. The Fund is not sponsored, endorsed, issued, sold or promoted by Morningstar and Morningstar makes no representation regarding the advisability of investing in the Fund.
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.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
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