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First Trust Income Opportunities ETF (FCEF)
Investment Objective/Strategy - The First Trust Income Opportunities ETF (formerly First Trust CEF Income Opportunity ETF) (the "Fund") seeks to provide current income with a secondary emphasis on total return. Under normal market conditions, the Fund seeks to achieve its investment objectives by investing in a portfolio of closed-end investment companies ("closed-end funds") and exchange-traded funds ("ETFs") that are listed and traded in the United States on registered exchanges. Closed-end funds and ETFs are managed registered investment companies which invest in various types of securities. Both closed-end funds and ETFs trade on a securities exchange and their shares may, at times, trade at a premium or discount to their net asset value. As a shareholder in a pooled investment vehicle, the Fund will bear its ratable share of an underlying fund's expenses and would remain subject to payment of the underlying fund's advisory and administrative fees with respect to assets so invested.
There can be no assurance that the Fund's investment objectives will be achieved.
Fund Overview
TickerFCEF
Fund TypeMulti Asset Income
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon Corp
CUSIP33740F409
ISINUS33740F4090
Intraday NAVFCEFIV
Fiscal Year-End08/31
ExchangeNasdaq
Inception9/27/2016
Inception Price$20.05
Inception NAV$20.05
Fees And Expenses
Management Fees0.85%
Acquired Fund Fees and Expenses1.61%
Total Annual Expenses2.46%
Current Fund Data (as of 6/24/2022)
Closing NAV1$19.93
Closing Market Price2$20.02
Bid/Ask Midpoint$19.93
Bid/Ask Discount0.03%
30-Day Median Bid/Ask Spread (as of 6/23/2022)30.52%
Total Net Assets$27,995,939
Outstanding Shares1,405,000
Daily Volume530
Average 30-Day Daily Volume5,009
Closing Market Price 52-Week High/Low$26.26 / $19.13
Closing NAV 52-Week High/Low$25.92 / $19.15
Number of Holdings (excluding cash)54
Top Holdings (as of 6/23/2022)*
Holding Percent
Eaton Vance Tax-Advantaged Global Dividend Income Fund 4.17%
Cohen & Steers REIT and Preferred and Income Fund, Inc. 3.96%
Eaton Vance Tax-Advantaged Dividend Income Fund 3.91%
Tekla Healthcare Opportunities Fund 3.52%
Tekla Healthcare Investors 3.28%
Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund 3.22%
John Hancock Tax-Advantaged Dividend Income Fund 3.18%
Ares Dynamic Credit Allocation Fund, Inc. 3.15%
Source Capital, Inc. 3.14%
The Gabelli Dividend & Income Trust 3.12%

* Excluding cash.  Holdings are subject to change.

Fixed-Income Credit Quality (as of 5/31/2022)
Credit Quality Percent
AAA 5.17%
AA 0.08%
A 0.45%
BBB 14.21%
BB 27.83%
B 33.48%
CCC-D 12.49%
N/R 6.29%
The ratings are by Standard & Poor's except where otherwise indicated. A credit rating is an assessment provided by a nationally recognized statistical rating organization (NRSRO) of the creditworthiness of an issuer with respect to debt obligations except for those debt obligations that are only privately rated. Ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest). Investment grade is defined as those issuers that have a long-term credit rating of BBB- or higher. "NR" indicates no rating. The credit ratings shown relate to the creditworthiness of the issuers of the underlying securities in the Fund, and not to the Fund or its shares. Credit ratings are subject to change.
NAV History (Since Inception)
Past performance is not indicative of future results.
Distribution Information
Dividend per Share Amt (as of 6/25/2022)4$0.1175
30-Day SEC Yield (as of 5/31/2022)56.54%
12-Month Distribution Rate (as of 5/31/2022)66.15%
Distribution Rate (as of 5/31/2022)76.55%
Fund Characteristics (as of 5/31/2022)
Weighted Average Option-Adjusted Duration82.87 Years
Weighted Average Leverage Option-Adjusted Duration94.25 Years
Weighted Average Effective Maturity7.28 Years
Weighted Average Leverage1017.56%
Weighted Average Premium/Discount11-7.22%
Fund Composition (as of 5/31/2022)
Percent
CEFs - Equity 64.32%
CEFs - Taxable Fixed-Income 29.47%
Cash 5.23%
ETF 0.98%
World Regions (as of 5/31/2022)
Region Percent
Americas 80.08%
Europe 14.12%
Asia 5.80%
Refers to the equity holdings of the underlying closed-end funds as a percentage of the total such equity holdings.
Market Capitalization (as of 5/31/2022)
Capitalization Percent
Large 36.99%
Mid 27.20%
Mega 24.16%
Small 7.96%
Micro 3.69%
Refers to the equity holdings of the underlying closed-end funds as a percentage of the total such equity holdings.
Market Classification (as of 5/31/2022)
Classification Percent
Developed Markets 98.20%
Emerging Markets 1.80%
Refers to the equity holdings of the underlying closed-end funds as a percentage of the total such equity holdings.
Bid/Ask Premium/Discount (as of 6/24/2022)
  2021 Q1 2022 Q2 2022 Q3 2022
Days Traded at Premium 159 52 39 ---
Days Traded at Discount 93 10 19 ---
Weighted Avg Premium/Discount11
Current Weighted Average Premium Discount Information (as of 6/23/2022)
Current-8.93%
52-Week Average-5.28%
52-Week High-2.55%
52-Week Low-9.60%
Top Sector Exposure (as of 5/31/2022)
Global Allocation 10.90%
High Yield Bond 10.64%
Health 8.98%
Allocation--70% to 85% Equity 7.86%
Bank Loan 7.85%
Large Blend 7.25%
Infrastructure 7.19%
Allocation--50% to 70% Equity 6.47%
Real Estate 5.37%
Multisector Bond 5.29%
Cash 5.23%
Preferred Stock 4.68%
Technology 2.46%
Small Blend 2.37%
Equity Energy 1.63%
Energy Limited Partnership 1.62%
Convertibles 1.01%
Financial 0.98%
Global Large-Stock Growth 0.64%
Derivative Income 0.54%
Natural Resources 0.52%
Utilities 0.52%
Hypothetical Growth of $10,000 Since Inception (as of 6/23/2022) *


Month End Performance (as of 5/31/2022)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception12
Fund Performance *
Net Asset Value (NAV) -4.99% -13.79% -9.34% 6.50% 5.56% N/A 6.84%
After Tax Held -5.59% -14.68% -11.29% 4.22% 3.38% N/A 4.57%
After Tax Sold -2.94% -8.14% -5.36% 4.05% 3.36% N/A 4.32%
Market Price -5.07% -13.87% -9.46% 6.47% 5.52% N/A 6.83%
Index Performance **
Blended Benchmark -5.46% -12.64% -9.58% 5.37% 4.75% N/A 6.02%
Russell 3000® Index -6.15% -13.89% -3.68% 15.60% 12.75% N/A 13.57%
Quarter End Performance (as of 3/31/2022)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception12
Fund Performance *
Net Asset Value (NAV) -7.12% -7.12% 3.84% 8.76% 7.91% N/A 8.52%
After Tax Held -7.67% -7.67% 1.73% 6.46% 5.68% N/A 6.23%
After Tax Sold -4.21% -4.21% 2.38% 5.74% 5.15% N/A 5.60%
Market Price -6.92% -6.92% 3.93% 8.87% 7.97% N/A 8.57%
Index Performance **
Blended Benchmark -5.89% -5.89% 3.34% 7.70% 7.00% N/A 7.65%
Russell 3000® Index -5.28% -5.28% 11.92% 18.24% 15.40% N/A 16.00%
3-Year Statistics (as of 5/31/2022)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
FCEF 19.65% -7.88 0.99 0.38 0.95
Blended Benchmark 18.81% -8.43 0.95 0.34 0.95
Russell 3000® Index 18.87% --- 1.00 0.83 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.

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.

Prior to August 2019, the Blended Benchmark consisted of the following two indexes: 60% of the Morningstar US All Equity CEF Index and 40% of the Morningstar US All Taxable Fixed Income CEF Index. The prior Blended Benchmark is no longer shown because the Morningstar Indexes used in the Blended Benchmark were closed in August 2019.

Blended Benchmark - The Benchmark consists of the following two indexes: 60% of the First Trust Equity Closed-End Fund Index which is a cap weighted index (based on NAV) designed to provide a broad representation of the equity based closed-end fund universe; and 40% of the First Trust Taxable Fixed Income Closed-End Fund Index which is a cap weighted index (based on NAV) designed to provide a broad representation of the taxable fixed income closed-end fund universe. Funds included in the indexes trade on an U.S. Stock Exchange and have a market cap of at least $100 million. The Blended Benchmark returns are calculated by using the monthly return of the two indices during each period shown above. At the beginning of each month the two indices are rebalanced to a 60-40 ratio to account for divergence from that ratio that occurred during the course of each month. The monthly returns are then compounded for each period shown above, giving the performance for the Blended Benchmark for each period shown above.

Russell 3000® Index - The Index is comprised of the 3000 largest and most liquid stocks based and traded in the U.S.

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 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.
7 Distribution Rate is calculated by dividing the fund's most recent ordinary distribution paid or declared, on an annualized basis, by the NAV price. Distribution rates may vary.
8 A measure of a bond's sensitivity to interest rate changes that reflects the change in a bond's price given a change in yield and is adjusted for option provisions.
9 A measure of a bond's sensitivity to interest rate changes that reflects the change in a bond's price given a change in yield that is adjusted for option provisions and the leveraging process.
10 The use of various financial instruments or borrowed capital to increase the potential return of an investment.
11 A premium occurs when an underlying fund's market price is higher than its NAV, and a discount occurs when an underlying fund's market price is lower than its NAV.
12 Inception Date is 9/27/2016

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 SAI 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.

All or a portion of a fund's otherwise exempt- interest dividends may be taxable to those shareholders subject to the federal and state alternative minimum tax.

Asset-backed securities are a type of debt security and are generally not backed by the full faith and credit of the U.S. government and are subject to the risk of default on the underlying asset or loan, particularly during periods of economic downturn.

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.

Investments in bank loans are subject to the same risks as other debt securities, but the risks may be heightened because of limited public information available and because loan borrowers may be leveraged and tend to be more adversely affected by changes in market or economic conditions. The secondary market for bank loans may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods.

During periods of falling interest rates if an issuer calls higher-yielding debt instruments, a fund may be forced to invest the proceeds at lower interest rates, likely resulting in a decline in the fund's income.

A fund that effects all or a portion of its creations and redemptions for cash rather than in-kind may be less tax-efficient.

Because the shares of CEFs cannot be redeemed upon demand, shares of many CEFs will trade on exchanges at market prices rather than net asset value, which may cause the shares to trade at a price greater than NAV (premium) or less than NAV (discount). A fund that invests in the shares of CEFs involves additional expenses that would not be present in a direct investment in the underlying funds. In addition, a fund's investment performance and risks will be related to the investment performance and risks of the underlying funds. CEFs may utilize leverage and the fund may be indirectly exposed to leverage.

Commodity prices can have significant volatility, and exposure to commodities can cause the value of a fund's shares to decline or fluctuate in a rapid and unpredictable manner.

A convertible security is exposed to risks associated with both equity and debt securities. The value of convertibles may rise and fall with the market value of the underlying stock or vary with changes in interest rates and credit quality of the issuer.

A fund may be subject to the risk that a counterparty will not fulfill its obligations which may result in significant financial loss to a fund.

Covenant-lite loans contain fewer maintenance covenants than traditional loans and may not include terms that allow the lender to monitor the financial performance of the borrower and declare a default if certain criteria are breached. This may hinder a fund's ability to mitigate problems and increase a fund's exposure to losses on such investments.

An issuer or other obligated party of a debt security may be unable or unwilling to make dividend, interest and/or principal payments when due and the value of a security may decline as a result.

Custodial receipt trusts may hold inverse floater securities, which would subject a fund to the inverse floaters risks.

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.

Investments in debt securities subject the holder to the credit risk of the issuer and the value of debt securities will generally change inversely with changes in interest rates. In addition, debt securities generally do not trade on a securities exchange making them less liquid and more difficult to value.

The use of derivatives instruments involves different and possibly greater risks than investing directly in securities including counterparty risk, valuation risk, volatility risk, and liquidity risk. Further, losses because of adverse movements in the price or value of the underlying asset, index or rate may be magnified by certain features of the derivatives.

Distressed securities are speculative and often illiquid or trade in low volumes and thus may be more difficult to value and pose a substantial risk of default.

Companies that issue dividend-paying securities are not required to continue to pay dividends on such securities. Therefore, there is a possibility that such companies could reduce or eliminate the payment of dividends in the future.

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.

A fund may invest in the shares of other ETFs, which involves additional expenses that would not be present in a direct investment in the underlying funds. In addition, a fund's investment performance and risks may be related to the investment performance and risks of the underlying funds.

Extension risk is the risk that, when interest rates rise, certain obligations will be paid off by the issuer (or other obligated party) more slowly than anticipated, causing the value of these debt securities to fall. Rising interest rates tend to extend the duration of debt securities, making their market value more sensitive to changes in interest rates.

Floating rate securities are structured so that the security's coupon rate fluctuates based upon the level of a reference rate. As a result, the coupon on floating rate securities will generally decline in a falling interest rate environment, causing a fund to experience a reduction in the income it receives from the security. A floating rate security's coupon rate resets periodically according to the terms of the security. Consequently, in a rising interest rate environment, floating rate securities with coupon rates that reset infrequently may lag behind the changes in market interest rates.

High yield securities, or "junk" bonds, are less liquid and are subject to greater market fluctuations and risk of loss than securities with higher ratings, and therefore, are considered to be highly speculative.

A fund's income may decline when interest rates fall or if there are defaults in its portfolio.

As inflation increases, the present value of a fund's assets and distributions may decline.

Interest rate risk is the risk that the value of the debt securities in a fund's portfolio will decline because of rising interest rates. Interest rate risk is generally lower for shorter term debt securities and higher for longer-term debt securities.

Inverse floating rate securities are a type of debt instrument that has a coupon rate that varies inversely with a benchmark rate. Inverse floaters create effective leverage and will typically be more volatile and involve greater risk than the fixed rate municipal bonds underlying the inverse floaters.

A fund's investment in other investment companies is restricted by federal securities laws which limit the size of the position a fund can take in another investment company.

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

Leverage may result in losses that exceed the amount originally invested and may accelerate the rates of losses. Leverage tends to magnify, sometimes significantly, the effect of any increase or decrease in a fund's exposure to an asset or class of assets and may cause the value of a fund's shares to be volatile and sensitive to market swings.

To the extent a fund invests in floating or variable rate obligations that use the London Interbank Offered Rate ("LIBOR") as a reference interest rate, it is subject to LIBOR Risk. The United Kingdom's Financial Conduct Authority, which regulates LIBOR, has ceased making LIBOR available as a reference rate over a phase-out period that began December 31, 2021. There is no assurance that any alternative reference rate, including the Secured Overnight Financing Rate ("SOFR") will be similar to or produce the same value or economic equivalence as LIBOR or that instruments using an alternative rate will have the same volume or liquidity. The unavailability or replacement of LIBOR may affect the value, liquidity or return on certain fund investments and may result in costs incurred in connection with closing out positions and entering into new trades. Any potential effects of the transition away from LIBOR on a fund or on certain instruments in which a fund invests can be difficult to ascertain, and they may vary depending on a variety of factors, and they could result in losses to a fund.

Certain fund investments may be subject to restrictions on resale, trade over-the-counter or in limited volume, or lack an active trading market. Illiquid securities may trade at a discount and may be subject to wide fluctuations in market value.

The portfolio managers of an actively managed portfolio will apply investment techniques and risk analyses that may not have the desired result.

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, or other events could have significant negative impact on a fund. 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 fund investments as well as fund performance. The COVID-19 global pandemic has caused and may continue to cause significant volatility and declines 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.

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.

Master limited partnerships ("MLPs") are subject to certain risks, including price and supply fluctuations caused by international politics, energy conservation, taxes, price controls, and other regulatory policies of various governments. In addition, there is the risk that MLPs could be taxed as corporations, resulting in decreased returns from such MLPs.

Mortgage-related securities are more susceptible to adverse economic, political or regulatory events that affect the value of real estate.

Participation interests in municipal leases pose special risks because many leases and contracts contain "non-appropriation" clauses that provide that the governmental issuer has no obligation to make future payments under the lease or contract unless money is appropriated for this purpose by the appropriate legislative body.

The values of municipal securities may be adversely affected by local political and economic conditions and developments. Income from municipal securities could be declared taxable because of, among other things, unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of an issuer.

Inventories of municipal securities have decreased in recent years and some municipal securities may have resale restrictions lessening the ability to make a market in these securities. This reduction in market making capacity has the potential to decrease a fund's ability to buy or sell municipal securities and increase price volatility and trading costs.

There is no assurance that a fund will be able to sell a portfolio security at the price established by a pricing service, which could result in a loss to a fund.

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.

Preferred securities combine some of the characteristics of both common stocks and bonds. Preferred stocks are typically subordinated to other debt instruments in terms of priority to corporate income, and therefore will be subject to greater credit risk than those debt instruments.

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.

Prepayment risk is the risk that the issuer of a debt security will repay principal prior to the scheduled maturity date. Debt securities allowing prepayment may offer less potential for gains during a period of declining interest rates, as a fund may be required to reinvest the proceeds of any prepayment at lower interest rates.

The securities held in an escrow fund pledged to pay the principal and interest of a pre-refunded bond do not guarantee the price of the bond.

Private activity bonds can have a substantially different credit profile than the municipality or public authority that issued them and may be negatively impacted by conditions affecting the general credit of the private enterprise or the project itself.

Real Estate Investment Trusts ("REITs") are subject to risks the risks of investing in real estate, including, but not limited to, changes in the real estate market, vacancy rates and competition, volatile interest rates and economic recession. Increases in interest rates typically lower the present value of a REIT's future earnings stream and may make financing property purchases and improvements more costly. The value of a fund will generally decline when investors in REIT stocks anticipate or experience rising interest rates.

Companies that issue loans tend to be highly leveraged and thus are more susceptible to the risks of interest deferral, default and/or bankruptcy. Loans are usually rated below investment grade but may also be unrated. As a result, the risks associated with these loans are similar to the risks of high-yield fixed income instruments. The senior loan market has seen a significant increase in loans with weaker lender protections which may impact recovery values and/or trading levels in the future.

A fund with significant exposure to a single asset class, country, region, industry, or sector may be more affected by an adverse economic or political development than a broadly diversified fund.

Securities of small- and mid-capitalization companies may experience greater price volatility and be less liquid than larger, more established companies.

Investments in sovereign bonds involve special risks because the governmental authority that controls the repayment of the debt may be unwilling or unable to repay the principal and/or interest when due. In times of economic uncertainty, the prices of these securities may be more volatile than those of corporate debt or other government debt obligations.

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.

Securities issued or guaranteed by federal agencies and U.S. government sponsored instrumentalities may or may not be backed by the full faith and credit of the U.S. government.

A fund may hold securities or other assets that may be valued on the basis of factors other than market quotations. This may occur because the asset or security does not trade on a centralized exchange, or in times of market turmoil or reduced liquidity. Portfolio holdings that are valued using techniques other than market quotations, including "fair valued" assets or securities, may be subject to greater fluctuation in their valuations from one day to the next than if market quotations were used. There is no assurance that a fund could sell or close out a portfolio position for the value established for it at any time.

Zero coupon bonds do not pay interest on a current basis, they may be highly volatile, and they do not produce cash flow. A fund could be forced to liquidate zero coupon bond securities at an inopportune time to generate cash to distribute to shareholders as required by tax laws.

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.

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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