First Trust Municipal High Income ETF (FMHI)

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Fund Summary

Investment Objective/Strategy - The First Trust Municipal High Income ETF is an actively managed exchange-traded fund. The Fund's primary investment objective will be to seek to provide federally tax-exempt income, and its secondary objective will be long term capital appreciation. Under normal market conditions, the Fund seeks to achieve its investment objectives by investing at least 80% of its net assets (including investment borrowings) in municipal debt securities that pay interest that is exempt from regular federal income taxes (collectively, "Municipal Securities").

There can be no assurance that the Fund's investment objectives will be achieved.

Fund Overview

Ticker	FMHI
Fund Type	Tax-Free Fixed Income
Investment Advisor	First Trust Advisors L.P.
Investor Servicing Agent	Brown Brothers Harriman
CUSIP	33739P301
ISIN	US33739P3010
Intraday NAV	FMHIIV
Fiscal Year-End	07/31
Exchange	Nasdaq
Inception	11/1/2017
Inception Price	$50.00
Inception NAV	$50.00
Gross Expense Ratio*	0.70%
Net Expense Ratio*	0.55%

* As of 12/1/2020

First Trust has contractually agreed to waive management fees of 0.15% of average daily net assets until November 30, 2021.

Current Fund Data (as of 6/18/2021)

Closing NAV¹	$56.26
Closing Market Price²	$56.33
Bid/Ask Midpoint	$56.34
Bid/Ask Premium	0.13%
30-Day Median Bid/Ask Spread (as of 6/17/2021)³	0.07%
Total Net Assets	$239,084,729
Outstanding Shares	4,250,002
Daily Volume	59,439
Average 30-Day Daily Volume	38,643
Closing Market Price 52-Week High/Low	$56.37 / $50.51
Closing NAV 52-Week High/Low	$56.33 / $50.60
Number of Holdings (excluding cash)	302

Top Holdings (as of 6/17/2021)*

Holding	Percent
BUCKEYE OH TOBACCO SETTLEMENT 5%, due 06/01/2055	1.73%
ILLINOIS ST 5%, due 11/01/2029	1.29%
OKLAHOMA ST DEV FIN AUTH 7.25%, due 09/01/2051	1.29%
NEW YORK CITY NY TRANSITIONAL FIN AUTH 4%, due 11/01/2040	1.00%
TOBACCO SETTLEMENT AUTH IA 4%, due 06/01/2049	0.99%
CALIFORNIA ST INFRASTRUCTURE & ECON DEV BANK 5%, due 08/01/2044	0.97%
STHRN OH PORT EXEMPT FAC REVENUE 7%, due 12/01/2042	0.96%
TSASC INC NY 5%, due 06/01/2045	0.93%
CSCDA CMNTY IMPT AUTH CA ESSENTIAL HSG REV 4%, due 07/01/2056	0.92%
FLORIDA DEV FIN CORP SURFACE TRANS FAC 7.375%, due 01/01/2049	0.92%

* Excluding cash. Holdings are subject to change.

Top State Exposure (as of 5/28/2021)

State	Percent
Colorado	15.24%
Florida	8.69%
California	7.77%
New York	6.95%
Illinois	5.45%
Ohio	5.44%
Pennsylvania	4.86%
Texas	4.34%
Arizona	3.41%
New Jersey	3.13%

NAV History (Since Inception)

Past performance is not indicative of future results.

Overall Morningstar Rating^TM (as of 5/31/2021)⁴

Among 181 funds in the High Yield Muni category. This fund was rated 4 stars/181 funds (3 years) based on risk adjusted returns.

Distribution Information

Dividend per Share Amt (as of 6/19/2021)⁵	$0.1350
30-Day SEC Yield (as of 5/28/2021)⁶	1.98%
Unsubsidized 30-Day SEC Yield (as of 5/28/2021)⁷	1.83%
Taxable Equivalent 30-Day SEC Yield (as of 5/28/2021)⁸	3.34%
12-Month Distribution Rate (as of 5/28/2021)⁹	3.01%
Distribution Rate (as of 5/28/2021)¹⁰	2.91%
Taxable Equivalent Annualized Distribution Rate (as of 5/28/2021)¹¹	4.92%

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 5/28/2021)

Net Weighted Average Effective Duration (Includes Short Positions)¹²	6.67 Years
Weighted Average Effective Duration (Long Positions)¹²	7.02 Years
Net Weighted Average Modified Duration¹³	5.59 Years
Net Weighted Average Maturity	17.63 Years
Weighted Average Price	$112.35
Weighted Average Coupon	4.62%
Short Position - US Treasury Futures	-3.45%

Maturity Exposure (as of 5/28/2021)

Years	Percent
0 - 0.99 Years	0.57%
1 - 1.99 Years	0.57%
2 - 2.99 Years	0.23%
3 - 3.99 Years	0.93%
4 - 4.99 Years	2.07%
5 - 5.99 Years	1.36%
6 - 6.99 Years	3.02%
7 - 7.99 Years	3.36%
8 - 8.99 Years	5.45%
9 - 9.99 Years	3.88%
10 - 14.99 Years	13.31%
15 - 19.99 Years	27.78%
20 - 24.99 Years	13.47%
25 - 29.99 Years	11.67%
30 Years & Over	11.35%
Cash	0.98%

Bid/Ask Premium/Discount (as of 6/18/2021)

	2020	Q1 2021	Q2 2021	Q3 2021
Days Traded at Premium	142	38	51	---
Days Traded at Discount	111	23	4	---

Credit Quality (as of 5/28/2021)

Cash	0.98%
AAA	1.05%
AA	7.11%
A	9.69%
BBB	15.96%
BB	14.38%
B	3.31%
CCC	1.00%
NR	45.95%
SP-2/MIG1	0.57%

The credit quality information presented reflects the ratings assigned by one or more nationally recognized statistical rating organizations (NRSROs), including Standard & Poor's Ratings Group, a division of the McGraw Hill Companies, Inc., Moody's Investors Service, Inc., Fitch Ratings or a comparably rated NRSRO. For situations in which a security is rated by more than one NRSRO and ratings are not equivalent, the highest ratings are used. Sub-investment grade ratings are those rated BB+/Ba1 or lower. Investment grade ratings are those rated BBB-/Baa3 or higher. 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.

Top Sector Exposure (as of 5/28/2021)

EDUCATION	11.05%
IDB	10.64%
SPECIAL ASSESSMENT	10.04%
GO-LTD	10.02%
DEDICATED TAX	7.86%
CCRC	6.59%
HIGHER ED	5.86%
GO-UNLTD	5.19%
TOBACCO	4.69%
HOSPITAL	4.12%

Hypothetical Growth of $10,000 Since Inception (as of 6/17/2021) *

Month End Performance (as of 5/28/2021)

	3 Month	YTD	1 Year	3 Year	5 Year	10 Year	Since Fund Inception¹⁴
Fund Performance *
Net Asset Value (NAV)	4.06%	5.09%	16.91%	6.94%	N/A	N/A	6.46%
After Tax Held	3.75%	4.55%	15.42%	5.50%	N/A	N/A	5.06%
After Tax Sold	2.40%	3.01%	9.96%	4.70%	N/A	N/A	4.35%
Market Price	4.00%	5.13%	17.12%	6.97%	N/A	N/A	6.48%

Index Performance **
Blended Benchmark	2.15%	2.18%	9.61%	5.78%	N/A	N/A	5.26%
Bloomberg Barclays Municipal Bond Index	1.76%	0.78%	4.74%	5.03%	N/A	N/A	4.26%

Quarter End Performance (as of 3/31/2021)

	3 Month	YTD	1 Year	3 Year	5 Year	10 Year	Since Fund Inception¹⁴
Fund Performance *
Net Asset Value (NAV)	2.30%	2.30%	14.67%	6.40%	N/A	N/A	5.95%
After Tax Held	1.98%	1.98%	13.17%	4.96%	N/A	N/A	4.54%
After Tax Sold	1.36%	1.36%	8.63%	4.28%	N/A	N/A	3.95%
Market Price	2.41%	2.41%	14.68%	6.45%	N/A	N/A	5.99%

Index Performance **
Blended Benchmark	0.75%	0.75%	9.02%	5.77%	N/A	N/A	5.09%
Bloomberg Barclays Municipal Bond Index	-0.35%	-0.35%	5.51%	4.91%	N/A	N/A	4.13%

3-Year Statistics (as of 5/28/2021)

	Standard Deviation	Alpha	Beta	Sharpe Ratio	Correlation
FMHI	7.79%	-0.54	1.72	0.71	0.87
Bloomberg Barclays Municipal Bond Index	4.02%	---	1.00	0.89	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.

**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.

Blended Benchmark - The Benchmark consists of the following two indexes: 50% of the Bloomberg Barclays High Yield 10-Year Municipal Index (8-12 years) which is comprised of bonds with a final maturity between 8 and 12 years that are part of the Bloomberg Barclays Municipal Bond High Yield Index; and 50% of the Bloomberg Barclays Revenue 10-Year Municipal Index (8-12 years) which is comprised of revenue bonds that have a final maturity between 8 and 12 years that are part of the Bloomberg Barclays Municipal Bond Index. 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 50-50 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.

Bloomberg Barclays Municipal Bond Index - The Index is a rules-based, market-value-weighted index engineered for the long-term tax-exempt bond market.

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	The Morningstar Rating^TM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
⁵	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.
⁶	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.
⁷	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.
⁸	The taxable equivalent yield is for illustrative purposes only. This information illustrates approximately what you would have to earn on taxable investments to equal the tax-exempt yield using the highest federal tax bracket and Medicare tax for 2021. This information is based on present law as of the date of publication and does not account for any proposed changes in tax rates. This information does not account for limitations on deductions, the alternative minimum tax or taxes other than Federal personal income tax and Medicare tax.
⁹	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.
¹⁰	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.
¹¹	The taxable equivalent annualized distribution rate is for illustrative purposes only. This information illustrates approximately what you would have to earn on taxable investments to equal the tax-exempt annualized distribution rate using the highest federal tax bracket and Medicare tax for 2021. This information is based on present law as of the date of publication and does not account for any proposed changes in tax rates. This information does not account for limitations on deductions, the alternative minimum tax or taxes other than Federal personal income tax and Medicare tax.
¹²	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. It accounts for the likelihood of changes in the timing of cash flows in response to interest rate movements.
¹³	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. In contrast to effective duration, modified duration assumes that the timing of cash flows remain constant.
¹⁴	Inception Date is 11/1/2017

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 Nasdaq Stock Market LLC.

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. The fund is subject to management risk because it is an actively managed portfolio. In managing the fund's investment portfolio, the advisor will apply investment techniques and risk analyses that may not have the desired result. There can be no assurance that the fund's investment objectives will be achieved.

The fund is subject to market risk. Market risk is the risk that a particular security owned by the fund or shares of the fund in general may fall in value. The values of municipal securities held by the fund may be adversely affected by local political and economic conditions and developments. 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.

Municipal bonds are subject to numerous additional risks, including credit risk, income risk, interest rate risk, call risk, zero coupon bond risk, and political and economic risk. Credit risk is the risk that an issuer of a security will be unable or unwilling to make dividend, interest and/or principal payments when due and that the value of a security may decline as a result. Income risk is the risk that income from the fund's fixed income investments could decline during periods of falling interest rates. Interest rate risk is the risk that the value of the securities in the fund will decline because of rising market interest rates. Call risk is the risk that performance could be adversely impacted if an issuer calls higher-yielding debt instruments held by the fund. Zero coupon bond risk is the risk that zero coupon bonds may be highly volatile as interest rates rise or fall because they do not pay interest on a current basis. Political and economic risk is the risk that the values of municipal securities held by the fund may be adversely affected by local political and economic conditions and developments. Adverse conditions in an industry significant to a local economy could have a correspondingly adverse effect on the financial condition of local issuers.

Income from municipal bonds held by the fund 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 a bond issuer. The fund has no limit as to the amount that can be invested in alternative minimum tax bonds. All or a portion of the fund's otherwise exempt-interest dividends may be taxable to those shareholders subject to the federal alternative minimum tax.

Inventories of municipal securities have decreased in recent years, lessening the ability to make a market in these securities. This reduction in market making capacity has the potential to decrease the fund's ability to buy or sell municipal securities, and increase price volatility and trading costs. Custodial receipt trusts may issue inverse floater securities in which the fund may invest. Inverse floater securities may be leveraged and their market values may be more volatile than other types of fixed-income instruments.

As the use of Internet technology has become more prevalent in the course of business, the fund has become more susceptible to potential operational risks through breaches in cyber security. Such events could cause the fund to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss.

If the fund has lower average daily trading volumes, it may rely on a small number of third-party market makers to provide a market for the purchase and sale of shares. Any trading halt or other problem relating to the trading activity of these market makers could result in a dramatic change in the spread between the fund's net asset value and the price at which the fund's shares are trading.

The fund is subject to industrial development bond risk which is the risk that to the extent that the industrial development sector continues to represent a significant portion of the fund, the fund will be sensitive to changes in, and its performance may depend to a greater extent on, the overall condition of the industrial development sector.

The payment of principal and interest of a pre-refunded bond is funded from securities held in a designated escrow account where such securities are obligations of and carry the full faith and credit of the U.S. Treasury. The securities held in the escrow fund do not guarantee the price of the bond. Private activity bonds, issued by municipalities or other public authorities, can have a substantially different credit profile than the municipality or public authority and may be negatively impacted by conditions affecting either the general credit of the use of the private activity project or the project itself.

An investment in inverse floaters typically will involve greater risk than an investment in a fixed rate municipal bond. Investments in inverse floaters create effective leverage. In addition, distributions paid to the fund on its inverse floaters will be reduced or even eliminated as short-term municipal interest rates rise and will increase as short-term municipal interest rates fall. The fund may invest in distressed municipal securities and many distressed securities are illiquid or trade in low volumes and thus may be more difficult to value.

High-yield securities, or "junk" bonds, are subject to greater market fluctuations and risk of loss than securities with higher ratings, and therefore, may be highly speculative. These securities are issued by companies that may have limited operating history, narrowly focused operations, and/or other impediments to the timely payment of periodic interest and principal at maturity. The market for high-yield securities is smaller and less liquid than that for investment-grade securities.

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 fund will, under most circumstances, effect a portion of creations and redemptions for cash, rather than in-kind securities. As a result, the fund may be less tax-efficient.

The fund currently has fewer assets than larger funds, and like other relatively new funds, large inflows and outflows may impact the fund's market exposure for limited periods of time.

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.

©2021 Morningstar, Inc. All Rights Reserved. The Morningstar Rating^TM information contained herein: (1) is proprietary to Morningstar;(2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value