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 12/1/2021

First Trust has contractually agreed to waive management fees of 0.15% of average daily net assets until November 30, 2022.

Current Fund Data (as of 1/24/2022)

Closing NAV¹	$55.08
Closing Market Price²	$55.14
Bid/Ask Midpoint	$55.13
Bid/Ask Premium	0.09%
30-Day Median Bid/Ask Spread³	0.09%
Total Net Assets	$393,806,718
Outstanding Shares	7,150,002
Daily Volume	78,311
Average 30-Day Daily Volume	57,930
Closing Market Price 52-Week High/Low	$56.92 / $53.90
Closing NAV 52-Week High/Low	$56.81 / $53.90
Number of Holdings (excluding cash)	402

Top Holdings (as of 1/24/2022)*

Holding	Percent
BUCKEYE OH TOBACCO SETTLEMENT 5%, due 06/01/2055	1.61%
BLACK DESERT PUB INFRASTRUCTURE DIST UT 4%, due 03/01/2051	1.03%
CANYON PINES MET DIST CO SPL IMPT DIST 1 3.75%, due 12/01/2040	0.85%
SAWYERS LANDING CDD FL SPL ASSMNT REV 4.125%, due 05/01/2041	0.83%
NORTH PARKWAY MUNI MGMT DIST 1 TX 5%, due 09/15/2051	0.77%
HAWAII ST DEPT OF BUDGET & FIN 3.10%, due 05/01/2026	0.76%
OKLAHOMA ST DEV FIN AUTH 7.25%, due 09/01/2051	0.76%
ILLINOIS ST 5%, due 11/01/2029	0.75%
MIDA GOLF & EQUESTRIAN CTR PUB INFRA DIST UT 4.50%, due 06/01/2051	0.75%
PALM BEACH CNTY FL HLTH FACS AUTH 4%, due 08/15/2049	0.73%

* Excluding cash. Holdings are subject to change.

Top State Exposure (as of 12/31/2021)

State	Percent
Colorado	13.41%
Florida	11.11%
Pennsylvania	6.76%
Texas	6.22%
California	6.14%
New York	5.93%
Utah	4.37%
Illinois	3.81%
Ohio	3.41%
Arizona	2.71%

NAV History (Since Inception)

Past performance is not indicative of future results.

Overall Morningstar Rating^TM (as of 12/31/2021)⁴

Among 189 funds in the High Yield Muni category. This fund was rated 4 stars/189 funds (3 years) based on risk adjusted returns.

Distribution Information

Dividend per Share Amt (as of 1/26/2022)⁵	$0.1300
30-Day SEC Yield (as of 12/31/2021)⁶	1.97%
Unsubsidized 30-Day SEC Yield (as of 12/31/2021)⁷	1.83%
Taxable Equivalent 30-Day SEC Yield (as of 12/31/2021)⁸	3.34%
12-Month Distribution Rate (as of 12/31/2021)⁹	2.87%
Distribution Rate (as of 12/31/2021)¹⁰	2.78%
Taxable Equivalent Annualized Distribution Rate (as of 12/31/2021)¹¹	4.70%

Fund Characteristics (as of 12/31/2021)

Weighted Average Effective Duration (Includes Short Positions)¹²	7.16 Years
Weighted Average Effective Duration (Long Positions)¹²	7.42 Years
Weighted Average Modified Duration¹³	5.84 Years
Weighted Average Maturity	19.71 Years
Weighted Average Price	$110.54
Weighted Average Coupon	4.38%
Short Position - US Treasury Futures	-2.55%

Maturity Exposure (as of 12/31/2021)

Years	Percent
0 - 0.99 Years	0.56%
1 - 1.99 Years	0.21%
2 - 2.99 Years	0.32%
3 - 3.99 Years	1.85%
4 - 4.99 Years	1.78%
5 - 5.99 Years	1.68%
6 - 6.99 Years	1.88%
7 - 7.99 Years	2.42%
8 - 8.99 Years	2.83%
9 - 9.99 Years	2.36%
10 - 14.99 Years	8.77%
15 - 19.99 Years	29.00%
20 - 24.99 Years	9.44%
25 - 29.99 Years	24.00%
30 Years & Over	10.35%
Cash	2.55%

Bid/Ask Premium/Discount (as of 1/24/2022)

	2021	Q1 2022	Q2 2022	Q3 2022
Days Traded at Premium	203	13	---	---
Days Traded at Discount	49	2	---	---

Credit Quality (as of 12/31/2021)

Cash	2.55%
AAA	1.26%
AA	8.37%
A	11.77%
BBB	11.91%
BB	10.95%
B	1.66%
CCC	0.58%
NR	50.62%
SP-2/MIG1	0.33%

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 12/31/2021)

GO-LTD	12.41%
SPECIAL ASSESSMENT	12.41%
EDUCATION	10.42%
CCRC	9.66%
IDB	7.30%
HOSPITAL	6.30%
DEDICATED TAX	4.82%
INSURED	4.80%
HIGHER ED	4.36%
TAX INCREMENT	4.12%

Hypothetical Growth of $10,000 Since Inception (as of 1/24/2022) *

Month End Performance (as of 12/31/2021)

	3 Month	YTD	1 Year	3 Year	5 Year	10 Year	Since Fund Inception¹⁴
Fund Performance *
Net Asset Value (NAV)	1.33%	7.60%	7.60%	7.36%	N/A	N/A	6.13%
After Tax Held	1.04%	6.34%	6.34%	5.98%	N/A	N/A	4.76%
After Tax Sold	0.79%	4.48%	4.48%	5.06%	N/A	N/A	4.12%
Market Price	1.31%	7.64%	7.64%	7.31%	N/A	N/A	6.14%

Index Performance **
Blended Benchmark	0.76%	3.89%	3.89%	5.46%	N/A	N/A	4.92%
Bloomberg Municipal Bond Index	0.72%	1.52%	1.52%	4.73%	N/A	N/A	3.83%

Quarter End Performance (as of 12/31/2021)

	3 Month	YTD	1 Year	3 Year	5 Year	10 Year	Since Fund Inception¹⁴
Fund Performance *
Net Asset Value (NAV)	1.33%	7.60%	7.60%	7.36%	N/A	N/A	6.13%
After Tax Held	1.04%	6.34%	6.34%	5.98%	N/A	N/A	4.76%
After Tax Sold	0.79%	4.48%	4.48%	5.06%	N/A	N/A	4.12%
Market Price	1.31%	7.64%	7.64%	7.31%	N/A	N/A	6.14%

Index Performance **
Blended Benchmark	0.76%	3.89%	3.89%	5.46%	N/A	N/A	4.92%
Bloomberg Municipal Bond Index	0.72%	1.52%	1.52%	4.73%	N/A	N/A	3.83%

3-Year Statistics (as of 12/31/2021)

	Standard Deviation	Alpha	Beta	Sharpe Ratio	Correlation
FMHI	7.85%	-0.10	1.76	0.81	0.88
Bloomberg Municipal Bond Index	3.99%	---	1.00	0.92	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 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 Municipal Bond High Yield Index; and 50% of the Bloomberg 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 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 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.

Risk Considerations

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 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 discount to a fund's net asset value and possibly face delisting.

A fund's shares will change in value, and you could lose money by investing in a fund. One of the principal risks of investing in a fund is market risk. Market risk is the risk that a particular stock owned by a fund, fund shares or stocks in general may fall in value. There can be no assurance that a 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. While the development of vaccines has slowed the spread of the virus and allowed for the resumption of "reasonably" normal business activity in the United States, many countries continue to impose lockdown measures in an attempt to slow the spread. Additionally, there is no guarantee that vaccines will be effective against emerging variants of the disease.

In managing a fund's investment portfolio, the portfolio managers will apply investment techniques and risk analyses that may not have the desired result.

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.

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

The differences in yield between debt securities of different credit quality may increase which may reduce the market value of a fund's debt securities.

As the use of Internet technology has become more prevalent in the course of business, funds have become more susceptible to potential operational risks through breaches in cyber security.

Certain securities are subject to call, credit, inflation, income, interest rate, extension, prepayment and zero coupon risks. These risks could result in a decline in a security's value and/or income, increased volatility as interest rates rise or fall and have an adverse impact on a fund's performance.

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

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.

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 issue.

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.

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.

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 credit of the use of the project or the project itself.

Certain fund investments may be subject to restrictions on their resale and a fund may be unable to sell a restricted security on short notice or only sell them at a price below current value.

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

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

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.

©2022 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