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First Trust Capital Strength ETF (FTCS)
  • 2020 Estimated Capital Gain Distributions
    Certain First Trust Exchange-Traded Funds are expected to pay a short term and/or long-term capital gain distribution in December. For a list of exchange-traded funds expected to pay a capital gain distribution, please click here. Final determination of the source and tax status of all distributions paid in the current year are to be made after year-end and could differ from the expectations noted above.
Investment Objective/Strategy - The First Trust Capital Strength ETF seeks investment results that correspond generally to the price and yield (before the fund's fees and expenses) of an equity index called The Capital Strength IndexSM.
There can be no assurance that the Fund's investment objectives will be achieved.
  • From the stocks in the NASDAQ US Benchmark Index, the largest 500 companies with a minimum three-month average daily dollar trading volume of $5 million are selected.
  • To be eligible for inclusion in the index, companies must have:
    • at least $1 billion in cash or short term investments.
    • a long term debt to market cap ratio less than 30%.
    • a return on equity greater than 15%.
  • Eligible companies are then ranked by a combined short-term (90 days) and long-term (260 days) realized volatility.
  • The 50 companies with the lowest combined volatility score are selected for inclusion in the index.
  • A maximum weight of 30% in any one Industry Classification Benchmark industry is allowed. If an industry has a weight greater than 30%, the highest ranking security by volatility will be removed and replaced with the next eligible security from a different industry. This process is repeated until no industry has a weight greater than 30%.
  • The index stocks are equally weighted initially and on each rebalancing effective date. The index is reconstituted and rebalanced on a quarterly basis.
Fund Overview
TickerFTCS
Fund TypeLarge Cap Core
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon
CUSIP33733E104
ISINUS33733E1047
Intraday NAVFTCSIV
Fiscal Year-End12/31
ExchangeNasdaq
Inception7/6/2006
Inception Price$20.00
Inception NAV$20.00
Rebalance FrequencyQuarterly
Gross Expense Ratio*0.58%
Net Expense Ratio*0.58%
* As of 5/1/2020
Expenses are capped contractually at 0.65% per year, at least until April 30, 2021.
Current Fund Data (as of 11/23/2020)
Closing NAV1$65.62
Closing Market Price2$65.67
Bid/Ask Midpoint$65.63
Bid/Ask Premium0.01%
30-Day Median Bid/Ask Spread30.03%
Total Net Assets$6,627,317,879
Outstanding Shares101,000,002
Daily Volume503,848
Average 30-Day Daily Volume530,108
Closing Market Price 52-Week High/Low$66.84 / $43.11
Closing NAV 52-Week High/Low$66.83 / $43.01
Number of Holdings (excluding cash)51
Top Holdings (as of 11/23/2020)*
Holding Percent
Honeywell International Inc. 2.32%
Garmin Ltd. 2.30%
CSX Corporation 2.28%
Amphenol Corporation 2.21%
Alphabet Inc. (Class A) 2.19%
The Allstate Corporation 2.17%
W.W. Grainger, Inc. 2.15%
AMETEK, Inc. 2.13%
Accenture Plc 2.12%
The Estee Lauder Companies Inc. 2.12%

* 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 11/25/2020)4$0.1154
30-Day SEC Yield (as of 10/30/2020)51.02%
Unsubsidized 30-Day SEC Yield (as of 10/30/2020)61.02%
12-Month Distribution Rate (as of 10/30/2020)71.02%
Index Yield (as of 10/30/2020)81.82%
For funds with certain equity strategies, due to the negative economic impact across many industries caused by the recent 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 10/30/2020)9
Maximum Market Cap.$1,094,796
Median Market Cap.$53,145
Minimum Market Cap.$14,816
Price/Earnings20.05
Price/Book5.55
Price/Cash Flow15.34
Price/Sales1.76
Bid/Ask Premium/Discount (as of 11/23/2020)
  2019 Q1 2020 Q2 2020 Q3 2020
Days Traded at Premium 224 44 47 54
Days Traded at Discount 28 18 16 10
Top Sector Exposure (as of 11/23/2020)
Industrials 26.90%
Health Care 17.50%
Consumer Staples 15.98%
Consumer Discretionary 15.73%
Financials 9.82%
Technology 8.31%
Utilities 2.06%
Real Estate 1.87%
Basic Materials 1.83%
Month End Performance (as of 10/30/2020)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception10
Fund Performance *
Net Asset Value (NAV) -1.32% 1.69% 7.22% 8.86% 11.03% 12.50% 9.69%
After Tax Held -1.40% 1.38% 6.74% 8.32% 10.44% 11.79% 9.06%
After Tax Sold -0.78% 0.98% 4.25% 6.62% 8.46% 10.02% 7.80%
Market Price -1.28% 1.79% 7.25% 8.90% 11.04% 12.49% 9.70%
Index Performance **
The Capital Strength IndexSM -1.18% 2.21% 7.87% 9.54% 11.74% N/A N/A
S&P 500 Index 0.37% 2.77% 9.71% 10.42% 11.71% 13.01% 9.06%
Quarter End Performance (as of 9/30/2020)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception10
Fund Performance *
Net Asset Value (NAV) 8.58% 5.78% 12.92% 11.54% 13.51% 13.46% 10.06%
After Tax Held 8.50% 5.45% 12.42% 10.99% 12.90% 12.74% 9.42%
After Tax Sold 5.08% 3.40% 7.62% 8.73% 10.51% 10.87% 8.11%
Market Price 8.53% 5.73% 12.81% 11.51% 13.49% 13.45% 10.05%
Index Performance **
The Capital Strength IndexSM 8.74% 6.26% 13.62% 12.25% 14.24% N/A N/A
S&P 500 Index 8.93% 5.57% 15.15% 12.28% 14.15% 13.74% 9.32%
3-Year Statistics (as of 10/30/2020)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
FTCS 16.16% -0.66 0.89 0.49 0.98
S&P 500 Index 17.86% --- 1.00 0.54 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 based on the midpoint of the bid/ask spread on the stock exchange on which shares of the fund are listed for trading 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 Capital Strength 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.

On June 4, 2013, the fund's underlying index changed from the Credit Suisse U.S. Value Index, Powered by HOLTTM to The Capital Strength IndexSM. On June 18, 2010, the fund's underlying index changed from the Deutsche Bank CROCI® US+ IndexTM to the Credit Suisse U.S. Value Index, Powered by HOLTTM. Therefore, the fund's performance and historical returns shown for the periods prior to these dates are not necessarily indicative of the performance that the fund, based on its current index, would have generated.

The fund no longer uses the S&P 500 Value Index as a comparative index for the fund as the Advisor has determined that this index is no longer representative of the fund's investment strategy and portfolio holdings. The S&P 500 Value Index will be represented in performance comparisons of the fund until May 1, 2018.

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 Capital Strength Index(SM).
9 All market capitalization numbers are in USD$ Millions.
10 Inception Date is 7/6/2006

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 Nasdaq Stock Market LLC.

The fund's return may not match the return of The Capital Strength 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 industry.

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.

Nasdaq® and The Capital Strength Index℠ are registered trademarks and service marks of Nasdaq, Inc. (together with its affiliates hereinafter referred to as the “Corporations”) and are licensed for use by First Trust. The Fund has not been passed on by the Corporations as to its legality or suitability. The Fund is not issued, endorsed, sold or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO 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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