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FT Cboe Vest S&P 500® Dividend Aristocrats Target Income ETF® (KNG)
Investment Objective/Strategy - The FT Cboe Vest S&P 500® Dividend Aristocrats Target Income ETF® (the "Fund") seeks investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of an equity index called the Cboe S&P 500® Dividend Aristocrats Target Income Index Monthly Series (the "Index"). The Fund will normally invest at least 80% of its total assets (including investment borrowings) in the common stocks and call options that comprise the Index. The Fund, using an indexing investment approach, attempts to replicate, before fees and expenses, the performance of the Index. The Index is owned, developed, maintained and calculated by S&P Opco, LLC (the "Index Provider"). Cboe Vest Financial LLC is the Fund's investment sub-advisor ("Cboe Vest" or the "Sub-Advisor").
There can be no assurance that the Fund's investment objectives will be achieved.
  • The index is a rules-based buy-write index designed with the primary goal of generating an annualized level of income from stock dividends and option premiums that is approximately 3% over the annual dividend yield of the S&P 500 Index and a secondary goal of generating price returns that are proportional to the price returns of the S&P 500 Index.
  • The index is composed of two parts:
    • An equal-weighted portfolio of the stocks contained in the S&P 500® Dividend Aristocrats Index (the "Aristocrat Stocks") that have options that trade on a national securities exchange.
    • A rolling series of short (written) call options on each of the Aristocrat Stocks (the "Covered Calls").
  • The S&P 500 Dividend Aristocrats Index generally includes companies in the S&P 500 Index that have increased dividend payments each year for at least 25 consecutive years and meet certain market capitalization and liquidity requirements.
  • The Covered Calls are written (sold) by the index on the third Friday of each month with an expiration typically on the third Friday of the following month and a strike price as close as possible to the closing price of the underlying Aristocrat Stock at the time the Covered Call is written.
  • The index employs a "partial covered call strategy," meaning that Covered Calls will be written on a notional value of no more than 20% of the value of each underlying Aristocrat Stock, such that the short position in each call option is "covered" by a portion of the corresponding Aristocrat Stock held by the Index.
  • The equity portion of the Index is rebalanced quarterly and reconstituted annually.
Fund Overview
TickerKNG
Fund TypeTarget Income Strategies
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon
Portfolio Manager/Sub-AdvisorCBOE Vest Financial, LLC
CUSIP33739Q705
ISINUS33739Q7051
Intraday NAVKNGIV
Fiscal Year-End10/31
ExchangeCboe BZX
Inception3/26/2018
Inception Price$40.00
Inception NAV$40.00
Expense Ratio0.75%
On March 1, 2021, the Cboe Vest S&P 500® Dividend Aristocrats Target Income ETF (the "Target Fund") was reorganized into the FT Cboe Vest S&P 500® Dividend Aristocrats Target Income ETF (the “Acquiring Fund”). Pursuant to the reorganization, the assets of the Target Fund were transferred to, and the liabilities of the Target Fund were assumed by, the Acquiring Fund. The Target Fund was incepted on March 26, 2018. The Acquiring Fund was incepted on February 24, 2021.
Current Fund Data (as of 7/23/2021)
Closing NAV1$53.98
Closing Market Price2$54.05
Bid/Ask Midpoint$54.01
Bid/Ask Premium0.06%
30-Day Median Bid/Ask Spread30.15%
Total Net Assets$219,960,168
Outstanding Shares4,075,000
Daily Volume29,954
Average 30-Day Daily Volume38,537
Closing Market Price 52-Week High/Low$55.19 / $42.08
Closing NAV 52-Week High/Low$55.09 / $42.07
Number of Holdings (excluding cash)128
Top Holdings (as of 7/23/2021)*
Holding Percent
Target Corporation 1.90%
Nucor Corporation 1.80%
Albemarle Corporation 1.78%
Expeditors International of Washington, Inc. 1.76%
West Pharmaceutical Services, Inc. 1.76%
T. Rowe Price Group, Inc. 1.75%
Roper Technologies, Inc. 1.71%
Cintas Corporation 1.68%
Dover Corporation 1.67%
Essex Property Trust, Inc. 1.67%

* Excluding cash.  Holdings are subject to change.

NAV History (Since Inception)
Past performance is not indicative of future results.
Overall Morningstar RatingTM (as of 6/30/2021)4

Among 1,141 funds in the Large Value category. This fund was rated 4 stars/1,141 funds (3 years) based on risk adjusted returns.
Distribution Information
Dividend per Share Amt (as of 7/26/2021)5$0.4965
30-Day SEC Yield (as of 6/30/2021)61.62%
12-Month Distribution Rate (as of 6/30/2021)73.53%
Distribution Rate (as of 6/30/2021)83.73%
Fund Characteristics (as of 6/30/2021)9
Maximum Market Cap.$433,826
Median Market Cap.$45,142
Minimum Market Cap.$6,904
Price/Earnings25.01
Price/Book3.78
Price/Cash Flow17.62
Price/Sales1.74
Market cap and price ratio statistics are for the equity portion of the fund and exclude cash and options.
Portfolio Options Information (as of 6/30/2021)
Option Overwrite %6.48%
Current Month Upside Participation %93.52%
ATM Short Call Maturity8/20/21
Moneyness is how much an option contract's strike price is in-the-money (ITM) or out-of-the-money (OTM) expressed as a percentage of the price of the option contract's underlying asset.
Bid/Ask Premium/Discount (as of 7/23/2021)
  2020 Q1 2021 Q2 2021 Q3 2021
Days Traded at Premium 180 54 62 16
Days Traded at Discount 73 7 1 0
Top Sector Exposure (as of 7/23/2021)
Industrials 20.56%
Consumer Staples 19.36%
Materials 12.52%
Health Care 10.79%
Financials 10.72%
Consumer Discretionary 9.42%
Real Estate 4.83%
Utilities 4.41%
Information Technology 3.08%
Energy 3.04%
Communication Services 1.35%
Hypothetical Growth of $10,000 Since Inception (as of 7/23/2021) *
Tracking Index: Cboe S&P 500 Dividend Aristocrats Target Income Index Monthly Series

Month End Performance (as of 6/30/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception10
Fund Performance *
Net Asset Value (NAV) 5.49% 13.99% 36.29% 14.70% N/A N/A 13.85%
After Tax Held 5.09% 13.13% 34.56% 13.19% N/A N/A 12.35%
After Tax Sold 3.25% 8.27% 21.72% 10.94% N/A N/A 10.29%
Market Price 5.42% 14.06% 36.34% 14.70% N/A N/A 13.86%
Index Performance **
Cboe S&P 500 Dividend Aristocrats Target Income Index Monthly Series 5.67% 14.44% 37.28% 15.58% N/A N/A 14.72%
S&P 500 Dividend Aristocrats Index 5.80% 14.80% 38.12% 16.33% N/A N/A 15.41%
S&P 500 Index 8.55% 15.25% 40.79% 18.67% N/A N/A 18.03%
Quarter End Performance (as of 6/30/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception10
Fund Performance *
Net Asset Value (NAV) 5.49% 13.99% 36.29% 14.70% N/A N/A 13.85%
After Tax Held 5.09% 13.13% 34.56% 13.19% N/A N/A 12.35%
After Tax Sold 3.25% 8.27% 21.72% 10.94% N/A N/A 10.29%
Market Price 5.42% 14.06% 36.34% 14.70% N/A N/A 13.86%
Index Performance **
Cboe S&P 500 Dividend Aristocrats Target Income Index Monthly Series 5.67% 14.44% 37.28% 15.58% N/A N/A 14.72%
S&P 500 Dividend Aristocrats Index 5.80% 14.80% 38.12% 16.33% N/A N/A 15.41%
S&P 500 Index 8.55% 15.25% 40.79% 18.67% N/A N/A 18.03%
3-Year Statistics (as of 6/30/2021)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
KNG 17.67% -1.94 0.91 0.79 0.95
S&P 500 Index 18.52% --- 1.00 0.94 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 the Cboe S&P 500 Dividend Aristocrats Target Income Index Monthly Series 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 Dividend Aristocrats Index - The Index consists of companies from the S&P 500 Index that have increased dividends every year for at least 25 consecutive years.

S&P 500 Index - The Index is an unmanaged index of 500 stocks used to measure large-cap U.S. stock market performance.

A written (sold) call option gives the seller the obligation to sell shares of the underlying asset at a specified price (strike price) at a specified date (expiration date). The writer (seller) of the call option receives an amount (premium) for selling the option. In the event the underlying asset appreciates above the strike price as of the expiration date, the seller of the call option will have to pay the difference between the value of the underlying asset and the strike price (which loss is offset by the premium initially received), and in the event the underlying asset declines in value, the call option may end up worthless and the seller of the call option retains the premium.
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 RatingTM 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 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 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.
9 All market capitalization numbers are in USD$ Millions.
10 Inception Date is 3/26/2018

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

A Target Outcome fund has characteristics unlike many other traditional investment products and may not be appropriate for all investors.

A fund's return may not match the return of its underlying index. A fund invests in securities included in the index regardless of investment merit and the securities held by a 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 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.

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

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.

A fund's covered call strategy may limit its ability to distribute dividends eligible for treatment as qualified dividend income and to distribute dividends eligible for the dividends-received deduction for corporate shareholders.

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.

The use of derivatives, including options can lead to losses because of adverse movements in the price or value of the underlying asset, index or rate, which may be magnified by certain features of the derivatives.

A fund's investment in dividend-paying securities may cause a fund to underperform similar funds that do not consider an issuer's track record of paying dividends.

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

There is no assurance that the index provider or its agents will compile or maintain the index accurately.

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

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.

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.

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

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.

High portfolio turnover may result in higher levels of transaction costs and may generate greater tax liabilities for shareholders.

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.

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.

A fund may invest in securities that exhibit more volatility than the market as a whole.

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.

S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("S&P"), a division of S&P Global; Cboe® is a registered trademark of Cboe. The Index, S&P, and Cboe trademarks have been licensed for use by the Sub-Advisor, and in turn, sub-licensed by the Advisor, including for use by the Fund. The Fund is not sponsored, endorsed, sold, or promoted by Cboe and/or its affiliates (the "Cboe Group"), or S&P and/or its affiliates (together, the "S&P Group"). Neither the Cboe Group nor the S&P Group make any representation regarding the advisability of investing in the Fund and shall have no liability whatsoever in connection with the Fund.

©2021 Morningstar, Inc. All Rights Reserved. The Morningstar RatingTM 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
 
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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