Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORT TO STOCKHOLDERS.
The registrant's semi-annual report transmitted to shareholders pursuant to Rule
30e-1 under the Investment Company Act of 1940 is as follows:
FIRST TRUST
First Trust Exchange-Traded Fund II
Book 1
First Trust STOXX(R) European Select Dividend Index Fund (FDD)
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund (FFR)
First Trust Dow Jones Global Select Dividend Index Fund (FGD)
First Trust Global Wind Energy ETF (FAN)
First Trust Global Engineering and Construction ETF (FLM)
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund (GRID)
First Trust Indxx Global Natural Resources Income ETF (FTRI)
First Trust Indxx Global Agriculture ETF (FTAG)
First Trust BICK Index Fund (BICK)
First Trust Indxx NextG ETF (NXTG)
First Trust NASDAQ Global Auto Index Fund (CARZ)
First Trust Cloud Computing ETF (SKYY)
First Trust International Equity Opportunities ETF (FPXI)
First Trust Nasdaq Cybersecurity ETF (CIBR)
Semi-Annual Report
March 31, 2020
TABLE OF CONTENTS
FIRST TRUST EXCHANGE-TRADED FUND II
SEMI-ANNUAL REPORT
MARCH 31, 2020
Shareholder Letter....................................................................... 2
Market Overview.......................................................................... 3
Fund Performance Overview
First Trust STOXX(R) European Select Dividend Index Fund (FDD)..................... 4
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund (FFR)........ 6
First Trust Dow Jones Global Select Dividend Index Fund (FGD)...................... 8
First Trust Global Wind Energy ETF (FAN)........................................... 10
First Trust Global Engineering and Construction ETF (FLM).......................... 12
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund (GRID).... 14
First Trust Indxx Global Natural Resources Income ETF (FTRI)....................... 16
First Trust Indxx Global Agriculture ETF (FTAG).................................... 18
First Trust BICK Index Fund (BICK)................................................. 20
First Trust Indxx NextG ETF (NXTG)................................................. 22
First Trust NASDAQ Global Auto Index Fund (CARZ)................................... 24
First Trust Cloud Computing ETF (SKYY)............................................. 26
First Trust International Equity Opportunities ETF (FPXI).......................... 28
First Trust Nasdaq Cybersecurity ETF (CIBR)........................................ 30
Notes to Fund Performance Overview....................................................... 32
Understanding Your Fund Expenses......................................................... 33
Portfolio of Investments
First Trust STOXX(R) European Select Dividend Index Fund (FDD)..................... 35
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund (FFR)........ 36
First Trust Dow Jones Global Select Dividend Index Fund (FGD)...................... 42
First Trust Global Wind Energy ETF (FAN)........................................... 45
First Trust Global Engineering and Construction ETF (FLM).......................... 47
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund (GRID).... 50
First Trust Indxx Global Natural Resources Income ETF (FTRI)....................... 52
First Trust Indxx Global Agriculture ETF (FTAG).................................... 55
First Trust BICK Index Fund (BICK)................................................. 57
First Trust Indxx NextG ETF (NXTG)................................................. 59
First Trust NASDAQ Global Auto Index Fund (CARZ)................................... 62
First Trust Cloud Computing ETF (SKYY)............................................. 64
First Trust International Equity Opportunities ETF (FPXI).......................... 66
First Trust Nasdaq Cybersecurity ETF (CIBR)........................................ 68
Statements of Assets and Liabilities..................................................... 70
Statements of Operations................................................................. 74
Statements of Changes in Net Assets...................................................... 78
Financial Highlights..................................................................... 86
Notes to Financial Statements............................................................ 93
Additional Information................................................................... 104
|
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This report contains certain forward-looking statements within the meaning of
the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934,
as amended. Forward-looking statements include statements regarding the goals,
beliefs, plans or current expectations of First Trust Advisors L.P. ("First
Trust" or the "Advisor") and its representatives, taking into account the
information currently available to them. Forward-looking statements include all
statements that do not relate solely to current or historical fact. For example,
forward-looking statements include the use of words such as "anticipate,"
"estimate," "intend," "expect," "believe," "plan," "may," "should," "would" or
other words that convey uncertainty of future events or outcomes.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
any series of First Trust Exchange-Traded Fund II (the "Trust") described in
this report (each such series is referred to as a "Fund" and collectively, as
the "Funds") to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. When
evaluating the information included in this report, you are cautioned not to
place undue reliance on these forward-looking statements, which reflect the
judgment of the Advisor and its representatives only as of the date hereof. We
undertake no obligation to publicly revise or update these forward-looking
statements to reflect events and circumstances that arise after the date hereof.
PERFORMANCE AND RISK DISCLOSURE
There is no assurance that any Fund described in this report will achieve its
investment objective. Each Fund is subject to market risk, which is the
possibility that the market values of securities owned by the Fund will decline
and that the value of the Fund shares may therefore be less than what you paid
for them. Accordingly, you can lose money by investing in a Fund. See "Risk
Considerations" in the Additional Information section of this report for a
discussion of other risks of investing in the Funds.
Performance data quoted represents past performance, which is no guarantee of
future results, and current performance may be lower or higher than the figures
shown. For the most recent month-end performance figures, please visit
www.ftportfolios.com or speak with your financial advisor. Investment returns,
net asset value and share price will fluctuate and Fund shares, when sold, may
be worth more or less than their original cost.
The Advisor may also periodically provide additional information on Fund
performance on each Fund's webpage at www.ftportfolios.com.
HOW TO READ THIS REPORT
This report contains information that may help you evaluate your investment. It
includes details about each Fund and presents data and analysis that provide
insight into each Fund's performance and investment approach.
By reading the market overview by Robert F. Carey, Chief Market Strategist of
the Advisor, you may obtain an understanding of how the market environment
affected the performance of each Fund. The statistical information that follows
may help you understand each Fund's performance compared to that of relevant
market benchmarks.
It is important to keep in mind that the opinions expressed by personnel of the
Advisor are just that: informed opinions. They should not be considered to be
promises or advice. The opinions, like the statistics, cover the period through
the date on the cover of this report. The material risks of investing in each
Fund are spelled out in its prospectus, statement of additional information, and
other Fund regulatory filings.
Page 1
SHAREHOLDER LETTER
FIRST TRUST EXCHANGE-TRADED FUND II
SEMI-ANNUAL LETTER FROM THE CHAIRMAN AND CEO
MARCH 31, 2020
Dear Shareholders,
First Trust is pleased to provide you with the semi-annual report for certain
series of the First Trust Exchange-Traded Fund II (the "Funds"), which contains
detailed information about the Funds for the six months ended March 31, 2020.
I am sorry to report that the coronavirus (COVID-19) pandemic is still
dominating our daily lives, the economy and securities markets. Many of us have
learned the hard way that it is no fun sheltering in place for weeks on end, and
by hard way I mean at the behest of state and local government officials. It is
also not fun being furloughed from a job or losing a job outright for reasons
beyond one's control. As President Donald J. Trump has repeatedly said, the cure
cannot be worse than the problem itself. For those who do not follow the news
closely, the governors of Georgia, South Carolina, Tennessee and Texas announced
on or about April 20, 2020, that they intend to open some "nonessential"
businesses by early May. If nothing else, these could prove to be valuable test
cases for the rest of the states trying to strike a balance between fighting
COVID-19 and curbing the economic fallout stemming from the virus. While we
certainly trumpet the call for health and safety first, we also realize that we
need to find a way to get Americans back to work.
Suffice it to say that this virus is proving to be plenty stubborn. While I tend
to be largely U.S.-centric, it does not escape me that this fight is global in
scope. We now have proof that the virus can flare up again after seemingly being
mitigated. Singapore, which had been credited with having a successful blueprint
for curbing the spread of the virus, reported that it experienced back-to-back
days of more than 1,000 new cases in the third week of April. As a result, it
has extended its partial lockdown strategy another four weeks. COVID-19 impacts
business dealings at every level, especially the C-suite. Refinitiv, a global
provider of financial market data, reported that global mergers and acquisitions
deal activity totaled $762.6 billion year-to-date through April 17, 2020, down
33% from the same period a year ago, according to Reuters. The number of deals
declined by 20%. A recent survey by EY of more than 2,900 executives worldwide
found that 56% of them, despite the current crisis, are still planning an
acquisition in the next 12 months. The takeaway here is that, despite having to
navigate unchartered waters, more than one out of two executives are looking to
grow their companies over the next 12 months. I'll take that ratio in this
climate. At First Trust Advisors L.P., we have always believed in the
traditional buy-and-hold philosophy of investing. Investors should strongly
consider shifting their focus away from the next two quarters, which are likely
to be dismal, to what potentially lies beyond - a full-on recovery, in our
opinion.
The Federal Reserve, Treasury Department and Congress are all working with the
Trump Administration to pull together trillions of dollars of aid and stimulus
to help prop up workers, companies and municipalities in this time of need.
Health Care companies have ramped up their efforts to develop and manufacture
much needed testing equipment, medical supplies and therapeutics. Hopefully, at
some point in the near-future, one or more of these companies will deliver us a
present in the form of a vaccine.
Both the equity and debt markets in the U.S. have responded favorably to the
enormous financial support from the Federal government. The government has
responded faster and more robustly to the current crisis than it did in the
2008-2009 financial crisis. While still down, stock and bond valuations have
rebounded significantly from their lows reached in late March. We remain
optimistic about the second half of 2020 and 2021. Stay the course.
Thank you for giving First Trust the opportunity to play a role in your
financial future. We value our relationship with you and will report on the
Funds again in six months.
Sincerely,
/s/ James A. Bowen
James A. Bowen
Chairman of the Board of Trustees
Chief Executive Officer of First Trust Advisors L.P.
|
Page 2
MARKET OVERVIEW
FIRST TRUST EXCHANGE-TRADED FUND II
SEMI-ANNUAL REPORT
MARCH 31, 2020
ROBERT F. CAREY, CFA
SENIOR VICE PRESIDENT AND CHIEF MARKET STRATEGIST
FIRST TRUST ADVISORS L.P.
Mr. Carey is responsible for the overall management of research and analysis of
the First Trust product line. Mr. Carey has over 27 years of experience as an
Equity and Fixed-Income Analyst and is a recipient of the Chartered Financial
Analyst ("CFA") designation. He is a graduate of the University of Illinois at
Champaign-Urbana with a B.S. in Physics. He is also a member of the Investment
Analysts Society of Chicago and the CFA Institute. Mr. Carey has appeared as a
guest on such programs as Bloomberg TV, CNBC, and WBBM Radio, and has been
quoted by several publications, including The Wall Street Journal, The Wall
Street Reporter, Bloomberg News Service and Registered Rep.
STATE OF THE GLOBAL ECONOMY
The onset of the coronavirus (COVID-19) pandemic has inflicted tremendous damage
on the global economy. It single-handedly brought an end to the bull market in
stocks in the first quarter of 2020 (see below), although that nearly happened
in the fourth quarter of 2018. At this time, we don't know how long it will take
for the virus to run its course or for a vaccine to become available for the
masses. History suggests that vaccines take roughly 18 months to win approval
and go to market, but some are hoping for closer to 12 months this time around.
Perhaps an existing drug will be proven effective against the virus.
The International Monetary Fund ("IMF") has characterized the quarantine and
social distancing efforts accompanying the COVID-19 pandemic as the "Great
Lockdown." No country has been spared. The IMF adjusted its global economic
growth projections following the end of the first quarter of 2020. It now sees
world real gross domestic product ("GDP") growth declining by 3.0% in 2020, down
over six percentage points from its 3.3% growth projection prior to the onset of
the virus. Provided the pandemic fades in the second half of 2020, the IMF sees
the growth rate rising by 5.8% in 2021. U.S. real GDP growth is projected to be
down 5.9% in 2020, but up 4.7% in 2021. Emerging Markets and Developing Nations
are expected to come in at 1.0% in 2020 and 8.5% in 2021.
In addition to the COVID-19 developments, investors should also be aware that,
despite the Phase One trade deal signed with China in January 2020, there is
still an ongoing trade conflict between the U.S. and China, and who knows if the
virus might eventually get folded into the battle since it reportedly first
surfaced in China in the fourth quarter of 2019. President Donald J. Trump has
driven home this point at more than one of his press briefings. The Trump
Administration's implementation of tariffs, particularly against China, has been
operational for 24 months and counting.
GLOBAL EQUITIES MARKETS
For the six-month period ended March 31, 2020, the MSCI World ex USA and MSCI
Emerging Markets Indices posted total returns of -17.23% (USD) and -14.55%
(USD), respectively, according to Bloomberg. Over that same period, the U.S.
dollar declined by 0.33% against a basket of major currencies, as measured by
the U.S. Dollar Index (DXY). The slight dip in the dollar likely had little
influence on the performance of the two foreign stock indices, in our opinion.
With respect to U.S. equities, the S&P 500(R), S&P MidCap 400(R) and S&P
SmallCap 600(R) Indices posted total returns of -12.31%, -24.73% and -27.10%,
respectively, over the past six months. Large-capitalization (cap) stocks
clearly outperformed their mid- and small-cap counterparts as investors sought
to reduce their risk exposure due to the escalation in the trade war between the
U.S. and China and the onset of COVID-19 in the first quarter of 2020, in our
opinion. Ten of the 11 sectors that comprise the S&P 500(R) Index were down on a
total return basis. The top performer was Information Technology, up 0.75%,
while the worst result by far came from Energy, down 47.74%.
The S&P 500(R) Index closed at 2,584.59 on March 31, 2020, 23.67% below its
all-time closing high of 3,386.15 on February 19, 2020, according to Bloomberg.
The nearly 11-year bull market was no more. The S&P 500(R) Index was now in bear
market territory. A bear market entails a price decline of 20% or more from the
most recent high. Data from Goldman Sachs and CNBC indicates that the average
bear market since WWII has generated an average loss of 30.4%, has lasted 13
months and taken 21.9 months on average to recover. A Bloomberg survey of 19
equity strategists found that their average 2020 year-end price target for the
S&P 500(R) Index was 3,039 as of March 26, 2020, according to its own release.
The highest estimate was 3,500 while the lowest estimate was 2,650. Keep in
mind, earnings and revenue projections may become harder to come by in the
months ahead if more and more companies choose to suspend guidance.
Investors liquidated an estimated net $78.44 billion from U.S. Equity mutual
funds and exchange-traded funds ("ETFs") for the 12-month period ended March 31,
2020, according to Morningstar. International Equity mutual funds and ETFs,
however, took in an estimated net $7.36 billion over the same period. Investors
continue to favor passive over active funds. Passive U.S. Equity mutual funds
and ETFs reported estimated net inflows totaling $180.37 billion in the period,
compared to estimated net outflows for active U.S. Equity mutual funds and ETFs
totaling $258.81 billion. Passive International Equity mutual funds and ETFs
reported estimated net inflows totaling $73.19 billion, compared to estimated
net outflows for active International Equity mutual funds and ETFs totaling
$65.83 billion.
Page 3
FUND PERFORMANCE OVERVIEW (UNAUDITED)
FIRST TRUST STOXX(R) EUROPEAN SELECT DIVIDEND INDEX FUND (FDD)
First Trust STOXX(R) European Select Dividend Index Fund (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 STOXX(R) Europe Select
Dividend 30 Index (the "STOXX Index"). The shares of the Fund are listed and
trade on the NYSE Arca, Inc. under the ticker symbol "FDD." The Fund will
normally invest at least 90% of its net assets (including investment borrowings)
in the common stocks and depositary receipts that comprise the STOXX Index.
The STOXX Index consists of 30 high dividend-yielding securities selected from
the STOXX(R) Europe 600 Index, including secondary lines of those companies
(where there are multiple lines of equity capital in a company), which covers 18
European countries: Austria, Belgium, Czech Republic, Denmark, Finland, France,
Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal,
Spain, Sweden, Switzerland and the United Kingdom. In addition, a company must
have a non-negative five-year dividend-per-share growth rate and a
dividend-to-earnings ratio of 60% or less. The STOXX Index is compiled and
maintained by STOXX Limited.
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (8/27/07) Ended Ended (8/27/07)
3/31/20 3/31/20 3/31/20 3/31/20 to 3/31/20 3/31/20 3/31/20 to 3/31/20
FUND PERFORMANCE
NAV -24.11% -21.19% -1.96% 1.13% -4.42% -9.41% 11.93% -43.43%
Market Price -23.81% -21.00% -1.96% 1.18% -4.41% -9.43% 12.43% -43.33%
INDEX PERFORMANCE
STOXX(R) Europe Select
Dividend 30 Index -22.47% -19.54% -1.33% 1.63% -3.87% -6.46% 17.53% -39.15%
STOXX(R) Europe 600 Index -17.30% -15.09% -1.10% 2.74% -0.03% -5.39% 31.05% -0.40%
MSCI Europe Index -17.64% -15.50% -1.31% 2.46% -0.28% -6.39% 27.53% -3.52%
-------------------------------------------------------------------------------------------------------------------------
|
(See Notes to Fund Performance Overview on page 32.)
The STOXX Index and the trademarks used in the index name are the intellectual
property of STOXX Limited, Zurich, Switzerland ("STOXX"), Deutsche Borse Group
and/or their licensors. The STOXX Index is used under license from STOXX. The
Fund is in no way sponsored, endorsed, sold or promoted by STOXX and/or its
licensors and neither STOXX nor its licensors shall have any liability with
respect thereto.
Page 4
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST STOXX(R) EUROPEAN SELECT DIVIDEND INDEX FUND (FDD) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Financials 64.51%
Energy 9.64
Utilities 8.43
Real Estate 4.85
Consumer Discretionary 3.59
Communication Services 3.15
Health Care 3.07
Industrials 2.76
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Aegon N.V. 6.06%
Royal Dutch Shell PLC, Class B 6.05
Standard Life Aberdeen PLC 5.64
Natixis S.A. 5.06
Aviva PLC 4.67
UBS Group AG 4.15
NN Group N.V. 3.80
Intesa Sanpaolo S.p.A. 3.63
TOTAL S.A. 3.59
Bayerische Motoren Werke AG
(Preference Shares) 3.59
------
Total 46.24%
======
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PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2009 - MARCH 31, 2020
First Trust STOXX(R) European STOXX(R) Europe Select STOXX(R) Europe MSCI Europe
Select Dividend Index Fund Dividend 30 Index 600 Index Index
----------------------------- ---------------------- --------------- -----------
9/30/09 $10,000 $10,000 $10,000 $10,000
3/31/10 9,752 9,816 10,155 10,138
9/30/10 9,905 9,993 10,284 10,263
3/31/11 10,964 11,080 11,455 11,418
9/30/11 9,241 9,401 9,067 9,051
3/31/12 9,940 10,056 10,591 10,556
9/30/12 9,955 10,083 10,672 10,618
3/31/13 9,946 10,089 11,768 11,670
9/30/13 11,278 11,475 13,363 13,191
3/31/14 12,617 12,857 14,786 14,530
9/30/14 12,257 12,510 14,158 13,959
3/31/15 12,047 12,334 14,067 13,812
9/30/15 11,288 11,524 13,015 12,656
3/31/16 11,594 11,901 13,019 12,646
9/30/16 11,726 12,032 13,302 12,971
3/31/17 12,311 12,683 14,212 13,880
9/30/17 13,946 14,369 16,271 15,863
3/31/18 14,295 14,745 16,317 15,892
9/30/18 14,049 14,524 16,224 15,816
3/31/19 13,847 14,340 15,676 15,300
9/30/19 14,380 14,882 16,095 15,696
3/31/20 10,913 11,538 13,311 12,927
|
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
BID/ASK MIDPOINT VS. NAV THROUGH MARCH 31, 2020
The following Frequency Distribution of Discounts and Premiums charts are
provided to show the frequency at which the bid/ask midpoint price for the Fund
was at a discount or premium to the daily NAV. The following tables are for
comparative purposes only and represent the period October 1, 2014 through March
31, 2020. Shareholders may pay more than NAV when they buy Fund shares and
receive less than NAV when they sell those shares because shares are bought and
sold at current market price. Data presented represents past performance and
cannot be used to predict future results.
NUMBER OF DAYS BID/ASK MIDPOINT NUMBER OF DAYS BID/ASK MIDPOINT
AT/ABOVE NAV BELOW NAV
---------------------------------------- ----------------------------------------
0.00%- 0.50%- 1.00%- 0.00%- 0.50%- 1.00%-
FOR THE PERIOD 0.49% 0.99% 1.99% >=2.00% 0.49% 0.99% 1.99% >=2.00%
10/1/14 - 9/30/15 145 32 2 0 63 10 0 0
10/1/15 - 9/30/16 158 27 2 0 54 12 0 0
10/1/16 - 9/30/17 181 30 0 0 38 2 0 0
10/1/17 - 9/30/18 147 4 0 0 96 4 0 0
10/1/18 - 9/30/19 86 3 1 0 160 0 1 0
10/1/19 - 3/31/20 69 5 0 0 44 5 2 1
|
Page 5
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST FTSE EPRA/NAREIT DEVELOPED MARKETS REAL ESTATE INDEX FUND (FFR)
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund (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 FTSE
EPRA/NAREIT Developed Index (the "FTSE Index"). The shares of the Fund are
listed and trade on the NYSE Arca, Inc. under the ticker symbol "FFR." The Fund
will normally invest at least 90% of its net assets (including investment
borrowings) in the common stocks and depositary receipts that comprise the FTSE
Index.
The FTSE Index is compiled and maintained by FTSE International Limited. The
FTSE Index is modified market cap weighted based on free float market
capitalization and includes the securities of listed real estate companies or
real estate investment trusts ("REITs") that are publicly traded on an official
stock exchange located in North America, Europe or Asia and provide an audited
annual report in English.
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (8/27/07) Ended Ended (8/27/07)
3/31/20 3/31/20 3/31/20 3/31/20 to 3/31/20 3/31/20 3/31/20 to 3/31/20
FUND PERFORMANCE
NAV -27.26% -23.86% -1.87% 4.45% 0.65% -9.01% 54.53% 8.51%
Market Price -28.23% -24.80% -2.02% 4.29% 0.56% -9.68% 52.21% 7.33%
INDEX PERFORMANCE
FTSE EPRA/NAREIT
Developed Index -26.93% -23.22% -1.15% 5.26% 1.48% -5.61% 66.91% 20.37%
S&P Global REIT Index -28.45% -23.39% -2.14% 5.12% 1.12% -10.24% 64.71% 15.05%
MSCI World REIT Index -23.36% -16.81% 0.77% 6.57% 1.74% 3.89% 88.87% 24.24%
-------------------------------------------------------------------------------------------------------------------------
|
(See Notes to Fund Performance Overview on page 32.)
The Fund has been developed solely by First Trust. The Fund is not in any way
connected to or sponsored, endorsed, sold or promoted by the London Stock
Exchange Group plc and its group undertakings, including FTSE International
Limited (collectively, the "LSE Group"), European Public Real Estate Association
("EPRA"), or the National Association of Real Estate Investments Trusts
("Nareit") (and together the "Licensor Parties"). FTSE Russell is a trading name
of certain of the LSE Group companies. All rights in the FTSE Index vest in the
Licensor Parties. "FTSE(R)" and "FTSE Russell(R)" are trade marks of the
relevant LSE Group company and are used by any other LSE Group company under
license. "Nareit(R)" is a trade mark of Nareit, "EPRA(R)" is a trade mark of
EPRA and all are used by the LSE Group under license. The FTSE Index is
calculated by or on behalf of FTSE International Limited or its affiliate, agent
or partner. The Licensor Parties do not accept any liability whatsoever to any
person arising out of (a) the use of, reliance on or any error in the FTSE Index
or (b) investment in or operation of the Fund. The Licensor Parties makes no
claim, prediction, warranty or representation either as to the results to be
obtained from the Fund or the suitability of the FTSE Index for the purpose to
which it is being put by First Trust.
Page 6
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST FTSE EPRA/NAREIT DEVELOPED MARKETS REAL ESTATE INDEX FUND (FFR)
(CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Real Estate 99.83%
Health Care 0.11
Consumer Discretionary 0.06
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Prologis, Inc. 4.90%
Digital Realty Trust, Inc. 3.01
Public Storage 2.44
Vonovia SE 2.25
Equity Residential 1.88
AvalonBay Communities, Inc. 1.70
Welltower, Inc. 1.56
Sun Hung Kai Properties Ltd. 1.55
Link REIT 1.45
Mitsubishi Estate Co., Ltd. 1.41
------
Total 22.15%
======
|
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2009 - MARCH 31, 2020
First Trust FTSE EPRA/NAREIT Developed FTSE EPRA/NAREIT S&P Global MSCI World
Markets Real Estate Index Fund Developed Index REIT Index REIT Index
-------------------------------------- ---------------- ---------- ----------
9/30/09 $10,000 $10,000 $10,000 $10,000
3/31/10 10,803 10,854 10,970 10,809
9/30/10 11,748 11,841 11,948 11,705
3/31/11 12,791 12,952 13,438 13,321
9/30/11 10,788 11,026 11,748 11,725
3/31/12 13,103 13,365 14,213 14,134
9/30/12 14,048 14,399 15,131 15,196
3/31/13 15,772 16,205 16,913 16,632
9/30/13 15,456 15,976 16,143 15,830
3/31/14 15,934 16,537 17,105 16,640
9/30/14 16,363 17,048 17,711 17,427
3/31/15 18,348 19,193 20,130 19,652
9/30/15 16,849 17,658 18,439 18,298
3/31/16 18,443 19,436 20,681 20,675
9/30/16 19,367 20,456 21,558 21,502
3/31/17 18,664 19,797 20,752 20,732
9/30/17 19,496 20,767 21,339 21,451
3/31/18 19,321 20,617 20,701 21,046
9/30/18 20,274 21,724 21,947 22,132
3/31/19 21,926 23,590 23,584 24,540
9/30/19 22,948 24,788 25,256 26,638
3/31/20 16,692 18,113 18,071 20,415
|
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
BID/ASK MIDPOINT VS. NAV THROUGH MARCH 31, 2020
The following Frequency Distribution of Discounts and Premiums charts are
provided to show the frequency at which the bid/ask midpoint price for the Fund
was at a discount or premium to the daily NAV. The following tables are for
comparative purposes only and represent the period October 1, 2014 through March
31, 2020. Shareholders may pay more than NAV when they buy Fund shares and
receive less than NAV when they sell those shares because shares are bought and
sold at current market price. Data presented represents past performance and
cannot be used to predict future results.
NUMBER OF DAYS BID/ASK MIDPOINT NUMBER OF DAYS BID/ASK MIDPOINT
AT/ABOVE NAV BELOW NAV
---------------------------------------- ----------------------------------------
0.00%- 0.50%- 1.00%- 0.00%- 0.50%- 1.00%-
FOR THE PERIOD 0.49% 0.99% 1.99% >=2.00% 0.49% 0.99% 1.99% >=2.00%
10/1/14 - 9/30/15 67 14 0 0 127 44 0 0
10/1/15 - 9/30/16 35 0 0 0 184 33 1 0
10/1/16 - 9/30/17 144 4 0 0 102 1 0 0
10/1/17 - 9/30/18 34 0 0 1 209 7 0 0
10/1/18 - 9/30/19 101 1 0 0 148 0 1 0
10/1/19 - 3/31/20 48 2 0 0 60 9 7 0
|
Page 7
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST DOW JONES GLOBAL SELECT DIVIDEND INDEX FUND (FGD)
First Trust Dow Jones Global Select Dividend Index Fund (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 Dow Jones Global Select
Dividend Index (the "Select Dividend Index"). The shares of the Fund are listed
and trade on the NYSE Arca, Inc. under the ticker symbol "FGD." The Fund will
normally invest at least 90% of its net assets (including investment borrowings)
in the common stocks and depositary receipts that comprise the Select Dividend
Index.
The Select Dividend Index is an indicated annual dividend yield weighted index
of 100 stocks selected from the developed-market portion of the Dow Jones World
Index(SM). Indicated annual dividend yield is a stock's unadjusted indicated
annual dividend (not including any special dividends) divided by its unadjusted
price.
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (11/21/07) Ended Ended (11/21/07)
3/31/20 3/31/20 3/31/20 3/31/20 to 3/31/20 3/31/20 3/31/20 to 3/31/20
FUND PERFORMANCE
NAV -27.63% -26.05% -3.93% 1.95% -0.08% -18.15% 21.30% -1.02%
Market Price -27.69% -26.17% -3.85% 1.93% -0.09% -17.84% 21.10% -1.13%
INDEX PERFORMANCE
Dow Jones Global Select
Dividend Index -27.44% -25.85% -3.80% 2.05% 0.06% -17.62% 22.47% 0.80%
Dow Jones World Developed
Markets Index(SM) -14.80% -11.21% 3.18% 6.76% 3.94% 16.95% 92.31% 61.21%
MSCI World Index -14.30% -10.39% 3.25% 6.57% 3.61% 17.31% 88.98% 55.04%
-------------------------------------------------------------------------------------------------------------------------
|
(See Notes to Fund Performance Overview on page 32.)
The Select Dividend Index is a product of S&P Dow Jones Indices LLC or its
affiliates ("SPDJI"), and has been licensed for use by First Trust. Standard &
Poor's(R) and S&P(R) are registered trademarks of Standard & Poor's Financial
Services LLC ("S&P"); Dow Jones(R) is a registered trademark of Dow Jones
Trademark Holdings LLC ("Dow Jones"); and these trademarks have been licensed
for use by SPDJI and sublicensed for certain purposes by First Trust. The Fund
is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their
respective affiliates, and none of such parties make any representation
regarding the advisability of investing in such product nor do they have any
liability for any errors, omissions, or interruptions of the Select Dividend
Index.
Page 8
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST DOW JONES GLOBAL SELECT DIVIDEND INDEX FUND (FGD) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Financials 43.53%
Communication Services 16.96
Consumer Discretionary 11.90
Utilities 9.26
Information Technology 4.92
Energy 4.62
Materials 3.17
Industrials 3.05
Consumer Staples 2.59
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
BE Semiconductor Industries N.V. 2.23%
Standard Life Aberdeen PLC 2.06
Azimut Holding S.p.A. 1.72
JB Hi-Fi Ltd. 1.66
Fortescue Metals Group Ltd. 1.66
EDP-Energias de Portugal S.A. 1.59
Spark New Zealand Ltd. 1.58
UnipolSai Assicurazioni S.p.A. 1.58
AT&T, Inc. 1.57
British American Tobacco PLC 1.53
------
Total 17.18%
======
|
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2009 - MARCH 31, 2020
First Trust Dow Jones Global Dow Jones Global Dow Jones World Developed MSCI World
Select Dividend Index Fund Select Dividend Index Markets Index(SM) Index
---------------------------- ----------------------- ------------------------- ----------
9/30/09 $10,000 $10,000 $10,000 $10,000
3/31/10 10,386 10,415 10,794 10,744
9/30/10 11,033 11,062 10,782 10,676
3/31/11 12,286 12,335 12,378 12,190
9/30/11 10,860 10,970 10,332 10,213
3/31/12 12,284 12,298 12,417 12,259
9/30/12 12,769 12,807 12,570 12,418
3/31/13 13,430 13,464 13,978 13,712
9/30/13 14,606 14,667 15,265 14,928
3/31/14 16,059 16,147 16,735 16,325
9/30/14 15,856 15,937 17,094 16,749
3/31/15 15,391 15,484 17,747 17,310
9/30/15 13,555 13,572 16,301 15,898
3/31/16 14,417 14,530 17,168 16,714
9/30/16 15,409 15,474 18,250 17,703
3/31/17 16,266 16,418 19,792 19,181
9/30/17 17,588 17,751 21,652 20,919
3/31/18 17,750 17,873 22,639 21,775
9/30/18 17,986 18,164 24,077 23,271
3/31/19 17,035 17,203 23,379 22,664
9/30/19 17,408 17,578 24,363 23,697
3/31/20 12,598 12,755 20,757 20,308
|
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
BID/ASK MIDPOINT VS. NAV THROUGH MARCH 31, 2020
The following Frequency Distribution of Discounts and Premiums charts are
provided to show the frequency at which the bid/ask midpoint price for the Fund
was at a discount or premium to the daily NAV. The following tables are for
comparative purposes only and represent the period October 1, 2014 through March
31, 2020. Shareholders may pay more than NAV when they buy Fund shares and
receive less than NAV when they sell those shares because shares are bought and
sold at current market price. Data presented represents past performance and
cannot be used to predict future results.
NUMBER OF DAYS BID/ASK MIDPOINT NUMBER OF DAYS BID/ASK MIDPOINT
AT/ABOVE NAV BELOW NAV
---------------------------------------- ----------------------------------------
0.00%- 0.50%- 1.00%- 0.00%- 0.50%- 1.00%-
FOR THE PERIOD 0.49% 0.99% 1.99% >=2.00% 0.49% 0.99% 1.99% >=2.00%
10/1/14 - 9/30/15 105 3 0 0 136 8 0 0
10/1/15 - 9/30/16 65 2 0 0 176 10 0 0
10/1/16 - 9/30/17 184 3 0 0 62 2 0 0
10/1/17 - 9/30/18 171 3 0 0 74 2 1 0
10/1/18 - 9/30/19 184 4 1 0 60 2 0 0
10/1/19 - 3/31/20 92 5 0 0 21 7 1 0
|
Page 9
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN)
First Trust Global Wind Energy 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 ISE Clean Edge Global Wind Energy(TM)
Index (the "Index"). The shares of the Fund are listed and trade on the NYSE
Arca, Inc. under the ticker symbol "FAN." The Fund will normally invest at least
90% of its net assets (including investment borrowings) in the common stocks and
depositary receipts that comprise the Index.
The Index is developed, maintained and sponsored by Nasdaq, Inc. The Index
provides a benchmark for investors interested in tracking public companies
throughout the world that are active in the wind energy industry.
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (6/16/08) Ended Ended (6/16/08)
3/31/20 3/31/20 3/31/20 3/31/20 to 3/31/20 3/31/20 3/31/20 to 3/31/20
FUND PERFORMANCE
NAV -6.42% -4.72% 5.43% 1.31% -5.38% 30.29% 13.86% -47.92%
Market Price -6.86% -4.73% 5.50% 1.35% -5.39% 30.70% 14.32% -47.98%
INDEX PERFORMANCE
ISE Clean Edge Global Wind
Energy(TM) Index -5.80% -3.54% 6.32% 2.14% -4.60% 35.85% 23.57% -42.59%
Russell 3000(R) Index -13.70% -9.13% 5.77% 10.15% 7.59% 32.36% 162.92% 136.94%
MSCI World Index -14.30% -10.39% 3.25% 6.57% 4.11% 17.31% 88.98% 60.72%
-------------------------------------------------------------------------------------------------------------------------
|
(See Notes to Fund Performance Overview on page 32.)
Nasdaq(R), Clean Edge(R), and the Index are registered trademarks and service
marks of Nasdaq, Inc. and Clean Edge, Inc., respectively (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.
Page 10
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Utilities 56.57%
Industrials 41.87
Materials 1.50
Energy 0.06
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Vestas Wind Systems A/S 10.21%
Siemens Gamesa Renewable Energy S.A. 9.99
Northland Power, Inc. 9.70
Orsted A/S 9.45
Boralex, Inc., Class A 5.13
China Longyuan Power Group Corp.,
Ltd., Class H 4.58
SSE PLC 2.65
E. ON SE 2.54
NextEra Energy, Inc. 2.54
General Electric Co. 2.22
------
Total 59.01%
======
|
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2009 - MARCH 31, 2020
First Trust Global ISE Clean Edge Global Russell 3000(R) MSCI World
Wind Energy ETF Wind Energy(TM) Index Index Index
------------------ --------------------- --------------- ----------
9/30/09 $10,000 $10,000 $10,000 $10,000
3/31/10 8,375 8,429 11,219 10,744
9/30/10 6,490 6,579 11,096 10,675
3/31/11 7,437 7,551 13,172 12,189
9/30/11 5,161 5,292 11,157 10,212
3/31/12 5,009 5,128 14,119 12,257
9/30/12 4,328 4,458 14,527 12,416
3/31/13 4,967 5,116 16,176 13,710
9/30/13 6,779 7,024 17,664 14,926
3/31/14 7,896 8,213 19,833 16,323
9/30/14 7,605 7,926 20,801 16,746
3/31/15 7,319 7,666 22,284 17,307
9/30/15 7,045 7,390 20,697 15,895
3/31/16 7,981 8,447 22,208 16,710
9/30/16 9,189 9,740 23,794 17,699
3/31/17 9,126 9,759 26,219 19,177
9/30/17 9,760 10,445 28,243 20,914
3/31/18 9,938 10,618 29,839 21,769
9/30/18 9,475 10,192 33,208 23,265
3/31/19 10,011 10,795 32,454 22,658
9/30/19 10,193 11,053 34,177 23,691
3/31/20 9,539 10,412 29,495 20,303
|
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
BID/ASK MIDPOINT VS. NAV THROUGH MARCH 31, 2020
The following Frequency Distribution of Discounts and Premiums charts are
provided to show the frequency at which the bid/ask midpoint price for the Fund
was at a discount or premium to the daily NAV. The following tables are for
comparative purposes only and represent the period October 1, 2014 through March
31, 2020. Shareholders may pay more than NAV when they buy Fund shares and
receive less than NAV when they sell those shares because shares are bought and
sold at current market price. Data presented represents past performance and
cannot be used to predict future results.
NUMBER OF DAYS BID/ASK MIDPOINT NUMBER OF DAYS BID/ASK MIDPOINT
AT/ABOVE NAV BELOW NAV
---------------------------------------- ----------------------------------------
0.00%- 0.50%- 1.00%- 0.00%- 0.50%- 1.00%-
FOR THE PERIOD 0.49% 0.99% 1.99% >=2.00% 0.49% 0.99% 1.99% >=2.00%
10/1/14 - 9/30/15 58 8 0 0 130 53 2 1
10/1/15 - 9/30/16 102 20 5 1 96 27 2 0
10/1/16 - 9/30/17 138 31 0 0 79 3 0 0
10/1/17 - 9/30/18 85 13 0 0 140 12 1 0
10/1/18 - 9/30/19 77 5 0 0 152 17 0 0
10/1/19 - 3/31/20 93 5 2 0 23 2 1 0
|
Page 11
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST GLOBAL ENGINEERING AND CONSTRUCTION ETF (FLM)
First Trust Global Engineering and Construction 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 ISE Global Engineering
and Construction(TM) Index (the "Index"). The shares of the Fund are listed and
trade on the NYSE Arca, Inc. under the ticker symbol "FLM." The Fund will
normally invest in at least 90% of its net assets (including investment
borrowings) in the common stocks and depositary receipts that comprise the
Index.
The Index is developed, maintained and sponsored by Nasdaq, Inc. The Index
provides a benchmark for investors interested in tracking public companies
throughout the world that are active in the engineering and construction
industries.
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (10/13/08) Ended Ended (10/13/08)
3/31/20 3/31/20 3/31/20 3/31/20 to 3/31/20 3/31/20 3/31/20 to 3/31/20
FUND PERFORMANCE
NAV -22.81% -26.34% -3.44% 0.69% 3.25% -16.07% 7.09% 44.26%
Market Price -23.10% -26.70% -3.47% 0.59% 3.21% -16.19% 6.06% 43.58%
INDEX PERFORMANCE
ISE Global Engineering and
Construction(TM) Index -21.52% -24.84% -2.39% 1.84% 4.80% -11.37% 20.05% 71.23%
Russell 3000(R) Index -13.70% -9.13% 5.77% 10.15% 10.76% 32.36% 162.92% 222.58%
MSCI World Industrials Index -20.70% -17.49% 1.81% 5.97% 7.60% 9.36% 78.58% 131.47%
-------------------------------------------------------------------------------------------------------------------------
|
(See Notes to Fund Performance Overview on page 32.)
Nasdaq(R) and the 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.
Page 12
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST GLOBAL ENGINEERING AND CONSTRUCTION ETF (FLM) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Industrials 96.27%
Information Technology 2.40
Utilities 0.86
Energy 0.47
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Jacobs Engineering Group, Inc. 3.60%
Kingspan Group PLC 3.42
Vinci S.A. 3.21
Taisei Corp. 3.06
Quanta Services, Inc. 2.90
Bouygues S.A. 2.85
Shimizu Corp. 2.83
Obayashi Corp. 2.80
COMSYS Holdings Corp. 2.72
Kajima Corp. 2.65
------
Total 30.04%
======
|
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2009 - MARCH 31, 2020
First Trust Global Engineering ISE Global Engineering and Russell 3000(R) MSCI World
and Construction ETF Construction(TM) Index Index Industrials Index
------------------------------ -------------------------- --------------- -----------------
9/30/09 $10,000 $10,000 $10,000 $10,000
3/31/10 10,065 10,113 11,219 11,258
9/30/10 10,103 10,188 11,096 11,449
3/31/11 12,511 12,679 13,173 13,645
9/30/11 8,759 9,018 11,157 10,593
3/31/12 10,688 10,944 14,119 13,090
9/30/12 10,330 10,652 14,527 12,809
3/31/13 11,393 11,767 16,176 14,716
9/30/13 12,917 13,458 17,665 16,419
3/31/14 14,150 14,802 19,833 17,901
9/30/14 13,182 13,851 20,802 17,760
3/31/15 12,843 13,698 22,286 18,385
9/30/15 12,235 13,087 20,699 16,523
3/31/16 12,984 13,992 22,210 18,246
9/30/16 13,753 14,848 23,797 19,485
3/31/17 14,758 16,044 26,223 21,268
9/30/17 16,283 17,775 28,247 23,703
3/31/18 16,399 17,866 29,843 24,488
9/30/18 16,556 18,180 33,212 25,450
3/31/19 14,636 16,151 32,458 24,368
9/30/19 13,966 15,468 34,182 25,352
3/31/20 10,779 12,141 29,501 20,108
|
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
BID/ASK MIDPOINT VS. NAV THROUGH MARCH 31, 2020
The following Frequency Distribution of Discounts and Premiums charts are
provided to show the frequency at which the bid/ask midpoint price for the Fund
was at a discount or premium to the daily NAV. The following tables are for
comparative purposes only and represent the period October 1, 2014 through March
31, 2020. Shareholders may pay more than NAV when they buy Fund shares and
receive less than NAV when they sell those shares because shares are bought and
sold at current market price. Data presented represents past performance and
cannot be used to predict future results.
NUMBER OF DAYS BID/ASK MIDPOINT NUMBER OF DAYS BID/ASK MIDPOINT
AT/ABOVE NAV BELOW NAV
---------------------------------------- ----------------------------------------
0.00%- 0.50%- 1.00%- 0.00%- 0.50%- 1.00%-
FOR THE PERIOD 0.49% 0.99% 1.99% >=2.00% 0.49% 0.99% 1.99% >=2.00%
10/1/14 - 9/30/15 62 2 1 0 170 17 0 0
10/1/15 - 9/30/16 64 3 1 0 159 24 2 0
10/1/16 - 9/30/17 82 0 0 0 163 6 0 0
10/1/17 - 9/30/18 85 9 0 0 148 9 0 0
10/1/18 - 9/30/19 99 6 0 0 132 13 1 0
10/1/19 - 3/31/20 59 4 1 0 53 8 1 0
|
Page 13
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) SMART GRID INFRASTRUCTURE INDEX FUND (GRID)
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund (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 NASDAQ
OMX(R) Clean Edge(R) Smart Grid Infrastructure Index(SM) (the "Index"). The
shares of the Fund are listed and trade on The Nasdaq Stock Market LLC under the
ticker symbol "GRID." The Fund will normally invest at least 90% of its net
assets (including investment borrowings) in the common stocks and depositary
receipts that comprise the Index.
The Index is designed to act as a transparent and liquid benchmark for the grid
and electric energy infrastructure sector. The Index includes companies that are
primarily engaged and involved in electric grid, electric meters and devices,
networks, energy storage and management, and enabling software used by the smart
grid infrastructure sector. Clean Edge, Inc. and Nasdaq, Inc. serve as index
providers to the Index.
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (11/16/09) Ended Ended (11/16/09)
3/31/20 3/31/20 3/31/20 3/31/20 to 3/31/20 3/31/20 3/31/20 to 3/31/20
FUND PERFORMANCE
NAV -13.12% -0.55% 4.93% 4.55% 4.64% 27.17% 56.00% 60.01%
Market Price -13.01% -0.48% 4.94% 4.54% 4.64% 27.24% 55.85% 60.01%
INDEX PERFORMANCE
NASDAQ OMX(R) Clean Edge(R)
Smart Grid Infrastructure
Index(SM) -12.50% 0.91% 5.79% 5.41% 5.51% 32.47% 69.41% 74.44%
Russell 3000(R) Index -13.70% -9.13% 5.77% 10.15% 10.52% 32.36% 162.92% 182.15%
S&P Composite 1500(R)
Industrials Index -23.28% -19.52% 2.90% 8.76% 9.63% 15.34% 131.55% 159.45%
MSCI World Industrials Index -20.70% -17.49% 1.81% 5.97% 6.55% 9.36% 78.58% 93.11%
-------------------------------------------------------------------------------------------------------------------------
|
(See Notes to Fund Performance Overview on page 32.)
NASDAQ(R), NASDAQ OMX(R), Clean Edge(R) and the Index are registered trademarks
and service marks of Nasdaq, Inc. and Clean Edge, Inc. respectively (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.
Page 14
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) SMART GRID INFRASTRUCTURE INDEX FUND (GRID)
(CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Information Technology 38.61%
Industrials 31.73
Utilities 20.94
Consumer Discretionary 8.72
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Terna Rete Elettrica Nazionale S.p.A. 9.56%
Red Electrica Corp., S.A. 8.97
Schneider Electric SE 8.55
Enphase Energy, Inc. 7.22
Prysmian S.p.A. 6.80
Aptiv PLC 5.13
SolarEdge Technologies, Inc. 4.90
Quanta Services, Inc. 3.72
Advanced Energy Industries, Inc. 3.69
Badger Meter, Inc. 3.57
------
Total 62.11%
======
|
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
NOVEMBER 16, 2009 - MARCH 31, 2020
First Trust NASDAQ(R) NASDAQ OMX(R) Russell MSCI World
Clean Edge(R) Smart Grid Clean Edge(R) Smart Grid 3000(R) S&P Composite 1500(R) Industrials
Infrastructure Index Fund Infrastructure Index(SM) Index Industrials Index Index
------------------------- ------------------------ ------- ------------------- -----------
11/16/09 $10,000 $10,000 $10,000 $10,000 $10,000
3/31/10 10,257 10,297 10,731 11,205 10,814
9/30/10 10,154 10,236 10,614 11,249 10,997
3/31/11 11,775 11,912 12,600 13,832 13,106
9/30/11 8,161 8,341 10,672 10,743 10,174
3/31/12 9,553 9,741 13,505 14,081 12,572
9/30/12 9,860 10,103 13,895 14,004 12,302
3/31/13 10,996 11,314 15,472 16,373 14,134
9/30/13 11,678 12,082 16,896 18,307 15,769
3/31/14 13,450 13,973 18,971 20,766 17,193
9/30/14 12,401 12,931 19,897 21,102 17,057
3/31/15 12,583 13,168 21,316 22,495 17,657
9/30/15 11,164 11,698 19,798 20,347 15,868
3/31/16 12,302 12,977 21,243 22,980 17,523
9/30/16 14,035 14,828 22,760 24,368 18,713
3/31/17 15,064 15,986 25,079 27,424 20,425
9/30/17 17,786 18,927 27,015 29,969 22,764
3/31/18 18,037 19,213 28,541 31,357 23,517
9/30/18 17,492 18,727 31,763 33,558 24,441
3/31/19 16,094 17,287 31,042 32,236 23,402
9/30/19 18,423 19,937 32,690 33,819 24,347
3/31/20 16,006 17,445 28,211 25,946 19,307
|
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
BID/ASK MIDPOINT VS. NAV THROUGH MARCH 31, 2020
The following Frequency Distribution of Discounts and Premiums charts are
provided to show the frequency at which the bid/ask midpoint price for the Fund
was at a discount or premium to the daily NAV. The following tables are for
comparative purposes only and represent the period October 1, 2014 through March
31, 2020. Shareholders may pay more than NAV when they buy Fund shares and
receive less than NAV when they sell those shares because shares are bought and
sold at current market price. Data presented represents past performance and
cannot be used to predict future results.
NUMBER OF DAYS BID/ASK MIDPOINT NUMBER OF DAYS BID/ASK MIDPOINT
AT/ABOVE NAV BELOW NAV
---------------------------------------- ----------------------------------------
0.00%- 0.50%- 1.00%- 0.00%- 0.50%- 1.00%-
FOR THE PERIOD 0.49% 0.99% 1.99% >=2.00% 0.49% 0.99% 1.99% >=2.00%
10/1/14 - 9/30/15 72 28 13 2 99 32 4 2
10/1/15 - 9/30/16 68 48 2 0 98 37 0 0
10/1/16 - 9/30/17 150 29 4 5 59 4 0 0
10/1/17 - 9/30/18 167 20 0 1 44 19 0 0
10/1/18 - 9/30/19 55 3 0 0 191 2 0 0
10/1/19 - 3/31/20 90 3 1 0 27 1 3 1
|
Page 15
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST INDXX GLOBAL NATURAL RESOURCES INCOME ETF (FTRI)
First Trust Indxx Global Natural Resources 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 Indxx Global Natural
Resources Income Index (the "Index"). The shares of the Fund are listed and
traded on The Nasdaq Stock Market LLC under the ticker symbol "FTRI." The Fund
will normally invest at least 90% of its net assets (including investment
borrowings) in the common stocks and depositary receipts that comprise the
Index.
The Index is owned and is developed, maintained and sponsored by Indxx, LLC. The
Index is a free float adjusted market capitalization weighted index designed to
measure the market performance of the 50 highest dividend yielding companies
involved in the upstream (i.e., generally exploration and production) segment of
the natural resources sector.
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (3/11/10) Ended Ended (3/11/10)
3/31/20 3/31/20 3/31/20 3/31/20 to 3/31/20 3/31/20 3/31/20 to 3/31/20
FUND PERFORMANCE
NAV -25.19% -27.53% -9.25% -9.46% -9.15% -38.45% -63.00% -61.90%
Market Price -24.07% -27.11% -9.13% -9.40% -9.05% -38.05% -62.74% -61.48%
INDEX PERFORMANCE
Indxx Global Natural Resources
Income Index* -24.59% -26.52% N/A N/A N/A N/A N/A N/A
MSCI All Country World
Materials Index -20.37% -21.27% -0.53% -0.70% -0.41% -2.64% -6.79% -4.08%
MSCI All Country World Index -14.33% -11.26% 2.85% 5.88% 6.02% 15.08% 77.03% 80.06%
-------------------------------------------------------------------------------------------------------------------------
|
(See Notes to Fund Performance Overview on page 32.)
* Effective on the close of business December 18, 2015, the Fund's underlying
index changed from the ISE Global Copper(TM) Index to the Indxx Global Natural
Resources Income Index. Therefore, the Fund's performance and total returns
shown for the period prior to December 18, 2015, are not necessarily indicative
of the performance the Fund, based on its current index, would have generated.
Since the Fund's new underlying index had an inception date of June 1, 2015, it
was not in existence for all the periods disclosed.
Indxx and the Index are trademarks of Indxx, LLC ("Indxx") and have been
licensed for use for certain purposes by First Trust. The Fund is not sponsored,
endorsed, sold or promoted by Indxx, and Indxx makes no representation regarding
the advisability of trading in such product. The Index is determined, composed
and calculated by Indxx without regard to First Trust or the Fund.
Page 16
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST INDXX GLOBAL NATURAL RESOURCES INCOME ETF (FTRI) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Materials 45.69%
Energy 20.80
Utilities 14.95
Consumer Staples 13.32
Industrials 5.24
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Rio Tinto PLC, ADR 10.99%
Archer-Daniels-Midland Co. 9.00
CNOOC Ltd., ADR 7.57
MMC Norilsk Nickel PJSC 6.64
UPM-Kymmene OYJ 6.55
BHP Group PLC, ADR 4.93
Occidental Petroleum Corp. 4.59
International Paper Co. 4.52
Tatneft PJSC 4.43
Marubeni Corp. 4.10
------
Total 63.32%
======
|
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
MARCH 11, 2010 - MARCH 31, 2020
First Trust Indxx Global MSCI All Country MSCI All Country
Natural Resources Income ETF World Materials Index World Index
---------------------------- --------------------- ----------------
3/11/10 $10,000 $10,000 $10,000
3/31/10 10,297 10,291 10,172
9/30/10 11,208 10,440 10,220
3/31/11 14,567 12,429 11,604
9/30/11 8,910 9,096 9,606
3/31/12 10,984 10,529 11,519
9/30/12 10,141 10,066 11,621
3/31/13 9,256 10,081 12,731
9/30/13 8,085 10,105 13,681
3/31/14 8,027 10,600 14,841
9/30/14 7,893 10,309 15,230
3/31/15 6,189 9,852 15,646
9/30/15 4,144 7,880 14,216
3/31/16 3,874 8,628 14,967
9/30/16 4,152 9,775 15,916
3/31/17 4,436 10,849 17,218
9/30/17 4,794 12,098 18,885
3/31/18 5,108 12,564 19,761
9/30/18 5,327 12,657 20,731
3/31/19 5,256 12,184 20,289
9/30/19 5,093 12,046 21,017
3/31/20 3,810 9,592 18,006
|
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
BID/ASK MIDPOINT VS. NAV THROUGH MARCH 31, 2020
The following Frequency Distribution of Discounts and Premiums charts are
provided to show the frequency at which the bid/ask midpoint price for the Fund
was at a discount or premium to the daily NAV. The following tables are for
comparative purposes only and represent the period October 1, 2014 through March
31, 2020. Shareholders may pay more than NAV when they buy Fund shares and
receive less than NAV when they sell those shares because shares are bought and
sold at current market price. Data presented represents past performance and
cannot be used to predict future results.
NUMBER OF DAYS BID/ASK MIDPOINT NUMBER OF DAYS BID/ASK MIDPOINT
AT/ABOVE NAV BELOW NAV
---------------------------------------- ----------------------------------------
0.00%- 0.50%- 1.00%- 0.00%- 0.50%- 1.00%-
FOR THE PERIOD 0.49% 0.99% 1.99% >=2.00% 0.49% 0.99% 1.99% >=2.00%
10/1/14 - 9/30/15 104 14 2 0 119 13 0 0
10/1/15 - 9/30/16 74 21 2 1 114 31 10 0
10/1/16 - 9/30/17 115 7 0 0 129 0 0 0
10/1/17 - 9/30/18 51 19 0 0 93 85 3 0
10/1/18 - 9/30/19 128 27 3 0 52 40 1 0
10/1/19 - 3/31/20 15 40 7 2 26 35 1 0
|
Page 17
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST INDXX GLOBAL AGRICULTURE ETF (FTAG)
First Trust Indxx Global Agriculture 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 Indxx Global Agriculture Index (the
"Index"). The shares of the Fund are listed and traded on The Nasdaq Stock
Market LLC under the ticker symbol "FTAG." The Fund will normally invest at
least 90% of its net assets (including investment borrowings) in the common
stocks and depositary receipts that comprise the Index.
The Index is owned and is developed, maintained and sponsored by Indxx, LLC. The
Index is a market capitalization weighted index designed to measure the
performance of companies that are directly or indirectly engaged in improving
agricultural yields. The Index is composed of farmland companies and firms
involved in chemicals and fertilizers, seeds, irrigation equipment, and farm
machinery.
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (3/11/10) Ended Ended (3/11/10)
3/31/20 3/31/20 3/31/20 3/31/20 to 3/31/20 3/31/20 3/31/20 to 3/31/20
FUND PERFORMANCE
NAV -28.62% -28.34% -17.42% -19.06% -18.70% -61.60% -87.94% -87.53%
Market Price -28.41% -28.03% -17.47% -19.12% -18.69% -61.72% -88.02% -87.51%
INDEX PERFORMANCE
Indxx Global Agriculture Index* -28.40% -27.70% N/A N/A N/A N/A N/A N/A
MSCI All Country World Index -14.33% -11.26% 2.85% 5.88% 6.02% 15.08% 77.03% 80.06%
MSCI All Country World
Materials Index -20.37% -21.27% -0.53% -0.70% -0.41% -2.64% -6.79% -4.08%
-------------------------------------------------------------------------------------------------------------------------
|
(See Notes to Fund Performance Overview on page 32.)
* Effective on the close of business December 18, 2015, the Fund's underlying
index changed from the ISE Global Platinum(TM) Index to the Indxx Global
Agriculture Index. Therefore, the Fund's performance and total returns shown for
the period prior to December 18, 2015, are not necessarily indicative of the
performance the Fund, based on its current Index, would have generated. Since
the Fund's new underlying index had an inception date of June 1, 2015, it was
not in existence for all the periods disclosed.
Indxx and the Index are trademarks of Indxx, LLC ("Indxx") and have been
licensed for use for certain purposes by First Trust. The Fund is not sponsored,
endorsed, sold or promoted by Indxx, and Indxx makes no representation regarding
the advisability of trading in such product. The Index is determined, composed
and calculated by Indxx without regard to First Trust or the Fund.
Page 18
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST INDXX GLOBAL AGRICULTURE ETF (FTAG) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Materials 53.68%
Industrials 28.00
Health Care 9.77
Consumer Staples 6.98
Consumer Discretionary 1.57
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Deere & Co. 10.21%
Bayer AG 9.77
BASF SE 9.64
Corteva, Inc. 5.75
Nutrien Ltd. 5.23
Kubota Corp. 5.06
Wilmar International Ltd. 4.13
Industries Qatar QSC 3.74
FMC Corp. 3.55
Evonik Industries AG 3.28
------
Total 60.36%
======
|
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
MARCH 11, 2010 - MARCH 31, 2020
First Trust Indxx MSCI All Country MSCI All Country World
Global Agriculture ETF World Index Materials Index
---------------------- ---------------- ----------------------
3/11/10 $10,000 $10,000 $10,000
3/31/10 10,337 10,172 10,291
9/30/10 9,794 10,220 10,440
3/31/11 10,930 11,604 12,429
9/30/11 6,416 9,606 9,096
3/31/12 6,576 11,519 10,529
9/30/12 4,871 11,621 10,066
3/31/13 4,667 12,731 10,081
9/30/13 4,392 13,681 10,105
3/31/14 4,363 14,841 10,600
9/30/14 3,924 15,230 10,309
3/31/15 3,248 15,646 9,852
9/30/15 1,915 14,216 7,880
3/31/16 1,480 14,967 8,628
9/30/16 1,552 15,916 9,775
3/31/17 1,782 17,218 10,849
9/30/17 1,972 18,885 12,098
3/31/18 1,945 19,761 12,564
9/30/18 1,942 20,731 12,657
3/31/19 1,739 20,289 12,184
9/30/19 1,746 21,017 12,046
3/31/20 1,246 18,005 9,592
|
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
BID/ASK MIDPOINT VS. NAV THROUGH MARCH 31, 2020
The following Frequency Distribution of Discounts and Premiums charts are
provided to show the frequency at which the bid/ask midpoint price for the Fund
was at a discount or premium to the daily NAV. The following tables are for
comparative purposes only and represent the period October 1, 2014 through March
31, 2020. Shareholders may pay more than NAV when they buy Fund shares and
receive less than NAV when they sell those shares because shares are bought and
sold at current market price. Data presented represents past performance and
cannot be used to predict future results.
NUMBER OF DAYS BID/ASK MIDPOINT NUMBER OF DAYS BID/ASK MIDPOINT
AT/ABOVE NAV BELOW NAV
---------------------------------------- ----------------------------------------
0.00%- 0.50%- 1.00%- 0.00%- 0.50%- 1.00%-
FOR THE PERIOD 0.49% 0.99% 1.99% >=2.00% 0.49% 0.99% 1.99% >=2.00%
10/1/14 - 9/30/15 96 52 7 1 55 38 3 0
10/1/15 - 9/30/16 37 20 15 16 72 47 22 24
10/1/16 - 9/30/17 120 0 0 0 122 7 2 0
10/1/17 - 9/30/18 171 5 0 0 72 3 0 0
10/1/18 - 9/30/19 18 0 1 0 221 11 0 0
10/1/19 - 3/31/20 6 1 0 0 102 16 1 0
|
Page 19
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST BICK INDEX FUND (BICK)
The First Trust BICK Index Fund (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 ISE BICK(TM) Index (the "Index"). The
shares of the Fund are listed and trade on The Nasdaq Stock Market LLC under the
ticker symbol "BICK." The Fund will normally invest at least 90% of its net
assets (including investment borrowings) in the common stocks and depositary
receipts that comprise the Index.
The Index is developed, maintained and sponsored by Nasdaq, Inc. The Index is
designed to provide a benchmark for investors interested in tracking some of the
largest and most liquid public companies that are domiciled in Brazil, India,
China (including Hong Kong) and South Korea that are accessible for investment
by U.S. investors.
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
6 Months 1 Year 5 Years Inception 5 Years Inception
Ended Ended Ended (4/12/10) Ended (4/12/10)
3/31/20 3/31/20 3/31/20 to 3/31/20 3/31/20 to 3/31/20
FUND PERFORMANCE
NAV -19.46% -23.91% -1.25% -2.24% -6.10% -20.21%
Market Price -19.29% -23.95% -1.32% -2.29% -6.43% -20.61%
INDEX PERFORMANCE
ISE BICK(TM) Index -18.61% -22.92% -0.37% -1.32% -1.84% -12.45%
MSCI All Country World Index -14.33% -11.26% 2.85% 5.63% 15.08% 72.65%
MSCI Emerging Markets Index -14.55% -17.69% -0.37% 0.38% -1.82% 3.82%
-------------------------------------------------------------------------------------------------------------------------
|
(See Notes to Fund Performance Overview on page 32.)
Nasdaq(R) and the 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.
Page 20
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST BICK INDEX FUND (BICK) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Consumer Discretionary 21.87%
Financials 19.57
Information Technology 15.15
Communication Services 13.50
Health Care 10.33
Materials 5.25
Consumer Staples 5.20
Energy 4.03
Industrials 2.38
Utilities 1.48
Real Estate 1.24
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Dr. Reddy's Laboratories Ltd., ADR 2.54%
Celltrion Healthcare Co., Ltd. 2.45
Wipro Ltd., ADR 2.19
Infosys Ltd., ADR 2.14
Reliance Industries Ltd., GDR 1.82
Celltrion, Inc. 1.77
WNS (Holdings) Ltd., ADR 1.75
NCSoft Corp. 1.70
JD.com, Inc., ADR 1.65
TAL Education Group, ADR 1.60
------
Total 19.61%
======
|
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
APRIL 12, 2010 - MARCH 31, 2020
First Trust BICK ISE BICK(TM) MSCI All Country MSCI Emerging
Index Fund Index World Index Markets Index
---------------- ------------ ---------------- -------------
4/12/10 $10,000 $10,000 $10,000 $10,000
9/30/10 10,417 10,488 9,800 10,487
3/31/11 11,231 11,311 11,127 11,486
9/30/11 7,586 7,795 9,211 8,793
3/31/12 8,996 9,139 11,045 10,475
9/30/12 8,328 8,515 11,143 10,282
3/31/13 8,480 8,665 12,207 10,656
9/30/13 8,385 8,650 13,119 10,383
3/31/14 8,808 9,127 14,231 10,527
9/30/14 9,050 9,432 14,604 10,829
3/31/15 8,497 8,920 15,003 10,572
9/30/15 6,865 7,163 13,632 8,740
3/31/16 7,383 7,773 14,352 9,300
9/30/16 8,512 8,958 15,262 10,207
3/31/17 9,234 9,764 16,510 10,901
9/30/17 10,822 11,512 18,108 12,499
3/31/18 11,613 12,333 18,948 13,600
9/30/18 10,085 10,867 19,878 12,398
3/31/19 10,487 11,363 19,455 12,610
9/30/19 9,906 10,758 20,152 12,150
3/31/20 7,979 8,755 17,265 10,382
|
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
BID/ASK MIDPOINT VS. NAV THROUGH MARCH 31, 2020
The following Frequency Distribution of Discounts and Premiums charts are
provided to show the frequency at which the bid/ask midpoint price for the Fund
was at a discount or premium to the daily NAV. The following tables are for
comparative purposes only and represent the period October 1, 2014 through March
31, 2020. Shareholders may pay more than NAV when they buy Fund shares and
receive less than NAV when they sell those shares because shares are bought and
sold at current market price. Data presented represents past performance and
cannot be used to predict future results.
NUMBER OF DAYS BID/ASK MIDPOINT NUMBER OF DAYS BID/ASK MIDPOINT
AT/ABOVE NAV BELOW NAV
---------------------------------------- ----------------------------------------
0.00%- 0.50%- 1.00%- 0.00%- 0.50%- 1.00%-
FOR THE PERIOD 0.49% 0.99% 1.99% >=2.00% 0.49% 0.99% 1.99% >=2.00%
10/1/14 - 9/30/15 38 6 0 0 116 79 13 0
10/1/15 - 9/30/16 34 0 0 0 113 97 8 1
10/1/16 - 9/30/17 65 26 0 0 51 99 10 0
10/1/17 - 9/30/18 120 37 2 0 76 14 2 0
10/1/18 - 9/30/19 40 4 1 0 148 56 2 0
10/1/19 - 3/31/20 50 14 0 0 46 6 9 1
|
Page 21
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST INDXX NEXTG ETF (NXTG)
The First Trust Indxx NextG 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 Indxx 5G & NextG Thematic Index (the
"Index"). The shares of the Fund are listed and trade on The Nasdaq Stock Market
LLC under the ticker symbol "NXTG." The Fund will normally invest at least 90%
of its net assets (including investment borrowings) in the common stocks and
depositary receipts that comprise the Index.
The Index is owned and is developed, maintained and sponsored by Indxx, LLC. The
Index is designed to track the performance of companies that have devoted, or
have committed to devote, material resources to the research, development and
application of fifth generation (5G) and next generation digital cellular
technologies as they emerge.
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
6 Months 1 Year 5 Years Inception 5 Years Inception
Ended Ended Ended (2/17/11) Ended (2/17/11)
3/31/20 3/31/20 3/31/20 to 3/31/20 3/31/20 to 3/31/20
FUND PERFORMANCE
NAV -6.92% -3.88% 4.23% 6.08% 23.00% 71.23%
Market Price -7.18% -3.41% 4.24% 6.08% 23.05% 71.26%
INDEX PERFORMANCE
Indxx 5G & NextG Thematic Index (1) (2) -5.94% N/A N/A N/A N/A N/A
Nasdaq CTA Smartphone Index(SM) (1) -1.66% 1.41% 6.06% 7.54% 34.19% 93.99%
MSCI World Index -14.30% -10.39% 3.25% 5.58% 17.31% 64.06%
MSCI All Country World Information Technology Index -1.17% 6.72% 13.79% 12.62% 90.78% 195.40%
-------------------------------------------------------------------------------------------------------------------------
|
(See Notes to Fund Performance Overview on page 32.)
(1) On May 30, 2019, the Fund's underlying index changed from the Nasdaq CTA
Smartphone Index(SM) to the Indxx 5G & NextG Thematic Index. Therefore,
the Fund's performance and historical returns shown for the periods prior
to this date are not necessarily indicative of the performance that the
Fund, based on its current index, would have generated.
(2) Performance data is not available for all the periods shown in the table
for the index because performance data does not exist for some of the
entire periods.
Indxx and the Index are trademarks of Indxx, LLC ("Indxx") and have been
licensed for use for certain purposes by First Trust. The Fund is not sponsored,
endorsed, sold or promoted by Indxx, and Indxx makes no representation regarding
the advisability of trading in such product. The Index is determined, composed
and calculated by Indxx without regard to First Trust or the Fund.
Page 22
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST INDXX NEXTG ETF (NXTG) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Information Technology 57.39%
Communication Services 23.57
Real Estate 14.99
Consumer Discretionary 2.58
Industrials 1.47
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Digital Realty Trust, Inc. 4.07%
SBA Communications Corp. 1.98
GDS Holdings Ltd., ADR 1.98
Equinix, Inc. 1.91
Crown Castle International Corp. 1.83
Infrastrutture Wireless Italiane S.p.A. 1.82
Advanced Micro Devices, Inc. 1.79
CoreSite Realty Corp. 1.76
Arista Networks, Inc. 1.76
China Tower Corp., Ltd., Class H 1.76
------
Total 20.66%
======
|
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
FEBRUARY 17, 2011 - MARCH 31, 2020
First Trust Indxx Nasdaq CTA MSCI World MSCI All Country World
NextG ETF Smartphone Index(SM) Index Information Technology Index
--------------------- -------------------- ---------- ----------------------------
2/17/11 $10,000 $10,000 $10,000 $10,000
3/31/11 9,399 9,412 9,849 9,547
9/30/11 7,503 7,595 8,251 8,390
3/31/12 9,238 9,328 9,904 10,774
9/30/12 7,805 7,925 10,032 10,566
3/31/13 9,021 9,180 11,077 10,774
9/30/13 10,975 11,245 12,059 11,756
3/31/14 12,117 12,470 13,188 13,356
9/30/14 12,748 13,187 13,530 14,502
3/31/15 13,920 14,460 13,983 15,485
9/30/15 12,194 12,706 12,842 14,328
3/31/16 13,098 13,739 13,501 15,785
9/30/16 14,585 15,322 14,300 17,605
3/31/17 16,474 17,413 15,494 19,719
9/30/17 18,041 19,153 16,898 22,884
3/31/18 18,932 20,114 17,589 25,486
9/30/18 18,076 19,388 18,797 28,111
3/31/19 17,816 19,136 18,306 27,681
9/30/19 18,397 19,733 19,141 29,887
3/31/20 17,123 19,399 16,406 29,537
|
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
BID/ASK MIDPOINT VS. NAV THROUGH MARCH 31, 2020
The following Frequency Distribution of Discounts and Premiums charts are
provided to show the frequency at which the bid/ask midpoint price for the Fund
was at a discount or premium to the daily NAV. The following tables are for
comparative purposes only and represent the period October 1, 2014 through March
31, 2020. Shareholders may pay more than NAV when they buy Fund shares and
receive less than NAV when they sell those shares because shares are bought and
sold at current market price. Data presented represents past performance and
cannot be used to predict future results.
NUMBER OF DAYS BID/ASK MIDPOINT NUMBER OF DAYS BID/ASK MIDPOINT
AT/ABOVE NAV BELOW NAV
---------------------------------------- ----------------------------------------
0.00%- 0.50%- 1.00%- 0.00%- 0.50%- 1.00%-
FOR THE PERIOD 0.49% 0.99% 1.99% >=2.00% 0.49% 0.99% 1.99% >=2.00%
10/1/14 - 9/30/15 123 4 0 0 118 7 0 0
10/1/15 - 9/30/16 19 0 0 0 164 67 3 0
10/1/16 - 9/30/17 59 0 0 0 159 32 1 0
10/1/17 - 9/30/18 61 1 0 0 166 21 2 0
10/1/18 - 9/30/19 110 11 0 0 119 11 0 0
10/1/19 - 3/31/20 100 2 0 0 19 5 0 0
|
Page 23
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST NASDAQ GLOBAL AUTO INDEX FUND (CARZ)
The First Trust NASDAQ Global Auto Index Fund (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 NASDAQ OMX Global Auto Index(SM)
(the "Index"). The shares of the Fund are listed and trade on The Nasdaq Stock
Market LLC under the ticker symbol "CARZ." The Fund will normally invest at
least 90% of its net assets (including investment borrowings) in the common
stocks and depositary receipts that comprise the Index.
The Index is owned and was developed by Nasdaq, Inc. (the "Index Provider"). The
Index is designed to track the performance of the largest and most liquid
companies engaged in manufacturing of automobiles. To be eligible for inclusion
in the Index, a security must be issued by a company classified as an
"Automobile Manufacturer" by the Industry Classification Benchmark. In addition,
a security must be listed on an Index-eligible global stock exchange, as
determined by the Index Provider, have a minimum float-adjusted worldwide market
capitalization of at least $500 million and a minimum three-month average daily
dollar trading volume of $1 million and a minimum free float of 20%.
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
6 Months 1 Year 5 Years Inception 5 Years Inception
Ended Ended Ended (5/9/11) Ended (5/9/11)
3/31/20 3/31/20 3/31/20 to 3/31/20 3/31/20 to 3/31/20
FUND PERFORMANCE
NAV -24.55% -24.76% -7.71% -0.70% -33.05% -6.05%
Market Price -24.58% -24.57% -7.70% -0.67% -33.01% -5.84%
INDEX PERFORMANCE
NASDAQ OMX Global Auto Index(SM) -23.97% -23.79% -6.86% 0.26% -29.91% 2.33%
MSCI World Index -14.30% -10.39% 3.25% 5.70% 17.31% 63.68%
-------------------------------------------------------------------------------------------------------------------------
|
(See Notes to Fund Performance Overview on page 32.)
NASDAQ(R), OMX(R), NASDAQ OMX(R), and the Index, are the 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.
Page 24
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST NASDAQ GLOBAL AUTO INDEX FUND (CARZ) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Consumer Discretionary 100.00%
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Tesla, Inc. 17.68%
Toyota Motor Corp. 9.61
Honda Motor Co., Ltd. 8.90
General Motors Co. 6.43
Daimler AG 5.89
Geely Automobile Holdings Ltd. 4.26
Subaru Corp. 4.06
Hyundai Motor Co. 3.91
Bayerische Motoren Werke AG 3.52
Volkswagen AG (Preference Shares) 3.31
------
Total 67.57%
======
|
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
MAY 9, 2011 - MARCH 31, 2020
First Trust NASDAQ NASDAQ OMX Global MSCI World
Global Auto Index Fund Auto Index(SM) Index
---------------------- ----------------- ----------
5/9/11 $10,000 $10,000 $10,000
9/30/11 7,545 7,717 8,232
3/31/12 9,324 9,459 9,881
9/30/12 8,282 8,439 10,009
3/31/13 10,210 10,402 11,052
9/30/13 13,205 13,581 12,032
3/31/14 13,593 14,039 13,158
9/30/14 13,085 13,556 13,499
3/31/15 14,034 14,601 13,951
9/30/15 11,727 12,208 12,813
3/31/16 11,826 12,418 13,470
9/30/16 11,990 12,550 14,267
3/31/17 13,091 13,851 15,458
9/30/17 14,803 15,719 16,858
3/31/18 15,201 16,109 17,547
9/30/18 13,682 14,656 18,752
3/31/19 12,488 13,426 18,263
9/30/19 12,453 13,460 19,098
3/31/20 9,395 10,233 16,368
|
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
BID/ASK MIDPOINT VS. NAV THROUGH MARCH 31, 2020
The following Frequency Distribution of Discounts and Premiums charts are
provided to show the frequency at which the bid/ask midpoint price for the Fund
was at a discount or premium to the daily NAV. The following tables are for
comparative purposes only and represent the period October 1, 2014 through March
31, 2020. Shareholders may pay more than NAV when they buy Fund shares and
receive less than NAV when they sell those shares because shares are bought and
sold at current market price. Data presented represents past performance and
cannot be used to predict future results.
NUMBER OF DAYS BID/ASK MIDPOINT NUMBER OF DAYS BID/ASK MIDPOINT
AT/ABOVE NAV BELOW NAV
---------------------------------------- ----------------------------------------
0.00%- 0.50%- 1.00%- 0.00%- 0.50%- 1.00%-
FOR THE PERIOD 0.49% 0.99% 1.99% >=2.00% 0.49% 0.99% 1.99% >=2.00%
10/1/14 - 9/30/15 90 12 1 1 129 19 0 0
10/1/15 - 9/30/16 78 7 2 0 118 42 5 1
10/1/16 - 9/30/17 91 9 0 0 124 26 1 0
10/1/17 - 9/30/18 120 12 1 0 113 5 0 0
10/1/18 - 9/30/19 114 6 0 0 126 4 1 0
10/1/19 - 3/31/20 51 6 1 1 61 5 1 0
|
Page 25
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST CLOUD COMPUTING ETF (SKYY)
The First Trust Cloud Computing 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 ISE CTA Cloud Computing(TM) Index (the
"Index"). The shares of the Fund are listed and trade on The Nasdaq Stock Market
LLC under the ticker symbol "SKYY." The Fund will normally invest at least 90%
of its net assets (including investment borrowings) in the common stocks and
depositary receipts that comprise the Index.
The Index is owned by Nasdaq, Inc. The Index is designed to provide a benchmark
for investors interested in tracking companies involved in the cloud computing
industry. To be eligible for inclusion in the Index, a security must be issued
by a cloud computing company classified by the Consumer Technology Association
("CTA"). A cloud computing company is a company engaged in one or more of the
following activities: Infrastructure-as-a-Service, Platform-as-a-Service or
Software-as-a-Service. In addition, securities included in the Index must have a
minimum capitalization of $500 million.
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
6 Months 1 Year 5 Years Inception 5 Years Inception
Ended Ended Ended (7/5/11) Ended (7/5/11)
3/31/20 3/31/20 3/31/20 to 3/31/20 3/31/20 to 3/31/20
FUND PERFORMANCE
NAV -3.13% -4.87% 13.86% 12.43% 91.40% 178.51%
Market Price -3.08% -4.84% 13.88% 12.44% 91.50% 178.67%
INDEX PERFORMANCE
ISE CTA Cloud Computing(TM) Index (1) -2.89% -4.22% 14.43% 13.05% 96.18% 192.04%
S&P 500(R) Index -12.31% -6.98% 6.73% 10.11% 38.47% 131.99%
S&P Composite 1500 Information Technology Index -0.33% 9.03% 16.38% 16.09% 113.47% 268.26%
-------------------------------------------------------------------------------------------------------------------------
|
(See Notes to Fund Performance Overview on page 32.)
(1) On June 24, 2019, the Fund's underlying index changed its methodology and
changed its name from "ISE Cloud Computing(TM) Index" to "ISE CTA Cloud
Computing(TM) Index."
Nasdaq(R) and the 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.
Page 26
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST CLOUD COMPUTING ETF (SKYY) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Information Technology 81.84%
Consumer Discretionary 9.16
Communication Services 7.21
Health Care 1.79
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Amazon.com, Inc. 5.24%
Microsoft Corp. 5.04
Alphabet, Inc., Class A 4.31
Oracle Corp. 4.16
Citrix Systems, Inc. 4.05
Alibaba Group Holding Ltd. 3.92
VMware, Inc., Class A 3.76
MongoDB, Inc. 3.70
Akamai Technologies, Inc. 3.39
Shopify, Inc., Class A 2.99
------
Total 40.56%
======
|
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
JULY 5, 2011 - MARCH 31, 2020
First Trust Cloud ISE CTA Cloud S&P 500(R) S&P Composite 1500
Computing ETF Computing(TM) Index Index Information Technology Index
----------------- ------------------- ---------- ----------------------------
7/5/11 $10,000 $10,000 $10,000 $10,000
9/30/11 7,902 7,909 8,501 8,886
3/31/12 10,604 10,641 10,702 11,739
9/30/12 9,864 9,934 11,068 11,695
3/31/13 10,531 10,640 12,196 11,682
9/30/13 12,214 12,376 13,209 12,718
3/31/14 13,390 13,612 14,861 14,655
9/30/14 13,581 13,852 15,815 16,153
3/31/15 14,551 14,885 16,753 17,253
9/30/15 13,994 14,354 15,718 16,547
3/31/16 14,789 15,247 17,052 18,475
9/30/16 17,114 17,697 18,143 20,324
3/31/17 19,392 19,930 19,979 23,173
9/30/17 21,052 21,701 21,519 26,144
3/31/18 24,370 25,195 22,776 29,394
9/30/18 28,591 29,662 25,375 34,091
3/31/19 29,280 30,490 24,939 33,777
9/30/19 28,753 30,069 26,455 36,949
3/31/20 27,851 29,200 23,199 36,826
|
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
BID/ASK MIDPOINT VS. NAV THROUGH MARCH 31, 2020
The following Frequency Distribution of Discounts and Premiums charts are
provided to show the frequency at which the bid/ask midpoint price for the Fund
was at a discount or premium to the daily NAV. The following tables are for
comparative purposes only and represent the period October 1, 2014 through March
31, 2020. Shareholders may pay more than NAV when they buy Fund shares and
receive less than NAV when they sell those shares because shares are bought and
sold at current market price. Data presented represents past performance and
cannot be used to predict future results.
NUMBER OF DAYS BID/ASK MIDPOINT NUMBER OF DAYS BID/ASK MIDPOINT
AT/ABOVE NAV BELOW NAV
---------------------------------------- ----------------------------------------
0.00%- 0.50%- 1.00%- 0.00%- 0.50%- 1.00%-
FOR THE PERIOD 0.49% 0.99% 1.99% >=2.00% 0.49% 0.99% 1.99% >=2.00%
10/1/14 - 9/30/15 193 9 0 0 48 2 0 0
10/1/15 - 9/30/16 146 1 0 0 106 0 0 0
10/1/16 - 9/30/17 188 0 0 0 62 1 0 0
10/1/17 - 9/30/18 176 1 0 0 74 0 0 0
10/1/18 - 9/30/19 168 5 0 0 72 4 2 0
10/1/19 - 3/31/20 79 0 0 0 47 0 0 0
|
Page 27
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST INTERNATIONAL EQUITY OPPORTUNITIES ETF (FPXI)
First Trust International Equity Opportunities ETF (formerly First Trust
International IPO ETF) (the "Fund") seeks investment results that correspond
generally to the price and yield (before the Fund's fees and expenses) of an
index called the IPOX(R) International Index (the "Index"). The shares of the
Fund are listed and trade on The Nasdaq Stock Market LLC under the ticker symbol
"FPXI." The Fund will normally invest at least 90% of its net assets (including
investment borrowings) in the common stocks and depositary receipts that
comprise the Index.
The Index is owned and is developed, maintained and sponsored by IPOX(R)
Schuster LLC (the "Index Provider"). The Index is a market-cap weighted
portfolio measuring the performance of the top 50 companies domiciled outside
the United States ranked quarterly by market capitalization in the IPOX Global
Composite Index (the "Base Index") and represents, on average, 25% of the total
market capitalization of the Base Index, a fully market capitalization-weighted
index constructed and managed to provide a broad and objective view of global
performance of initial public offerings and spin-offs in all world countries
(both developed and emerging market countries).
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
6 Months 1 Year 5 Years Inception 5 Years Inception
Ended Ended Ended (11/4/14) Ended (11/4/14)
3/31/20 3/31/20 3/31/20 to 3/31/20 3/31/20 to 3/31/20
FUND PERFORMANCE
NAV 1.29% 6.33% 5.96% 5.10% 33.55% 30.86%
Market Price 1.13% 6.34% 5.91% 5.06% 33.23% 30.54%
INDEX PERFORMANCE
IPOX(R) International Index 2.10% 7.61% 6.87% 5.98% 39.43% 36.83%
MSCI World ex USA Index -17.23% -14.89% -0.76% -0.25% -3.76% -1.34%
-------------------------------------------------------------------------------------------------------------------------
|
(See Notes to Fund Performance Overview on page 32.)
IPOX(R) and the Index are registered international trademarks and service marks
of IPOX(R) Schuster LLC ("IPOX") and have been licensed for use by First Trust.
The Fund is not sponsored, endorsed, sold or promoted by IPOX, and IPOX makes no
representation regarding the advisability of trading in such Fund.
Page 28
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST INTERNATIONAL EQUITY OPPORTUNITIES ETF (FPXI) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Consumer Discretionary 27.51%
Information Technology 16.55
Health Care 16.15
Communication Services 14.92
Utilities 6.63
Industrials 5.36
Financials 4.22
Consumer Staples 3.84
Energy 3.15
Real Estate 1.67
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Softbank Corp. 5.51%
Siemens Healthineers AG 3.66
Prosus N.V. 3.45
Shopify, Inc., Class A 3.30
Wuxi Biologics Cayman, Inc. 3.30
Postal Savings Bank of China Co., Ltd.,
Class H 3.21
Saudi Arabian Oil Co. 3.15
Sanofi 3.12
Orsted A/S 3.12
Adyen N.V. 3.02
------
Total 34.84%
======
|
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
NOVEMBER 4, 2014 - MARCH 31, 2020
First Trust International IPOX(R) International MSCI World
Equity Opportunities ETF Index ex USA Index
------------------------- --------------------- -----------
11/4/14 $10,000 $10,000 $10,000
3/31/15 9,798 9,813 10,252
9/30/15 8,526 8,522 9,212
3/31/16 8,864 8,954 9,386
9/30/16 9,432 9,523 9,872
3/31/17 9,913 10,072 10,506
9/30/17 11,952 12,204 11,722
3/31/18 12,949 13,217 11,951
9/30/18 12,352 12,713 12,036
3/31/19 12,308 12,716 11,594
9/30/19 12,920 13,403 11,922
3/31/20 13,086 13,684 9,866
|
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
BID/ASK MIDPOINT VS. NAV THROUGH MARCH 31, 2020
The following Frequency Distribution of Discounts and Premiums charts are
provided to show the frequency at which the bid/ask midpoint price for the Fund
was at a discount or premium to the daily NAV. The following tables are for
comparative purposes only and represent the period November 5, 2014
(commencement of trading) through March 31, 2020. Shareholders may pay more than
NAV when they buy Fund shares and receive less than NAV when they sell those
shares because shares are bought and sold at current market price. Data
presented represents past performance and cannot be used to predict future
results.
NUMBER OF DAYS BID/ASK MIDPOINT NUMBER OF DAYS BID/ASK MIDPOINT
AT/ABOVE NAV BELOW NAV
---------------------------------------- ----------------------------------------
0.00%- 0.50%- 1.00%- 0.00%- 0.50%- 1.00%-
FOR THE PERIOD 0.49% 0.99% 1.99% >=2.00% 0.49% 0.99% 1.99% >=2.00%
11/5/14 - 9/30/15 90 11 1 0 117 8 0 1
10/1/15 - 9/30/16 109 30 0 0 86 28 0 0
10/1/16 - 9/30/17 138 32 0 0 63 17 1 0
10/1/17 - 9/30/18 152 27 1 0 67 4 0 0
10/1/18 - 9/30/19 94 26 10 0 93 24 4 0
10/1/19 - 3/31/20 50 31 5 0 31 2 5 2
|
Page 29
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST NASDAQ CYBERSECURITY ETF (CIBR)
The First Trust Nasdaq Cybersecurity 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 Nasdaq CTA Cybersecurity Index(SM) (the
"Index"). The shares of the Fund are listed and trade on The Nasdaq Stock Market
LLC under the ticker symbol "CIBR." The Fund will normally invest at least 90%
of its net assets (including investment borrowings) in the common stocks and
depositary receipts that comprise the Index.
The Index is owned by Nasdaq, Inc. (the "Index Provider"). The Index Provider
and the Consumer Technology Association ("CTA") have jointly developed the
eligibility and selection criteria and rules for the Index. The Index includes
securities of companies classified as "cybersecurity" companies by the CTA.
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
6 Months Ended 1 Year Ended Inception (7/6/15) Inception (7/6/15)
3/31/20 3/31/20 to 3/31/20 to 3/31/20
FUND PERFORMANCE
NAV -5.36% -6.67% 6.24% 33.18%
Market Price -5.38% -6.59% 6.27% 33.39%
INDEX PERFORMANCE
Nasdaq CTA Cybersecurity Index(SM) -4.83% -5.80% 7.03% 37.94%
S&P 500(R) Index -12.31% -6.98% 6.99% 37.67%
S&P Composite 1500 Information Technology Index -0.33% 9.03% 17.26% 112.50%
-------------------------------------------------------------------------------------------------------------------------
|
(See Notes to Fund Performance Overview on page 32.)
Nasdaq(R) and the 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.
Page 30
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST NASDAQ CYBERSECURITY ETF (CIBR) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Information Technology 93.46%
Industrials 6.54
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Okta, Inc. 6.72%
Cisco Systems, Inc. 6.19
Splunk, Inc. 6.03
Broadcom, Inc. 5.35
Palo Alto Networks, Inc. 5.15
NortonLifeLock, Inc. 4.64
Zscaler, Inc. 4.16
Akamai Technologies, Inc. 3.75
Leidos Holdings, Inc. 3.60
Fortinet, Inc. 3.43
------
Total 49.02%
======
|
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
JULY 6, 2015 - MARCH 31, 2020
First Trust Nasdaq Nasdaq CTA S&P 500(R) S&P Composite 1500
Cybersecurity ETF Cybersecurity Index(SM) Index Information Technology Index
------------------ ----------------------- ---------- ----------------------------
7/6/15 $10,000 $10,000 $10,000 $10,000
9/30/15 8,575 8,585 9,328 9,547
3/31/16 8,595 8,645 10,120 10,659
9/30/16 10,018 10,113 10,768 11,726
3/31/17 10,993 11,137 11,858 13,370
9/30/17 11,093 11,276 12,772 15,084
3/31/18 12,713 12,943 13,518 16,959
9/30/18 14,475 14,808 15,060 19,669
3/31/19 14,271 14,642 14,801 19,488
9/30/19 14,074 14,493 15,701 21,318
3/31/20 13,318 13,794 13,767 21,250
|
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
BID/ASK MIDPOINT VS. NAV THROUGH MARCH 31, 2020
The following Frequency Distribution of Discounts and Premiums charts are
provided to show the frequency at which the bid/ask midpoint price for the Fund
was at a discount or premium to the daily NAV. The following tables are for
comparative purposes only and represent the period July 7, 2015 (commencement of
trading) through March 31, 2020. Shareholders may pay more than NAV when they
buy Fund shares and receive less than NAV when they sell those shares because
shares are bought and sold at current market price. Data presented represents
past performance and cannot be used to predict future results.
NUMBER OF DAYS BID/ASK MIDPOINT NUMBER OF DAYS BID/ASK MIDPOINT
AT/ABOVE NAV BELOW NAV
---------------------------------------- ----------------------------------------
0.00%- 0.50%- 1.00%- 0.00%- 0.50%- 1.00%-
FOR THE PERIOD 0.49% 0.99% 1.99% >=2.00% 0.49% 0.99% 1.99% >=2.00%
7/7/15 - 9/30/15 49 7 1 0 4 0 0 0
10/1/15 - 9/30/16 140 0 0 0 113 0 0 0
10/1/16 - 9/30/17 228 2 0 0 21 0 0 0
10/1/17 - 9/30/18 222 1 0 0 28 0 0 0
10/1/18 - 9/30/19 200 4 0 0 45 2 0 0
10/1/19 - 3/31/20 110 1 0 0 9 2 3 1
|
Page 31
NOTES TO FUND PERFORMANCE OVERVIEW (UNAUDITED)
Total returns for the periods since inception are calculated from the inception
date of each Fund. "Average Annual Total Returns" represent the average annual
change in value of an investment over the periods indicated. "Cumulative Total
Returns" represent the total change in value of an investment over the periods
indicated. For certain Funds, the total returns would have been lower if certain
fees had not been waived and expenses reimbursed by the Advisor.
Each Fund's per share net asset value ("NAV") is the value of one share of the
Fund and is computed by dividing the value of all assets of the Fund (including
accrued interest and dividends), less all liabilities (including accrued
expenses and dividends declared but unpaid), by the total number of outstanding
shares. The price used to calculate market return ("Market Price") is determined
by using the midpoint between the highest bid and the lowest offer 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. Since shares of each Fund did not trade in the
secondary market until after the Fund's inception, for the period from inception
to the first day of secondary market trading in shares of the Fund, the NAV of
each Fund is used as a proxy for the secondary market trading price to calculate
market returns. NAV and market returns assume that all distributions have been
reinvested in each Fund at NAV and Market Price, respectively.
An index is a statistical composite that tracks a specified financial market or
sector. Unlike each Fund, the indices do not actually hold a portfolio of
securities and therefore do not incur the expenses incurred by each Fund. These
expenses negatively impact the performance of each Fund. Also, market returns do
not include brokerage commissions that may be payable on secondary market
transactions. If brokerage commissions were included, market returns would be
lower. The total returns presented reflect the reinvestment of dividends on
securities in the indices. The returns presented do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption or
sale of Fund shares. The investment return and principal value of shares of each
Fund will vary with changes in market conditions. Shares of each Fund may be
worth more or less than their original cost when they are redeemed or sold in
the market. Each Fund's past performance is no guarantee of future performance.
Page 32
FIRST TRUST EXCHANGE-TRADED FUND II
UNDERSTANDING YOUR FUND EXPENSES
MARCH 31, 2020 (UNAUDITED)
As a shareholder of First Trust STOXX(R) European Select Dividend Index Fund,
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund, First
Trust Dow Jones Global Select Dividend Index Fund, First Trust Global Wind
Energy ETF, First Trust Global Engineering and Construction ETF, First Trust
NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund, First Trust Indxx
Global Natural Resources Income ETF, First Trust Indxx Global Agriculture ETF,
First Trust BICK Index Fund, First Trust Indxx NextG ETF, First Trust NASDAQ
Global Auto Index Fund, First Trust Cloud Computing ETF, First Trust
International Equity Opportunities ETF or First Trust Nasdaq Cybersecurity ETF
(each a "Fund" and collectively, the "Funds"), you incur two types of costs: (1)
transaction costs; and (2) ongoing costs, including management fees,
distribution and/or service fees, if any, and other Fund expenses. This Example
is intended to help you understand your ongoing costs (in U.S. dollars) of
investing in the Funds and to compare these costs with the ongoing costs of
investing in other funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held through the six-month period ended March 31, 2020.
ACTUAL EXPENSES
The first line in the following table provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During the Six-Month
Period" to estimate the expenses you paid on your account during this six-month
period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line in the following table provides information about hypothetical
account values and hypothetical expenses based on each Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
each Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Funds and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs such as brokerage
commissions. Therefore, the second line in the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
-------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED
EXPENSE RATIO
BEGINNING ENDING BASED ON THE EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE SIX-MONTH DURING THE
OCTOBER 1, 2019 MARCH 31, 2020 PERIOD (a) SIX-MONTH PERIOD (b)
-------------------------------------------------------------------------------------------------------------------------------
FIRST TRUST STOXX(R) EUROPEAN SELECT DIVIDEND INDEX FUND (FDD)
Actual $1,000.00 $ 758.90 0.55% $2.42
Hypothetical (5% return before expenses) $1,000.00 $1,022.25 0.55% $2.78
FIRST TRUST FTSE EPRA/NAREIT DEVELOPED MARKETS REAL ESTATE INDEX FUND (FFR)
Actual $1,000.00 $ 727.40 0.60% $2.59
Hypothetical (5% return before expenses) $1,000.00 $1,022.00 0.60% $3.03
FIRST TRUST DOW JONES GLOBAL SELECT DIVIDEND INDEX FUND (FGD)
Actual $1,000.00 $ 723.70 0.55% $2.37
Hypothetical (5% return before expenses) $1,000.00 $1,022.25 0.55% $2.78
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN)
Actual $1,000.00 $ 935.80 0.60% $2.90
Hypothetical (5% return before expenses) $1,000.00 $1,022.00 0.60% $3.03
FIRST TRUST GLOBAL ENGINEERING AND CONSTRUCTION ETF (FLM)
Actual $1,000.00 $ 771.90 0.70% $3.10
Hypothetical (5% return before expenses) $1,000.00 $1,021.50 0.70% $3.54
|
Page 33
FIRST TRUST EXCHANGE-TRADED FUND II
UNDERSTANDING YOUR FUND EXPENSES (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
-------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED
EXPENSE RATIO
BEGINNING ENDING BASED ON THE EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE SIX-MONTH DURING THE
OCTOBER 1, 2019 MARCH 31, 2020 PERIOD (a) SIX-MONTH PERIOD (b)
-------------------------------------------------------------------------------------------------------------------------------
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) SMART GRID INFRASTRUCTURE INDEX FUND (GRID)
Actual $1,000.00 $ 868.80 0.70% $3.27
Hypothetical (5% return before expenses) $1,000.00 $1,021.50 0.70% $3.54
FIRST TRUST INDXX GLOBAL NATURAL RESOURCES INCOME ETF (FTRI)
Actual $1,000.00 $ 748.10 0.70% $3.06
Hypothetical (5% return before expenses) $1,000.00 $1,021.50 0.70% $3.54
FIRST TRUST INDXX GLOBAL AGRICULTURE ETF (FTAG)
Actual $1,000.00 $ 713.80 0.70% $3.00
Hypothetical (5% return before expenses) $1,000.00 $1,021.50 0.70% $3.54
FIRST TRUST BICK INDEX FUND (BICK)
Actual $1,000.00 $ 805.40 0.64% $2.89
Hypothetical (5% return before expenses) $1,000.00 $1,021.80 0.64% $3.23
FIRST TRUST INDXX NEXTG ETF (NXTG)
Actual $1,000.00 $ 930.80 0.70% $3.38
Hypothetical (5% return before expenses) $1,000.00 $1,021.50 0.70% $3.54
FIRST TRUST NASDAQ GLOBAL AUTO INDEX FUND (CARZ)
Actual $1,000.00 $ 754.50 0.70% $3.07
Hypothetical (5% return before expenses) $1,000.00 $1,021.50 0.70% $3.54
FIRST TRUST CLOUD COMPUTING ETF (SKYY)
Actual $1,000.00 $ 968.70 0.60% $2.95
Hypothetical (5% return before expenses) $1,000.00 $1,022.00 0.60% $3.03
FIRST TRUST INTERNATIONAL EQUITY OPPORTUNITIES ETF (FPXI)
Actual $1,000.00 $1,012.90 0.70% $3.52
Hypothetical (5% return before expenses) $1,000.00 $1,021.50 0.70% $3.54
FIRST TRUST NASDAQ CYBERSECURITY ETF (CIBR)
Actual $1,000.00 $ 946.40 0.60% $2.92
Hypothetical (5% return before expenses) $1,000.00 $1,022.00 0.60% $3.03
|
(a) These expense ratios reflect expense caps for certain Funds. See Note 3 in
the Notes to Financial Statements.
(b) Expenses are equal to the annualized expense ratio as indicated in the
table multiplied by the average account value over the period (October 1,
2019 through March 31, 2020), multiplied by 183/366 (to reflect the
six-month period).
Page 34
FIRST TRUST STOXX(R) EUROPEAN SELECT DIVIDEND INDEX FUND (FDD)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.1%
BELGIUM -- 3.1%
292,002 Proximus S.A., DP (b) $ 6,705,692
--------------
DENMARK -- 3.2%
614,610 Danske Bank A/S (b) (c) 6,840,244
--------------
FINLAND -- 2.1%
313,725 Fortum OYJ (b) 4,563,774
--------------
FRANCE -- 23.4%
152,151 BNP Paribas S.A. (b) 4,442,087
563,796 CNP Assurances (b) 5,459,002
56,232 Covivio (b) 3,158,032
374,687 Klepierre S.A. (b) 7,142,129
3,379,283 Natixis S.A. (b) 10,760,454
201,417 SCOR SE (b) 4,431,428
429,444 Societe Generale S.A. (b) 7,035,221
202,488 TOTAL S.A. (b) 7,629,513
--------------
50,057,866
--------------
GERMANY -- 8.4%
26,711 Allianz SE (b) 4,548,821
179,896 Bayerische Motoren Werke AG
(Preference Shares) (b) 7,628,555
219,247 Deutsche Post AG (b) 5,877,713
--------------
18,055,089
--------------
ITALY -- 8.7%
374,538 Assicurazioni Generali S.p.A. (b) 5,073,044
4,764,984 Intesa Sanpaolo S.p.A. (b) 7,710,040
1,295,208 Snam S.p.A. (b) 5,919,495
--------------
18,702,579
--------------
NETHERLANDS -- 13.2%
5,159,878 Aegon N.V. (b) 12,886,310
1,423,711 ING Groep N.V. (b) 7,295,237
297,541 NN Group N.V. (b) 8,085,908
--------------
28,267,455
--------------
SPAIN -- 2.9%
2,650,639 Banco Santander S.A. (b) 6,305,404
--------------
SWEDEN -- 2.6%
826,383 Skandinaviska Enskilda Banken
AB, Class A (b) (c) 5,534,337
--------------
SWITZERLAND -- 8.8%
65,755 Swiss Re AG (b) 5,063,064
961,670 UBS Group AG (b) 8,814,778
13,927 Zurich Insurance Group AG (b) 4,892,647
--------------
18,770,489
--------------
UNITED KINGDOM -- 22.7%
3,021,596 Aviva PLC (b) 9,934,242
347,423 GlaxoSmithKline PLC (b) 6,519,088
766,528 Royal Dutch Shell PLC,
Class B (b) 12,857,758
462,157 SSE PLC (b) 7,426,409
4,341,128 Standard Life Aberdeen PLC (b) 11,980,638
--------------
48,718,135
--------------
DESCRIPTION VALUE
-------------------------------------------------------------
TOTAL INVESTMENTS -- 99.1% $ 212,521,064
(Cost $261,742,058) (d)
NET OTHER ASSETS AND
LIABILITIES -- 0.9% 1,873,428
--------------
NET ASSETS -- 100.0% $ 214,394,492
==============
|
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures adopted by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940, as
amended. At March 31, 2020, securities noted as such are valued at
$212,521,064 or 99.1% of net assets. Certain of these securities are fair
valued using a factor provided by a third-party pricing service due to the
change in value between the foreign markets' close and the New York Stock
Exchange ("NYSE") close exceeding a certain threshold. On days when this
threshold is not exceeded, these securities are typically valued at the
last sale price on the exchange on which they are principally traded.
(c) Non-income producing security.
(d) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2020, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $6,110,065 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $55,331,059. The net unrealized depreciation
was $49,220,994.
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2020 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
LEVEL 1 SIGNIFICANT SIGNIFICANT
QUOTED OBSERVABLE UNOBSERVABLE
PRICES INPUTS INPUTS
--------------------------------------------
Common Stocks* $ -- $ 212,521,064 $ --
============================================
|
* See Portfolio of Investments for country breakout.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
Euro 62.4%
British Pound Sterling 22.9
Swiss Franc 8.9
Danish Krone 3.2
Swedish Krona 2.6
------
Total 100.0%
======
|
See Notes to Financial Statements Page 35
FIRST TRUST FTSE EPRA/NAREIT DEVELOPED MARKETS REAL ESTATE INDEX FUND (FFR)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.3%
AUSTRALIA -- 2.6%
196,196 BGP Holdings
PLC (b) (c) (d) (e) (f) $ 0
16,693 BWP Trust (b) 34,348
14,795 Charter Hall Long Wale REIT (b) 40,023
12,562 Charter Hall Retail REIT (b) 23,992
81,950 Cromwell Property Group (b) 40,040
37,481 Dexus (b) 207,705
66,500 GPT Group (The) (b) 147,740
134,148 Mirvac Group (b) 170,435
180,232 Scentre Group (b) 172,631
32,349 Shopping Centres Australasia
Property Group (b) 44,865
81,893 Stockland (b) 125,928
107,386 Vicinity Centres (b) 67,174
--------------
1,074,881
--------------
AUSTRIA -- 0.2%
2,364 CA Immobilien Anlagen AG (b) 80,616
--------------
BELGIUM -- 1.2%
844 Aedifica S.A. 87,965
177 Ascencio (b) 8,192
732 Befimmo S.A. (b) 35,016
886 Cofinimmo S.A. (b) 115,065
759 Intervest Offices & Warehouses
N.V. (b) 19,775
83 Leasinvest Real Estate S.C.A. 8,111
432 Montea C.V.A. (b) (c) 39,818
344 Retail Estates N.V. (b) 17,788
4,528 Warehouses De Pauw C.V.A. (b) 129,250
82 Wereldhave Belgium Comm VA (b) 4,642
523 Xior Student Housing N.V. (b) (g) 22,760
--------------
488,382
--------------
BERMUDA -- 0.4%
39,722 Hongkong Land Holdings Ltd. (b) 148,614
--------------
CANADA -- 2.7%
4,218 Allied Properties Real Estate
Investment Trust 134,096
4,212 Artis Real Estate Investment
Trust 23,884
1,303 Boardwalk Real Estate Investment
Trust 21,212
5,779 Canadian Apartment Properties
REIT 174,894
7,342 Chartwell Retirement Residences 46,693
8,758 Choice Properties Real Estate
Investment Trust 80,405
6,219 Cominar Real Estate Investment
Trust 35,839
3,026 Crombie Real Estate Investment
Trust 26,706
3,778 Dream Industrial Real Estate
Investment Trust 25,208
1,615 Dream Office Real Estate
Investment Trust 26,785
4,564 First Capital Real Estate
Investment Trust 44,203
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
CANADA (CONTINUED)
1,850 Granite Real Estate Investment
Trust $ 76,416
9,802 H&R Real Estate Investment Trust 62,198
3,902 InterRent Real Estate Investment
Trust 36,904
2,895 Killam Apartment Real Estate
Investment Trust 32,462
1,630 Northview Apartment Real Estate
Investment Trust 37,921
3,510 NorthWest Healthcare Properties
Real Estate Investment Trust 24,093
10,844 RioCan Real Estate Investment
Trust 124,290
4,363 SmartCentres Real Estate
Investment Trust 58,409
3,531 Summit Industrial Income REIT 22,255
--------------
1,114,873
--------------
CAYMAN ISLANDS -- 1.5%
92,057 CK Asset Holdings Ltd. (b) 499,473
34,422 Wharf Real Estate Investment
Co., Ltd. (b) 140,405
--------------
639,878
--------------
FINLAND -- 0.3%
2,634 Citycon OYJ (b) 16,293
6,175 Kojamo OYJ (b) 116,613
--------------
132,906
--------------
FRANCE -- 1.4%
1,282 Carmila S.A. (b) 18,325
1,584 Covivio (b) 88,959
1,776 Gecina S.A. (b) 233,704
1,092 ICADE (b) 85,709
6,538 Klepierre S.A. (b) 124,625
2,103 Mercialys S.A. (b) 15,365
--------------
566,687
--------------
GERMANY -- 4.5%
5,773 alstria office REIT-AG (b) 82,848
1,753 Deutsche EuroShop AG (b) 20,224
12,259 Deutsche Wohnen SE (b) 464,600
2,396 Hamborner REIT AG (b) 21,276
2,370 LEG Immobilien AG (b) 265,766
4,331 TAG Immobilien AG (b) 85,176
454 TLG Immobilien AG (b) 7,200
18,620 Vonovia SE (b) 926,225
--------------
1,873,315
--------------
GUERNSEY -- 0.2%
8,230 BMO Real Estate Investments Ltd. 7,074
12,622 Regional REIT Ltd. (b) (g) (h) 12,901
17,789 Schroder Real Estate Investment
Trust Ltd. (b) 8,533
32,233 Sirius Real Estate Ltd. (b) 26,363
13,924 Standard Life Investment Property
Income Trust Ltd. (b) 14,506
--------------
69,377
--------------
|
Page 36 See Notes to Financial Statements
FIRST TRUST FTSE EPRA/NAREIT DEVELOPED MARKETS REAL ESTATE INDEX FUND (FFR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
HONG KONG -- 4.7%
67,416 Champion REIT (b) $ 40,486
69,251 Hang Lung Properties Ltd. (b) 139,647
21,402 Hysan Development Co., Ltd. (b) 69,116
71,054 Link REIT (b) 598,877
196,159 New World Development Co.,
Ltd. (b) 209,160
111,940 Sino Land Co., Ltd. (b) 140,883
48,910 Sun Hung Kai Properties Ltd. (b) 639,451
36,066 Swire Properties Ltd. (b) 100,759
--------------
1,938,379
--------------
IRELAND -- 0.1%
23,509 Hibernia REIT PLC (b) 27,121
14,988 Irish Residential Properties REIT
PLC (b) 20,294
--------------
47,415
--------------
ISLE OF MAN -- 0.0%
8,692 RDI REIT PLC (b) 7,021
--------------
ISRAEL -- 0.2%
4,681 Amot Investments Ltd. (b) 27,476
1,255 Azrieli Group Ltd. (b) 71,755
--------------
99,231
--------------
ITALY -- 0.0%
2,238 Immobiliare Grande Distribuzione
SIIQ S.p.A. (b) 9,218
--------------
JAPAN -- 12.2%
24 Activia Properties, Inc. (b) 77,906
44 Advance Residence Investment
Corp. (b) 127,872
4,027 AEON Mall Co., Ltd. (b) 50,826
53 AEON REIT Investment Corp. (b) 50,944
21 Comforia Residential REIT,
Inc. (b) 60,044
68 Daiwa House REIT Investment
Corp. (b) 166,663
9 Daiwa Office Investment Corp. (b) 49,946
16 Frontier Real Estate Investment
Corp. (b) 45,328
25 Fukuoka REIT Corp. (b) 25,943
33 Global One Real Estate Investment
Corp. (b) 27,827
124 GLP J-REIT (b) 140,609
12,400 Hulic Co., Ltd. (b) 125,489
40 Hulic REIT, Inc. (b) 46,538
41 Ichigo Office REIT Investment
Corp. (b) 28,448
59 Industrial & Infrastructure Fund
Investment Corp. (b) 79,902
298 Invesco Office J-REIT, Inc. (b) 39,474
167 Invincible Investment Corp. (b) 37,675
43 Japan Excellent, Inc. (b) 49,664
153 Japan Hotel REIT Investment
Corp. (b) 44,663
30 Japan Logistics Fund, Inc. (b) 66,832
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
JAPAN (CONTINUED)
29 Japan Prime Realty Investment
Corp. (b) $ 87,617
45 Japan Real Estate Investment
Corp. (b) 264,523
51 Japan Rental Housing Investments,
Inc. (b) 43,175
90 Japan Retail Fund Investment
Corp. (b) 102,309
13 Kenedix Office Investment
Corp. (b) 68,841
31 Kenedix Residential Next
Investment Corp. (b) 48,504
18 Kenedix Retail REIT Corp. (b) 25,566
47 LaSalle Logiport REIT (b) 63,711
57 MCUBS MidCity Investment
Corp. (b) 40,390
39,366 Mitsubishi Estate Co., Ltd. (b) 581,402
32,268 Mitsui Fudosan Co., Ltd. (b) 558,711
14 Mitsui Fudosan Logistics Park,
Inc. (b) 59,224
53 Mori Hills REIT Investment
Corp. (b) 70,878
34 Mori Trust Sogo REIT, Inc. (b) 41,240
15 Nippon Accommodations Fund,
Inc. (b) 81,611
43 Nippon Building Fund, Inc. (b) 289,259
73 Nippon Prologis REIT, Inc. (b) 183,675
15 NIPPON REIT Investment
Corp. (b) 44,421
3,900 Nomura Real Estate Holdings,
Inc. (b) 63,105
154 Nomura Real Estate Master Fund,
Inc. (b) 195,876
90 Orix JREIT, Inc. (b) 118,374
43 Premier Investment Corp. (b) 47,583
137 Sekisui House REIT, Inc. (b) 87,829
13,544 Sumitomo Realty & Development
Co., Ltd. (b) 330,715
6,787 Tokyo Tatemono Co., Ltd. (b) 71,886
30 Tokyu REIT, Inc. (b) 39,452
102 United Urban Investment Corp. (b) 102,047
--------------
5,054,517
--------------
JERSEY -- 0.0%
2,849 Phoenix Spree Deutschland
Ltd. (b) 9,541
--------------
LUXEMBOURG -- 0.7%
1,000 ADO Properties S.A. (b) (g) (h) 22,568
41,267 Aroundtown S.A. (b) 206,560
3,778 Grand City Properties S.A. (b) 79,087
--------------
308,215
--------------
MULTI-NATIONAL -- 0.6%
4,622 Unibail-Rodamco-Westfield (b) 264,963
--------------
NETHERLANDS -- 0.1%
1,650 Eurocommercial Properties
N.V. (b) 15,935
610 NSI N.V. (b) 24,513
588 Vastned Retail N.V. (b) 9,867
|
See Notes to Financial Statements Page 37
FIRST TRUST FTSE EPRA/NAREIT DEVELOPED MARKETS REAL ESTATE INDEX FUND (FFR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
NETHERLANDS (CONTINUED)
1,383 Wereldhave N.V. $ 10,174
--------------
60,489
--------------
NEW ZEALAND -- 0.3%
37,311 Goodman Property Trust (b) 47,863
53,483 Kiwi Property Group Ltd. (b) 29,824
36,228 Precinct Properties New Zealand
Ltd. (b) 36,718
--------------
114,405
--------------
NORWAY -- 0.2%
5,739 Entra ASA (b) (g) (h) 68,552
--------------
SINGAPORE -- 3.3%
100,600 Ascendas Real Estate Investment
Trust (b) 199,189
93,490 CapitaLand Commercial Trust (b) 100,320
85,630 CapitaLand Ltd. (b) 171,597
82,283 CapitaLand Mall Trust (b) 103,172
26,900 CDL Hospitality Trusts (b) 15,095
16,100 City Developments Ltd. (b) 81,638
45,269 Fortune Real Estate Investment
Trust (b) 41,617
24,300 Frasers Centrepoint Trust (b) 38,020
56,800 Frasers Logistics & Industrial
Trust (b) (g) 35,114
41,533 Keppel DC REIT (b) 66,657
67,700 Keppel REIT (b) 45,036
48,600 Manulife US Real Estate
Investment Trust (b) (g) 35,084
74,821 Mapletree Commercial Trust (b) 95,964
52,600 Mapletree Industrial Trust (b) 89,324
87,253 Mapletree Logistics Trust (b) 96,648
70,297 Suntec Real Estate Investment
Trust (b) 61,477
16,900 UOL Group Ltd. (b) 77,536
--------------
1,353,488
--------------
SPAIN -- 0.5%
11,143 Inmobiliaria Colonial Socimi
S.A. (b) 105,041
2,094 Lar Espana Real Estate Socimi
S.A. 9,296
11,349 Merlin Properties Socimi S.A. (b) 85,647
--------------
199,984
--------------
SWEDEN -- 2.0%
1,581 Atrium Ljungberg AB, Class B (b) 24,622
9,244 Castellum AB (b) 155,858
864 Catena AB (b) 25,083
2,887 Dios Fastigheter AB (b) 19,296
9,048 Fabege AB (b) 115,439
3,325 Fastighets AB Balder,
Class B (b) (c) 120,203
3,755 Hufvudstaden AB, Class A (b) 51,308
17,286 Klovern AB, Class B (b) 25,528
6,472 Kungsleden AB (b) 48,684
5,472 Nyfosa AB (b) (c) 27,409
3,027 Pandox AB (b) 24,992
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
SWEDEN (CONTINUED)
31,907 Samhallsbyggnadsbolaget i
Norden AB (b) $ 61,168
5,587 Wallenstam AB, Class B (b) 63,462
4,549 Wihlborgs Fastigheter AB (b) 62,917
--------------
825,969
--------------
SWITZERLAND -- 1.4%
482 Allreal Holding AG (b) 89,479
95 Hiag Immobilien Holding AG (b) 9,059
222 Mobimo Holding AG (b) 62,168
1,345 PSP Swiss Property AG (b) 168,191
2,575 Swiss Prime Site AG (b) 250,626
--------------
579,523
--------------
UNITED KINGDOM -- 4.4%
80,971 Assura PLC (b) 83,935
5,254 Big Yellow Group PLC (b) 65,002
31,897 British Land (The) Co. PLC (b) 133,016
25,210 Capital & Counties Properties
PLC (b) 51,319
21,370 Civitas Social Housing
PLC (b) (g) 25,466
13,268 Custodian REIT PLC (b) 16,377
3,441 Derwent London PLC (b) 139,000
20,110 Empiric Student Property PLC (b) 16,361
15,616 GCP Student Living PLC (b) 25,561
20,629 Grainger PLC (b) 65,648
8,691 Great Portland Estates PLC (b) 73,223
26,289 Hammerson PLC (b) 25,066
3,405 Helical PLC (b) 14,524
8,079 Impact Healthcare REIT
PLC (b) (g) 9,236
33,410 Intu Properties PLC (b) (c) 1,789
24,446 Land Securities Group PLC (b) 168,577
27,888 LondonMetric Property PLC (b) 60,826
17,877 LXI REIT PLC (b) (g) 23,923
10,319 NewRiver REIT PLC (b) 7,535
41,146 Primary Health Properties PLC (b) 81,696
7,017 Safestore Holdings PLC (b) 55,488
37,396 Segro PLC (b) 353,518
7,635 Shaftesbury PLC (b) 58,223
15,690 Target Healthcare REIT PLC (b) 20,769
10,916 Triple Point Social Housing REIT
PLC (b) (g) (h) 12,210
58,540 Tritax Big Box REIT PLC (b) 81,490
14,506 Tritax EuroBox PLC (b) (g) (h) 16,865
9,968 UNITE Group (The) PLC (b) 99,475
4,560 Workspace Group PLC (b) 42,780
--------------
1,828,898
--------------
UNITED STATES -- 53.6%
2,912 Acadia Realty Trust 36,080
1,412 Agree Realty Corp. 87,403
73 Alexander's, Inc. 20,144
4,153 Alexandria Real Estate Equities,
Inc. 569,210
1,646 American Assets Trust, Inc. 41,150
4,678 American Campus Communities,
Inc. 129,814
|
Page 38 See Notes to Financial Statements
FIRST TRUST FTSE EPRA/NAREIT DEVELOPED MARKETS REAL ESTATE INDEX FUND (FFR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
UNITED STATES (CONTINUED)
3,640 American Finance Trust, Inc. $ 22,750
8,797 American Homes 4 Rent, Class A 204,090
6,555 Americold Realty Trust 223,132
5,056 Apartment Investment &
Management Co., Class A 177,718
7,186 Apple Hospitality REIT, Inc. 65,896
1,903 Armada Hoffler Properties, Inc. 20,362
4,769 AvalonBay Communities, Inc. 701,854
5,296 Boston Properties, Inc. 488,450
5,962 Brandywine Realty Trust 62,720
10,156 Brixmor Property Group, Inc. 96,482
2,247 Brookfield Property REIT, Inc.,
Class A 19,077
3,195 Camden Property Trust 253,172
3,251 CareTrust REIT, Inc. 48,082
1,562 Chatham Lodging Trust 9,278
16,352 Colony Capital, Inc. 28,616
3,927 Columbia Property Trust, Inc. 49,088
3,832 Corporate Office Properties Trust 84,802
4,983 Cousins Properties, Inc. 145,852
6,573 CubeSmart 176,091
3,830 CyrusOne, Inc. 236,503
6,856 DiamondRock Hospitality Co. 34,828
8,941 Digital Realty Trust, Inc. 1,241,994
8,059 Diversified Healthcare Trust 29,254
5,675 Douglas Emmett, Inc. 173,144
12,584 Duke Realty Corp. 407,470
2,533 Easterly Government Properties,
Inc. 62,413
1,308 EastGroup Properties, Inc. 136,660
5,119 Empire State Realty Trust, Inc.,
Class A 45,866
2,664 EPR Properties 64,522
4,119 Equity Commonwealth 130,613
5,934 Equity LifeStyle Properties, Inc. 341,086
12,531 Equity Residential 773,288
3,118 Essential Properties Realty
Trust, Inc. 40,721
2,241 Essex Property Trust, Inc. 493,558
4,301 Extra Space Storage, Inc. 411,864
2,555 Federal Realty Investment Trust 190,629
4,293 First Industrial Realty Trust,
Inc. 142,656
2,387 Four Corners Property Trust, Inc. 44,661
3,534 Franklin Street Properties Corp. 20,250
6,925 Gaming and Leisure Properties,
Inc. 191,892
1,136 Getty Realty Corp. 26,969
3,066 Global Net Lease, Inc. 40,992
4,509 Healthcare Realty Trust, Inc. 125,936
7,358 Healthcare Trust of America,
Inc., Class A 178,652
17,332 Healthpeak Properties, Inc. 413,368
3,492 Highwoods Properties, Inc. 123,687
24,342 Host Hotels & Resorts, Inc. 268,736
5,197 Hudson Pacific Properties, Inc. 131,796
3,099 Independence Realty Trust, Inc. 27,705
2,207 Industrial Logistics Properties
Trust 38,711
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
UNITED STATES (CONTINUED)
554 Innovative Industrial Properties,
Inc. $ 42,065
397 Investors Real Estate Trust 21,835
18,303 Invitation Homes, Inc. 391,135
4,181 JBG SMITH Properties 133,081
4,177 Kennedy-Wilson Holdings, Inc. 56,055
3,557 Kilroy Realty Corp. 226,581
14,136 Kimco Realty Corp. 136,695
2,821 Kite Realty Group Trust 26,715
8,231 Lexington Realty Trust 81,734
1,588 Life Storage, Inc. 150,145
1,340 LTC Properties, Inc. 41,406
4,834 Macerich (The) Co. 27,215
2,949 Mack-Cali Realty Corp. 44,913
17,568 Medical Properties Trust, Inc. 303,751
3,888 Mid-America Apartment
Communities, Inc. 400,581
3,223 Monmouth Real Estate Investment
Corp. 38,837
1,450 National Health Investors, Inc. 71,804
5,852 National Retail Properties, Inc. 188,376
2,020 National Storage Affiliates Trust 59,792
1,624 Office Properties Income Trust 44,254
7,725 Omega Healthcare Investors, Inc. 205,022
6,684 Paramount Group, Inc. 58,819
8,162 Park Hotels & Resorts, Inc. 64,561
4,428 Pebblebrook Hotel Trust 48,221
6,426 Physicians Realty Trust 89,578
4,263 Piedmont Office Realty Trust,
Inc., Class A 75,285
25,119 Prologis, Inc. 2,018,814
681 PS Business Parks, Inc. 92,289
5,073 Public Storage 1,007,549
1,959 QTS Realty Trust, Inc., Class A 113,642
11,167 Realty Income Corp. 556,787
5,693 Regency Centers Corp. 218,782
3,890 Retail Opportunity Investments
Corp. 32,248
7,289 Retail Properties of America,
Inc., Class A 37,684
3,868 Rexford Industrial Realty, Inc. 158,627
5,756 RLJ Lodging Trust 44,436
2,659 RPT Realty 16,034
1,667 Ryman Hospitality Properties,
Inc. 59,762
6,867 Sabra Health Care REIT, Inc. 74,988
410 Saul Centers, Inc. 13,423
1,148 Seritage Growth Properties,
Class A (c) 10,458
5,572 Service Properties Trust 30,089
10,534 Simon Property Group, Inc. 577,895
5,131 SITE Centers Corp. 26,733
2,701 SL Green Realty Corp. 116,413
3,393 Spirit Realty Capital, Inc. 88,727
5,096 STAG Industrial, Inc. 114,762
7,332 STORE Capital Corp. 132,856
3,524 Summit Hotel Properties, Inc. 14,871
3,098 Sun Communities, Inc. 386,785
|
See Notes to Financial Statements Page 39
FIRST TRUST FTSE EPRA/NAREIT DEVELOPED MARKETS REAL ESTATE INDEX FUND (FFR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
UNITED STATES (CONTINUED)
7,643 Sunstone Hotel Investors, Inc. $ 66,571
3,071 Tanger Factory Outlet Centers,
Inc. 15,355
1,999 Taubman Centers, Inc. 83,718
2,246 Terreno Realty Corp. 116,231
9,933 UDR, Inc. 362,952
436 Universal Health Realty Income
Trust 43,953
3,919 Urban Edge Properties 34,526
1,007 Urstadt Biddle Properties, Inc.,
Class A 14,199
12,755 Ventas, Inc. 341,834
36,577 VEREIT, Inc. 178,862
15,806 VICI Properties, Inc. 263,012
5,917 Vornado Realty Trust 214,255
2,801 Washington Real Estate Investment
Trust 66,860
4,140 Weingarten Realty Investors 59,740
14,069 Welltower, Inc. 644,079
5,851 WP Carey, Inc. 339,826
3,859 Xenia Hotels & Resorts, Inc. 39,748
--------------
22,210,568
--------------
TOTAL COMMON STOCKS -- 99.3% 41,169,905
(Cost $48,412,984) --------------
INVESTMENT COMPANIES (a) -- 0.2%
GUERNSEY -- 0.2%
18,061 BMO Commercial Property Trust
Ltd. (b) 16,624
18,773 Picton Property Income Ltd. (b) 20,771
22,398 UK Commercial Property REIT
Ltd. (b) 20,917
--------------
TOTAL INVESTMENT
COMPANIES -- 0.2% 58,312
(Cost $78,460) --------------
MONEY MARKET FUNDS -- 0.2%
95,624 Morgan Stanley Institutional
Liquidity Funds - Treasury
Portfolio - Institutional
Class - 0.12% (i) 95,624
(Cost $95,624) --------------
TOTAL INVESTMENTS -- 99.7% 41,323,841
(Cost $48,587,068) (j)
NET OTHER ASSETS AND
LIABILITIES -- 0.3% 121,470
--------------
NET ASSETS -- 100.0% $ 41,445,311
==============
|
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures adopted by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940, as
amended. At March 31, 2020, securities noted as such are valued at
$17,780,156 or 42.9% of net assets. Certain of these securities are fair
valued using a factor provided by a third-party pricing service due to the
change in value between the foreign markets' close and the NYSE close
exceeding a certain threshold. On days when this threshold is not
exceeded, these securities are typically valued at the last sale price on
the exchange on which they are principally traded.
(c) Non-income producing security.
(d) This is a restricted security which cannot be traded as a result of the
in-specie distribution. It was acquired on August 6, 2009 at a cost of $0
and has a carrying value per share of $0.
(e) Pursuant to procedures adopted by the Trust's Board of Trustees, this
security has been determined to be illiquid by First Trust Advisors, L.P.,
the Fund's advisor.
(f) This security's value was determined using significant unobservable inputs
(see Note 2A -- Portfolio Valuation in the Notes to Financial Statements).
(g) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the Securities Act of 1933, as
amended (the "1933 Act").
(h) This security is exempt from registration upon resale under Rule 144A of
the 1933 Act and may be resold in transactions exempt from registration,
normally to qualified institutional buyers. This security is not
restricted on the foreign exchange where it trades freely without any
additional registration. As such, it does not require the additional
disclosure required of restricted securities
(i) Rate shown reflects yield as of March 31, 2020.
(j) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2020, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $4,847,453 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $12,110,680. The net unrealized depreciation
was $7,263,227.
Page 40 See Notes to Financial Statements
FIRST TRUST FTSE EPRA/NAREIT DEVELOPED MARKETS REAL ESTATE INDEX FUND (FFR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2020 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2020 PRICES INPUTS INPUTS
----------------------------------------------------------
Common Stocks:
Australia $ 1,074,881 $ -- $ 1,074,881 $ --**
Belgium 488,382 96,076 392,306 --
Canada 1,114,873 1,114,873 -- --
Guernsey 69,377 7,074 62,303 --
Netherlands 60,489 10,174 50,315 --
Spain 199,984 9,296 190,688 --
United States 22,210,568 22,210,568 -- --
Other Country
Categories* 15,951,351 -- 15,951,351 --
Investment
Companies* 58,312 -- 58,312 --
Money Market
Funds 95,624 95,624 -- --
----------------------------------------------------------
Total
Investments $ 41,323,841 $ 23,543,685 $ 17,780,156 $ --**
==========================================================
|
* See Portfolio of Investments for country breakout.
** Investment is valued at $0.
Level 3 Common Stocks are fair valued by the Advisor's Pricing Committee and are
footnoted in the Portfolio of Investments.
Level 3 Common Stocks values are based on unobservable and non-quantitative
inputs.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 54.4%
Japanese Yen 12.2
Euro 9.8
Hong Kong Dollar 6.3
British Pound Sterling 4.8
Singapore Dollar 3.1
Canadian Dollar 2.7
Australian Dollar 2.6
Swedish Krona 2.0
Swiss Franc 1.4
New Zealand Dollar 0.3
Israeli Shekel 0.2
Norwegian Krone 0.2
------
Total 100.0%
======
|
See Notes to Financial Statements Page 41
FIRST TRUST DOW JONES GLOBAL SELECT DIVIDEND INDEX FUND (FGD)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.2%
AUSTRALIA -- 15.1%
261,579 Australia & New Zealand Banking
Group Ltd. (b) $ 2,743,287
916,556 Bendigo & Adelaide Bank Ltd. (b) 3,521,285
99,152 Commonwealth Bank of
Australia (b) 3,741,014
571,498 Crown Resorts Ltd. (b) 2,652,174
2,890,354 CSR Ltd. (b) 5,538,700
984,151 Fortescue Metals Group Ltd. (b) 6,031,107
2,850,671 Harvey Norman Holdings Ltd. (b) 5,234,291
351,203 JB Hi-Fi Ltd. (b) 6,046,876
393,539 National Australia Bank Ltd. (b) 4,036,880
439,013 Suncorp Group Ltd. (b) 2,437,958
923,748 Sydney Airport (b) 3,191,646
1,203,797 Tabcorp Holdings Ltd. (b) 1,862,997
247,049 Wesfarmers Ltd. (b) 5,235,025
325,421 Westpac Banking Corp. (b) 3,342,338
--------------
55,615,578
--------------
BERMUDA -- 2.0%
288,351 Invesco Ltd. 2,618,227
651,699 VTech Holdings Ltd. (b) 4,692,867
--------------
7,311,094
--------------
CANADA -- 12.0%
78,466 Bank of Nova Scotia (The) 3,204,321
110,294 BCE, Inc. 4,524,460
53,335 Canadian Imperial Bank of
Commerce 3,107,703
127,231 Emera, Inc. 5,017,637
125,029 Genworth MI Canada, Inc. 2,778,126
230,635 IGM Financial, Inc. 3,826,709
189,535 Laurentian Bank of Canada 4,115,817
80,997 National Bank of Canada 3,130,410
315,812 Russel Metals, Inc. 2,937,525
191,313 Shaw Communications, Inc.,
Class B 3,103,586
101,266 TC Energy Corp. 4,500,951
230,728 TELUS Corp. 3,647,906
--------------
43,895,151
--------------
DENMARK -- 0.9%
296,888 Danske Bank A/S (b) (c) 3,304,187
--------------
FINLAND -- 4.1%
228,956 Fortum OYJ (b) 3,330,635
127,111 Nokian Renkaat OYJ (b) 3,035,168
884,723 Nordea Bank Abp (b) (c) 4,976,930
126,914 Sampo OYJ, Class A (b) 3,661,324
--------------
15,004,057
--------------
FRANCE -- 8.1%
212,298 AXA S.A. (b) 3,594,621
118,434 BNP Paribas S.A. (b) 3,457,711
123,841 Bouygues S.A. (b) 3,594,015
440,744 Credit Agricole S.A. (b) 3,118,661
340,801 Engie S.A. (b) 3,489,961
197,903 Lagardere S.C.A. (b) 2,463,938
1,023,703 Natixis S.A. (b) 3,259,718
|
SHARES DESCRIPTION VALUE
FRANCE (CONTINUED)
237,331 Societe Generale S.A. (b) $ 3,887,995
79,258 TOTAL S.A. (b) 2,986,349
--------------
29,852,969
--------------
GERMANY -- 3.3%
199,852 Aareal Bank AG (b) 3,285,799
18,307 Allianz SE (b) 3,117,639
93,359 Daimler AG (b) 2,788,092
645,731 TUI AG (b) 2,826,398
--------------
12,017,928
--------------
HONG KONG -- 1.5%
9,920,901 PCCW Ltd. (b) 5,440,285
--------------
IRELAND -- 1.4%
104,558 Seagate Technology PLC 5,102,430
--------------
ITALY -- 7.6%
267,528 Assicurazioni Generali S.p.A. (b) 3,623,614
440,356 Azimut Holding S.p.A. (b) 6,267,468
825,732 Banca Mediolanum S.p.A. (b) 4,144,428
282,819 Eni S.p.A. (b) 2,810,508
3,286,822 Intesa Sanpaolo S.p.A. (b) 5,318,283
2,335,962 UnipolSai Assicurazioni
S.p.A. (b) 5,749,071
--------------
27,913,372
--------------
JAPAN -- 1.9%
177,178 Aozora Bank Ltd. (b) 3,381,300
1,525,100 Tokai Tokyo Financial Holdings,
Inc. (b) 3,458,732
--------------
6,840,032
--------------
JERSEY -- 1.0%
563,730 WPP PLC (b) 3,832,754
--------------
MALTA -- 0.5%
514,082 Kindred Group PLC (b) 1,883,476
--------------
NETHERLANDS -- 2.9%
1,032,475 Aegon N.V. (b) 2,578,509
265,457 BE Semiconductor Industries
N.V. (b) 8,130,119
--------------
10,708,628
--------------
NEW ZEALAND -- 1.6%
2,362,551 Spark New Zealand Ltd. (b) 5,749,916
--------------
NORWAY -- 0.6%
168,217 Equinor ASA (b) 2,097,017
--------------
PORTUGAL -- 1.6%
1,442,956 EDP-Energias de Portugal S.A. (b) 5,805,572
--------------
SINGAPORE -- 1.1%
2,359,340 Singapore Telecommunications
Ltd. (b) 4,206,053
--------------
SPAIN -- 3.5%
1,849,362 Mapfre S.A. (b) 3,137,258
184,988 Naturgy Energy Group S.A. (b) 3,245,398
218,196 Red Electrica Corp., S.A. (b) 3,920,876
552,940 Telefonica S.A. (b) 2,516,482
--------------
12,820,014
--------------
|
Page 42 See Notes to Financial Statements
FIRST TRUST DOW JONES GLOBAL SELECT DIVIDEND INDEX FUND (FGD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
SWEDEN -- 4.7%
276,471 JM AB (b) $ 4,764,568
568,080 Skandinaviska Enskilda Banken
AB, Class A (b) (c) 3,804,466
399,352 Swedbank AB, Class A (b) (c) 4,404,546
1,211,775 Telia Co., AB (b) 4,337,404
--------------
17,310,984
--------------
SWITZERLAND -- 3.9%
51,806 Swiss Re AG (b) 3,989,006
9,227 Swisscom AG (b) 4,940,882
15,665 Zurich Insurance Group AG (b) 5,503,218
--------------
14,433,106
--------------
UNITED KINGDOM -- 12.4%
163,954 British American Tobacco PLC (b) 5,585,123
2,213,061 BT Group PLC (b) 3,219,036
3,780,474 Dixons Carphone PLC (b) 3,624,266
865,965 Galliford Try Holdings PLC (b) 1,389,668
682,132 HSBC Holdings PLC (b) 3,829,324
3,086,378 ITV PLC (b) 2,532,782
1,372,153 Legal & General Group PLC (b) 3,241,979
653,564 Phoenix Group Holdings PLC (b) 5,015,916
177,699 Royal Dutch Shell PLC,
Class A (b) 3,087,279
2,722,508 Standard Life Aberdeen PLC (b) 7,513,573
381,801 United Utilities Group PLC (b) 4,273,838
319,839 Vistry Group PLC (b) 2,279,762
--------------
45,592,546
--------------
UNITED STATES -- 7.5%
99,807 Altria Group, Inc. 3,859,537
196,518 AT&T, Inc. 5,728,500
586,101 CenturyLink, Inc. 5,544,515
86,444 Helmerich & Payne, Inc. 1,352,849
226,434 Macy's, Inc. 1,111,791
129,647 PacWest Bancorp 2,323,274
86,103 Southern (The) Co. 4,661,616
268,970 Waddell & Reed Financial, Inc.,
Class A 3,060,879
--------------
27,642,961
--------------
TOTAL COMMON STOCKS -- 99.2% 364,380,110
(Cost $544,164,761) --------------
MONEY MARKET FUNDS -- 0.1%
540,041 Morgan Stanley Institutional
Liquidity Funds - Treasury
Portfolio - Institutional
Class - 0.12% (d) 540,041
(Cost $540,041) --------------
TOTAL INVESTMENTS -- 99.3% 364,920,151
(Cost $544,704,802) (e)
NET OTHER ASSETS AND
LIABILITIES -- 0.7% 2,424,738
--------------
NET ASSETS -- 100.0% $ 367,344,889
==============
|
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures adopted by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940, as
amended. At March 31, 2020, securities noted as such are valued at
$285,121,341 or 77.6% of net assets. Certain of these securities are fair
valued using a factor provided by a third-party pricing service due to the
change in value between the foreign markets' close and the NYSE close
exceeding a certain threshold. On days when this threshold is not
exceeded, these securities are typically valued at the last sale price on
the exchange on which they are principally traded.
(c) Non-income producing security.
(d) Rate shown reflects yield as of March 31, 2020.
(e) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2020, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $6,326,972 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $186,111,623. The net unrealized depreciation
was $179,784,651.
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2020 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2020 PRICES INPUTS INPUTS
----------------------------------------------------------
Common Stocks:
Bermuda $ 7,311,094 $ 2,618,227 $ 4,692,867 $ --
Canada 43,895,151 43,895,151 -- --
Ireland 5,102,430 5,102,430 -- --
United States 27,642,961 27,642,961 -- --
Other Country
Categories* 280,428,474 -- 280,428,474 --
Money Market
Funds 540,041 540,041 -- --
----------------------------------------------------------
Total
Investments $ 364,920,151 $ 79,798,810 $285,121,341 $ --
==========================================================
|
* See Portfolio of Investments for country breakout.
See Notes to Financial Statements Page 43
FIRST TRUST DOW JONES GLOBAL SELECT DIVIDEND INDEX FUND (FGD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
Euro 29.2%
Australian Dollar 15.3
British Pound Sterling 14.3
Canadian Dollar 12.0
United States Dollar 9.7
Swedish Krona 6.6
Swiss Franc 4.0
Hong Kong Dollar 2.8
Japanese Yen 1.9
New Zealand Dollar 1.6
Singapore Dollar 1.1
Danish Krone 0.9
Norwegian Krone 0.6
------
Total 100.0%
======
|
Page 44 See Notes to Financial Statements
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.6%
AUSTRALIA -- 1.6%
133,840 AGL Energy Ltd. (b) $ 1,400,683
--------------
CANADA -- 15.0%
255,178 Boralex, Inc., Class A 4,533,113
429,487 Northland Power, Inc. 8,572,650
21,066 TransAlta Renewables, Inc. 222,590
--------------
13,328,353
--------------
CAYMAN ISLANDS -- 1.0%
1,519,260 China High Speed Transmission
Equipment Group Co.,
Ltd. (b) (c) 877,115
--------------
CHINA -- 6.6%
7,418,224 China Longyuan Power Group
Corp., Ltd., Class H (b) 4,048,914
308,110 China Suntien Green Energy Corp.,
Ltd., Class H (b) 53,346
2,018,195 Xinjiang Goldwind Science &
Technology Co., Ltd.,
Class H (b) 1,740,122
--------------
5,842,382
--------------
DENMARK -- 19.6%
85,298 Orsted A/S (b) (d) (e) 8,350,473
110,844 Vestas Wind Systems A/S (b) 9,018,898
--------------
17,369,371
--------------
FRANCE -- 1.5%
134,011 Engie S.A. (b) 1,372,335
--------------
GERMANY -- 8.5%
219,125 E. ON SE (b) 2,247,716
221,824 Nordex SE (b) (c) (f) 1,690,733
71,505 RWE AG (b) 1,869,972
20,371 Siemens AG (b) 1,705,769
--------------
7,514,190
--------------
GREECE -- 1.5%
162,851 Terna Energy S.A. (b) 1,302,808
--------------
ITALY -- 3.1%
280,968 Enel S.p.A. (b) 1,938,076
54,723 Prysmian S.p.A. (b) 868,831
--------------
2,806,907
--------------
JAPAN -- 5.0%
54,300 Mitsubishi Heavy Industries
Ltd. (b) 1,368,464
130,210 Mitsui & Co., Ltd. (b) 1,807,798
285,904 Toray Industries, Inc. (b) 1,237,544
--------------
4,413,806
--------------
NETHERLANDS -- 0.5%
40,101 SIF Holding N.V. (b) (c) 416,859
--------------
PORTUGAL -- 2.0%
447,734 EDP-Energias de Portugal S.A. (b) 1,801,408
--------------
SPAIN -- 14.2%
4,366 Acciona S.A. (b) 461,793
64,821 Endesa S.A. (b) 1,371,639
198,108 Iberdrola S.A. (b) 1,937,698
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
SPAIN (CONTINUED)
598,370 Siemens Gamesa Renewable
Energy S.A. (b) $ 8,829,646
--------------
12,600,776
--------------
SWEDEN -- 2.0%
71,756 Eolus Vind AB, Class B (b) 760,872
76,760 SKF AB, Class B (b) (c) 1,046,021
--------------
1,806,893
--------------
SWITZERLAND -- 2.6%
107,667 ABB Ltd. (b) 1,871,365
3,987 BKW AG (b) 324,667
72 Gurit Holding AG (b) 85,129
--------------
2,281,161
--------------
UNITED KINGDOM -- 2.6%
145,554 SSE PLC (b) 2,338,910
--------------
UNITED STATES -- 12.3%
38,900 Alliant Energy Corp. 1,878,481
57,036 American Superconductor Corp. (f) 312,557
22,000 Duke Energy Corp. 1,779,360
247,308 General Electric Co. 1,963,625
9,313 NextEra Energy, Inc. 2,240,894
114,327 TPI Composites, Inc. (f) 1,689,753
24,009 Trinity Industries, Inc. 385,825
10,854 Woodward, Inc. 645,162
--------------
10,895,657
--------------
TOTAL COMMON STOCKS -- 99.6% 88,369,614
(Cost $96,867,849) --------------
MONEY MARKET FUNDS -- 2.1%
1,873,249 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
0.24% (g) (h) 1,873,249
30,602 Morgan Stanley Institutional
Liquidity Funds - Treasury
Portfolio - Institutional
Class - 0.12% (g) 30,602
--------------
TOTAL MONEY MARKET
FUNDS -- 2.1% 1,903,851
(Cost $1,903,851) --------------
TOTAL INVESTMENTS -- 101.7% 90,273,465
(Cost $98,771,700) (i)
NET OTHER ASSETS AND
LIABILITIES -- (1.7)% (1,519,616)
--------------
NET ASSETS -- 100.0% $ 88,753,849
==============
|
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
See Notes to Financial Statements Page 45
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
|
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures adopted by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940, as
amended. At March 31, 2020, securities noted as such are valued at
$64,145,604 or 72.3% of net assets. Certain of these securities are fair
valued using a factor provided by a third-party pricing service due to the
change in value between the foreign markets' close and the NYSE close
exceeding a certain threshold. On days when this threshold is not
exceeded, these securities are typically valued at the last sale price on
the exchange on which they are principally traded.
(c) All or a portion of this security is on loan (see Note 2E - Securities
Lending in the Notes to Financial Statements). The aggregate value of such
securities is $1,530,556 and the total value of the collateral held by the
Fund is $1,873,249.
(d) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(e) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(f) Non-income producing security.
(g) Rate shown reflects yield as of March 31, 2020.
(h) This security serves as collateral for securities on loan.
(i) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2020, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $5,302,191 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $13,800,426. The net unrealized depreciation
was $8,498,235.
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2020 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2020 PRICES INPUTS INPUTS
----------------------------------------------------------
Common Stocks:
Canada $ 13,328,353 $ 13,328,353 $ -- $ --
United States 10,895,657 10,895,657 -- --
Other Country
Categories* 64,145,604 -- 64,145,604 --
Money Market
Funds 1,903,851 1,903,851 -- --
----------------------------------------------------------
Total
Investments $ 90,273,465 $ 26,127,861 $ 64,145,604 $ --
==========================================================
|
* See Portfolio of Investments for country breakout.
OFFSETTING ASSETS AND LIABILITIES
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 1,530,556
Non-cash Collateral(2) (1,530,556)
--------------
Net Amount $ --
==============
|
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value", is not offset and is shown on a gross
basis.
(2) At March 31, 2020, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
Euro 30.8%
Danish Krone 19.2
Canadian Dollar 14.8
United States Dollar 14.2
Hong Kong Dollar 7.4
Japanese Yen 4.9
British Pound Sterling 2.6
Swiss Franc 2.5
Swedish Krona 2.0
Australian Dollar 1.6
------
Total 100.0%
======
|
Page 46 See Notes to Financial Statements
FIRST TRUST GLOBAL ENGINEERING AND CONSTRUCTION ETF (FLM)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 98.9%
AUSTRALIA -- 2.9%
6,092 CIMIC Group Ltd. (b) $ 86,283
23,840 Downer EDI Ltd. (b) 43,552
4,123 Monadelphous Group Ltd. (b) 25,892
--------------
155,727
--------------
CANADA -- 4.6%
2,113 Aecon Group, Inc. 18,858
7,564 SNC-Lavalin Group, Inc. 111,582
4,535 Stantec, Inc. 116,009
--------------
246,449
--------------
CAYMAN ISLANDS -- 1.3%
96,745 China State Construction
International Holdings
Ltd. (b) 70,950
--------------
CHINA -- 4.8%
189,769 China Communications
Construction Co., Ltd.,
Class H (b) 130,800
233,427 China Railway Group Ltd.,
Class H (b) 123,474
--------------
254,274
--------------
FINLAND -- 0.3%
3,828 YIT OYJ (b) 16,850
--------------
FRANCE -- 8.4%
5,175 Bouygues S.A. (b) 150,185
1,769 Eiffage S.A. (b) 125,570
2,072 Vinci S.A. (b) 169,302
--------------
445,057
--------------
GERMANY -- 1.4%
1,172 HOCHTIEF AG (b) 76,953
--------------
IRELAND -- 3.4%
3,348 Kingspan Group PLC (b) 180,539
--------------
ITALY -- 0.8%
31,775 Salini Impregilo
S.p.A. (b) (c) (d) 40,298
--------------
JAPAN -- 33.7%
15,300 Chiyoda Corp. (b) (d) 29,740
5,600 COMSYS Holdings Corp. (b) 143,415
11,200 JGC Holdings Corp. (b) 89,399
13,700 Kajima Corp. (b) 140,035
5,900 Kandenko Co., Ltd. (b) 46,890
6,800 Kinden Corp. (b) 100,058
2,270 Kumagai Gumi Co., Ltd. (b) 52,246
5,600 Kyowa Exeo Corp. (b) 124,182
11,000 Maeda Corp. (b) 80,792
5,000 Maeda Road Construction Co.,
Ltd. (b) 93,326
2,000 Nippo Corp. (b) 43,918
3,820 Nishimatsu Construction Co.,
Ltd. (b) 72,934
17,400 Obayashi Corp. (b) 147,648
2,000 Okumura Corp. (b) 41,352
19,300 Penta-Ocean Construction Co.,
Ltd. (b) 101,052
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
JAPAN (CONTINUED)
2,300 Raito Kogyo Co., Ltd. (b) $ 26,006
19,200 Shimizu Corp. (b) 149,411
2,100 SHO-BOND Holdings Co., Ltd. (b) 83,037
5,300 Taisei Corp. (b) 161,640
12,200 Toda Corp. (b) 70,411
--------------
1,797,492
--------------
NETHERLANDS -- 3.0%
2,240 Arcadis N.V. (b) 36,044
4,757 Boskalis Westminster (b) 86,630
24,719 Koninklijke BAM Groep N.V. (b) 34,681
--------------
157,355
--------------
NORWAY -- 0.5%
3,502 Veidekke ASA (b) 29,201
--------------
PHILIPPINES -- 0.9%
10,340 Manila Electric Co. (b) 45,455
--------------
SOUTH KOREA -- 1.5%
4,347 Daewoo Engineering &
Construction Co., Ltd. (b) (d) 10,351
4,309 GS Engineering & Construction
Corp. (b) 71,594
--------------
81,945
--------------
SPAIN -- 2.7%
5,384 ACS Actividades de Construccion
y Servicios S.A. (b) 106,923
16,756 Sacyr S.A. (b) 25,366
1,047 Tecnicas Reunidas S.A. (b) (d) 13,262
--------------
145,551
--------------
SWEDEN -- 5.3%
5,333 NCC AB, Class B (b) 69,709
11,490 Peab AB, Class B (b) 82,285
8,663 Skanska AB, Class B (b) (d) 130,371
--------------
282,365
--------------
UNITED KINGDOM -- 3.5%
35,123 Balfour Beatty PLC (b) 93,203
58,424 Galliford Try Holdings PLC (b) 93,757
--------------
186,960
--------------
UNITED STATES -- 19.9%
4,420 AECOM (d) 131,937
2,313 Dycom Industries, Inc. (d) 59,329
2,092 EMCOR Group, Inc. 128,282
9,831 Fluor Corp. 67,932
4,602 Granite Construction, Inc. 69,858
2,396 Jacobs Engineering Group, Inc. 189,931
6,127 KBR, Inc. 126,706
2,914 MasTec, Inc. (d) 95,375
1,219 Matrix Service Co. (d) 11,544
4,818 Quanta Services, Inc. 152,875
4,122 Tutor Perini Corp. (d) 27,700
--------------
1,061,469
--------------
TOTAL COMMON STOCKS -- 98.9% 5,274,890
(Cost $7,538,415) --------------
|
See Notes to Financial Statements Page 47
FIRST TRUST GLOBAL ENGINEERING AND CONSTRUCTION ETF (FLM)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
MONEY MARKET FUNDS -- 0.7%
37,094 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
0.24% (e) (f) $ 37,094
(Cost $37,094) --------------
TOTAL INVESTMENTS -- 99.6% 5,311,984
(Cost $7,575,509) (g)
NET OTHER ASSETS AND
LIABILITIES -- 0.4% 18,778
--------------
NET ASSETS -- 100.0% $ 5,330,762
==============
|
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures adopted by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940, as
amended. At March 31, 2020, securities noted as such are valued at
$3,966,972 or 74.4% of net assets. Certain of these securities are fair
valued using a factor provided by a third-party pricing service due to the
change in value between the foreign markets' close and the NYSE close
exceeding a certain threshold. On days when this threshold is not
exceeded, these securities are typically valued at the last sale price on
the exchange on which they are principally traded.
(c) All or a portion of this security is on loan (see Note 2E - Securities
Lending in the Notes to Financial Statements). The aggregate value of such
securities is $36,188 and the total value of the collateral held by the
Fund is $37,094.
(d) Non-income producing security.
(e) Rate shown reflects yield as of March 31, 2020.
(f) This security serves as collateral for securities on loan.
(g) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2020, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $320,258 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $2,583,783. The net unrealized depreciation was
$2,263,525.
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2020 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2020 PRICES INPUTS INPUTS
----------------------------------------------------------
Common Stocks:
Canada $ 246,449 $ 246,449 $ -- $ --
United States 1,061,469 1,061,469 -- --
Other Country
Categories* 3,966,972 -- 3,966,972 --
Money Market
Funds 37,094 37,094 -- --
----------------------------------------------------------
Total
Investments $ 5,311,984 $ 1,345,012 $ 3,966,972 $ --
==========================================================
|
* See Portfolio of Investments for country breakout
OFFSETTING ASSETS AND LIABILITIES
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 36,188
Non-cash Collateral(2) (36,188)
--------------
Net Amount $ --
==============
|
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value", is not offset and is shown on a gross
basis.
(2) At March 31, 2020, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
Page 48 See Notes to Financial Statements
FIRST TRUST GLOBAL ENGINEERING AND CONSTRUCTION ETF (FLM)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
Japanese Yen 33.8%
United States Dollar 20.7
Euro 20.0
Hong Kong Dollar 6.1
Swedish Krona 5.3
Canadian Dollar 4.6
British Pound Sterling 3.5
Australian Dollar 2.9
South Korean Won 1.6
Philippine Peso 0.9
Norwegian Krone 0.6
------
Total 100.0%
======
|
See Notes to Financial Statements Page 49
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) SMART GRID INFRASTRUCTURE INDEX FUND (GRID)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.9%
CANADA -- 0.3%
2,380 Fortis, Inc. $ 91,780
--------------
CHINA -- 0.1%
3,875 BYD Co., Ltd., Class H (b) 20,674
--------------
FRANCE -- 8.9%
10,051 Engie S.A. (b) 102,927
28,171 Schneider Electric SE (b) 2,381,096
--------------
2,484,023
--------------
GERMANY -- 2.6%
4,062 Siemens AG (b) 340,132
13,611 SMA Solar Technology AG (b) (c) 387,169
--------------
727,301
--------------
IRELAND -- 4.3%
2,133 Eaton Corp. PLC 165,713
3,980 Johnson Controls International
PLC 107,301
55,059 nVent Electric PLC 928,845
--------------
1,201,859
--------------
ITALY -- 17.3%
39,201 Enel S.p.A. (b) 270,403
119,276 Prysmian S.p.A. (b) 1,893,733
423,297 Terna Rete Elettrica Nazionale
S.p.A. (b) 2,660,791
--------------
4,824,927
--------------
JAPAN -- 3.0%
4,900 Hitachi Ltd. (b) 140,759
1,300 NEC Corp. (b) 47,337
1,400 NGK Insulators Ltd. (b) 18,221
39,100 Nissin Electric Co., Ltd. (b) 332,455
33,600 Osaki Electric Co., Ltd. (b) 165,506
13,300 Panasonic Corp. (b) 100,686
1,800 Toshiba Corp. (b) 39,453
--------------
844,417
--------------
JERSEY -- 5.1%
28,983 Aptiv PLC 1,427,123
--------------
NETHERLANDS -- 0.0%
375 STMicroelectronics N.V. 8,014
--------------
SPAIN -- 9.0%
139,032 Red Electrica Corp., S.A. (b) 2,498,338
--------------
SWITZERLAND -- 3.9%
10,305 ABB Ltd. (b) 179,112
13,316 Landis+Gyr Group AG (b) 911,110
--------------
1,090,222
--------------
TAIWAN -- 0.1%
2,356 Advantech Co., Ltd. (b) 19,413
--------------
UNITED KINGDOM -- 0.8%
17,580 National Grid PLC (b) 205,409
--------------
UNITED STATES -- 44.5%
143 Adesto Technologies Corp. (c) 1,600
21,189 Advanced Energy Industries,
Inc. (c) 1,027,455
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
UNITED STATES (CONTINUED)
11,920 American Superconductor Corp. (c) $ 65,321
2,000 Analog Devices, Inc. 179,300
226 Arcosa, Inc. 8,981
104 AZZ, Inc. 2,924
18,528 Badger Meter, Inc. 993,101
205 Belden, Inc. 7,396
15,013 Cisco Systems, Inc. 590,161
132 Digi International, Inc. (c) 1,259
205 EnerSys 10,152
62,209 Enphase Energy, Inc. (c) 2,008,729
106 ESCO Technologies, Inc. 8,046
41,739 General Electric Co. 331,408
3,810 Honeywell International, Inc. 509,740
251 Hubbell, Inc. 28,800
4,810 International Business Machines
Corp. 533,573
16,990 Itron, Inc. (c) 948,552
286 MasTec, Inc. (c) 9,361
9,610 MYR Group, Inc. (c) 251,686
3,091 NVIDIA Corp. 814,788
11,587 Oracle Corp. 560,000
32,673 Quanta Services, Inc. 1,036,714
16,671 SolarEdge Technologies, Inc. (c) 1,365,021
665 Tesla, Inc. (c) 348,460
1,150 Trimble, Inc. (c) 36,604
101 Valmont Industries, Inc. 10,704
72,552 Veoneer, Inc. (c) (d) 531,081
207 WESCO International, Inc. (c) 4,730
7,873 Willdan Group, Inc. (c) 168,246
--------------
12,393,893
--------------
TOTAL COMMON STOCKS -- 99.9% 27,837,393
(Cost $31,537,336) --------------
MONEY MARKET FUNDS -- 1.8%
502,040 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
0.24% (e) (f) 502,040
(Cost $502,040) --------------
TOTAL INVESTMENTS -- 101.7% 28,339,433
(Cost $32,039,376) (g)
NET OTHER ASSETS AND
LIABILITIES -- (1.7)% (462,221)
--------------
NET ASSETS -- 100.0% $ 27,877,212
==============
|
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures adopted by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940, as
amended. At March 31, 2020, securities noted as such are
Page 50 See Notes to Financial Statements
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) SMART GRID INFRASTRUCTURE INDEX FUND (GRID)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
valued at $12,714,724 or 45.6% of net assets. Certain of these securities
are fair valued using a factor provided by a third-party pricing service
due to the change in value between the foreign markets' close and the NYSE
close exceeding a certain threshold. On days when this threshold is not
exceeded, these securities are typically valued at the last sale price on
the exchange on which they are principally traded.
(c) Non-income producing security.
(d) All or a portion of this security is on loan (see Note 2E - Securities
Lending in the Notes to Financial Statements). The aggregate value of such
securities is $477,264 and the total value of the collateral held by the
Fund is $502,040.
(e) Rate shown reflects yield as of March 31, 2020.
(f) This security serves as collateral for securities on loan.
(g) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2020, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $2,617,551 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $6,317,494. The net unrealized depreciation was
$3,699,943.
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2020 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2020 PRICES INPUTS INPUTS
----------------------------------------------------------
Common Stocks:
Canada $ 91,780 $ 91,780 $ -- $ --
Ireland 1,201,859 1,201,859 -- --
Jersey 1,427,123 1,427,123 -- --
Netherlands 8,014 8,014 -- --
United States 12,393,893 12,393,893 -- --
Other Country
Categories* 12,714,724 -- 12,714,724 --
Money Market
Funds 502,040 502,040 -- --
----------------------------------------------------------
Total
Investments $ 28,339,433 $ 15,624,709 $ 12,714,724 $ --
==========================================================
|
* See Portfolio of Investments for country breakout.
OFFSETTING ASSETS AND LIABILITIES
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 477,264
Non-cash Collateral(2) (477,264)
--------------
Net Amount $ --
==============
|
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value", is not offset and is shown on a gross
basis.
(2) At March 31, 2020, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 54.8%
Euro 37.2
Swiss Franc 3.8
Japanese Yen 3.0
British Pound Sterling 0.7
Canadian Dollar 0.3
Hong Kong Dollar 0.1
New Taiwan Dollar 0.1
------
Total 100.0%
======
|
See Notes to Financial Statements Page 51
FIRST TRUST INDXX GLOBAL NATURAL RESOURCES INCOME ETF (FTRI)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 98.8%
AUSTRALIA -- 1.4%
59,996 Alumina Ltd. (b) $ 53,768
20,444 New Hope Corp. Ltd. (b) 17,299
--------------
71,067
--------------
BERMUDA -- 3.4%
3,538 Bunge Ltd. 145,164
25,560 China Oriental Group Co. Ltd. (b) 6,498
27,802 China Water Affairs Group
Ltd. (b) 20,764
--------------
172,426
--------------
CANADA -- 0.7%
1,203 Norbord, Inc. 14,233
3,942 Vermilion Energy, Inc. (c) 12,259
10,451 Whitecap Resources, Inc. 8,689
--------------
35,181
--------------
CAYMAN ISLANDS -- 0.2%
36,510 China Zhongwang Holdings
Ltd. (b) 9,536
--------------
CHILE -- 1.2%
28,597 Empresas CMPC S.A. (b) 60,917
--------------
CHINA -- 1.0%
12,000 Angang Steel Co. Ltd.,
Class H (b) 3,129
24,885 China Shenhua Energy Co., Ltd.,
Class H (b) 47,019
--------------
50,148
--------------
COLOMBIA -- 1.1%
5,714 Ecopetrol S.A., ADR 54,340
--------------
FINLAND -- 6.5%
11,888 UPM-Kymmene OYJ (b) 324,150
--------------
FRANCE -- 3.8%
9,069 Veolia Environnement S.A. (b) 191,545
--------------
HONG KONG -- 7.5%
3,617 CNOOC Ltd., ADR 374,251
--------------
INDIA -- 0.2%
23,450 National Aluminium Co., Ltd. (b) 9,011
--------------
INDONESIA -- 0.5%
93,343 Bukit Asam Tbk PT (b) 12,338
9,598 Indo Tambangraya Megah Tbk
PT (b) 4,707
141,783 Japfa Comfeed Indonesia Tbk
PT (b) 8,187
--------------
25,232
--------------
ISRAEL -- 1.1%
17,764 ICL Ltd. 54,536
--------------
JAPAN -- 4.1%
40,900 Marubeni Corp. (b) 202,989
--------------
NORWAY -- 1.2%
2,214 Austevoll Seafood ASA (b) 15,756
1,348 Salmar ASA (b) 44,597
--------------
60,353
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
RUSSIA -- 16.0%
3,361 Magnitogorsk Iron & Steel Works
PJSC, GDR (b) (d) $ 20,758
1,355 MMC Norilsk Nickel PJSC (b) 328,422
2,874 Novolipetsk Steel PJSC,
GDR (b) (d) 44,676
1,181 PhosAgro PJSC (b) 37,009
748 Polyus PJSC (b) 101,092
4,738 Severstal PJSC, GDR (b) (d) 51,910
31,722 Tatneft PJSC (b) 219,230
--------------
803,097
--------------
SOUTH AFRICA -- 0.4%
3,714 Exxaro Resources Ltd. (b) 20,359
--------------
SPAIN -- 0.2%
3,427 Ence Energia y Celulosa
S.A. (b) (c) 9,358
--------------
THAILAND -- 0.3%
34,700 TTW PCL (b) 13,343
--------------
TURKEY -- 0.8%
34,860 Eregli Demir ve Celik Fabrikalari
TAS (b) 39,500
--------------
UNITED KINGDOM -- 27.0%
8,037 BHP Group PLC, ADR 243,843
15,444 Diversified Gas & Oil PLC (b) (d) 16,924
12,321 Evraz PLC (b) 35,252
10,788 Pennon Group PLC (b) 144,248
11,928 Rio Tinto PLC, ADR 543,440
6,114 Severn Trent PLC (b) 173,068
17,542 United Utilities Group PLC (b) 196,363
--------------
1,353,138
--------------
UNITED STATES -- 20.2%
2,205 Alliance Resource Partners,
L.P. (e) 6,835
12,653 Archer-Daniels-Midland Co. 445,133
1,446 Domtar Corp. 31,291
6,932 GrafTech International Ltd. (c) 56,288
7,185 International Paper Co. 223,669
19,624 Occidental Petroleum Corp. 227,246
2,486 Peabody Energy Corp. 7,209
1,330 Warrior Met Coal, Inc. 14,125
--------------
1,011,796
--------------
TOTAL COMMON STOCKS -- 98.8% 4,946,273
(Cost $6,887,430) --------------
MONEY MARKET FUNDS -- 6.4%
321,279 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
0.24% (f) (g) 321,279
(Cost $321,279) --------------
TOTAL INVESTMENTS -- 105.2% 5,267,552
(Cost $7,208,709) (h)
NET OTHER ASSETS AND
LIABILITIES -- (5.2)% (260,014)
--------------
NET ASSETS -- 100.0% $ 5,007,538
==============
|
Page 52 See Notes to Financial Statements
FIRST TRUST INDXX GLOBAL NATURAL RESOURCES INCOME ETF (FTRI)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures adopted by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940, as
amended. At March 31, 2020, securities noted as such are valued at
$2,483,722 or 49.6% of net assets. Certain of these securities are fair
valued using a factor provided by a third-party pricing service due to the
change in value between the foreign markets' close and the NYSE close
exceeding a certain threshold. On days when this threshold is not
exceeded, these securities are typically valued at the last sale price on
the exchange on which they are principally traded.
(c) All or a portion of this security is on loan (see Note 2E - Securities
Lending in the Notes to Financial Statements). The aggregate value of such
securities is $32,394 and the total value of the collateral held by the
Fund is $321,279.
(d) This Security may be resold to qualified foreign investors and foreign
institutional buyers under regulation S of the Securities Act of 1933, as
amended.
(e) Security is a Master Limited Partnership ("MLP").
(f) Rate shown reflects yield as of March 31, 2020.
(g) This security serves as collateral for securities on loan.
(h) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2020, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $210,200 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $2,151,357. The net unrealized depreciation was
$1,941,157.
ADR - American Depositary Receipt
GDR - Global Depositary Receipt.
-----------------------------
|
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2020 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2020 PRICES INPUTS INPUTS
----------------------------------------------------------
Common Stocks:
Bermuda $ 172,426 $ 145,164 $ 27,262 $ --
Canada 35,181 35,181 -- --
Colombia 54,340 54,340 -- --
Hong Kong 374,251 374,251 -- --
Israel 54,536 54,536 -- --
United Kingdom 1,353,138 787,283 565,855 --
United States 1,011,796 1,011,796 -- --
Other Country
Categories* 1,890,605 -- 1,890,605 --
Money Market
Funds 321,279 321,279 -- --
----------------------------------------------------------
Total
Investments $ 5,267,552 $ 2,783,830 $ 2,483,722 $ --
==========================================================
|
* See Portfolio of Investments for country breakout.
See Notes to Financial Statements Page 53
FIRST TRUST INDXX GLOBAL NATURAL RESOURCES INCOME ETF (FTRI)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
OFFSETTING ASSETS AND LIABILITIES
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 32,394
Non-cash Collateral(2) (32,394)
--------------
Net Amount $ --
==============
|
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value", is not offset and is shown on a gross
basis.
(2) At March 31, 2020, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 54.6%
Russian Ruble 13.0
British Pound Sterling 10.7
Euro 10.0
Japanese Yen 3.9
Hong Kong Dollar 1.7
Australian Dollar 1.3
Chilean Peso 1.2
Norwegian Krone 1.1
Turkish Lira 0.7
Indonesian Rupiah 0.5
Canadian Dollar 0.4
South African Rand 0.4
Thai Baht 0.3
Indian Rupee 0.2
------
Total 100.0%
======
|
Page 54 See Notes to Financial Statements
FIRST TRUST INDXX GLOBAL AGRICULTURE ETF (FTAG)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.3%
AUSTRALIA -- 1.4%
1,743 GrainCorp Ltd., Class A (b) (c) $ 3,360
12,291 Incitec Pivot Ltd. (b) 15,246
2,892 Nufarm Ltd. (b) (c) 8,947
1,743 United Malt Grp Ltd. (c) 4,717
--------------
32,270
--------------
BERMUDA -- 1.9%
1,081 Bunge Ltd. 44,353
--------------
CANADA -- 5.2%
3,461 Nutrien Ltd. 118,318
--------------
CHILE -- 0.9%
917 Sociedad Quimica y Minera de
Chile S.A., ADR 20,678
--------------
GERMANY -- 22.9%
4,662 BASF SE (b) 217,911
3,856 Bayer AG (b) 220,943
3,550 Evonik Industries AG (b) 74,135
1,458 K+S AG (b) 8,389
--------------
521,378
--------------
INDIA -- 4.7%
2,239 Coromandel International Ltd. (b) 16,180
933 Escorts Ltd. (b) 8,111
9,490 Mahindra & Mahindra Ltd. (b) 35,436
1,053 PI Industries Ltd. (b) 16,336
1,940 Tata Chemicals Ltd. (b) 5,691
5,819 UPL Ltd. (b) 25,057
--------------
106,811
--------------
ISRAEL -- 1.3%
9,754 ICL Ltd. 29,945
--------------
JAPAN -- 10.3%
9,000 Kubota Corp. (b) 114,471
1,600 Mitsui Chemicals, Inc. (b) 30,116
1,100 Nissan Chemical Corp. (b) 39,839
400 Sakata Seed Corp. (b) 12,136
12,600 Sumitomo Chemical Co., Ltd. (b) 37,226
--------------
233,788
--------------
MALAYSIA -- 3.1%
60,901 Petronas Chemicals Group Bhd (b) 71,032
--------------
MEXICO -- 0.8%
16,035 Orbia Advance Corp. SAB de CV 17,683
--------------
NETHERLANDS -- 3.4%
10,285 CNH Industrial N.V. 57,699
1,605 OCI N.V. (b) (c) 19,180
--------------
76,879
--------------
NORWAY -- 2.9%
2,075 Yara International ASA (b) 65,610
--------------
QATAR -- 3.7%
46,407 Industries Qatar QSC (b) 84,497
--------------
RUSSIA -- 1.4%
987 PhosAgro PJSC (b) 30,929
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
SINGAPORE -- 4.1%
41,300 Wilmar International Ltd. (b) $ 93,396
--------------
SWITZERLAND -- 0.9%
78 Bucher Industries AG (b) 20,559
--------------
TAIWAN -- 0.5%
7,465 Taiwan Fertilizer Co., Ltd. (b) 10,255
--------------
TURKEY -- 0.2%
2,543 Gubre Fabrikalari TAS (b) (c) 5,605
--------------
UNITED STATES -- 29.7%
575 AGCO Corp. 27,169
1,647 CF Industries Holdings, Inc. 44,798
5,529 Corteva, Inc. 129,931
1,671 Deere & Co. 230,865
984 FMC Corp. 80,383
82 Lindsay Corp. 7,510
2,885 Mosaic (The) Co. 31,216
272 Raven Industries, Inc. 5,775
424 Scotts Miracle-Gro (The) Co. 43,418
318 SiteOne Landscape Supply, Inc. (c) 23,411
815 Toro (The) Co. 53,048
--------------
677,524
--------------
TOTAL INVESTMENTS -- 99.3% 2,261,510
(Cost $3,202,963) (d)
NET OTHER ASSETS AND
LIABILITIES -- 0.7% 16,152
--------------
NET ASSETS -- 100.0% $ 2,277,662
==============
|
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures adopted by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940, as
amended. At March 31, 2020, securities noted as such are valued at
$1,290,593 or 56.7% of net assets. Certain of these securities are fair
valued using a factor provided by a third-party pricing service due to the
change in value between the foreign markets' close and the NYSE close
exceeding a certain threshold. On days when this threshold is not
exceeded, these securities are typically valued at the last sale price on
the exchange on which they are principally traded.
(c) Non-income producing security.
(d) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2020, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $27,406 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $968,859. The net unrealized depreciation was
$941,453.
ADR - American Depositary Receipt
See Notes to Financial Statements Page 55
FIRST TRUST INDXX GLOBAL AGRICULTURE ETF (FTAG)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2020 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2020 PRICES INPUTS INPUTS
----------------------------------------------------------
Common Stocks:
Australia $ 32,270 $ 4,717 $ 27,553 $ --
Bermuda 44,353 44,353 -- --
Canada 118,318 118,318 -- --
Chile 20,678 20,678 -- --
Israel 29,945 29,945 -- --
Mexico 17,683 17,683 -- --
Netherlands 76,879 57,699 19,180 --
United States 677,524 677,524 -- --
Other Country
Categories* 1,243,860 -- 1,243,860 --
----------------------------------------------------------
Total
Investments $ 2,261,510 $ 970,917 $ 1,290,593 $ --
==========================================================
|
* See Portfolio of Investments for country breakout.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 36.7%
Euro 23.9
Japanese Yen 10.3
Canadian Dollar 5.2
Indian Rupee 4.7
Singapore Dollar 4.1
Qatar Riyal 3.7
Malaysian Ringgit 3.2
Norwegian Krone 2.9
Australian Dollar 1.4
Russian Ruble 1.4
Swiss Franc 0.9
Mexican Peso 0.8
New Taiwan Dollar 0.5
Turkish Lira 0.3
------
Total 100.0%
======
|
Page 56 See Notes to Financial Statements
FIRST TRUST BICK INDEX FUND (BICK)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.4%
BRAZIL -- 16.6%
219,684 Ambev S.A., ADR $ 505,273
69,406 B2W Cia Digital (b) 639,148
81,952 B3 S.A. - Brasil Bolsa Balcao 561,950
117,816 Banco Bradesco S.A., ADR 478,333
81,792 Banco do Brasil S.A. 436,814
106,854 BRF S.A. (b) 310,521
112,281 Centrais Eletricas
Brasileiras S.A. 515,584
68,127 Cia de Saneamento Basico do
Estado de Sao Paulo 509,894
381,517 Cogna Educacao 301,037
105,319 IRB Brasil Resseguros S.A. 196,608
113,618 Itau Unibanco Holding S.A., ADR 510,145
294,692 Itausa - Investimentos Itau S.A.
(Preference Shares) 493,412
137,317 JBS S.A. 537,524
91,160 Localiza Rent a Car S.A. 460,879
75,499 Lojas Renner S.A. 488,351
86,848 Magazine Luiza S.A. 658,200
68,990 Notre Dame Intermedica
Participacoes S.A. 592,963
137,507 Petrobras Distribuidora S.A. 416,536
62,796 Petroleo Brasileiro S.A., ADR 345,378
34,610 Raia Drogasil S.A. 674,735
160,076 Rumo S.A. (b) 606,281
101,423 Suzano S.A. 700,149
78,643 Vale S.A., ADR 651,950
--------------
11,591,665
--------------
CAYMAN ISLANDS -- 20.8%
4,624 Alibaba Group Holding Ltd.,
ADR (b) 899,275
98,230 ANTA Sports Products Ltd. (c) 712,826
7,797 Baidu, Inc., ADR (b) 785,860
48,301 iQIYI, Inc., ADR (b) 859,758
28,322 JD.com, Inc., ADR (b) 1,147,041
70,141 Meituan Dianping,
Class B (b) (c) (d) 836,168
2,936 NetEase, Inc., ADR 942,338
7,646 New Oriental Education &
Technology Group, Inc., ADR (b) 827,603
27,244 Pagseguro Digital Ltd., Class A (b) 526,626
25,734 Pinduoduo, Inc., ADR (b) 927,196
22,566 StoneCo., Ltd., Class A (b) 491,262
189,508 Sunac China Holdings Ltd. (c) 864,302
56,406 Sunny Optical Technology Group
Co., Ltd. (c) 746,131
20,903 TAL Education Group, ADR (b) 1,113,294
21,803 Tencent Holdings Ltd. (c) 1,077,670
27,828 Trip.com Group Ltd., ADR (b) 652,567
808,846 Xiaomi Corp.,
Class B (b) (c) (d) (e) 1,073,975
--------------
14,483,892
--------------
CHINA -- 8.7%
2,305,696 Bank of China Ltd., Class H (c) 877,695
1,162,178 China Construction Bank Corp.,
Class H (c) 944,673
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
CHINA (CONTINUED)
366,009 China Life Insurance Co., Ltd.,
Class H (c) $ 706,781
195,496 China Merchants Bank Co., Ltd.,
Class H (c) 874,605
4,524,428 China Tower Corp., Ltd.,
Class H (c) (d) (e) 1,005,332
1,297,474 Industrial & Commercial Bank of
China Ltd., Class H (c) 885,109
81,725 Ping An Insurance (Group) Co. of
China Ltd., Class H (c) 798,148
--------------
6,092,343
--------------
HONG KONG -- 2.1%
637,227 CNOOC Ltd. (c) 662,190
406,491 CSPC Pharmaceutical Group
Ltd. (c) 799,604
--------------
1,461,794
--------------
INDIA -- 16.5%
34,735 Axis Bank Ltd., GDR (c) (d) 861,129
43,686 Dr. Reddy's Laboratories Ltd.,
ADR 1,761,856
28,799 HDFC Bank Ltd., ADR 1,107,610
126,238 ICICI Bank Ltd., ADR 1,073,023
180,936 Infosys Ltd., ADR 1,485,485
41,173 Reliance Industries Ltd.,
GDR (c) (e) 1,261,026
37,406 State Bank of India,
GDR (b) (c) (d) 947,712
158,524 Tata Motors Ltd., ADR (b) 748,233
220,947 Vedanta Ltd., ADR 786,571
489,975 Wipro Ltd., ADR 1,518,923
--------------
11,551,568
--------------
ISLE OF MAN -- 1.6%
666,147 Eros International PLC (b) 1,099,143
--------------
JERSEY -- 1.7%
28,186 WNS (Holdings) Ltd., ADR (b) 1,211,434
--------------
MAURITIUS -- 1.2%
68,325 MakeMyTrip Ltd. (b) 816,825
--------------
SOUTH KOREA -- 28.9%
5,780 Amorepacific Corp. (c) 792,653
23,293 Celltrion Healthcare Co.,
Ltd. (c) (f) 1,699,296
6,594 Celltrion, Inc. (c) (f) 1,226,494
30,565 Hana Financial Group, Inc. (c) 575,038
9,490 HLB, Inc. (b) (c) 690,281
4,457 Hyundai Mobis Co., Ltd. (c) 616,527
9,023 Hyundai Motor Co. (c) 650,031
7,032 Kakao Corp. (c) 889,429
23,719 KB Financial Group, Inc. (c) 667,074
25,260 Kia Motors Corp. (c) 531,696
3,573 LG Chem Ltd. (c) 884,966
15,624 LG Electronics, Inc. (c) 614,303
857 LG Household & Health Care
Ltd. (c) 785,002
6,360 NAVER Corp. (c) 884,259
2,207 NCSoft Corp. (c) 1,177,886
|
See Notes to Financial Statements Page 57
FIRST TRUST BICK INDEX FUND (BICK)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
SOUTH KOREA (CONTINUED)
4,733 POSCO (c) $ 622,805
2,772 Samsung Biologics Co.,
Ltd. (b) (c) (d) (e) 1,086,487
9,836 Samsung Electro-Mechanics Co.,
Ltd. (c) 779,393
21,726 Samsung Electronics Co., Ltd. (c) 844,740
4,727 Samsung SDI Co., Ltd. (c) 920,302
25,082 Shinhan Financial Group Co.,
Ltd. (c) 586,774
4,251 SK Holdings Co., Ltd. (c) 581,473
13,502 SK Hynix, Inc. (c) 912,790
7,449 SK Innovation Co., Ltd. (c) 527,060
4,447 SK Telecom Co., Ltd. (c) 646,798
--------------
20,193,557
--------------
UNITED STATES -- 1.3%
20,774 Yum China Holdings, Inc. 885,596
--------------
TOTAL INVESTMENTS -- 99.4% 69,387,817
(Cost $88,329,648) (g)
NET OTHER ASSETS AND
LIABILITIES -- 0.6% 397,136
--------------
NET ASSETS -- 100.0% $ 69,784,953
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) Non-income producing security.
(c) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures adopted by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940, as
amended. At March 31, 2020, securities noted as such are valued at
$36,128,633 or 51.8% of net assets. Certain of these securities are fair
valued using a factor provided by a third-party pricing service due to the
change in value between the foreign markets' close and the NYSE close
exceeding a certain threshold. On days when this threshold is not
exceeded, these securities are typically valued at the last sale price on
the exchange on which they are principally traded.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the Securities Act of 1933, as
amended (the "1933 Act").
(e) This security is exempt from registration upon resale under Rule 144A of
the 1933 Act and may be resold in transactions exempt from registration,
normally to qualified institutional buyers. This security is not
restricted on the foreign exchange where it trades freely without any
additional registration. As such, it does not require the additional
disclosure required of restricted securities.
(f) Non-income producing security which makes payment-in-kind ("PIK")
distributions. For the six months ended March 31, 2020, the Fund received
1,469 and 416 shares of Celltrion Healthcare Co., Ltd. and Celltrion,
Inc., respectively
(g) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2020, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $6,558,110 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $25,499,941. The net unrealized depreciation
was $18,941,831.
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
-----------------------------
|
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2020 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2020 PRICES INPUTS INPUTS
----------------------------------------------------------
Common Stocks:
Brazil $ 11,591,665 $ 11,591,665 $ -- $ --
Cayman
Islands 14,483,892 9,172,820 5,311,072 --
India 11,551,568 8,481,701 3,069,867 --
Isle of Man 1,099,143 1,099,143 -- --
Jersey 1,211,434 1,211,434 -- --
Mauritius 816,825 816,825 -- --
United States 885,596 885,596 -- --
Other Country
Categories* 27,747,694 -- 27,747,694 --
----------------------------------------------------------
Total
Investments $ 69,387,817 $ 33,259,184 $ 36,128,633 $ --
==========================================================
|
* See Portfolio of Investments for country breakout.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 39.2%
South Korean Won 29.1
Hong Kong Dollar 18.6
Brazilian Real 13.1
------
Total 100.0%
======
|
Page 58 See Notes to Financial Statements
FIRST TRUST INDXX NEXTG ETF (NXTG)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.7%
AUSTRALIA -- 0.4%
587,253 Telstra Corp., Ltd. (b) $ 1,102,362
--------------
BERMUDA -- 1.5%
190,939 Marvell Technology Group Ltd. 4,320,950
--------------
BRAZIL -- 0.4%
109,547 Telefonica Brasil S.A., ADR 1,043,983
--------------
CANADA -- 1.3%
30,720 BCE, Inc. 1,260,190
31,196 Rogers Communications, Inc.,
Class B 1,302,105
78,870 TELUS Corp. 1,246,968
--------------
3,809,263
--------------
CAYMAN ISLANDS -- 3.7%
99,689 GDS Holdings Ltd., ADR (c) 5,778,971
3,846,607 Xiaomi Corp.,
Class B (b) (c) (d) (e) 5,107,473
--------------
10,886,444
--------------
CHINA -- 2.7%
3,852,810 China Telecom Corp., Ltd.,
Class H (b) 1,167,343
23,148,753 China Tower Corp., Ltd.,
Class H (b) (d) (e) 5,143,674
518,667 ZTE Corp., Class H (b) (c) (f) 1,583,097
--------------
7,894,114
--------------
FINLAND -- 2.0%
28,227 Elisa OYJ (b) 1,742,269
1,370,800 Nokia OYJ, ADR 4,249,480
--------------
5,991,749
--------------
FRANCE -- 0.4%
100,524 Orange S.A. (b) 1,217,091
--------------
GERMANY -- 1.9%
91,014 Deutsche Telekom AG (b) 1,175,486
212,650 Infineon Technologies AG (b) 3,069,767
502,057 Telefonica Deutschland Holding
AG (b) 1,232,604
--------------
5,477,857
--------------
GUERNSEY -- 1.3%
69,712 Amdocs Ltd. 3,832,069
--------------
HONG KONG -- 2.2%
193,427 China Mobile Ltd. (b) 1,449,596
1,688,938 China Unicom Hong Kong Ltd. (b) 985,074
7,446,217 Lenovo Group Ltd. (b) 3,944,577
--------------
6,379,247
--------------
INDIA -- 5.7%
240,667 Bharti Airtel Ltd. (b) (c) 1,402,638
646,312 HCL Technologies Ltd. (b) 3,728,155
487,912 Infosys Ltd., ADR 4,005,757
458,258 Tech Mahindra Ltd. (b) 3,413,544
1,329,825 Wipro Ltd., ADR 4,122,457
--------------
16,672,551
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
ITALY -- 2.2%
491,884 Infrastrutture Wireless Italiane
S.p.A. (b) (d) (e) $ 5,326,026
2,427,458 Telecom Italia S.p.A. (b) (c) 982,573
--------------
6,308,599
--------------
JAPAN -- 10.4%
52,800 Fujitsu Ltd. (b) 4,755,628
51,100 KDDI Corp. (b) 1,509,422
73,100 Kyocera Corp. (b) 4,313,689
352,400 Mitsubishi Electric Corp. (b) 4,304,995
117,000 NEC Corp. (b) 4,260,348
58,000 Nippon Telegraph & Telephone
Corp. (b) 1,387,164
53,770 NTT DOCOMO, Inc. (b) 1,681,555
715,800 Renesas Electronics Corp. (b) (c) 2,546,151
112,300 Softbank Corp. (b) 1,430,555
73,300 Sony Corp. (b) 4,341,821
--------------
30,531,328
--------------
MALAYSIA -- 1.5%
4,513,300 DiGi.Com Bhd (b) 4,547,153
--------------
NETHERLANDS -- 2.4%
39,472 NXP Semiconductors N.V. 3,273,413
181,970 STMicroelectronics N.V. (b) 3,859,641
--------------
7,133,054
--------------
NEW ZEALAND -- 0.4%
523,459 Spark New Zealand Ltd. (b) 1,273,981
--------------
NORWAY -- 0.4%
84,944 Telenor ASA (b) 1,241,518
--------------
PHILIPPINES -- 1.0%
39,065 Globe Telecom, Inc. (b) 1,480,474
76,059 PLDT, Inc., ADR 1,563,773
--------------
3,044,247
--------------
QATAR -- 0.4%
761,982 Ooredoo QPSC (b) 1,219,219
--------------
RUSSIA -- 0.4%
156,906 Mobile TeleSystems PJSC, ADR 1,192,486
--------------
SINGAPORE -- 0.4%
597,900 Singapore Telecommunications
Ltd. (b) 1,065,891
--------------
SOUTH AFRICA -- 0.7%
250,774 MTN Group Ltd. (b) 672,415
193,020 Vodacom Group Ltd. (b) 1,261,316
--------------
1,933,731
--------------
SOUTH KOREA -- 4.9%
131,949 KT Corp., ADR 1,026,563
81,006 LG Electronics, Inc. (b) 3,184,988
127,677 LG Uplus Corp. (b) 1,121,682
108,971 Samsung Electronics Co., Ltd. (b) 4,236,958
29,278 Samsung SDS Co., Ltd. (b) 3,578,758
7,410 SK Telecom Co., Ltd. (b) 1,077,754
--------------
14,226,703
--------------
|
See Notes to Financial Statements Page 59
FIRST TRUST INDXX NEXTG ETF (NXTG)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
SPAIN -- 0.3%
200,958 Telefonica S.A. (b) $ 914,579
--------------
SWEDEN -- 2.4%
102,977 Tele2 AB, Class B (b) 1,371,966
537,667 Telefonaktiebolaget LM Ericsson,
Class B (b) (c) (f) 4,352,394
346,473 Telia Co., AB (b) 1,240,159
--------------
6,964,519
--------------
SWITZERLAND -- 0.5%
2,846 Swisscom AG (b) 1,523,979
--------------
TAIWAN -- 4.7%
1,748,332 ASE Technology Holding Co.,
Ltd. (b) 3,386,550
407,148 Chunghwa Telecom Co., Ltd. (b) 1,443,456
347,537 MediaTek, Inc. (b) 3,730,194
394,709 Taiwan Mobile Co., Ltd. (b) 1,303,251
83,497 Taiwan Semiconductor
Manufacturing Co., Ltd., ADR 3,990,321
--------------
13,853,772
--------------
TURKEY -- 0.4%
636,749 Turkcell Iletisim Hizmetleri
AS (b) 1,182,693
--------------
UNITED ARAB EMIRATES -- 0.4%
334,081 Emirates Telecommunications
Group Co. PJSC (b) 1,262,284
--------------
UNITED KINGDOM -- 0.7%
602,158 BT Group PLC (b) 875,877
789,639 Vodafone Group PLC (b) 1,092,419
--------------
1,968,296
--------------
UNITED STATES -- 41.7%
114,904 Advanced Micro Devices, Inc. (c) 5,225,834
23,338 American Tower Corp. 5,081,849
41,539 Analog Devices, Inc. 3,723,971
25,396 Arista Networks, Inc. (c) 5,143,960
38,991 AT&T, Inc. 1,136,588
14,929 Broadcom, Inc. 3,539,666
114,823 Ciena Corp. (c) 4,571,104
107,155 Cisco Systems, Inc. 4,212,263
44,481 CoreSite Realty Corp. 5,155,348
37,074 Crown Castle International Corp. 5,353,485
80,357 CyrusOne, Inc. 4,962,045
85,559 Digital Realty Trust, Inc. 11,885,001
8,933 Equinix, Inc. 5,579,284
34,112 F5 Networks, Inc. (c) 3,637,362
298,400 Hewlett Packard Enterprise Co. 2,897,464
85,035 Intel Corp. 4,602,094
36,164 International Business Machines
Corp. 4,011,672
200,976 Juniper Networks, Inc. 3,846,681
45,608 Keysight Technologies, Inc. (c) 3,816,477
65,224 Lumentum Holdings, Inc. (c) 4,807,009
96,012 Micron Technology, Inc. (c) 4,038,265
42,425 Qorvo, Inc. (c) 3,420,728
54,955 QUALCOMM, Inc. 3,717,706
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
UNITED STATES (CONTINUED)
21,459 SBA Communications Corp. $ 5,793,286
43,894 Skyworks Solutions, Inc. 3,923,246
19,967 T-Mobile US, Inc. (c) 1,675,231
24,445 Verizon Communications, Inc. 1,313,430
9,577 VMware, Inc., Class A (c) 1,159,775
50,691 Xilinx, Inc. 3,950,856
--------------
122,181,680
--------------
TOTAL COMMON STOCKS -- 99.7% 292,197,392
(Cost $328,700,010) --------------
MONEY MARKET FUNDS -- 1.9%
|
5,618,105 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
0.24% (g) (h) 5,618,105
(Cost $5,618,105) --------------
TOTAL INVESTMENTS -- 101.6% 297,815,497
(Cost $334,318,115) (i)
NET OTHER ASSETS AND
|
LIABILITIES -- (1.6)% (4,650,203)
NET ASSETS -- 100.0% $ 293,165,294
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures adopted by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940, as
amended. At March 31, 2020, securities noted as such are valued at
$127,806,226 or 43.6% of net assets. Certain of these securities are fair
valued using a factor provided by a third-party pricing service due to the
change in value between the foreign markets' close and the NYSE close
exceeding a certain threshold. On days when this threshold is not
exceeded, these securities are typically valued at the last sale price on
the exchange on which they are principally traded.
(c) Non-income producing security.
(d) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(e) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
Page 60 See Notes to Financial Statements
FIRST TRUST INDXX NEXTG ETF (NXTG)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
(f) All or a portion of this security is on loan (see Note 2E - Securities
Lending in the Notes to Financial Statements). The aggregate value of such
securities is $4,515,551 and the total value of the collateral held by the
Fund is $5,618,105.
(g) Rate shown reflects yield as of March 31, 2020.
(h) This security serves as collateral for securities on loan.
(i) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2020, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $7,102,512 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $43,605,130. The net unrealized depreciation
was $36,502,618.
ADR - American Depositary Receipt
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2020 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2020 PRICES INPUTS INPUTS
----------------------------------------------------------
Common Stocks:
Bermuda $ 4,320,950 $ 4,320,950 $ -- $ --
Brazil 1,043,983 1,043,983 -- --
Canada 3,809,263 3,809,263 -- --
Cayman
Islands 10,886,444 5,778,971 5,107,473 --
Finland 5,991,749 4,249,480 1,742,269 --
Guernsey 3,832,069 3,832,069 -- --
India 16,672,551 8,128,214 8,544,337 --
Netherlands 7,133,054 3,273,413 3,859,641 --
Philippines 3,044,247 1,563,773 1,480,474 --
Russia 1,192,486 1,192,486 -- --
South Korea 14,226,703 1,026,563 13,200,140 --
Taiwan 13,853,772 3,990,321 9,863,451 --
United States 122,181,680 122,181,680 -- --
Other Country
Categories* 84,008,441 -- 84,008,441 --
Money Market
Funds 5,618,105 5,618,105 -- --
----------------------------------------------------------
Total
Investments $ 297,815,497 $ 170,009,271 $127,806,226 $ --
==========================================================
|
* See Portfolio of Investments for country breakout.
OFFSETTING ASSETS AND LIABILITIES
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 4,515,551
Non-cash Collateral(2) (4,515,551)
--------------
Net Amount $ --
==============
|
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value", is not offset and is shown on a gross
basis.
(2) At March 31, 2020, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 55.8%
Japanese Yen 10.3
Euro 6.6
Hong Kong Dollar 6.5
South Korean Won 4.4
New Taiwan Dollar 3.3
Indian Rupee 2.9
Swedish Krona 2.3
Malaysian Ringgit 1.5
Canadian Dollar 1.3
British Pound Sterling 0.7
South African Rand 0.6
Swiss Franc 0.5
Philippine Peso 0.5
New Zealand Dollar 0.4
United Arab Emirates Dirham 0.4
Norwegian Krone 0.4
Qatar Riyal 0.4
Turkish Lira 0.4
Australian Dollar 0.4
Singapore Dollar 0.4
------
Total 100.0%
======
|
See Notes to Financial Statements Page 61
FIRST TRUST NASDAQ GLOBAL AUTO INDEX FUND (CARZ)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 98.9%
BERMUDA -- 0.9%
140,196 Brilliance China Automotive
Holdings Ltd. (b) $ 114,164
--------------
CAYMAN ISLANDS -- 4.2%
382,325 Geely Automobile Holdings
Ltd. (b) 554,839
--------------
CHINA -- 5.3%
107,383 BAIC Motor Corp., Ltd.,
Class H (b) (c) (d) 42,240
46,165 BYD Co., Ltd., Class H (b) (e) 246,298
139,091 Dongfeng Motor Group Co., Ltd.,
Class H (b) 90,564
209,279 Great Wall Motor Co., Ltd.,
Class H (b) 132,711
191,212 Guangzhou Automobile Group
Co., Ltd., Class H (b) 190,200
--------------
702,013
--------------
FRANCE -- 5.0%
30,012 Peugeot S.A. (b) 390,735
13,965 Renault S.A. (b) 265,401
--------------
656,136
--------------
GERMANY -- 15.7%
8,975 Bayerische Motoren Werke AG (b) 458,167
25,698 Daimler AG (b) 767,450
9,793 Porsche Automobil Holding SE
(Preference Shares) (b) 409,352
3,749 Volkswagen AG (Preference
Shares) (b) 431,872
--------------
2,066,841
--------------
ITALY -- 0.1%
10,631 Piaggio & C. S.p.A. (b) 18,783
--------------
JAPAN -- 32.6%
51,835 Honda Motor Co., Ltd. (b) 1,159,883
40,459 Mazda Motor Corp. (b) 213,658
46,200 Mitsubishi Motors Corp. (b) 130,171
116,976 Nissan Motor Co., Ltd. (b) 391,367
27,665 Subaru Corp. (b) 528,819
16,359 Suzuki Motor Corp. (b) 389,528
20,776 Toyota Motor Corp. (b) 1,252,064
19,612 Yamaha Motor Co., Ltd. (b) 235,833
--------------
4,301,323
--------------
MALAYSIA -- 0.1%
18,093 UMW Holdings Bhd (b) 8,910
--------------
SOUTH KOREA -- 6.5%
7,081 Hyundai Motor Co. (b) 510,126
16,408 Kia Motors Corp. (b) 345,371
--------------
855,497
--------------
TAIWAN -- 0.3%
17,181 China Motor Corp. (b) 14,096
58,363 Yulon Motor Co., Ltd. 28,370
--------------
42,466
--------------
|
SHARES DESCRIPTION VALUE
UNITED KINGDOM -- 0.1%
3,999 Aston Martin Lagonda Global
Holdings PLC (b) (c) (d) (f) $ 9,753
--------------
UNITED STATES -- 28.1%
80,062 Ford Motor Co. 386,700
40,298 General Motors Co. 837,392
9,056 Harley-Davidson, Inc. 171,430
4,397 Tesla, Inc. (f) 2,304,028
--------------
3,699,550
--------------
TOTAL COMMON STOCKS -- 98.9% 13,030,275
(Cost $20,046,677) --------------
MONEY MARKET FUNDS -- 1.5%
203,126 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
0.24% (g) (h) 203,126
(Cost $203,126) --------------
TOTAL INVESTMENTS -- 100.4% 13,233,401
(Cost $20,249,803) (i)
NET OTHER ASSETS AND
LIABILITIES -- (0.4)% (55,129)
--------------
NET ASSETS -- 100.0% $ 13,178,272
==============
|
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures adopted by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940, as
amended. At March 31, 2020, securities noted as such are valued at
$9,302,355 or 70.6% of net assets. Certain of these securities are fair
valued using a factor provided by a third-party pricing service due to the
change in value between the foreign markets' close and the NYSE close
exceeding a certain threshold. On days when this threshold is not
exceeded, these securities are typically valued at the last sale price on
the exchange on which they are principally traded.
(c) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
Page 62 See Notes to Financial Statements
FIRST TRUST NASDAQ GLOBAL AUTO INDEX FUND (CARZ)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
(e) All or a portion of this security is on loan (see Note 2E - Securities
Lending in the Notes to Financial Statements). The aggregate value of such
securities is $197,038 and the total value of the collateral held by the
Fund is $203,126.
(f) Non-income producing security.
(g) Rate shown reflects yield as of March 31, 2020.
(h) This security serves as collateral for securities on loan.
(i) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2020, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $1,043,959 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $8,060,361. The net unrealized depreciation was
$7,016,402.
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2020 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2020 PRICES INPUTS INPUTS
----------------------------------------------------------
Common Stocks:
Taiwan $ 42,466 $ 28,370 $ 14,096 $ --
United States 3,699,550 3,699,550 -- --
Other Country
Categories* 9,288,259 -- 9,288,259 --
Money Market
Funds 203,126 203,126 -- --
----------------------------------------------------------
Total
Investments $ 13,233,401 $ 3,931,046 $ 9,302,355 $ --
==========================================================
|
* See Portfolio of Investments for country breakout.
OFFSETTING ASSETS AND LIABILITIES
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 197,038
Non-cash Collateral(2) (197,038)
--------------
Net Amount $ --
==============
|
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value", is not offset and is shown on a gross
basis.
(2) At March 31, 2020, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
Japanese Yen 32.5%
United States Dollar 29.5
Euro 20.7
Hong Kong Dollar 10.3
South Korean Won 6.5
New Taiwan Dollar 0.3
British Pound Sterling 0.1
Malaysian Ringgit 0.1
------
Total 100.0%
======
|
See Notes to Financial Statements Page 63
FIRST TRUST CLOUD COMPUTING ETF (SKYY)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.9%
CANADA -- 3.6%
389,236 Open Text Corp. $ 13,592,121
151,117 Shopify, Inc., Class A (b) 63,005,211
--------------
76,597,332
--------------
CAYMAN ISLANDS -- 3.9%
424,075 Alibaba Group Holding Ltd.,
ADR (b) 82,474,106
--------------
GERMANY -- 1.3%
249,547 SAP SE, ADR 27,574,944
--------------
JERSEY -- 0.6%
382,477 Mimecast Ltd. (b) 13,501,438
--------------
NETHERLANDS -- 0.6%
213,610 Elastic N.V. (b) 11,921,574
--------------
UNITED STATES -- 89.9%
164,407 Adobe, Inc. (b) 52,320,884
778,829 Akamai Technologies, Inc. (b) 71,255,065
78,045 Alphabet, Inc., Class A (b) 90,684,388
56,516 Amazon.com, Inc. (b) 110,190,376
314,593 Anaplan, Inc. (b) 9,519,584
150,220 Appfolio, Inc., Class A (b) 16,666,909
787,507 Appian Corp. (b) (c) 31,681,407
173,864 Arista Networks, Inc. (b) 35,216,153
217,388 Avalara, Inc. (b) 16,217,145
707,377 Benefitfocus, Inc. (b) 6,302,729
204,665 Blackbaud, Inc. 11,369,141
315,179 Blackline, Inc. (b) 16,581,567
929,983 Box, Inc., Class A (b) 13,056,961
5,853,304 CenturyLink, Inc. 55,372,256
1,497,491 Cisco Systems, Inc. 58,866,371
601,466 Citrix Systems, Inc. 85,137,512
3,433,777 Cloudera, Inc. (b) 27,023,825
870,786 Cloudflare, Inc., Class A (b) 20,446,055
275,063 Cornerstone OnDemand, Inc. (b) 8,733,250
110,518 Coupa Software, Inc. (b) 15,442,680
238,203 DocuSign, Inc. (b) 22,009,957
917,407 Dropbox, Inc., Class A (b) 16,605,067
788,596 Eventbrite, Inc., Class A (b) 5,756,751
192,888 Everbridge, Inc. (b) 20,515,568
746,494 Five9, Inc. (b) 57,076,931
3,214,693 Hewlett Packard Enterprise Co. 31,214,669
337,006 HubSpot, Inc. (b) 44,885,829
378,494 International Business Machines
Corp. 41,986,339
65,521 Intuit, Inc. 15,069,830
672,328 Microsoft Corp. 106,032,849
338,516 MicroStrategy, Inc., Class A (b) 39,978,740
570,368 MongoDB, Inc. (b) 77,878,047
839,884 NetApp, Inc. 35,014,764
249,382 New Relic, Inc. (b) 11,531,424
1,362,478 Nutanix, Inc., Class A (b) 21,527,152
1,812,922 Oracle Corp. 87,618,520
61,285 Paycom Software, Inc. (b) 12,380,183
3,166,685 Pure Storage, Inc., Class A (b) 38,950,225
|
SHARES DESCRIPTION VALUE
UNITED STATES (CONTINUED)
200,915 Q2 Holdings, Inc. (b) $ 11,866,040
312,411 salesforce.com, Inc. (b) 44,980,936
179,795 ServiceNow, Inc. (b) 51,525,651
357,645 Smartsheet, Inc., Class A (b) 14,845,844
341,027 Splunk, Inc. (b) 43,047,838
993,724 SVMK, Inc. (b) 13,425,211
380,248 Tabula Rasa HealthCare,
Inc. (b) (c) 19,883,168
638,664 Teradata Corp. (b) 13,086,225
492,728 Twilio, Inc., Class A (b) 44,094,229
113,711 Veeva Systems, Inc., Class A (b) 17,780,989
654,015 VMware, Inc., Class A (b) 79,201,216
94,696 Workday, Inc., Class A (b) 12,331,313
391,121 Workiva, Inc. (b) 12,644,942
214,718 Zendesk, Inc. (b) 13,744,099
227,689 Zoom Video Communications,
Inc., Class A (b) 33,269,917
325,396 Zscaler, Inc. (b) (c) 19,803,601
1,064,176 Zuora, Inc., Class A (b) 8,566,617
--------------
1,892,214,939
--------------
TOTAL COMMON STOCKS -- 99.9% 2,104,284,333
(Cost $2,222,635,794) --------------
MONEY MARKET FUNDS -- 1.5%
31,364,004 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
0.24% (d) (e) 31,364,004
(Cost $31,364,004) --------------
TOTAL INVESTMENTS -- 101.4% 2,135,648,337
(Cost $2,253,999,798) (f)
NET OTHER ASSETS AND
LIABILITIES -- (1.4)% (30,509,894)
--------------
NET ASSETS -- 100.0% $2,105,138,443
==============
|
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) Non-income producing security.
(c) All or a portion of this security is on loan (see Note 2E - Securities
Lending in the Notes to Financial Statements). The aggregate value of such
securities is $30,426,941 and the total value of the collateral held by
the Fund is $31,364,004.
(d) Rate shown reflects yield as of March 31, 2020.
(e) This security serves as collateral for securities on loan.
Page 64 See Notes to Financial Statements
FIRST TRUST CLOUD COMPUTING ETF (SKYY)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
(f) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2020, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $164,718,467 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $283,069,928. The net unrealized depreciation
was $118,351,461.
ADR - American Depositary Receipt
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2020 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
LEVEL 1 SIGNIFICANT SIGNIFICANT
QUOTED OBSERVABLE UNOBSERVABLE
PRICES INPUTS INPUTS
--------------------------------------------
Common Stocks* $2,104,284,333 $ -- $ --
Money Market Funds 31,364,004 -- --
--------------------------------------------
Total Investments $2,135,648,337 $ -- $ --
============================================
|
* See Portfolio of Investments for country breakout.
OFFSETTING ASSETS AND LIABILITIES
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 30,426,941
Non-cash Collateral(2) (30,426,941)
--------------
Net Amount $ --
==============
|
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value", is not offset and is shown on a gross
basis.
(2) At March 31, 2020, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
See Notes to Financial Statements Page 65
FIRST TRUST INTERNATIONAL EQUITY OPPORTUNITIES ETF (FPXI)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.5%
BRAZIL -- 0.7%
108,685 Neoenergia S.A. $ 356,629
--------------
CANADA -- 3.3%
4,202 Shopify, Inc., Class A (b) 1,751,940
--------------
CAYMAN ISLANDS -- 38.6%
8,089 Alibaba Group Holding Ltd.,
ADR (b) 1,573,149
750,138 China Feihe Ltd. (c) (d) (e) 1,333,447
326,855 Country Garden Services Holdings
Co., Ltd. (c) 1,315,197
274,535 Ever Sunshine Lifestyle Services
Group Ltd. (c) (e) 342,502
23,345 GDS Holdings Ltd., ADR (b) 1,353,310
28,202 GSX Techedu, Inc., ADR (b) 1,194,637
291,873 Haidilao International Holding
Ltd. (c) (d) (e) 1,125,397
168,201 Koolearn Technology Holding
Ltd. (b) (c) (d) (e) 626,834
16,910 Luckin Coffee, Inc., ADR (b) 459,783
122,579 Meituan Dianping,
Class B (b) (c) (e) 1,461,294
34,971 Pinduoduo, Inc., ADR (b) 1,260,005
95,603 Ping An Healthcare and
Technology Co.,
Ltd. (b) (c) (d) (e) 880,299
27,403 Sea Ltd., ADR (b) 1,214,227
24,837 StoneCo., Ltd., Class A (b) 540,701
137,102 Wuxi Biologics Cayman,
Inc. (b) (c) (d) (e) 1,750,358
1,062,382 Xiaomi Corp.,
Class B (b) (c) (d) (e) 1,410,616
27,794 XP, Inc., Class A (b) 536,146
93,448 Yihai International Holding
Ltd. (c) 703,897
6,633 Zai Lab Ltd., ADR (b) 341,467
44,815 ZTO Express Cayman, Inc.,
ADR 1,186,701
--------------
20,609,967
--------------
CHINA -- 4.0%
49,493 Poly Property Development Co.,
Ltd., Class H (c) (e) 416,394
2,797,594 Postal Savings Bank of China Co.,
Ltd., Class H (c) (d) (e) 1,703,285
--------------
2,119,679
--------------
DENMARK -- 5.7%
65,640 Genmab A/S, ADR (b) 1,390,912
16,901 Orsted A/S (c) (d) (e) 1,654,568
--------------
3,045,480
--------------
FRANCE -- 3.9%
17,102 La Francaise des Jeux
SAEM (c) (d) (e) 433,293
19,146 Sanofi (c) 1,657,564
--------------
2,090,857
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
GERMANY -- 9.1%
119,292 E. ON SE (c) 1,223,660
29,564 HelloFresh SE (b) (c) 965,422
50,254 Siemens Healthineers
AG (c) (d) (e) 1,942,648
17,908 TeamViewer AG (b) (c) 728,157
--------------
4,859,887
--------------
ITALY -- 1.4%
56,213 Nexi S.p.A. (b) (c) (d) (e) 731,272
--------------
JAPAN -- 7.1%
9,200 Freee KK (b) (c) 295,731
29,500 Mercari, Inc. (b) (c) 572,922
229,500 Softbank Corp. (c) 2,923,529
--------------
3,792,182
--------------
NETHERLANDS -- 8.3%
1,888 Adyen N.V. (b) (d) (e) 1,604,602
12,806 Just Eat Takeaway.com
N.V. (b) (c) (d) (e) 968,427
26,127 Prosus N.V. (b) (c) 1,829,436
--------------
4,402,465
--------------
NORWAY -- 1.6%
61,331 Adevinta ASA (b) (c) 555,235
22,508 Scatec Solar ASA (c) (d) (e) 282,122
--------------
837,357
--------------
SAUDI ARABIA -- 3.1%
208,580 Saudi Arabian Oil Co. (d) (e) 1,673,859
--------------
SPAIN -- 2.4%
28,477 Cellnex Telecom
S.A. (b) (c) (d) (e) 1,291,788
--------------
SWEDEN -- 6.2%
55,858 Embracer Group AB (b) (c) 548,366
16,262 Evolution Gaming Group
AB (c) (d) (e) 551,361
246,169 Samhallsbyggnadsbolaget i
Norden AB (c) 471,922
9,627 Sinch AB (b) (c) (d) (e) 372,251
104,267 Tele2 AB, Class B (c) 1,389,153
--------------
3,333,053
--------------
SWITZERLAND -- 1.1%
8,954 Galenica AG (c) (d) (e) 610,955
--------------
UNITED STATES -- 3.0%
37,180 Yum China Holdings, Inc. 1,584,983
--------------
TOTAL INVESTMENTS -- 99.5% 53,092,353
(Cost $49,622,605) (f)
NET OTHER ASSETS AND
LIABILITIES -- 0.5% 272,348
--------------
NET ASSETS -- 100.0% $ 53,364,701
==============
|
Page 66 See Notes to Financial Statements
FIRST TRUST INTERNATIONAL EQUITY OPPORTUNITIES ETF (FPXI)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) Non-income producing security.
(c) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures adopted by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940, as
amended. At March 31, 2020, securities noted as such are valued at
$35,069,302 or 65.7% of net assets. Certain of these securities are fair
valued using a factor provided by a third-party pricing service due to the
change in value between the foreign markets' close and the NYSE close
exceeding a certain threshold. On days when this threshold is not
exceeded, these securities are typically valued at the last sale price on
the exchange on which they are principally traded.
(d) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(e) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(f) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2020, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $4,961,527 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $1,491,779. The net unrealized appreciation was
$3,469,748.
ADR - American Depositary Receipt
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2020 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2020 PRICES INPUTS INPUTS
----------------------------------------------------------
Common Stocks:
Brazil $ 356,629 $ 356,629 $ -- $ --
Canada 1,751,940 1,751,940 -- --
Cayman
Islands 20,609,967 9,660,126 10,949,841 --
Denmark 3,045,480 1,390,912 1,654,568 --
Netherlands 4,402,465 1,604,602 2,797,863 --
Saudi Arabia 1,673,859 1,673,859 -- --
United States 1,584,983 1,584,983 -- --
Other Country
Categories* 19,667,030 -- 19,667,030 --
----------------------------------------------------------
Total
Investments $ 53,092,353 $ 18,023,051 $ 35,069,302 $ --
==========================================================
|
* See Portfolio of Investments for country breakout.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 27.1%
Euro 25.2
Hong Kong Dollar 24.6
Japanese Yen 7.1
Swedish Krona 6.3
SAR 3.2
Danish Krone 3.1
Norwegian Krone 1.6
Swiss Franc 1.1
Brazilian Real 0.7
------
Total 100.0%
======
|
See Notes to Financial Statements Page 67
FIRST TRUST NASDAQ CYBERSECURITY ETF (CIBR)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.9%
FRANCE -- 3.0%
437,700 Thales S.A. (b) $ 36,248,509
--------------
ISRAEL -- 5.7%
364,059 Check Point Software
Technologies Ltd. (c) 36,602,492
350,181 CyberArk Software Ltd. (c) 29,961,487
128,976 Radware Ltd. (c) 2,717,524
--------------
69,281,503
--------------
JAPAN -- 2.2%
67,300 FFRI, Inc. (b) (c) 1,176,377
512,536 Trend Micro, Inc. (b) 25,310,175
--------------
26,486,552
--------------
JERSEY -- 1.6%
536,891 Mimecast Ltd. (c) 18,952,252
--------------
SOUTH KOREA -- 0.4%
111,401 Ahnlab, Inc. (b) 5,143,674
--------------
UNITED KINGDOM -- 5.2%
3,951,731 Avast PLC (b) (d) (e) 19,105,382
5,785,934 BAE Systems PLC (b) 37,174,660
362,230 NCC Group PLC (b) 741,610
210,713 Ultra Electronics Holdings
PLC (b) 5,213,220
--------------
62,234,872
--------------
UNITED STATES -- 81.8%
320,363 A10 Networks, Inc. (c) 1,989,454
492,591 Akamai Technologies, Inc. (c) 45,067,151
589,789 Booz Allen Hamilton Holding
Corp. 40,483,117
271,434 Broadcom, Inc. 64,357,001
1,894,243 Cisco Systems, Inc. 74,462,692
294,507 F5 Networks, Inc. (c) 31,403,281
2,560,501 FireEye, Inc. (c) 27,090,101
686,931 ForeScout Technologies, Inc. (c) 21,700,150
408,282 Fortinet, Inc. (c) 41,305,890
259,058 Itron, Inc. (c) 14,463,208
1,712,455 Juniper Networks, Inc. 32,776,389
472,407 Leidos Holdings, Inc. 43,296,102
142,729 ManTech International Corp.,
Class A 10,372,116
1,351,002 MobileIron, Inc. (c) 5,133,808
2,982,983 NortonLifeLock, Inc. 55,811,612
661,338 Okta, Inc. (c) 80,855,184
182,874 OneSpan, Inc. (c) 3,319,163
377,726 Palo Alto Networks, Inc. (c) 61,931,955
361,566 Proofpoint, Inc. (c) 37,093,056
305,267 Qualys, Inc. (c) 26,555,176
474,766 Rapid7, Inc. (c) 20,571,611
649,665 Ribbon Communications, Inc. (c) 1,968,485
1,112,974 SailPoint Technologies Holding,
Inc. (c) 16,939,464
575,179 Splunk, Inc. (c) 72,604,845
564,078 Tenable Holdings, Inc. (c) 12,330,745
229,297 Varonis Systems, Inc. (c) 14,599,340
224,983 VeriSign, Inc. (c) 40,517,189
|
SHARES DESCRIPTION VALUE
UNITED STATES (CONTINUED)
275,753 VMware, Inc., Class A (c) $ 33,393,688
571,247 Zix Corp. (c) 2,462,075
823,220 Zscaler, Inc. (c) 50,101,169
--------------
984,955,217
--------------
TOTAL INVESTMENTS -- 99.9% 1,203,302,579
(Cost $1,273,848,350) (f)
NET OTHER ASSETS AND
LIABILITIES -- 0.1% 1,392,633
--------------
NET ASSETS -- 100.0% $1,204,695,212
==============
|
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures adopted by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940, as
amended. At March 31, 2020, securities noted as such are valued at
$130,113,607 or 10.8% of net assets. Certain of these securities are fair
valued using a factor provided by a third-party pricing service due to the
change in value between the foreign markets' close and the NYSE close
exceeding a certain threshold. On days when this threshold is not
exceeded, these securities are typically valued at the last sale price on
the exchange on which they are principally traded.
(c) Non-income producing security.
(d) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(e) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(f) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2020, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $60,788,916 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $131,334,687. The net unrealized depreciation
was $70,545,771.
Page 68 See Notes to Financial Statements
FIRST TRUST NASDAQ CYBERSECURITY ETF (CIBR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2020 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2020 PRICES INPUTS INPUTS
----------------------------------------------------------
Common Stocks:
Israel $ 69,281,503 $ 69,281,503 $ -- $ --
Jersey 18,952,252 18,952,252 -- --
United States 984,955,217 984,955,217 -- --
Other Country
Categories* 130,113,607 -- 130,113,607 --
----------------------------------------------------------
Total
Investments $1,203,302,579 $1,073,188,972 $130,113,607 $ --
==========================================================
|
* See Portfolio of Investments for country breakout.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 89.2%
British Pound Sterling 5.2
Euro 3.0
Japanese Yen 2.2
South Korean Won 0.4
------
Total 100.0%
======
|
See Notes to Financial Statements Page 69
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2020 (UNAUDITED)
FIRST TRUST
FIRST TRUST FTSE EPRA/NAREIT
STOXX(R) EUROPEAN DEVELOPED MARKETS
SELECT DIVIDEND REAL ESTATE
INDEX FUND INDEX FUND
(FDD) (FFR)
---------------------- ----------------------
ASSETS:
Investments, at value ................................................. $ 212,521,064 $ 41,323,841
Cash .................................................................. -- --
Foreign currency, at value ............................................ 25,840,692 1,360
Due from authorized participant ....................................... -- --
Receivables:
Reclaims ........................................................... 1,946,613 18,689
Investment securities sold ......................................... 828,195 --
Dividends .......................................................... 382,947 216,340
Securities lending income .......................................... -- --
Capital shares sold ................................................ -- --
From investment advisor ............................................ -- --
Prepaid expenses ...................................................... 1,667 316
---------------- ----------------
TOTAL ASSETS ....................................................... 241,521,178 41,560,546
---------------- ----------------
LIABILITIES:
Due to custodian ...................................................... 3,028 --
Due to custodian foreign currency ..................................... -- --
Payables:
Capital shares redeemed ............................................ -- --
Investment securities purchased .................................... 26,674,729 --
Licensing fees ..................................................... 219,654 33,876
Investment advisory fees ........................................... 85,689 5,050
Shareholder reporting fees ......................................... 23,306 9,104
Audit and tax fees ................................................. 14,253 15,787
Trustees' fees ..................................................... 1,872 1,819
Collateral for securities on loan .................................. -- --
Foreign capital gains tax .......................................... -- --
Other liabilities ..................................................... 104,155 49,599
---------------- ----------------
TOTAL LIABILITIES .................................................. 27,126,686 115,235
---------------- ----------------
NET ASSETS ............................................................ $ 214,394,492 $ 41,445,311
================ ================
NET ASSETS CONSIST OF:
Paid-in capital ....................................................... $ 325,923,922 $ 52,004,648
Par value ............................................................. 223,033 11,916
Accumulated distributable earnings (loss) ............................. (111,752,463) (10,571,253)
---------------- ----------------
NET ASSETS ............................................................ $ 214,394,492 $ 41,445,311
================ ================
NET ASSET VALUE, per share ............................................ $ 9.61 $ 34.78
================ ================
Number of shares outstanding (unlimited number of shares
authorized, par value $0.01 per share) ............................. 22,303,334 1,191,608
================ ================
Investments, at cost .................................................. $ 261,742,058 $ 48,587,068
================ ================
Foreign currency, at cost (proceeds) .................................. $ 25,240,243 $ 1,382
================ ================
Securities on loan, at value .......................................... $ -- $ --
================ ================
|
Page 70 See Notes to Financial Statements
FIRST TRUST FIRST TRUST
FIRST TRUST FIRST TRUST GLOBAL NASDAQ(R) CLEAN FIRST TRUST
DOW JONES GLOBAL GLOBAL ENGINEERING EDGE(R) SMART GRID INDXX GLOBAL
SELECT DIVIDEND WIND ENERGY AND CONSTRUCTION INFRASTRUCTURE NATURAL RESOURCES
INDEX FUND ETF ETF INDEX FUND INCOME ETF
(FGD) (FAN) (FLM) (GRID) (FTRI)
--------------------- --------------------- --------------------- --------------------- ---------------------
$ 364,920,151 $ 90,273,465 $ 5,311,984 $ 28,339,433 $ 5,267,552
35,144 -- 8,243 28,306 5,169
-- 478,746 -- -- 285
-- -- -- -- --
592,007 225,937 7,916 53,973 7,301
12,802,768 -- -- -- --
2,787,437 249,462 70,643 19,410 51,544
-- 4,137 903 120 112
-- -- -- -- --
-- -- 3,860 -- --
2,982 424 53 183 --
--------------- --------------- --------------- --------------- ---------------
381,140,489 91,232,171 5,403,602 28,441,425 5,331,963
--------------- --------------- --------------- --------------- ---------------
-- -- -- -- --
124 -- 1 -- --
6,376,614 -- -- -- --
6,866,446 477,822 -- -- --
140,805 24,328 2,095 7,454 --
149,773 35,951 -- 15,080 3,146
40,885 13,078 5,661 7,205 --
16,686 15,963 15,816 16,021 --
1,939 1,820 1,816 1,817 --
-- 1,873,249 37,094 502,040 321,279
-- -- -- -- --
202,328 36,111 10,357 14,596 --
--------------- --------------- --------------- --------------- ---------------
13,795,600 2,478,322 72,840 564,213 324,425
--------------- --------------- --------------- --------------- ---------------
$ 367,344,889 $ 88,753,849 $ 5,330,762 $ 27,877,212 $ 5,007,538
=============== =============== =============== =============== ===============
$ 669,799,360 $ 149,138,479 $ 14,887,740 $ 33,331,941 $ 68,096,646
231,000 73,000 1,500 6,500 6,000
(302,685,471) (60,457,630) (9,558,478) (5,461,229) (63,095,108)
--------------- --------------- --------------- --------------- ---------------
$ 367,344,889 $ 88,753,849 $ 5,330,762 $ 27,877,212 $ 5,007,538
=============== =============== =============== =============== ===============
$ 15.90 $ 12.16 $ 35.54 $ 42.89 $ 8.35
=============== =============== =============== =============== ===============
23,100,002 7,300,002 150,002 650,002 600,002
=============== =============== =============== =============== ===============
$ 544,704,802 $ 98,771,700 $ 7,575,509 $ 32,039,376 $ 7,208,709
=============== =============== =============== =============== ===============
$ (124) $ 479,723 $ (1) $ -- $ 285
=============== =============== =============== =============== ===============
$ -- $ 1,530,556 $ 36,188 $ 477,264 $ 32,394
=============== =============== =============== =============== ===============
|
See Notes to Financial Statements Page 71
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
FIRST TRUST FIRST TRUST
INDXX GLOBAL BICK
AGRICULTURE ETF INDEX FUND
(FTAG) (BICK)
---------------------- ----------------------
ASSETS:
Investments, at value ................................................. $ 2,261,510 $ 69,387,817
Cash .................................................................. 2,417 83,459
Foreign currency, at value ............................................ -- 13
Due from authorized participant ....................................... -- --
Receivables:
Reclaims ........................................................... 10,673 --
Investment securities sold ......................................... -- 8,081,717
Dividends .......................................................... 4,963 473,762
Securities lending income .......................................... -- --
Capital shares sold ................................................ -- --
From investment advisor ............................................ -- --
Prepaid expenses ...................................................... -- --
---------------- ----------------
TOTAL ASSETS ....................................................... 2,279,563 78,026,768
---------------- ----------------
LIABILITIES:
Due to custodian ...................................................... -- --
Due to custodian foreign currency ..................................... -- --
Payables:
Capital shares redeemed ............................................ -- 8,190,427
Investment securities purchased .................................... -- --
Licensing fees ..................................................... -- --
Investment advisory fees ........................................... 1,419 51,388
Shareholder reporting fees ......................................... -- --
Audit and tax fees ................................................. -- --
Trustees' fees ..................................................... -- --
Collateral for securities on loan .................................. -- --
Foreign capital gains tax .......................................... 482 --
Other liabilities ..................................................... -- --
---------------- ----------------
TOTAL LIABILITIES .................................................. 1,901 8,241,815
---------------- ----------------
NET ASSETS ............................................................ $ 2,277,662 $ 69,784,953
================ ================
NET ASSETS CONSIST OF:
Paid-in capital ....................................................... $ 22,715,392 $ 123,075,357
Par value ............................................................. 1,399 34,000
Accumulated distributable earnings (loss) (20,439,129) (53,324,404)
---------------- ----------------
NET ASSETS ............................................................ $ 2,277,662 $ 69,784,953
================ ================
NET ASSET VALUE, per share ............................................ $ 16.28 $ 20.52
================ ================
Number of shares outstanding (unlimited number of shares
authorized, par value $0.01 per share) ............................. 139,928 3,400,002
================ ================
Investments, at cost .................................................. $ 3,202,963 $ 88,329,648
================ ================
Foreign currency, at cost (proceeds) .................................. $ -- $ 13
================ ================
Securities on loan, at value .......................................... $ -- $ --
================ ================
|
Page 72 See Notes to Financial Statements
FIRST TRUST FIRST TRUST FIRST TRUST FIRST TRUST
FIRST TRUST NASDAQ GLOBAL CLOUD INTERNATIONAL NASDAQ
INDXX AUTO COMPUTING EQUITY CYBERSECURITY
NEXTG ETF INDEX FUND ETF OPPORTUNITIES ETF ETF
(NXTG) (CARZ) (SKYY) (FPXI) (CIBR)
--------------------- --------------------- --------------------- --------------------- ---------------------
$ 297,815,497 $ 13,233,401 $ 2,135,648,337 $ 53,092,353 $ 1,203,302,579
297,527 43,567 1,180,162 203,787 --
-- 84 -- -- 1,820,783
-- -- -- -- 10,338,019
94 19,166 276,213 16,928 --
94,486 -- -- -- --
833,090 92,908 379,426 82,646 220,201
1,834 784 70,791 -- --
-- -- 2,726,863 1,064 5,195,757
-- -- -- -- --
-- -- -- -- --
--------------- --------------- --------------- --------------- ---------------
299,042,528 13,389,910 2,140,281,792 53,396,778 1,220,877,339
--------------- --------------- --------------- --------------- ---------------
-- -- -- -- --
6,559 -- -- 144 134
-- -- -- -- 308
78,452 -- 2,725,307 -- 15,582,695
-- -- -- -- --
174,118 8,512 1,054,038 31,933 598,990
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
5,618,105 203,126 31,364,004 -- --
-- -- -- -- --
-- -- -- -- --
--------------- --------------- --------------- --------------- ---------------
5,877,234 211,638 35,143,349 32,077 16,182,127
--------------- --------------- --------------- --------------- ---------------
$ 293,165,294 $ 13,178,272 $ 2,105,138,443 $ 53,364,701 $ 1,204,695,212
=============== =============== =============== =============== ===============
$ 321,404,824 $ 24,915,589 $ 2,262,217,670 $ 55,514,749 $ 1,331,258,724
63,000 5,500 386,000 14,500 468,500
(28,302,530) (11,742,817) (157,465,227) (2,164,548) (127,032,012)
--------------- --------------- --------------- --------------- ---------------
$ 293,165,294 $ 13,178,272 $ 2,105,138,443 $ 53,364,701 $ 1,204,695,212
=============== =============== =============== =============== ===============
$ 46.53 $ 23.96 $ 54.54 $ 36.80 $ 25.71
=============== =============== =============== =============== ===============
6,300,002 550,002 38,600,002 1,450,002 46,850,002
=============== =============== =============== =============== ===============
$ 334,318,115 $ 20,249,803 $ 2,253,999,798 $ 49,622,605 $ 1,273,848,350
=============== =============== =============== =============== ===============
$ (6,595) $ 84 $ -- $ (144) $ 134
=============== =============== =============== =============== ===============
$ 4,515,551 $ 197,038 $ 30,426,941 $ -- $ --
=============== =============== =============== =============== ===============
|
See Notes to Financial Statements Page 73
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2020 (UNAUDITED)
FIRST TRUST
FIRST TRUST FTSE EPRA/NAREIT
STOXX(R) EUROPEAN DEVELOPED MARKETS
SELECT DIVIDEND REAL ESTATE
INDEX FUND INDEX FUND
(FDD) (FFR)
---------------------- ----------------------
INVESTMENT INCOME:
Dividends.............................................................. $ 3,560,854 $ 996,275
Securities lending income (net of fees)................................ -- --
Foreign withholding tax................................................ (290,097) (46,504)
---------------- ----------------
Total investment income 3,270,757 949,771
---------------- ----------------
EXPENSES:
Investment advisory fees............................................... 615,959 112,920
Licensing fees......................................................... 77,885 33,876
Accounting and administration fees..................................... 77,822 17,092
Shareholder reporting fees............................................. 21,988 9,425
Audit and tax fees..................................................... 12,009 13,798
Custodian fees......................................................... 10,594 28,827
Transfer agent fees.................................................... 7,703 1,412
Legal fees............................................................. 5,972 1,291
Listing fees........................................................... 5,771 4,506
Trustees' fees and expenses............................................ 3,725 3,620
Registration and filing fees........................................... 61 203
Other expenses......................................................... 1,382 2,618
---------------- ----------------
Total expenses...................................................... 840,871 229,588
Less fees waived and expenses reimbursed by
the investment advisor........................................... -- (60,208)
---------------- ----------------
Net expenses........................................................ 840,871 169,380
---------------- ----------------
NET INVESTMENT INCOME (LOSS)........................................... 2,429,886 780,391
---------------- ----------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments......................................................... (41,626,837) (472,788)
In-kind redemptions................................................. (1,438,779) --
Foreign currency transactions....................................... 164,944 (6,492)
Foreign capital gains tax........................................... -- --
---------------- ----------------
Net realized gain (loss)............................................... (42,900,672) (479,280)
---------------- ----------------
Net increase from payment by the advisor............................... -- --
---------------- ----------------
Net change in unrealized appreciation (depreciation) on:
Investments......................................................... (35,908,246) (15,802,174)
Foreign currency translation........................................ (181,589) 2,275
Deferred foreign capital gains tax.................................. -- --
---------------- ----------------
Net change in unrealized appreciation (depreciation)................... (36,089,835) (15,799,899)
---------------- ----------------
NET REALIZED AND UNREALIZED GAIN (LOSS)................................ (78,990,507) (16,279,179)
---------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS..................................................... $ (76,560,621) $ (15,498,788)
================ ================
|
(a) Fund is subject to a unitary fee (see Note 3 in the Notes to Financial
Statements).
Page 74 See Notes to Financial Statements
FIRST TRUST FIRST TRUST
FIRST TRUST FIRST TRUST GLOBAL NASDAQ(R) CLEAN FIRST TRUST
DOW JONES GLOBAL GLOBAL ENGINEERING EDGE(R) SMART GRID INDXX GLOBAL
SELECT DIVIDEND WIND ENERGY AND CONSTRUCTION INFRASTRUCTURE NATURAL RESOURCES
INDEX FUND ETF ETF INDEX FUND INCOME ETF
(FGD) (FAN) (FLM) (GRID) (FTRI)
--------------------- --------------------- --------------------- --------------------- ---------------------
$ 20,714,874 $ 1,048,451 $ 186,139 $ 203,564 $ 185,265
-- 20,747 4,242 2,189 498
(730,047) (121,852) (9,222) (17,323) (13,067)
--------------- --------------- --------------- --------------- ---------------
19,984,827 947,346 181,159 188,430 172,696
--------------- --------------- --------------- --------------- ---------------
1,131,410 179,971 18,221 63,289 24,464 (a)
164,698 44,993 4,555 14,240 --
142,866 23,390 3,424 8,726 --
45,129 13,338 4,917 6,688 --
13,798 13,423 13,423 13,423 --
30,071 5,560 949 3,398 --
14,149 2,250 228 791 --
12,618 1,776 172 722 --
4,506 4,676 4,676 2,954 --
3,868 3,626 3,605 3,611 --
625 208 25 98 --
4,276 895 727 637 --
--------------- --------------- --------------- --------------- ---------------
1,568,014 294,106 54,922 118,577 24,464
-- (24,149) (23,036) (7,822) --
--------------- --------------- --------------- --------------- ---------------
1,568,014 269,957 31,886 110,755 24,464
--------------- --------------- --------------- --------------- ---------------
18,416,813 677,389 149,273 77,675 148,232
--------------- --------------- --------------- --------------- ---------------
(19,133,741) 327,693 (542,811) (287,014) (143,006)
(9,300,769) -- 551,147 -- 41,418
(154,891) (34,426) (1,022) (283) (1,155)
-- -- -- -- --
--------------- --------------- --------------- --------------- ---------------
(28,589,401) 293,267 7,314 (287,297) (102,743)
--------------- --------------- --------------- --------------- ---------------
-- -- -- -- --
--------------- --------------- --------------- --------------- ---------------
(152,342,272) (9,427,927) (1,614,215) (4,491,672) (1,717,603)
62,969 5,132 (373) 1,774 34
-- -- -- -- --
--------------- --------------- --------------- --------------- ---------------
(152,279,303) (9,422,795) (1,614,588) (4,489,898) (1,717,569)
--------------- --------------- --------------- --------------- ---------------
(180,868,704) (9,129,528) (1,607,274) (4,777,195) (1,820,312)
--------------- --------------- --------------- --------------- ---------------
$ (162,451,891) $ (8,452,139) $ (1,458,001) $ (4,699,520) $ (1,672,080)
=============== =============== =============== =============== ===============
|
See Notes to Financial Statements Page 75
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE SIX MONTHS ENDED MARCH 31, 2020 (UNAUDITED)
FIRST TRUST
INDXX GLOBAL FIRST TRUST
AGRICULTURE BICK
ETF INDEX FUND
(FTAG) (BICK)
---------------------- ----------------------
INVESTMENT INCOME:
Dividends.............................................................. $ 28,211 $ 857,079
Securities lending income (net of fees)................................ -- --
Foreign withholding tax................................................ (1,308) (81,290)
---------------- ----------------
Total investment income............................................. 26,903 775,789
---------------- ----------------
EXPENSES:
Investment advisory fees............................................... 10,806 (a) 386,956 (a)
Licensing fees......................................................... -- --
Accounting and administration fees..................................... -- --
Shareholder reporting fees............................................. -- --
Audit and tax fees..................................................... -- --
Custodian fees......................................................... -- --
Transfer agent fees.................................................... -- --
Legal fees............................................................. -- --
Listing fees........................................................... -- --
Trustees' fees and expenses............................................ -- --
Registration and filing fees........................................... -- --
Other expenses......................................................... -- --
---------------- ----------------
Total expenses...................................................... 10,806 386,956
Less fees waived and expenses reimbursed by
the investment advisor........................................... -- --
---------------- ----------------
Net expenses........................................................ 10,806 386,956
---------------- ----------------
NET INVESTMENT INCOME (LOSS)........................................... 16,097 388,833
---------------- ----------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments......................................................... (316,393) (6,271,704)
In-kind redemptions................................................. -- (829,612)
Foreign currency transactions....................................... (214) (33,894)
Foreign capital gains tax........................................... (48) --
---------------- ----------------
Net realized gain (loss)............................................... (316,655) (7,135,210)
---------------- ----------------
Net increase from payment by the advisor............................... -- --
---------------- ----------------
Net change in unrealized appreciation (depreciation) on:
Investments......................................................... (615,395) (16,125,911)
Foreign currency translation........................................ 101 (10,938)
Deferred foreign capital gains tax.................................. 1,410 --
---------------- ----------------
Net change in unrealized appreciation (depreciation)................... (613,884) (16,136,849)
---------------- ----------------
NET REALIZED AND UNREALIZED GAIN (LOSS)................................ (930,539) (23,272,059)
---------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS..................................................... $ (914,442) $ (22,883,226)
================ ================
|
(a) Fund is subject to a unitary fee (see Note 3 in the Notes to Financial
Statements).
Page 76 See Notes to Financial Statements
FIRST TRUST FIRST TRUST FIRST TRUST FIRST TRUST
FIRST TRUST NASDAQ GLOBAL CLOUD INTERNATIONAL NASDAQ
INDXX AUTO COMPUTING EQUITY CYBERSECURITY
NEXTG ETF INDEX FUND ETF OPPORTUNITIES ETF ETF
(NXTG) (CARZ) (SKYY) (FPXI) (CIBR)
--------------------- --------------------- --------------------- --------------------- ---------------------
$ 2,740,904 $ 199,347 $ 9,249,130 $ 222,778 $ 25,206,115
52,150 5,053 559,864 -- --
(185,930) (14,325) (10,066) (26,399) (103,577)
--------------- --------------- --------------- --------------- ---------------
2,607,124 190,075 9,798,928 196,379 25,102,538
--------------- --------------- --------------- --------------- ---------------
920,855 (a) 62,467 (a) 6,817,978 (a) 171,945 (a) 3,565,399 (a)
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
--------------- --------------- --------------- --------------- ---------------
920,855 62,467 6,817,978 171,945 3,565,399
-- -- -- -- --
--------------- --------------- --------------- --------------- ---------------
920,855 62,467 6,817,978 171,945 3,565,399
--------------- --------------- --------------- --------------- ---------------
1,686,269 127,608 2,980,950 24,434 21,537,139
--------------- --------------- --------------- --------------- ---------------
(1,772,293) (368,372) (13,383,313) (4,229,959) (11,576,715)
11,918,888 -- 57,291,115 2,428,257 10,685,377
(41,217) (688) -- 6,570 (12,010)
-- -- -- -- --
--------------- --------------- --------------- --------------- ---------------
10,105,378 (369,060) 43,907,802 (1,795,132) (903,348)
--------------- --------------- --------------- --------------- ---------------
-- -- -- 806 --
--------------- --------------- --------------- --------------- ---------------
(43,995,661) (4,036,288) (123,419,281) 892,294 (124,678,947)
(8,312) (1,019) -- (114) (2,782)
-- -- -- -- --
--------------- --------------- --------------- --------------- ---------------
(44,003,973) (4,037,307) (123,419,281) 892,180 (124,681,729)
--------------- --------------- --------------- --------------- ---------------
(33,898,595) (4,406,367) (79,511,479) (902,146) (125,585,077)
--------------- --------------- --------------- --------------- ---------------
$ (32,212,326) $ (4,278,759) $ (76,530,529) $ (877,712) $ (104,047,938)
=============== =============== =============== =============== ===============
|
See Notes to Financial Statements Page 77
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF CHANGES IN NET ASSETS
FIRST TRUST
STOXX(R) EUROPEAN
SELECT DIVIDEND
INDEX FUND
(FDD)
---------------------------------------
SIX MONTHS ENDED
3/31/2020 YEAR ENDED
(UNAUDITED) 9/30/2019
------------------ ------------------
OPERATIONS:
Net investment income (loss)........................................................ $ 2,429,886 $ 16,522,898
Net realized gain (loss)............................................................ (42,900,672) 4,219,986
Net increase from payment by the advisor............................................ -- --
Net change in unrealized appreciation (depreciation)................................ (36,089,835) (18,930,002)
---------------- ----------------
Net increase (decrease) in net assets resulting
from operations.................................................................. (76,560,621) 1,812,882
---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations............................................................... (1,927,000) (16,448,343)
Return of capital................................................................... -- --
---------------- ----------------
Total distributions to shareholders................................................. (1,927,000) (16,448,343)
---------------- ----------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold........................................................... 22,395,003 20,079,043
Proceeds from shares acquired through reorganization................................ -- --
Cost of shares redeemed............................................................. (23,431,069) (166,349,357)
---------------- ----------------
Net increase (decrease) in net assets resulting
from shareholder transactions.................................................... (1,036,066) (146,270,314)
---------------- ----------------
Total increase (decrease) in net assets............................................. (79,523,687) (160,905,775)
NET ASSETS:
Beginning of period................................................................. 293,918,179 454,823,954
---------------- ----------------
End of period....................................................................... $ 214,394,492 $ 293,918,179
================ ================
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period............................................. 23,053,334 34,653,334
Shares sold......................................................................... 1,600,000 1,550,000
Shares issued through reorganization................................................ -- --
Shares redeemed..................................................................... (2,350,000) (13,150,000)
---------------- ----------------
Shares outstanding, end of period................................................... 22,303,334 23,053,334
================ ================
|
Page 78 See Notes to Financial Statements
FIRST TRUST FIRST TRUST
FTSE EPRA/NAREIT DOW JONES FIRST TRUST
DEVELOPED MARKETS REAL ESTATE GLOBAL SELECT DIVIDEND GLOBAL WIND ENERGY
INDEX FUND INDEX FUND ETF
(FFR) (FGD) (FAN)
---------------------------------------- --------------------------------------- ---------------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED SIX MONTHS ENDED
3/31/2020 YEAR ENDED 3/31/2020 YEAR ENDED 3/31/2020 YEAR ENDED
(UNAUDITED) 9/30/2019 (UNAUDITED) 9/30/2019 (UNAUDITED) 9/30/2019
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
$ 780,391 $ 1,263,898 $ 18,416,813 $ 30,447,876 $ 677,389 $ 1,690,007
(479,280) 593,342 (28,589,401) (12,120,254) 293,267 (47,761)
-- -- -- -- -- --
(15,799,899) 4,418,478 (152,279,303) (31,405,100) (9,422,795) 2,884,357
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(15,498,788) 6,275,718 (162,451,891) (13,077,478) (8,452,139) 4,526,603
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(1,962,221) (1,495,051) (18,655,667) (30,379,078) (933,810) (1,723,721)
-- -- -- -- -- --
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(1,962,221) (1,495,051) (18,655,667) (30,379,078) (933,810) (1,723,721)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
2,470,109 7,018,700 59,298,178 185,018,208 22,638,033 11,212,366
-- 2,028,889 -- -- -- --
-- (2,465,739) (43,377,494) (93,309,875) -- (17,875,844)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
2,470,109 6,581,850 15,920,684 91,708,333 22,638,033 (6,663,478)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(14,990,900) 11,362,517 (165,186,874) 48,251,777 13,252,084 (3,860,596)
56,436,211 45,073,694 532,531,763 484,279,986 75,501,765 79,362,361
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
$ 41,445,311 $ 56,436,211 $ 367,344,889 $ 532,531,763 $ 88,753,849 $ 75,501,765
================ ================ ================ ================ ================ ================
1,141,608 1,000,002 23,250,002 19,250,002 5,750,002 6,350,002
50,000 150,000 2,450,000 7,900,000 1,550,000 850,000
-- 41,606 -- -- -- --
-- (50,000) (2,600,000) (3,900,000) -- (1,450,000)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
1,191,608 1,141,608 23,100,002 23,250,002 7,300,002 5,750,002
================ ================ ================ ================ ================ ================
|
See Notes to Financial Statements Page 79
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FIRST TRUST
GLOBAL ENGINEERING
AND CONSTRUCTION
ETF
(FLM)
---------------------------------------
SIX MONTHS ENDED
3/31/2020 YEAR ENDED
(UNAUDITED) 9/30/2019
------------------ ------------------
OPERATIONS:
Net investment income (loss)........................................................ $ 149,273 $ 185,560
Net realized gain (loss)............................................................ 7,314 (133,129)
Net increase from payment by the advisor............................................ -- --
Net change in unrealized appreciation (depreciation)................................ (1,614,588) (2,158,038)
---------------- ----------------
Net increase (decrease) in net assets resulting
from operations.................................................................. (1,458,001) (2,105,607)
---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations............................................................... (130,957) (185,587)
Return of capital................................................................... -- --
---------------- ----------------
Total distributions to shareholders................................................. (130,957) (185,587)
---------------- ----------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold........................................................... -- --
Proceeds from shares acquired through reorganization................................ -- --
Cost of shares redeemed............................................................. (2,489,439) (2,493,964)
---------------- ----------------
Net increase (decrease) in net assets resulting
from shareholder transactions.................................................... (2,489,439) (2,493,964)
---------------- ----------------
Total increase (decrease) in net assets............................................. (4,078,397) (4,785,158)
NET ASSETS:
Beginning of period................................................................. 9,409,159 14,194,317
---------------- ----------------
End of period....................................................................... $ 5,330,762 $ 9,409,159
================ ================
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period............................................. 200,002 250,002
Shares sold......................................................................... -- --
Shares issued through reorganization................................................ -- --
Shares redeemed..................................................................... (50,000) (50,000)
---------------- ----------------
Shares outstanding, end of period................................................... 150,002 200,002
================ ================
|
Page 80 See Notes to Financial Statements
FIRST TRUST FIRST TRUST
NASDAQ(R) CLEAN EDGE(R) INDXX GLOBAL FIRST TRUST
SMART GRID INFRASTRUCTURE NATURAL RESOURCES INDXX GLOBAL
INDEX FUND INCOME ETF AGRICULTURE ETF
(GRID) (FTRI) (FTAG)
---------------------------------------- --------------------------------------- ---------------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED SIX MONTHS ENDED
3/31/2020 YEAR ENDED 3/31/2020 YEAR ENDED 3/31/2020 YEAR ENDED
(UNAUDITED) 9/30/2019 (UNAUDITED) 9/30/2019 (UNAUDITED) 9/30/2019
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
$ 77,675 $ 387,177 $ 148,232 $ 493,235 $ 16,097 $ 78,703
(287,297) 142,524 (102,743) 243,044 (316,655) (205,446)
-- -- -- -- -- --
(4,489,898) 27,773 (1,717,569) (1,131,308) (613,884) (414,894)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(4,699,520) 557,474 (1,672,080) (395,029) (914,442) (541,637)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(88,160) (360,196) (180,061) (478,011) (8,200) (100,503)
-- -- -- -- -- (6,587)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(88,160) (360,196) (180,061) (478,011) (8,200) (107,090)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
5,432,855 -- -- -- -- --
-- -- -- -- -- --
-- (6,298,315) (592,651) (582,416) -- (1,129,832)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
5,432,855 (6,298,315) (592,651) (582,416) -- (1,129,832)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
645,175 (6,101,037) (2,444,792) (1,455,456) (922,642) (1,778,559)
27,232,037 33,333,074 7,452,330 8,907,786 3,200,304 4,978,863
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
$ 27,877,212 $ 27,232,037 $ 5,007,538 $ 7,452,330 $ 2,277,662 $ 3,200,304
================ ================ ================ ================ ================ ================
550,002 700,002 650,002 700,002 139,928 189,928
100,000 -- -- -- -- --
-- -- -- -- -- --
-- (150,000) (50,000) (50,000) -- (50,000)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
650,002 550,002 600,002 650,002 139,928 139,928
================ ================ ================ ================ ================ ================
|
See Notes to Financial Statements Page 81
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FIRST TRUST
BICK
INDEX FUND
(BICK)
---------------------------------------
SIX MONTHS ENDED
3/31/2020 YEAR ENDED
(UNAUDITED) 9/30/2019
------------------ ------------------
OPERATIONS:
Net investment income (loss)........................................................ $ 388,833 $ 1,840,415
Net realized gain (loss)............................................................ (7,135,210) (10,954,662)
Net increase from payment by the advisor............................................ -- --
Net change in unrealized appreciation (depreciation)................................ (16,136,849) 2,602,806
---------------- ----------------
Net increase (decrease) in net assets resulting
from operations.................................................................. (22,883,226) (6,511,441)
---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations............................................................... (684,901) (2,279,891)
Return of capital................................................................... -- --
---------------- ----------------
Total distributions to shareholders................................................. (684,901) (2,279,891)
---------------- ----------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold........................................................... 7,275,104 17,424,177
Proceeds from shares acquired through reorganization................................ -- --
Cost of shares redeemed............................................................. (30,425,268) (82,778,057)
---------------- ----------------
Net increase (decrease) in net assets resulting
from shareholder transactions.................................................... (23,150,164) (65,353,880)
---------------- ----------------
Total increase (decrease) in net assets............................................. (46,718,291) (74,145,212)
NET ASSETS:
Beginning of period................................................................. 116,503,244 190,648,456
---------------- ----------------
End of period....................................................................... $ 69,784,953 $ 116,503,244
================ ================
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period............................................. 4,550,002 7,200,002
Shares sold......................................................................... 250,000 650,000
Shares issued through reorganization................................................ -- --
Shares redeemed..................................................................... (1,400,000) (3,300,000)
---------------- ----------------
Shares outstanding, end of period................................................... 3,400,002 4,550,002
================ ================
|
Page 82 See Notes to Financial Statements
FIRST TRUST
FIRST TRUST NASDAQ FIRST TRUST
INDXX GLOBAL AUTO CLOUD COMPUTING
NEXTG ETF INDEX FUND ETF
(NXTG) (CARZ) (SKYY)
---------------------------------------- --------------------------------------- ---------------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED SIX MONTHS ENDED
3/31/2020 YEAR ENDED 3/31/2020 YEAR ENDED 3/31/2020 YEAR ENDED
(UNAUDITED) 9/30/2019 (UNAUDITED) 9/30/2019 (UNAUDITED) 9/30/2019
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
$ 1,686,269 $ 1,029,361 $ 127,608 $ 610,100 $ 2,980,950 $ 20,846,125
10,105,378 (589,594) (369,060) (1,056,565) 43,907,802 372,621,864
-- -- -- -- -- --
(44,003,973) 6,528,478 (4,037,307) (912,086) (123,419,281) (414,864,808)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(32,212,326) 6,968,245 (4,278,759) (1,358,551) (76,530,529) (21,396,819)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(1,454,196) (721,966) (166,210) (605,577) (3,353,405) (21,035,531)
-- -- -- -- -- --
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(1,454,196) (721,966) (166,210) (605,577) (3,353,405) (21,035,531)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
185,585,083 177,245,669 -- 6,429,028 307,670,210 1,872,262,095
-- -- -- -- -- --
(54,768,519) (4,846,339) -- (5,009,096) (290,845,457) (1,728,771,629)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
130,816,564 172,399,330 -- 1,419,932 16,824,753 143,490,466
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
97,150,042 178,645,609 (4,444,969) (544,196) (63,059,181) 101,058,116
196,015,252 17,369,643 17,623,241 18,167,437 2,168,197,624 2,067,139,508
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
$ 293,165,294 $ 196,015,252 $ 13,178,272 $ 17,623,241 $ 2,105,138,443 $ 2,168,197,624
================ ================ ================ ================ ================ ================
3,900,002 350,002 550,002 500,002 38,450,002 36,450,002
3,400,000 3,650,000 -- 200,000 5,150,000 32,550,000
-- -- -- -- -- --
(1,000,000) (100,000) -- (150,000) (5,000,000) (30,550,000)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
6,300,002 3,900,002 550,002 550,002 38,600,002 38,450,002
================ ================ ================ ================ ================ ================
|
See Notes to Financial Statements Page 83
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FIRST TRUST
INTERNATIONAL
EQUITY
OPPORTUNITIES ETF
(FPXI)
---------------------------------------
SIX MONTHS ENDED
3/31/2020 YEAR ENDED
(UNAUDITED) 9/30/2019
------------------ ------------------
OPERATIONS:
Net investment income (loss)........................................................ $ 24,434 $ 202,382
Net realized gain (loss)............................................................ (1,795,132) (45,960)
Net increase from payment by the advisor............................................ 806 --
Net change in unrealized appreciation (depreciation)................................ 892,180 74,278
---------------- ----------------
Net increase (decrease) in net assets resulting
from operations.................................................................. (877,712) 230,700
---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations............................................................... (84,500) (200,971)
Return of capital................................................................... -- --
---------------- ----------------
Total distributions to shareholders................................................. (84,500) (200,971)
---------------- ----------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold........................................................... 38,586,160 16,491,543
Proceeds from shares acquired through reorganization................................ -- --
Cost of shares redeemed............................................................. (15,189,926) (11,912,293)
---------------- ----------------
Net increase (decrease) in net assets resulting
from shareholder transactions.................................................... 23,396,234 4,579,250
---------------- ----------------
Total increase (decrease) in net assets............................................. 22,434,022 4,608,979
NET ASSETS:
Beginning of period................................................................. 30,930,679 26,321,700
---------------- ----------------
End of period....................................................................... $ 53,364,701 $ 30,930,679
================ ================
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period............................................. 850,002 750,002
Shares sold......................................................................... 1,000,000 450,000
Shares issued through reorganization................................................ -- --
Shares redeemed..................................................................... (400,000) (350,000)
---------------- ----------------
Shares outstanding, end of period................................................... 1,450,002 850,002
================ ================
|
Page 84 See Notes to Financial Statements
FIRST TRUST
NASDAQ
CYBERSECURITY ETF
(CIBR)
----------------------------------------
SIX MONTHS ENDED
3/31/2020 YEAR ENDED
(UNAUDITED) 9/30/2019
------------------ ------------------
$ 21,537,139 $ 1,655,281
(903,348) 22,519,656
-- --
(124,681,729) (63,337,740)
---------------- ----------------
(104,047,938) (39,162,803)
---------------- ----------------
(19,971,481) (1,844,090)
-- --
---------------- ----------------
(19,971,481) (1,844,090)
---------------- ----------------
399,633,761 406,227,662
-- --
(50,568,926) (233,244,459)
---------------- ----------------
349,064,835 172,983,203
---------------- ----------------
225,045,416 131,976,310
979,649,796 847,673,486
---------------- ----------------
$ 1,204,695,212 $ 979,649,796
================ ================
35,450,002 29,750,002
13,300,000 14,350,000
-- --
(1,900,000) (8,650,000)
---------------- ----------------
46,850,002 35,450,002
================ ================
|
See Notes to Financial Statements Page 85
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST STOXX(R) EUROPEAN SELECT DIVIDEND INDEX FUND (FDD)
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2020 ------------------------------------------------------------------------
(UNAUDITED) 2019 2018 2017 2016 2015
------------ ------------ ------------ ------------ ------------ ------------
Net asset value, beginning of period $ 12.75 $ 13.12 $ 13.61 $ 11.82 $ 11.92 $ 13.50
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.10 0.66 0.59 0.42 0.55 0.55
Net realized and unrealized gain (loss) (3.16) (0.37) (0.49) 1.79 (0.10) (1.59)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations (3.06) 0.29 0.10 2.21 0.45 (1.04)
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.08) (0.66) (0.59) (0.42) (0.55) (0.54)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 9.61 $ 12.75 $ 13.12 $ 13.61 $ 11.82 $ 11.92
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) (24.11)% 2.35% 0.74% 18.93% 3.88% (7.90)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 214,394 $ 293,918 $ 454,824 $ 529,527 $ 165,490 $ 165,751
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.55% (b) 0.58% 0.57% 0.60% 0.60% 0.60%
Ratio of net expenses to average net
assets 0.55% (b) 0.58% 0.57% 0.60% 0.60% 0.60%
Ratio of net investment income (loss) to
average net assets 1.58% (b) 4.84% 4.25% 3.96% 4.63% 4.45%
Portfolio turnover rate (c) 39% 24% 35% 21% 34% 33%
|
FIRST TRUST FTSE EPRA/NAREIT DEVELOPED MARKETS REAL ESTATE INDEX FUND (FFR)
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2020 ------------------------------------------------------------------------
(UNAUDITED) 2019 2018 2017 2016 2015
------------ ------------ ------------ ------------ ------------ ------------
Net asset value, beginning of period $ 49.44 $ 45.07 $ 44.96 $ 46.18 $ 41.00 $ 41.09
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.66 1.25 1.48 0.89 0.90 1.15
Net realized and unrealized gain (loss) (13.67) 4.55 0.31 (0.65) 5.20 0.11
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations (13.01) 5.80 1.79 0.24 6.10 1.26
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (1.65) (1.43) (1.68) (1.46) (0.92) (1.35)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 34.78 $ 49.44 $ 45.07 $ 44.96 $ 46.18 $ 41.00
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) (27.26)% 13.19% 3.99% 0.67% 14.95% 2.97%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 41,445 $ 56,436 $ 45,074 $ 51,700 $ 71,576 $ 98,394
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.81% (b) 0.89% 0.85% 0.70% 0.72% 0.71%
Ratio of net expenses to average net
assets 0.60% (b) 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net investment income (loss) to
average net assets 2.76% (b) 2.61% 3.48% 2.40% 2.53% 2.76%
Portfolio turnover rate (c) 4% 7% 9% 6% 6% 10%
|
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year. The total returns would have been lower if certain
fees had not been waived and expenses reimbursed by the investment
advisor.
(b) Annualized.
(c) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
Page 86 See Notes to Financial Statements
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST DOW JONES GLOBAL SELECT DIVIDEND INDEX FUND (FGD)
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2020 ------------------------------------------------------------------------
(UNAUDITED) 2019 2018 2017 2016 2015
------------ ------------ ------------ ------------ ------------ ------------
Net asset value, beginning of period $ 22.90 $ 25.16 $ 25.73 $ 23.49 $ 21.62 $ 26.64
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.77 1.39 1.15 1.03 1.07 1.21
Net realized and unrealized gain (loss) (6.99) (2.24) (0.58) 2.23 1.82 (4.97)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations (6.22) (0.85) 0.57 3.26 2.89 (3.76)
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.78) (1.41) (1.14) (1.02) (1.02) (1.26)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 15.90 $ 22.90 $ 25.16 $ 25.73 $ 23.49 $ 21.62
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) (27.63)% (3.21)% 2.26% 14.14% 13.68% (14.51)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 367,345 $ 532,532 $ 484,280 $ 470,887 $ 344,068 $ 407,445
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.55% (b) 0.59% 0.58% 0.58% 0.58% 0.60%
Ratio of net expenses to average net
assets 0.55% (b) 0.59% 0.58% 0.58% 0.58% 0.60%
Ratio of net investment income (loss) to
average net assets 6.51% (b) 6.20% 4.48% 4.43% 4.63% 4.71%
Portfolio turnover rate (c) 6% 31% 31% 35% 43% 34%
|
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN)
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2020 ------------------------------------------------------------------------
(UNAUDITED) 2019 2018 2017 2016 2015
------------ ------------ ------------ ------------ ------------ ------------
Net asset value, beginning of period $ 13.13 $ 12.50 $ 13.13 $ 13.30 $ 10.38 $ 11.57
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.10 0.30 0.28 0.41 0.20 0.31
Net realized and unrealized gain (loss) (0.93) 0.64 (0.66) 0.32 2.93 (1.15)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations (0.83) 0.94 (0.38) 0.73 3.13 (0.84)
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.14) (0.31) (0.25) (0.90) (0.21) (0.35)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 12.16 $ 13.13 $ 12.50 $ 13.13 $ 13.30 $ 10.38
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) (6.42)% 7.58% (2.92)% 6.21% 30.42% (7.37)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 88,754 $ 75,502 $ 79,362 $ 100,467 $ 87,096 $ 39,959
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.65% (b) 0.71% 0.68% 0.71% 0.74% 0.75%
Ratio of net expenses to average net
assets 0.60% (b) 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net investment income (loss) to
average net assets 1.51% (b) 2.32% 2.21% 2.88% 1.80% 2.75%
Portfolio turnover rate (c) 11% 30% 22% 78% 26% 25%
|
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year. The total returns would have been lower if certain
fees had not been waived and expenses reimbursed by the investment
advisor.
(b) Annualized.
(c) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
See Notes to Financial Statements Page 87
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST GLOBAL ENGINEERING AND CONSTRUCTION ETF (FLM)
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2020 ------------------------------------------------------------------------
(UNAUDITED) 2019 2018 2017 2016 2015
------------ ------------ ------------ ------------ ------------ ------------
Net asset value, beginning of period $ 47.05 $ 56.78 $ 56.89 $ 48.63 $ 44.17 $ 48.12
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.92 0.87 0.79 0.62 0.96 0.60
Net realized and unrealized gain (loss) (11.61) (9.71) 0.16 8.27 4.46 (4.02)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations (10.69) (8.84) 0.95 8.89 5.42 (3.42)
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.82) (0.89) (1.06) (0.63) (0.96) (0.53)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 35.54 $ 47.05 $ 56.78 $ 56.89 $ 48.63 $ 44.17
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) (22.81)% (15.64)% 1.67% 18.39% 12.40% (7.19)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 5,331 $ 9,409 $ 14,194 $ 17,066 $ 14,588 $ 15,460
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 1.21% (b) 1.21% 0.88% 0.92% 1.03% 0.99%
Ratio of net expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income (loss) to
average net assets 3.28% (b) 1.64% 1.45% 1.20% 2.01% 1.21%
Portfolio turnover rate (c) 11% 14% 16% 20% 28% 46%
|
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) SMART GRID INFRASTRUCTURE INDEX FUND (GRID)
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2020 ------------------------------------------------------------------------
(UNAUDITED) 2019 2018 2017 2016 2015
------------ ------------ ------------ ------------ ------------ ------------
Net asset value, beginning of period $ 49.51 $ 47.62 $ 49.00 $ 39.19 $ 31.52 $ 35.38
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.12 0.67 0.52 0.57 0.42 0.38
Net realized and unrealized gain (loss) (6.60) 1.84 (1.32) 9.82 7.65 (3.88)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations (6.48) 2.51 (0.80) 10.39 8.07 (3.50)
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.14) (0.62) (0.58) (0.58) (0.40) (0.36)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 42.89 $ 49.51 $ 47.62 $ 49.00 $ 39.19 $ 31.52
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) (13.12)% 5.32% (1.66)% 26.73% 25.77% (9.97)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 27,877 $ 27,232 $ 33,333 $ 26,951 $ 13,715 $ 11,034
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.75% (b) 0.82% 0.74% 0.84% 1.07% 0.99%
Ratio of net expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income (loss) to
average net assets 0.49% (b) 1.40% 1.10% 1.44% 1.27% 1.02%
Portfolio turnover rate (c) 4% 31% 60% 32% 37% 18%
|
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year. The total returns would have been lower if certain
fees had not been waived and expenses reimbursed by the investment
advisor.
(b) Annualized.
(c) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
Page 88 See Notes to Financial Statements
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST INDXX GLOBAL NATURAL RESOURCES INCOME ETF (FTRI)
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2020 ------------------------------------------------------------------------
(UNAUDITED) 2019 2018 2017 2016 2015
------------ ------------ ------------ ------------ ------------ ------------
Net asset value, beginning of period $ 11.47 $ 12.73 $ 11.88 $ 10.66 $ 10.99 $ 21.19
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.25 0.72 0.48 0.41 0.33 0.23
Net realized and unrealized gain (loss) (3.07) (1.28) 0.83 1.22 (0.32) (10.23)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations (2.82) (0.56) 1.31 1.63 0.01 (10.00)
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.30) (0.70) (0.46) (0.41) (0.34) (0.20)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 8.35 $ 11.47 $ 12.73 $ 11.88 $ 10.66 $ 10.99
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) (25.19)% (4.42)% 11.12% 15.47% 0.20% (47.50)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 5,008 $ 7,452 $ 8,908 $ 8,913 $ 10,663 $ 12,643
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income (loss) to
average net assets 4.24% (b) 5.95% 3.74% 3.39% 3.00% 1.27%
Portfolio turnover rate (c) 9% 84% 50% 61% 179% (d) 40%
|
FIRST TRUST INDXX GLOBAL AGRICULTURE ETF (FTAG)
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2020 ------------------------------------------------------------------------
(UNAUDITED) 2019 2018 2017 2016 2015
------------ ------------ ------------ ------------ ------------ ------------
Net asset value, beginning of period $ 22.87 $ 26.21 $ 26.96 $ 21.55 $ 26.90 $ 56.20 (f)
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.12 0.51 0.44 0.39 0.20 0.60
Net realized and unrealized gain (loss) (6.65) (3.17) (0.83) 5.41 (5.46) (28.95)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations (6.53) (2.66) (0.39) 5.80 (5.26) (28.35)
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.06) (0.64) (0.36) (0.39) (0.09) (0.95)
Return on capital -- (0.04) -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total distributions (0.06) (0.68) (0.36) (0.39) (0.09) (0.95)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 16.28 $ 22.87 $ 26.21 $ 26.96 $ 21.55 $ 26.90
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) (28.62)% (10.16)% (1.46)% 27.09% (18.92)% (51.20)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 2,278 $ 3,200 $ 4,979 $ 7,816 $ 4,093 $ 5,380
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.72% (e) 0.70%
Ratio of net expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.72% (e) 0.70%
Ratio of net investment income (loss) to
average net assets 1.04% (b) 1.93% 1.56% 1.80% 1.74% 1.17%
Portfolio turnover rate (c) 12% 20% 30% 38% 137% (d) 40%
|
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(b) Annualized.
(c) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
(d) The variation in the portfolio turnover rate is due to the change in the
Fund's underlying index effective on the close of business December 18,
2015, which resulted in a complete rebalance of the Fund's portfolio.
(e) Includes foreign capital gains tax. If this tax expense was not included,
the expense ratio would have been 0.70%.
(f) All per share amounts and net asset values have been adjusted to reflect
the impact of the 1-for-5 reverse share split on May 2, 2016. The net
asset value reported on September 30, 2015 prior to the reverse share
split restatement was $5.38.
See Notes to Financial Statements Page 89
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST BICK INDEX FUND (BICK)
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2020 ------------------------------------------------------------------------
(UNAUDITED) 2019 2018 2017 2016 2015
------------ ------------ ------------ ------------ ------------ ------------
Net asset value, beginning of period $ 25.61 $ 26.48 $ 28.77 $ 22.94 $ 18.76 $ 25.12
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.06 0.33 0.40 0.33 0.28 0.32
Net realized and unrealized gain (loss) (5.00) (0.80) (2.34) 5.85 4.19 (6.34)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations (4.94) (0.47) (1.94) 6.18 4.47 (6.02)
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.15) (0.40) (0.35) (0.35) (0.29) (0.34)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 20.52 $ 25.61 $ 26.48 $ 28.77 $ 22.94 $ 18.76
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) (19.46)% (1.76)% (6.82)% 27.14% 23.99% (24.15)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 69,785 $ 116,503 $ 190,648 $ 202,863 $ 8,029 $ 7,503
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.64% (b) 0.64% 0.64% 0.64% 0.64% 0.64%
Ratio of net expenses to average net
assets 0.64% (b) 0.64% 0.64% 0.64% 0.64% 0.64%
Ratio of net investment income (loss) to
average net assets 0.64% (b) 1.25% 1.33% 2.15% 1.37% 1.17%
Portfolio turnover rate (c) 18% 66% 65% 86% 59% 70%
|
FIRST TRUST INDXX NEXTG ETF (NXTG)
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2020 ------------------------------------------------------------------------
(UNAUDITED) 2019 2018 2017 2016 2015
------------ ------------ ------------ ------------ ------------ ------------
Net asset value, beginning of period $ 50.26 $ 49.63 $ 50.52 $ 41.29 $ 34.93 $ 36.86
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.30 0.37 0.72 0.44 0.47 0.36
Net realized and unrealized gain (loss) (3.74) 0.50 (0.60) 9.29 6.34 (1.95)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations (3.44) 0.87 0.12 9.73 6.81 (1.59)
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.29) (0.24) (1.01) (0.50) (0.45) (0.34)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 46.53 $ 50.26 $ 49.63 $ 50.52 $ 41.29 $ 34.93
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) (6.92)% 1.78% 0.20% 23.68% 19.60% (4.35)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 293,165 $ 196,015 $ 17,370 $ 17,683 $ 10,324 $ 10,479
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income (loss) to
average net assets 1.28% (b) 1.73% 1.34% 1.04% 1.14% 0.93%
Portfolio turnover rate (c) 28% 59% 80% 18% 28% 28%
|
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(b) Annualized.
(c) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
Page 90 See Notes to Financial Statements
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST NASDAQ GLOBAL AUTO INDEX FUND (CARZ)
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2020 ------------------------------------------------------------------------
(UNAUDITED) 2019 2018 2017 2016 2015
------------ ------------ ------------ ------------ ------------ ------------
Net asset value, beginning of period $ 32.04 $ 36.33 $ 40.25 $ 33.39 $ 33.46 $ 37.93
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.23 1.02 0.98 0.87 0.80 0.64
Net realized and unrealized gain (loss) (8.01) (4.28) (3.98) 6.87 (0.09) (4.50)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations (7.78) (3.26) (3.00) 7.74 0.71 (3.86)
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.30) (1.03) (0.92) (0.88) (0.78) (0.61)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 23.96 $ 32.04 $ 36.33 $ 40.25 $ 33.39 $ 33.46
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) (24.55)% (8.97)% (7.57)% 23.46% 2.24% (10.38)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 13,178 $ 17,623 $ 18,167 $ 18,112 $ 21,705 $ 31,791
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income (loss) to
average net assets 1.43% (b) 3.19% 2.44% 2.20% 2.16% 1.34%
Portfolio turnover rate (c) 7% 24% 16% 17% 17% 18%
|
FIRST TRUST CLOUD COMPUTING ETF (SKYY)
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2020 ------------------------------------------------------------------------
(UNAUDITED) 2019 2018 2017 2016 2015
------------ ------------ ------------ ------------ ------------ ------------
Net asset value, beginning of period $ 56.39 $ 56.71 $ 41.88 $ 34.17 $ 28.08 $ 27.34
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.08 0.59 0.14 0.13 0.15 0.09
Net realized and unrealized gain (loss) (1.84) (0.31) 14.84 7.72 6.09 0.74
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations (1.76) 0.28 14.98 7.85 6.24 0.83
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.09) (0.60) (0.15) (0.14) (0.15) (0.09)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 54.54 $ 56.39 $ 56.71 $ 41.88 $ 34.17 $ 28.08
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) (3.13)% 0.57% 35.80% 23.00% 22.30% 3.04%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $2,105,138 $2,168,198 $2,067,140 $1,088,930 $ 587,642 $ 470,291
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.60% (b) 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net expenses to average net
assets 0.60% (b) 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net investment income (loss) to
average net assets 0.26% (b) 1.02% 0.28% 0.34% 0.49% 0.31%
Portfolio turnover rate (c) 7% 85% 7% 14% 23% 25%
|
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(b) Annualized.
(c) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
See Notes to Financial Statements Page 91
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST INTERNATIONAL EQUITY OPPORTUNITIES ETF (FPXI)
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2020 --------------------------------------------------------- PERIOD ENDED
(UNAUDITED) 2019 2018 2017 2016 9/30/2015 (a)
------------ ------------ ------------ ------------ ------------ ------------
Net asset value, beginning of period $ 36.39 $ 35.10 $ 34.51 $ 27.47 $ 25.24 $ 30.00
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.01) 0.30 0.49 0.22 0.51 0.37
Net realized and unrealized gain (loss) 0.49 (b) 1.29 0.66 7.07 2.14 (4.76)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 0.48 1.59 1.15 7.29 2.65 (4.39)
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.07) (0.30) (0.56) (0.25) (0.42) (0.37)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 36.80 $ 36.39 $ 35.10 $ 34.51 $ 27.47 $ 25.24
========== ========== ========== ========== ========== ==========
TOTAL RETURN (c) 1.29% (b) 4.60% 3.35% 26.71% 10.62% (14.74)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 53,365 $ 30,931 $ 26,322 $ 22,429 $ 2,748 $ 1,262
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.70% (d) 0.70% 0.70% 0.70% 0.71% (e) 0.70% (d)
Ratio of net expenses to average net
assets 0.70% (d) 0.70% 0.70% 0.70% 0.71% (e) 0.70% (d)
Ratio of net investment income (loss) to
average net assets 0.10% (d) 0.86% 1.42% 1.62% 2.25% 1.01% (d)
Portfolio turnover rate (f) 57% 98% 83% 58% 75% 98%
|
FIRST TRUST NASDAQ CYBERSECURITY ETF (CIBR)
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2020 --------------------------------------------------------- PERIOD ENDED
(UNAUDITED) 2019 2018 2017 2016 9/30/2015 (a)
------------ ------------ ------------ ------------ ------------ ------------
Net asset value, beginning of period $ 27.63 $ 28.49 $ 21.85 $ 19.77 $ 17.15 $ 20.00
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.48 0.06 0.02 0.03 0.23 (0.01)
Net realized and unrealized gain (loss) (1.95) (0.86) 6.64 2.09 2.62 (2.84)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations (1.47) (0.80) 6.66 2.12 2.85 (2.85)
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.45) (0.06) (0.02) (0.04) (0.23) --
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 25.71 $ 27.63 $ 28.49 $ 21.85 $ 19.77 $ 17.15
========== ========== ========== ========== ========== ==========
TOTAL RETURN (c) (5.36)% (2.78)% 30.49% 10.73% 16.83% (14.25)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $1,204,695 $ 979,650 $ 847,673 $ 313,575 $ 102,815 $ 79,753
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.60% (d) 0.60% 0.60% 0.60% 0.60% 0.60% (d)
Ratio of net expenses to average net
assets 0.60% (d) 0.60% 0.60% 0.60% 0.60% 0.60% (d)
Ratio of net investment income (loss) to
average net assets 3.62% (d) 0.20% 0.04% 0.13% 1.37% (0.30)%(d)
Portfolio turnover rate (f) 10% 58% 56% 67% 49% 7%
|
(a) Inception dates for FPXI and CIBR are November 4, 2014 and July 6, 2015,
respectively, which are consistent with the respective Fund's commencement
of investment operations and are the dates the initial creation units were
established.
(b) The Fund received a payment from the advisor in the amount of $806 in
connection with a trade error, which represents less than $0.01 per share.
Since the advisor reimbursed the Fund, there was no effect on the Fund's
total return.
(c) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(d) Annualized.
(e) Includes excise tax. If this excise tax expense was not included, the
expense ratio would have been 0.70%.
(f) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
Page 92 See Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
1. ORGANIZATION
First Trust Exchange-Traded Fund II (the "Trust") is an open-end management
investment company organized as a Massachusetts business trust on July 6, 2006,
and is registered with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended (the "1940 Act").
The Trust currently consists of sixteen exchange-traded funds. This report
covers the fourteen funds listed below:
First Trust STOXX(R) European Select Dividend Index Fund - (NYSE Arca, Inc.
("NYSE Arca") ticker "FDD")
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund -
(NYSE Arca ticker "FFR")
First Trust Dow Jones Global Select Dividend Index Fund -
(NYSE Arca ticker "FGD")
First Trust Global Wind Energy ETF - (NYSE Arca ticker "FAN")
First Trust Global Engineering and Construction ETF - (NYSE Arca ticker
"FLM")
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund -
(The Nasdaq Stock Market LLC ("Nasdaq") ticker "GRID")
First Trust Indxx Global Natural Resources Income ETF - (Nasdaq ticker
"FTRI")
First Trust Indxx Global Agriculture ETF - (Nasdaq ticker "FTAG")
First Trust BICK Index Fund - (Nasdaq ticker "BICK")
First Trust Indxx NextG ETF (Nasdaq ticker "NXTG")
First Trust NASDAQ Global Auto Index Fund - (Nasdaq ticker "CARZ")
First Trust Cloud Computing ETF - (Nasdaq ticker "SKYY")
First Trust International Equity Opportunities ETF - (Nasdaq ticker "FPXI")
First Trust Nasdaq Cybersecurity ETF - (Nasdaq ticker "CIBR")
Each fund represents a separate series of shares of beneficial interest in the
Trust (each a "Fund" and collectively, the "Funds"). Unlike conventional mutual
funds, each Fund issues and redeems shares on a continuous basis, at net asset
value ("NAV"), only in large specified blocks consisting of 50,000 shares called
a "Creation Unit." Each Fund's Creation Units are generally issued and redeemed
in-kind for securities in which a Fund invests, and in certain circumstances,
for cash, and only to and from broker-dealers and large institutional investors
that have entered into participation agreements. Except when aggregated in
Creation Units, each Fund's shares are not redeemable securities. The investment
objective of each Fund is to seek investment results that correspond generally
to the price and yield (before the Fund's fees and expenses) of the following
indices:
FUND INDEX
First Trust STOXX(R) European Select Dividend Index Fund STOXX(R) Europe Select Dividend 30 Index
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund FTSE EPRA/NAREIT Developed Index
First Trust Dow Jones Global Select Dividend Index Fund Dow Jones Global Select Dividend Index
First Trust Global Wind Energy ETF ISE Clean Edge Global Wind Energy(TM) Index
First Trust Global Engineering and Construction ETF ISE Global Engineering and Construction(TM) Index
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund NASDAQ OMX(R) Clean Edge(R) Smart Grid
Infrastructure Index(SM)
First Trust Indxx Global Natural Resources Income ETF Indxx Global Natural Resources Income Index
First Trust Indxx Global Agriculture ETF Indxx Global Agriculture Index
First Trust BICK Index Fund ISE BICK(TM) Index
First Trust Indxx NextG ETF Indxx 5G & NextG Thematic Index(SM)
First Trust NASDAQ Global Auto Index Fund NASDAQ OMX Global Auto Index(SM)
First Trust Cloud Computing ETF ISE CTA Cloud Computing(TM) Index
First Trust International Equity Opportunities ETF IPOX(R) International Index
First Trust Nasdaq Cybersecurity ETF Nasdaq CTA Cybersecurity Index(SM)
|
2. SIGNIFICANT ACCOUNTING POLICIES
The Funds are each considered an investment company and follow accounting and
reporting guidance under Financial Accounting Standards Board Accounting
Standards Codification Topic 946, "Financial Services-Investment Companies." The
following is a summary of significant accounting policies consistently followed
by the Funds in the preparation of the financial statements. The preparation of
the financial statements in accordance with accounting principles generally
accepted in the United States of America ("U.S. GAAP") requires management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
Page 93
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
A. PORTFOLIO VALUATION
Each Fund's NAV is determined daily as of the close of regular trading on the
New York Stock Exchange ("NYSE"), normally 4:00 p.m. Eastern time, on each day
the NYSE is open for trading. If the NYSE closes early on a valuation day, the
NAV is determined as of that time. Foreign securities are priced using data
reflecting the earlier closing of the principal markets for those securities.
Each Fund's NAV is calculated by dividing the value of all assets of each Fund
(including accrued interest and dividends), less all liabilities (including
accrued expenses and dividends declared but unpaid), by the total number of
shares outstanding.
Each Fund's investments are valued daily at market value or, in the absence of
market value with respect to any portfolio securities, at fair value. Market
value prices represent last sale or official closing prices from a national or
foreign exchange (i.e., a regulated market) and are primarily obtained from
third-party pricing services. Fair value prices represent any prices not
considered market value prices and are either obtained from a third-party
pricing service or are determined by the Pricing Committee of the Funds'
investment advisor, First Trust Advisors L.P. ("First Trust" or the "Advisor"),
in accordance with valuation procedures adopted by the Trust's Board of
Trustees, and in accordance with provisions of the 1940 Act. Investments valued
by the Advisor's Pricing Committee, if any, are footnoted as such in the
footnotes to the Portfolio of Investments. Each Fund's investments are valued as
follows:
Common stocks and other equity securities listed on any national or
foreign exchange (excluding Nasdaq and the London Stock Exchange
Alternative Investment Market ("AIM")) are valued at the last sale price
on the exchange on which they are principally traded or, for Nasdaq and
AIM securities, the official closing price. Securities traded on more than
one securities exchange are valued at the last sale price or official
closing price, as applicable, at the close of the securities exchange
representing the principal market for such securities.
Shares of open-end funds are valued at fair value which is based on NAV
per share.
Securities traded in an over-the-counter market are fair valued at the
mean of their most recent bid and asked price, if available, and otherwise
at their closing bid price.
Overnight repurchase agreements are valued at amortized cost when it
represents the best estimate of fair value.
Certain securities may not be able to be priced by pre-established pricing
methods. Such securities may be valued by the Trust's Board of Trustees or its
delegate, the Advisor's Pricing Committee, at fair value. These securities
generally include, but are not limited to, restricted securities (securities
which may not be publicly sold without registration under the Securities Act of
1933, as amended) for which a third-party pricing service is unable to provide a
market price; securities whose trading has been formally suspended; a security
whose market or fair value price is not available from a pre-established pricing
source; a security with respect to which an event has occurred that is likely to
materially affect the value of the security after the market has closed but
before the calculation of a Fund's NAV or make it difficult or impossible to
obtain a reliable market quotation; and a security whose price, as provided by
the third-party pricing service, does not reflect the security's fair value. As
a general principle, the current fair value of a security would appear to be the
amount which the owner might reasonably expect to receive for the security upon
its current sale. When fair value prices are used, generally they will differ
from market quotations or official closing prices on the applicable exchanges. A
variety of factors may be considered in determining the fair value of such
securities, including, but not limited to, the following:
1) the type of security;
2) the size of the holding;
3) the initial cost of the security;
4) transactions in comparable securities;
5) price quotes from dealers and/or third-party pricing services;
6) relationships among various securities;
7) information obtained by contacting the issuer, analysts, or the
appropriate stock exchange;
8) an analysis of the issuer's financial statements; and
9) the existence of merger proposals or tender offers that might affect
the value of the security.
If the securities in question are foreign securities, the following additional
information may be considered:
1) the value of similar foreign securities traded on other foreign
markets;
2) ADR trading of similar securities;
3) closed-end fund or exchange-traded fund trading of similar
securities;
4) foreign currency exchange activity;
5) the trading prices of financial products that are tied to baskets of
foreign securities;
6) factors relating to the event that precipitated the pricing problem;
7) whether the event is likely to recur; and
8) whether the effects of the event are isolated or whether they affect
entire markets, countries or regions.
Page 94
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
In addition, differences between the prices used to calculate a Fund's NAV and
the prices used by such Fund's corresponding index could result in a difference
between a Fund's performance and the performance of its underlying index.
Because foreign markets may be open on different days than the days during which
investors may transact in the shares of a Fund, the value of the Fund's
securities may change on the days when investors are not able to transact in the
shares of the Fund. The value of securities denominated in foreign currencies is
converted into U.S. dollars using exchange rates determined daily as of the
close of regular trading on the NYSE. Any use of a different rate from the rates
used by a relevant index may adversely affect the Fund's ability to track the
index.
The Funds are subject to fair value accounting standards that define fair value,
establish the framework for measuring fair value and provide a three-level
hierarchy for fair valuation based upon the inputs to the valuation as of the
measurement date. The three levels of the fair value hierarchy are as follows:
o Level 1 - Level 1 inputs are quoted prices in active markets for
identical investments. An active market is a market in which
transactions for the investment occur with sufficient frequency and
volume to provide pricing information on an ongoing basis.
o Level 2 - Level 2 inputs are observable inputs, either directly or
indirectly, and include the following:
o Quoted prices for similar investments in active markets.
o Quoted prices for identical or similar investments in markets
that are non-active. A non-active market is a market where
there are few transactions for the investment, the prices are
not current, or price quotations vary substantially either
over time or among market makers, or in which little
information is released publicly.
o Inputs other than quoted prices that are observable for the
investment (for example, interest rates and yield curves
observable at commonly quoted intervals, volatilities,
prepayment speeds, loss severities, credit risks, and default
rates).
o Inputs that are derived principally from or corroborated by
observable market data by correlation or other means.
o Level 3 - Level 3 inputs are unobservable inputs. Unobservable
inputs may reflect the reporting entity's own assumptions about the
assumptions that market participants would use in pricing the
investment.
The inputs or methodologies used for valuing investments are not necessarily an
indication of the risk associated with investing in those investments. A summary
of the inputs used to value each Fund's investments as of March 31, 2020, is
included with each Fund's Portfolio of Investments.
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded as of the trade date. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
Dividend income is recorded on the ex-dividend date. Interest income, if any, is
recorded on the accrual basis.
Withholding taxes and tax reclaims on foreign dividends have been provided for
in accordance with each Fund's understanding of the applicable country's tax
rules and rates.
Distributions received from a Fund's investments in real estate investment
trusts ("REITs") may be comprised of return of capital, capital gains and
income. The actual character of the amounts received during the year is not
known until after the REITs' fiscal year end. A Fund records the character of
distributions received from the REITs during the year based on estimates
available. The characterization of distributions received by a Fund may be
subsequently revised based on information received from the REITs after their
tax reporting periods conclude.
C. OFFSETTING ON THE STATEMENTS OF ASSETS AND LIABILITIES
Offsetting Assets and Liabilities require entities to disclose both gross and
net information about instruments and transactions eligible for offset on the
Statements of Assets and Liabilities, and disclose instruments and transactions
subject to master netting or similar agreements. These disclosure requirements
are intended to help investors and other financial statement users better assess
the effect or potential effect of offsetting arrangements on a fund's financial
position. The transactions subject to offsetting disclosures are derivative
instruments, repurchase agreements and reverse repurchase agreements, and
securities borrowing and securities lending transactions.
This disclosure, if applicable, is included within each Fund's Portfolio of
Investments under the heading "Offsetting Assets and Liabilities." For financial
reporting purposes, the Funds do not offset financial assets and financial
liabilities that are subject to master netting arrangements ("MNAs") or similar
agreements on the Statements of Assets and Liabilities. MNAs provide the right,
in the event of default (including bankruptcy and insolvency), for the
non-defaulting counterparty to liquidate the collateral and calculate the net
exposure to the defaulting party or request additional collateral.
D. FOREIGN CURRENCY
The books and records of the Funds are maintained in U.S. dollars. Foreign
currencies, investments and other assets and liabilities are translated into
U.S. dollars at the exchange rates prevailing at the end of the period.
Purchases and sales of investments and items of income and expense are
translated on the respective dates of such transactions. Unrealized gains and
losses on assets and liabilities, other than investments in securities, which
result from changes in foreign currency exchange rates have been included in
Page 95
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
"Net change in unrealized appreciation (depreciation) on foreign currency
translation" on the Statements of Operations. Unrealized gains and losses on
investments in securities which result from changes in foreign exchange rates
are included with fluctuations arising from changes in market price and are
shown in "Net change in unrealized appreciation (depreciation) on investments"
on the Statements of Operations. Net realized foreign currency gains and losses
include the effect of changes in exchange rates between trade date and
settlement date on investment security transactions, foreign currency
transactions and interest and dividends received and are included in "Net
realized gain (loss) on foreign currency transactions" on the Statements of
Operations. The portion of foreign currency gains and losses related to
fluctuations in exchange rates between the initial purchase settlement date and
subsequent sale trade date is included in "Net realized gain (loss) on
investments" on the Statements of Operations.
E. SECURITIES LENDING
The Funds may lend securities representing up to 33 1/3% of the value of their
total assets to broker-dealers, banks and other institutions to generate
additional income. When a Fund loans its portfolio securities, it will receive,
at the inception of each loan, collateral equal to at least 102% (for domestic
securities) or 105% (for international securities) of the market value of the
loaned securities. The collateral amount is valued at the beginning of each
business day and is compared to the market value of the loaned securities from
the prior business day to determine if additional collateral is required. If
additional collateral is required, a request is sent to the borrower. Securities
lending involves the risk that the Fund may lose money because the borrower of
the Fund's loaned securities fails to return the securities in a timely manner
or at all. The Fund could also lose money in the event of (i) a decline in the
value of the collateral provided for the loaned securities, (ii) a decline in
the value of any investments made with cash collateral or (iii) an increase in
the value of the loaned securities if the borrower does not increase the
collateral accordingly and the borrower fails to return the securities. These
events could also trigger adverse tax consequences for the Funds.
Under the Funds' Securities Lending Agency Agreement, the securities lending
agent will generally bear the risk that a borrower may default on its obligation
to return loaned securities. Brown Brothers Harriman & Co. ("BBH") acts as the
Funds' securities lending agent and is responsible for executing the lending of
the portfolio securities to creditworthy borrowers. The Funds, however, will be
responsible for the risks associated with the investment of cash collateral. A
Fund may lose money on its investment of cash collateral, which may affect its
ability to repay the collateral to the borrower without the use of other Fund
assets. Each Fund that engages in securities lending receives compensation (net
of any rebate and securities lending agent fees) for lending its securities.
Compensation can be in the form of fees received from the securities lending
agent or dividends or interest earned from the investment of cash collateral.
The fees received from the securities lending agent are accrued daily. The
dividend and interest earned on the securities loaned is accounted for in the
same manner as other dividend and interest income. At March 31, 2020, only FAN,
FLM, GRID, FTRI, NXTG, CARZ and SKYY had securities in the securities lending
program.
In the event of a default by a borrower with respect to any loan, BBH will
exercise any and all remedies provided under the applicable borrower agreement
to make the Funds whole. These remedies include purchasing replacement
securities by applying the collateral held from the defaulting broker against
the purchase cost of the replacement securities. If, despite such efforts by BBH
to exercise these remedies, a Fund sustains losses as a result of a borrower's
default, BBH will indemnify the Fund by purchasing replacement securities at its
own expense, or paying the Fund an amount equal to the market value of the
replacement securities, subject to certain limitations which are set forth in
detail in the Securities Lending Agency Agreement between the Trust on behalf of
the Funds and BBH.
F. REPURCHASE AGREEMENTS
Repurchase agreements involve the purchase of securities subject to the seller's
agreement to repurchase the securities at a mutually agreed upon date and price,
under the terms of a Master Repurchase Agreement ("MRA"). During the term of a
repurchase agreement, the value of the underlying securities held as collateral
on behalf of a Fund, including accrued interest, is required to exceed the value
of the repurchase agreement, including accrued interest. The underlying
securities for all repurchase agreements are held at the Funds' custodian or
designated sub-custodians under tri-party repurchase agreements.
MRAs govern transactions between a Fund and select counterparties. The MRAs
contain provisions for, among other things, initiation, income payments, events
of default, and maintenance of collateral for repurchase agreements.
Repurchase agreements received for lending securities are collateralized by U.S.
Treasury securities. The U.S. Treasury securities are held in a joint custody
account at BBH on behalf of the Funds participating in the securities lending
program. In the event the counterparty defaults on the repurchase agreement, the
U.S. Treasury securities can either be maintained as part of a Fund's portfolio
or sold for cash. A Fund could suffer a loss to the extent that the proceeds
from the sale of the underlying collateral held by the Fund is less than the
repurchase price and the Fund's costs associated with the delay and enforcement
of the MRA.
While the Funds may invest in repurchase agreements, any repurchase agreements
held by the Funds during the six months ended March 31, 2020 were received as
collateral for lending securities. There were no repurchase agreements held by
the Funds as of March 31, 2020.
Page 96
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income of each Fund, if any, are declared and paid
quarterly, or as the Board of Trustees may determine from time to time.
Distributions of net realized gains earned by each Fund, if any, are distributed
at least annually.
Distributions from net investment income and realized capital gains are
determined in accordance with federal income tax regulations, which may differ
from U.S. GAAP. Certain capital accounts in the financial statements are
periodically adjusted for permanent differences in order to reflect their tax
character. These permanent differences are primarily due to the varying
treatment of income and gain/loss on significantly modified portfolio securities
held by the Funds and have no impact on net assets or NAV per share. Temporary
differences, which arise from recognizing certain items of income, expense and
gain/loss in different periods for financial statement and tax purposes, will
reverse at some time in the future.
The tax character of distributions paid by each Fund during the fiscal year
ended September 30, 2019 was as follows:
Distributions Distributions Distributions
paid from paid from paid from
Ordinary Capital Return of
Income Gains Capital
----------------- -------------- --------------
First Trust STOXX(R) European Select Dividend Index Fund $ 16,448,343 $ -- $ --
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund 1,495,051 -- --
First Trust Dow Jones Global Select Dividend Index Fund 30,379,078 -- --
First Trust Global Wind Energy ETF 1,723,721 -- --
First Trust Global Engineering and Construction ETF 185,587 -- --
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund 360,196 -- --
First Trust Indxx Global Natural Resources Income ETF 478,011 -- --
First Trust Indxx Global Agriculture ETF 100,503 -- 6,587
First Trust BICK Index Fund 2,279,891 -- --
First Trust Indxx NextG ETF 721,966 -- --
First Trust NASDAQ Global Auto Index Fund 605,577 -- --
First Trust Cloud Computing ETF 21,035,531 -- --
First Trust International Equity Opportunities ETF 200,971 -- --
First Trust Nasdaq Cybersecurity ETF 1,844,090 -- --
|
As of September 30, 2019, the components of distributable earnings on a tax
basis for each Fund were as follows:
Accumulated Net
Undistributed Capital and Unrealized
Ordinary Other Appreciation
Income Gain (Loss) (Depreciation)
----------------- -------------- --------------
First Trust STOXX(R) European Select Dividend Index Fund $ 237,563 $ (16,857,872) $ (16,644,533)
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund 1,151,621 (641,306) 6,379,441
First Trust Dow Jones Global Select Dividend Index Fund 1,837,215 (79,444,235) (43,970,893)
First Trust Global Wind Energy ETF 211,889 (50,136,387) (1,147,183)
First Trust Global Engineering and Construction ETF 23,722 (7,266,234) (727,008)
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund 26,054 (1,398,268) 698,665
First Trust Indxx Global Natural Resources Income ETF 39,669 (61,047,921) (234,715)
First Trust Indxx Global Agriculture ETF -- (19,172,249) (344,238)
First Trust BICK Index Fund 280,977 (24,902,155) (5,135,099)
First Trust Indxx NextG ETF 286,107 (1,739,274) 6,817,159
First Trust NASDAQ Global Auto Index Fund 88,596 (3,917,490) (3,468,954)
First Trust Cloud Computing ETF -- (54,412,548) (23,168,745)
First Trust International Equity Opportunities ETF 73,814 (3,443,600) 2,167,450
First Trust Nasdaq Cybersecurity ETF -- (37,244,658) 34,232,065
|
H. INCOME AND OTHER TAXES
Each Fund intends to continue to qualify as a regulated investment company by
complying with the requirements under Subchapter M of the Internal Revenue Code
of 1986, as amended, which includes distributing substantially all of its net
investment income and net realized gains to shareholders. Accordingly, no
provision has been made for federal and state income taxes. However, due to the
timing and amount of distributions, each Fund may be subject to an excise tax of
4% of the amount by which approximately 98% of each Fund's taxable income
exceeds the distributions from such taxable income for the calendar year.
Page 97
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
Certain countries assess a capital gains tax on securities sold in their local
markets. This tax is accrued as the securities in these foreign markets
appreciate in value and is paid at the time of sale to the extent a capital gain
is realized. Taxes accrued on securities in an unrealized appreciation position
are included in "Net change in unrealized appreciation (depreciation) on
deferred foreign capital gains tax" on the Statements of Operations. The capital
gains tax paid on securities sold, if any, is included in "Net realized gain
(loss) on foreign capital gains tax" on the Statements of Operations.
India's Finance Bill, 2018 ("Finance Bill, 2018") was enacted into law on March
29, 2018, and amongst other provisions, it introduced a long-term capital gains
tax beginning April 1, 2018. Long-term capital gains on the sale of listed
shares in excess of INR 0.1 million are taxed at the rate of 10% (plus
applicable surcharge and cess (which is a type of tax)) subject to satisfaction
of certain conditions. Long-term capital gains accruing as of January 31, 2018,
are considered exempt due to a grandfather clause in the provision. The
aforesaid exemption from long-term capital gains tax is available with respect
to shares acquired after October 1, 2004 and on or before March 31, 2018, only
if on such acquisitions Securities Transaction Tax ("STT") was chargeable.
Certain exceptions in this regard, such as acquisition of shares in a public
offer, bonus, rights issued, etc. for which the condition of chargeability of
STT on acquisition is not applicable, have been notified.
In the case of the sale of listed shares held by a Fund for one year or less,
the income is classified as short-term capital gains and is taxable at 15% (plus
applicable surcharge and cess) provided the shares are sold on the stock
exchange and subjected to STT. For above purposes, the applicable rate of
surcharge is 2% or 5% (depending on the level of income of the Fund). The
Finance Bill, 2018 increases the cess imposed on the sum of tax and surcharge
from 3% to 4%. The cess 4% rate is applied to the capital gains tax, resulting
in a higher effective rate of capital gains tax.
Where the sale of shares is outside the stock exchange and not subject to STT,
the long-term capital gains are taxed at 10% (plus applicable surcharge and
cess) and short-term capital gains are taxed at 30% (plus applicable surcharge
and cess). The Finance Bill, 2018, approves the carry forward of long-term
capital losses to be offset against long-term capital gains. Short-term losses
can be netted against both short-term gains and long-term gains.
Until March 31, 2020, dividends received by a Fund from Indian companies were
exempt from tax in India because Indian companies were required to pay dividend
distribution tax. The Indian Finance Act, 2020 has amended the dividend taxation
framework effective April 1, 2020 and accordingly dividends would now be taxable
in the hands of the shareholders at 20%, plus applicable surcharge and cess.
There is an anomaly in the rates of surcharge applicable to non-resident
taxpayers such as regulated investment trusts. While the intention of the
legislation seems to be to cap the surcharge on dividend tax to 15%, the
enabling rule provides for a surcharge at a graded scale with a cap of 37%.
Considering the above, the highest effective tax rate on dividend income arising
to a Fund could be 28.50% though the rate should be 23.92% if the surcharge is
capped at 15%. Note that a Fund can obtain the reduced withholding tax rate of
25% under the US-India tax treaty if a Fund is considered as a tax resident of
the United States and qualifies for treaty benefits.
Even if a Fund is eligible for treaty benefits, Indian companies will still be
required to withhold tax at the domestic law rate, disregarding the treaty
rates. Any excess taxes withheld can be off-set against capital gains tax
liability during the year or claimed as a refund in the annual tax return.
Please note that the above description is based on current provisions of Indian
law, and any change or modification made by subsequent legislation, regulation,
or administrative or judicial decision could increase the Indian tax liability
of a Fund and thus reduce the return to a Fund's shareholders. There can be no
assurance that the Indian tax authorities and/or regulators will not take a
position contrary to the views expressed herein. If the Indian tax authorities
and/or regulators take a position contrary to the views expressed herein,
adverse unpredictable consequences may follow.
The Funds are subject to accounting standards that establish a minimum threshold
for recognizing, and a system for measuring, the benefits of a tax position
taken or expected to be taken in a tax return. Taxable years ending 2016, 2017,
2018, and 2019 remain open to federal and state audit. As of March 31, 2020,
management has evaluated the application of these standards to the Funds, and
has determined that no provision for income tax is required in the Funds'
financial statements for uncertain tax positions.
Under the Regulated Investment Company Modernization Act of 2010 (the "Act"),
net capital losses arising in taxable years beginning after December 22, 2010,
may be carried forward indefinitely, and their character is retained as
short-term and/or long- term losses. Previously, net capital losses were carried
forward for up to eight years and treated as short-term losses. As a transition
rule, the Act requires that post-enactment net capital losses be used before
pre-enactment net capital losses. At September 30, 2019, the Funds had
post-enactment net capital losses for federal income tax purposes as shown in
the following table. To the extent that these loss carryforwards are used to
offset future capital gains, it is probable that the capital gains so offset
will not be distributed to Fund shareholders. The Funds are subject to certain
limitations, under U.S. tax rules, on the use of capital loss carryforwards and
net unrealized built-in losses. These limitations apply when there has been a
50% change in ownership.
Page 98
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
Post Enactment -
No Expiration
---------------------
First Trust STOXX(R) European Select Dividend Index Fund $ 16,857,872
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund* 641,306
First Trust Dow Jones Global Select Dividend Index Fund 79,444,235
First Trust Global Wind Energy ETF 50,136,387
First Trust Global Engineering and Construction ETF 7,266,234
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund 1,398,268
First Trust Indxx Global Natural Resources Income ETF 61,047,921
First Trust Indxx Global Agriculture ETF 19,172,249
First Trust BICK Index Fund 24,902,155
First Trust Indxx NextG ETF 1,739,274
First Trust NASDAQ Global Auto Index Fund 3,917,490
First Trust Cloud Computing ETF 54,412,548
First Trust International Equity Opportunities ETF 3,443,600
First Trust Nasdaq Cybersecurity ETF 37,244,658
|
* $75,097 of First Trust FTSE EPRA/NAREIT Developed Markets Real
Estate Index Fund's post-enactment net capital losses is subject to
loss limitation resulting from reorganization activity. This
limitation generally reduces the utilization of these losses to a
maximum of $38,346 per year.
During the taxable year ended September 30, 2019, the following Fund utilized
post-enactment capital loss carryforwards in the following amount:
Capital Loss
Carryforward Utilized
---------------------
First Trust Indxx Global Natural Resources Income ETF $ 238,413
|
Certain losses realized during the current fiscal year may be deferred and
treated as occurring on the first day of the following fiscal year for federal
income tax purposes. For the fiscal year ended September 30, 2019, the Funds had
no net late year ordinary or capital losses.
I. EXPENSES
Expenses that are directly related to one of the Funds are charged directly to
the respective Fund, except for First Trust Indxx Global Natural Resources
Income ETF, First Trust Indxx Global Agriculture ETF, First Trust BICK Index
Fund, First Trust Indxx NextG ETF, First Trust NASDAQ Global Auto Index Fund,
First Trust Cloud Computing ETF, First Trust International Equity Opportunities
ETF, and First Trust Nasdaq Cybersecurity ETF (the "Unitary Fee Funds"), for
which expenses other than excluded expenses (discussed in Note 3) are paid by
the Advisor. General expenses of the Trust are allocated to all the Funds based
upon the net assets of each Fund.
First Trust has entered into licensing agreements with each of the following
"Licensors" for the respective Funds:
FUND LICENSOR
First Trust STOXX(R) European Select Dividend Index Fund STOXX Limited
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund FTSE International Limited
First Trust Dow Jones Global Select Dividend Index Fund S&P Dow Jones Indices LLC
First Trust Global Wind Energy ETF Nasdaq, Inc.
First Trust Global Engineering and Construction ETF Nasdaq, Inc.
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund Nasdaq, Inc.
First Trust Indxx Global Natural Resources Income ETF Indxx, LLC
First Trust Indxx Global Agriculture ETF Indxx, LLC
First Trust BICK Index Fund Nasdaq, Inc.
First Trust Indxx NextG ETF Indxx, LLC
First Trust NASDAQ Global Auto Index Fund Nasdaq, Inc.
First Trust Cloud Computing ETF Nasdaq, Inc.
First Trust International Equity Opportunities ETF IPOX(R) Schuster LLC
First Trust Nasdaq Cybersecurity ETF Nasdaq, Inc.
|
The respective license agreements allow for the use of each Fund's respective
index and of certain trademarks and trade names of the respective Licensors. The
Funds are sub-licensees to the applicable license agreements. The Funds, except
for the Unitary Fee Funds, are required to pay licensing fees, which are shown
on the Statements of Operations. The licensing fees for the Unitary Fee Funds
are paid by First Trust from the unitary investment advisory fees it receives
from each of these Funds.
Page 99
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
3. INVESTMENT ADVISORY FEE, AFFILIATED TRANSACTIONS AND OTHER FEE ARRANGEMENTS
First Trust, the investment advisor to the Funds, is a limited partnership with
one limited partner, Grace Partners of DuPage L.P., and one general partner, The
Charger Corporation. The Charger Corporation is an Illinois corporation
controlled by James A. Bowen, Chief Executive Officer of First Trust. First
Trust is responsible for the selection and ongoing monitoring of the securities
in each Fund's portfolio, managing the Funds' business affairs and providing
certain administrative services necessary for the management of the Funds.
For the following Unitary Fee Funds, First Trust is paid an annual unitary
management fee at the specified rate of such Fund's average daily net assets and
is responsible for the expenses of such Fund including the cost of transfer
agency, custody, fund administration, legal, audit and other services, and
excluding fee payments under the Investment Management Agreement, distribution
and service fees payable pursuant to a Rule 12b-1 plan, if any, brokerage
expense, acquired fund fees and expenses, taxes, interest, and extraordinary
expenses.
% of Daily
Net Assets
------------
First Trust Indxx Global Natural Resources Income ETF 0.70%
First Trust Indxx Global Agriculture ETF 0.70%
First Trust BICK Index Fund 0.64%
First Trust Indxx NextG ETF 0.70%
First Trust NASDAQ Global Auto Index Fund 0.70%
First Trust Cloud Computing ETF 0.60%
First Trust International Equity Opportunities ETF 0.70%
First Trust Nasdaq Cybersecurity ETF 0.60%
|
For the First Trust STOXX(R) European Select Dividend Index Fund, First Trust
FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund, First Trust Dow Jones
Global Select Dividend Index Fund, First Trust Global Wind Energy ETF, First
Trust Global Engineering and Construction ETF, and First Trust NASDAQ(R) Clean
Edge(R) Smart Grid Infrastructure Index Fund (such Funds, the "Expense Cap
Funds"), First Trust is paid an annual management fee of 0.40% of such Fund's
average daily net assets.
For the Expense Cap Funds, the Trust and First Trust have entered into an
Expense Reimbursement, Fee Waiver and Recovery Agreement ("Recovery Agreement")
in which First Trust has agreed to waive fees and/or reimburse Fund expenses to
the extent that the operating expenses of each such Fund (excluding interest
expense, brokerage commissions and other trading expenses, acquired fund fees
and expenses, taxes and extraordinary expenses) exceed the following amount as a
percentage of average daily net assets per year (the "Expense Cap") at least
through January 31, 2021.
Expense Cap
-------------
First Trust STOXX(R) European Select Dividend Index Fund 0.60%
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund 0.60%
First Trust Dow Jones Global Select Dividend Index Fund 0.60%
First Trust Global Wind Energy ETF 0.60%
First Trust Global Engineering and Construction ETF 0.70%
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund 0.70%
|
Expenses reimbursed and fees waived by First Trust under the Recovery Agreement
are subject to recovery by First Trust for up to three years from the date the
fee or expense was incurred, but no reimbursement payment will be made by a Fund
if it results in the Fund exceeding (i) the applicable expense limitation in
place for the most recent fiscal year for which such expense limitation was in
place, (ii) the applicable expense limitation in place at the time the fees were
waived, or (iii) the current expense limitation. These amounts would be included
in "Expenses previously waived or reimbursed" on the Statements of Operations.
Page 100
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
The advisory fee waivers and expense reimbursements for the six months ended
March 31, 2020 and the fees waived or expenses borne by First Trust subject to
recovery from the applicable Fund for the periods indicated were as follows:
Fees Waived or Expenses Borne by First Trust
Subject to Recovery
---------------------------------------------------------
Advisory Expense Six Months Year Year Six Months
Fee Reim- Ended Ended Ended Ended
Waivers bursements 9/30/2017 9/30/2018 9/30/2019 3/31/2020 Total
---------- ---------- ---------- ---------- ---------- ---------- ---------
First Trust FTSE EPRA/NAREIT
Developed Markets Real Estate
Index Fund $ 60,208 $ -- $ 56,927 $ 117,546 $ 140,904 $ 60,208 $ 375,585
First Trust Global Wind Energy ETF 24,149 -- 54,366 71,385 83,187 24,149 233,087
First Trust Global Engineering and
Construction ETF 18,221 4,815 24,618 33,419 57,523 23,036 138,596
First Trust NASDAQ(R) Clean Edge(R)
Smart Grid Infrastructure Index Fund 7,882 -- 17,041 13,940 32,068 7,822 70,871
|
For the six months ended March 31, 2020, the First Trust International Equity
Opportunities ETF received a payment from the Advisor of $806 in connection with
a trade error.
The Trust has multiple service agreements with The Bank of New York Mellon
("BNYM"). Under the service agreements, BNYM performs custodial, fund
accounting, certain administrative services, and transfer agency services for
each Fund. As custodian, BNYM is responsible for custody of each Fund's assets.
As fund accountant and administrator, BNYM is responsible for maintaining the
books and records of each Fund's securities and cash. As transfer agent, BNYM is
responsible for maintaining shareholder records for each Fund. BNYM is a
subsidiary of The Bank of New York Mellon Corporation, a financial holding
company.
Each Trustee who is not an officer or employee of First Trust, any sub-advisor
or any of their affiliates ("Independent Trustees") is paid a fixed annual
retainer that is allocated equally among each fund in the First Trust Fund
Complex. Each Independent Trustee is also paid an annual per fund fee that
varies based on whether the fund is a closed-end or other actively managed fund,
a defined-outcome fund or is an index fund.
Additionally, the Lead Independent Trustee and the Chairmen of the Audit
Committee, Nominating and Governance Committee and Valuation Committee are paid
annual fees to serve in such capacities, with such compensation allocated pro
rata among each fund in the First Trust Fund Complex based on net assets.
Independent Trustees are reimbursed for travel and out-of-pocket expenses in
connection with all meetings. The Lead Independent Trustee and Committee
Chairmen rotate every three years. The officers and "Interested" Trustee receive
no compensation from the Trust for acting in such capacities.
4. REORGANIZATION
On March 11, 2019, the Board of Trustees of FFR approved a reorganization of FFR
with the First Trust Heitman Global Prime Real Estate ETF ("PRME"). The merger
was completed on September 16, 2019. FFR was the surviving fund.
Under the terms of the reorganization, which was tax-free, the assets of PRME
were transferred to, and the liabilities of PRME were assumed by, FFR in
exchange for shares of FFR. The cost of the investments received from PRME was
carried forward to FFR for U.S. GAAP and tax purposes. The FFR shares were then
distributed to PRME shareholders and the separate existence of PRME ceased. The
reorganization was subject to certain conditions, including that the
reorganization was approved on August 22, 2019, by the shareholders of PRME.
When the reorganization occurred, the transactions were based on the relative
NAVs of PRME and FFR.
The following table summarizes the asset transfers and conversion ratios for the
reorganization.
Net Assets on Unrealized Accumulated Shares Acquiring Net Assets on
Acquired Shares September 13 Appreciation Net Realized Conversion (Surviving) Shares September 13,
Fund Redeemed 2019 (Depreciation) Gain (Loss) Ratio Fund Issued 2019*
-----------------------------------------------------------------------------------------------------------------------------
PRME 100,002 $2,028,889 $47,695 $(65,869) 0.416055 FFR 41,606 $51,202,233
|
* Amount reflects net assets of FFR prior to the reorganization.
The following table summarizes the operations of the Acquired Fund for the
period November 1, 2018 to September 13, 2019, and the operations of FFR, the
Acquiring (Surviving) Fund, for the fiscal year ended September 30, 2019, as
presented in the Statements of Operations and the combined Acquired and
Acquiring (Surviving) Funds' pro-forma results of operations for the fiscal year
ended September 30, 2019, assuming the acquisition had been completed on October
1, 2018.
Page 101
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
Because the combined investment portfolios have been managed as a single
integrated portfolio since the reorganization was completed, it is not
practicable to separate the amounts of revenue and earnings of PRME that have
been included in FFR's Statement of Operations since September 13, 2019.
Net Realized
and Change in Net Increase
Net Unrealized (Decrease)
Investment Gain (Loss) from
Income on Investments Operations
---------------- -------------- --------------
Acquired Fund for the period November 1, 2018 to September 13, 2019
PRME $ 40,759 $ 197,950 $ 238,709
Acquiring Fund for the fiscal year ended September 30, 2019
FFR 1,263,898 5,011,820 6,275,718
---------------- -------------- --------------
Combined Totals $ 1,304,657 $ 5,209,770 $ 6,514,427
================ ============== ==============
|
5. PURCHASES AND SALES OF SECURITIES
For the six months ended March 31, 2020, the cost of purchases and proceeds from
sales of investments for each Fund, excluding short-term investments and in-kind
transactions, were as follows:
Purchases Sales
---------------- --------------
First Trust STOXX(R) European Select Dividend Index Fund $ 117,426,703 $ 116,246,883
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund 2,036,519 3,018,383
First Trust Dow Jones Global Select Dividend Index Fund 34,804,055 34,997,040
First Trust Global Wind Energy ETF 9,625,004 9,443,585
First Trust Global Engineering and Construction ETF 997,647 1,030,877
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund 1,321,172 1,332,004
First Trust Indxx Global Natural Resources Income ETF 629,114 654,662
First Trust Indxx Global Agriculture ETF 367,928 360,420
First Trust BICK Index Fund 20,397,472 29,348,779
First Trust Indxx NextG ETF 102,381,574 72,709,518
First Trust NASDAQ Global Auto Index Fund 1,136,432 1,206,250
First Trust Cloud Computing ETF 164,979,559 164,442,545
First Trust International Equity Opportunities ETF 32,414,078 27,474,022
First Trust Nasdaq Cybersecurity ETF 125,844,717 122,033,230
|
For the six months ended March 31, 2020, the cost of in-kind purchases and
proceeds from in-kind sales for each Fund were as follows:
Purchases Sales
---------------- --------------
First Trust STOXX(R) European Select Dividend Index Fund $ 22,132,334 $ 22,974,408
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund 2,329,108 --
First Trust Dow Jones Global Select Dividend Index Fund 58,960,033 42,928,929
First Trust Global Wind Energy ETF 22,105,437 --
First Trust Global Engineering and Construction ETF -- 2,449,935
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund 5,411,155 --
First Trust Indxx Global Natural Resources Income ETF -- 584,258
First Trust Indxx Global Agriculture ETF -- --
First Trust BICK Index Fund 2,990,539 17,588,710
First Trust Indxx NextG ETF 155,590,681 54,783,446
First Trust NASDAQ Global Auto Index Fund -- --
First Trust Cloud Computing ETF 307,114,956 290,114,763
First Trust International Equity Opportunities ETF 33,245,621 14,951,894
First Trust Nasdaq Cybersecurity ETF 396,939,346 50,413,204
|
Page 102
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
6. CREATIONS, REDEMPTIONS AND TRANSACTION FEES
Shares are created and redeemed by each Fund only in Creation Unit size
aggregations of 50,000 shares in transactions with broker- dealers or large
institutional investors that have entered into a participation agreement (an
"Authorized Participant"). In order to purchase Creation Units of a Fund, an
Authorized Participant must deposit (i) a designated portfolio of equity
securities determined by First Trust (the "Deposit Securities") and generally
make or receive a cash payment referred to as the "Cash Component," which is an
amount equal to the difference between the NAV of the Fund Shares (per Creation
Unit Aggregation) and the market value of the Deposit Securities, and/or (ii)
cash in lieu of all or a portion of the Deposit Securities. If the Cash
Component is a positive number (i.e., the NAV per Creation Unit Aggregation
exceeds the Deposit Amount), the Authorized Participant will deliver the Cash
Component. If the Cash Component is a negative number (i.e., the NAV per
Creation Unit Aggregation is less than the Deposit Amount), the Authorized
Participant will receive the Cash Component. Authorized Participants purchasing
Creation Units must pay to BNYM, as transfer agent, a creation fee (the
"Creation Transaction Fee") regardless of the number of Creation Units purchased
in the transaction. The Creation Transaction Fee may vary and is based on the
composition of the securities included in each Fund's portfolio and the
countries in which the transactions are settled. The Creation Transaction Fee
may increase or decrease with changes in each Fund's portfolio. The price for
each Creation Unit will equal the daily NAV per share times the number of shares
in a Creation Unit plus the fees described above and, if applicable, any
operational processing and brokerage costs, transfer fees or stamp taxes. When a
Fund permits an Authorized Participant to substitute cash or a different
security in lieu of depositing one or more of the requisite Deposit Securities,
the Authorized Participant may also be assessed an amount to cover the cost of
purchasing the Deposit Securities and/or disposing of the substituted
securities, including operational processing and brokerage costs, transfer fees,
stamp taxes, and part or all of the spread between the expected bid and offer
side of the market related to such Deposit Securities and/or substitute
securities.
Authorized Participants redeeming Creation Units must pay to BNYM, as transfer
agent, a redemption transaction fee (the "Redemption Transaction Fee"),
regardless of the number of Creation Units redeemed in the transaction. The
Redemption Transaction Fee may vary and is based on the composition of the
securities included in each Fund's portfolio and the countries in which the
transactions are settled. The Redemption Transaction Fee may increase or
decrease with changes in each Fund's portfolio. Each Fund reserves the right to
effect redemptions in cash. An Authorized Participant may request a cash
redemption in lieu of securities; however, each Fund may, in its discretion,
reject any such request.
7. DISTRIBUTION PLAN
The Board of Trustees adopted a Distribution and Service Plan pursuant to Rule
12b-1 under the 1940 Act. In accordance with the Rule 12b-1 plan, the Funds are
authorized to pay an amount up to 0.25% of their average daily net assets each
year to reimburse First Trust Portfolios L.P. ("FTP"), the distributor of the
Funds, for amounts expended to finance activities primarily intended to result
in the sale of Creation Units or the provision of investor services. FTP may
also use this amount to compensate securities dealers or other persons that are
Authorized Participants for providing distribution assistance, including
broker-dealer and shareholder support and educational and promotional services.
No 12b-1 fees are currently paid by the Funds, and pursuant to a contractual
arrangement, no 12b-1 fees will be paid any time before January 31, 2021.
8. INDEMNIFICATION
The Trust, on behalf of the Funds, has a variety of indemnification obligations
under contracts with its service providers. The Trust's maximum exposure under
these arrangements is unknown. However, the Trust has not had prior claims or
losses pursuant to these contracts and expects the risk of loss to be remote.
9. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Funds
through the date the financial statements were issued, and has determined that
there were no subsequent events requiring recognition or disclosure in the
financial statements that have not already been disclosed.
Page 103
ADDITIONAL INFORMATION
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies and information on how each Fund voted proxies relating to
its portfolio securities during the most recent 12-month period ended June 30 is
available (1) without charge, upon request, by calling (800) 988-5891; (2) on
each Fund's website at www.ftportfolios.com; and (3) on the Securities and
Exchange Commission's ("SEC") website at www.sec.gov.
PORTFOLIO HOLDINGS
Each Fund files portfolio holdings information for each month in a fiscal
quarter within 60 days after the end of the relevant fiscal quarter on Form
N-PORT. Portfolio holdings information for the third month of each fiscal
quarter will be publicly available on the SEC's website at www.sec.gov. Each
Fund's complete schedule of portfolio holdings for the second and fourth
quarters of each fiscal year is included in the semi-annual and annual reports
to shareholders, respectively, and is filed with the SEC on Form N-CSR. The
semi-annual and annual report for each Fund is available to investors within 60
days after the period to which it relates. Each Fund's Forms N-PORT and Forms
N-CSR are available on the SEC's website listed above.
RISK CONSIDERATIONS
RISKS ARE INHERENT IN ALL INVESTING. CERTAIN GENERAL RISKS THAT MAY BE
APPLICABLE TO A FUND ARE IDENTIFIED BELOW, BUT NOT ALL OF THE MATERIAL RISKS
RELEVANT TO EACH FUND ARE INCLUDED IN THIS REPORT AND NOT ALL OF THE RISKS BELOW
APPLY TO EACH FUND. THE MATERIAL RISKS OF INVESTING IN EACH FUND ARE SPELLED OUT
IN ITS PROSPECTUS, STATEMENT OF ADDITIONAL INFORMATION AND OTHER REGULATORY
FILINGS. BEFORE INVESTING, YOU SHOULD CONSIDER EACH FUND'S INVESTMENT OBJECTIVE,
RISKS, CHARGES AND EXPENSES, AND READ EACH FUND'S PROSPECTUS AND STATEMENT OF
ADDITIONAL INFORMATION CAREFULLY. YOU CAN DOWNLOAD EACH FUND'S PROSPECTUS AT
WWW.FTPORTFOLIOS.COM OR CONTACT FIRST TRUST PORTFOLIOS L.P. AT (800) 621-1675 TO
REQUEST A PROSPECTUS, WHICH CONTAINS THIS AND OTHER INFORMATION ABOUT EACH FUND.
CONCENTRATION RISK. To the extent that a fund is able to invest a large
percentage of its assets in a single asset class or the securities of issuers
within the same country, state, region, industry or sector, an adverse economic,
business or political development may affect the value of the fund's investments
more than if the fund were more broadly diversified. A fund that tracks an index
will be concentrated to the extent the fund's corresponding index is
concentrated. A concentration makes a fund more susceptible to any single
occurrence and may subject the fund to greater market risk than a fund that is
not concentrated.
CREDIT 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
the related risk that the value of a security may decline because of concerns
about the issuer's ability to make such payments.
CYBER SECURITY RISK. The funds are susceptible to potential operational risks
through breaches in cyber security. A breach in cyber security refers to both
intentional and unintentional events that may cause a fund to lose proprietary
information, suffer data corruption or lose operational capacity. Such events
could cause a fund to incur regulatory penalties, reputational damage,
additional compliance costs associated with corrective measures and/or financial
loss. In addition, cyber security breaches of a fund's third-party service
providers, such as its administrator, transfer agent, custodian, or sub-advisor,
as applicable, or issuers in which the fund invests, can also subject a fund to
many of the same risks associated with direct cyber security breaches.
DERIVATIVES RISK. To the extent a fund uses derivative instruments such as
futures contracts, options contracts and swaps, the fund may experience 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 derivative.
These risks are heightened when a fund's portfolio managers use derivatives to
enhance the fund's return or as a substitute for a position or security, rather
than solely to hedge (or offset) the risk of a position or security held by the
fund.
EQUITY SECURITIES RISK. To the extent a fund invests in equity securities, the
value of the fund's shares will fluctuate with changes in the value of the
equity securities. Equity securities prices fluctuate for several reasons,
including changes in investors' perceptions of the financial condition of an
issuer or the general condition of the relevant stock market, such as market
volatility, or when political or economic events affecting the issuers occur. In
addition, common stock prices may be particularly sensitive to rising interest
rates, as the cost of capital rises and borrowing costs increase. 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.
ETF RISK. The shares of an ETF trade like common stock and represent an interest
in a portfolio of securities. The risks of owning an ETF generally reflect the
risks of owning the underlying securities, although lack of liquidity in an ETF
could result in it being more volatile and ETFs have management fees that
increase their costs. Shares of an ETF trade on an exchange at market prices
rather than net asset value, which may cause the shares to trade at a price
greater than net asset value (premium) or less than net asset value (discount).
In times of market stress, decisions by market makers to reduce or step away
Page 104
ADDITIONAL INFORMATION (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
from their role of providing a market for an ETF's shares, or decisions by an
ETF's authorized participants that they are unable or unwilling to proceed with
creation and/or redemption orders of an ETF's shares, could result in shares of
the ETF trading at a discount to net asset value and in greater than normal
intraday bid-ask spreads.
FIXED INCOME SECURITIES RISK. To the extent a fund invests in fixed income
securities, the fund will be subject to credit risk, income risk, interest rate
risk, liquidity risk and prepayment risk. Income risk is the risk that income
from a fund's fixed income investments could decline during periods of falling
interest rates. Interest rate risk is the risk that the value of a fund's fixed
income securities will decline because of rising interest rates. Liquidity risk
is the risk that a security cannot be purchased or sold at the time desired, or
cannot be purchased or sold without adversely affecting the price. Prepayment
risk is the risk that the securities will be redeemed or prepaid by the issuer,
resulting in lower interest payments received by the fund. In addition to these
risks, high yield securities, or "junk" bonds, are subject to greater market
fluctuations and risk of loss than securities with higher ratings, and the
market for high yield securities is generally smaller and less liquid than that
for investment grade securities.
INDEX CONSTITUENT RISK. Certain funds may be a constituent of one or more
indices. As a result, such a fund may be included in one or more index-tracking
exchange-traded funds or mutual funds. Being a component security of such a
vehicle could greatly affect the trading activity involving a fund, the size of
the fund and the market volatility of the fund. Inclusion in an index could
significantly increase demand for the fund and removal from an index could
result in outsized selling activity in a relatively short period of time. As a
result, a fund's net asset value could be negatively impacted and the fund's
market price may be significantly below its net asset value during certain
periods.
INDEX PROVIDER RISK. To the extent a fund seeks to track an index, it is subject
to Index Provider Risk. There is no assurance that the Index Provider will
compile the Index accurately, or that the Index will be determined, maintained,
constructed, reconstituted, rebalanced, composed, calculated or disseminated
accurately. To correct any such error, the Index Provider may carry out an
unscheduled rebalance or other modification of the Index constituents or
weightings, which may increase the fund's costs. The Index Provider does not
provide any representation or warranty in relation to the quality, accuracy or
completeness of data in the Index, and it does not guarantee that the Index will
be calculated in accordance with its stated methodology. Losses or costs
associated with any Index Provider errors generally will be borne by the fund
and its shareholders.
INVESTMENT COMPANIES RISK. To the extent a fund invests in the securities of
other investment vehicles, the fund will incur additional fees and expenses that
would not be present in a direct investment in those investment vehicles.
Furthermore, the fund's investment performance and risks are directly related to
the investment performance and risks of the investment vehicles in which the
fund invests.
LIBOR RISK. 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. In 2017, the United Kingdom's
Financial Conduct Authority announced that LIBOR will cease to be available for
use after 2021. 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 the fund or on certain
instruments in which the fund invests can be difficult to ascertain, and they
may vary depending on a variety of factors. Any such effects of the transition
away from LIBOR, as well as other unforeseen effects, could result in losses to
the fund.
MANAGEMENT RISK. To the extent that a fund is actively managed, it is subject to
management risk. In managing an actively-managed fund's investment portfolio,
the fund's portfolio managers will apply investment techniques and risk analyses
that may not have the desired result. There can be no guarantee that a fund will
meet its investment objective.
MARKET RISK. Securities held by a fund, as well as shares of a fund itself, are
subject to market fluctuations caused by factors such 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 of the risk of
loss associated with these market fluctuations. In addition, local, regional or
global events such as war, acts of terrorism, spread of infectious diseases or
other public health issues, recessions, or other events could have a significant
negative impact on a fund and its investments. Such events may affect certain
geographic regions, countries, sectors and industries more significantly than
others. 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.
NON-U.S. SECURITIES RISK. To the extent a fund invests in non-U.S. securities,
it is subject to additional risks not associated with securities of domestic
issuers. Non-U.S. securities are subject to higher volatility than securities of
domestic issuers due to: possible adverse political, social or economic
developments; restrictions on foreign investment or exchange of securities; lack
of liquidity; currency exchange rates; excessive taxation; government seizure of
assets; different legal or accounting standards; and less government supervision
and regulation of exchanges in foreign countries. Investments in non-U.S.
securities may involve higher costs than investments in U.S. securities,
including higher transaction and custody costs, as well as additional taxes
imposed by non-U.S. governments. These risks may be heightened for securities of
companies located, or with significant operations, in emerging market countries.
Page 105
ADDITIONAL INFORMATION (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
PASSIVE INVESTMENT RISK. To the extent a fund seeks to track an index, the fund
will invest in the securities included in, or representative of, the index
regardless of their investment merit. A fund generally will not attempt to take
defensive positions in declining markets.
NOT FDIC INSURED NOT BANK GUARANTEED MAY LOSE VALUE
Page 106
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FIRST TRUST
First Trust Exchange-Traded Fund II
INVESTMENT ADVISOR
First Trust Advisors L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
ADMINISTRATOR, CUSTODIAN,
FUND ACCOUNTANT &
TRANSFER AGENT
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
111 S. Wacker Drive
Chicago, IL 60606
LEGAL COUNSEL
Chapman and Cutler LLP
111 W. Monroe Street
Chicago, IL 60603
[BLANK BACK COVER]
FIRST TRUST
First Trust Exchange-Traded Fund II
Book 2
First Trust IPOX(R) Europe Equity Opportunities ETF (FPXE)
First Trust Dow Jones International Internet ETF (FDNI)
Semi-Annual Report
March 31, 2020
TABLE OF CONTENTS
FIRST TRUST EXCHANGE-TRADED FUND II
SEMI-ANNUAL REPORT
MARCH 31, 2020
Shareholder Letter ...................................................................... 2
Market Overview ......................................................................... 3
Fund Performance Overview
First Trust IPOX(R) Europe Equity Opportunities ETF (FPXE) ........................ 4
First Trust Dow Jones International Internet ETF (FDNI) ........................... 6
Notes to Fund Performance Overview ...................................................... 8
Understanding Your Fund Expenses ........................................................ 9
Portfolio of Investments
First Trust IPOX(R) Europe Equity Opportunities ETF (FPXE) ........................ 10
First Trust Dow Jones International Internet ETF (FDNI) ........................... 13
Statements of Assets and Liabilities .................................................... 15
Statements of Operations ................................................................ 16
Statements of Changes in Net Assets ..................................................... 17
Financial Highlights .................................................................... 18
Notes to Financial Statements ........................................................... 19
Additional Information .................................................................. 25
|
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This report contains certain forward-looking statements within the meaning of
the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934,
as amended. Forward-looking statements include statements regarding the goals,
beliefs, plans or current expectations of First Trust Advisors L.P. ("First
Trust" or the "Advisor") and its representatives, taking into account the
information currently available to them. Forward-looking statements include all
statements that do not relate solely to current or historical fact. For example,
forward-looking statements include the use of words such as "anticipate,"
"estimate," "intend," "expect," "believe," "plan," "may," "should," "would" or
other words that convey uncertainty of future events or outcomes.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
any series of First Trust Exchange-Traded Fund II (the "Trust") described in
this report (each such series is referred to as a "Fund" and collectively, as
the "Funds") to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. When
evaluating the information included in this report, you are cautioned not to
place undue reliance on these forward-looking statements, which reflect the
judgment of the Advisor and its representatives only as of the date hereof. We
undertake no obligation to publicly revise or update these forward-looking
statements to reflect events and circumstances that arise after the date hereof.
PERFORMANCE AND RISK DISCLOSURE
There is no assurance that any Fund described in this report will achieve its
investment objective. Each Fund is subject to market risk, which is the
possibility that the market values of securities owned by the Fund will decline
and that the value of the Fund shares may therefore be less than what you paid
for them. Accordingly, you can lose money by investing in a Fund. See "Risk
Considerations" in the Additional Information section of this report for a
discussion of other risks of investing in the Funds.
Performance data quoted represents past performance, which is no guarantee of
future results, and current performance may be lower or higher than the figures
shown. For the most recent month-end performance figures, please visit
www.ftportfolios.com or speak with your financial advisor. Investment returns,
net asset value and share price will fluctuate and Fund shares, when sold, may
be worth more or less than their original cost.
The Advisor may also periodically provide additional information on Fund
performance on each Fund's webpage at www.ftportfolios.com.
HOW TO READ THIS REPORT
This report contains information that may help you evaluate your investment. It
includes details about each Fund and presents data and analysis that provide
insight into each Fund's performance and investment approach.
By reading the market overview by Robert F. Carey, Chief Market Strategist of
the Advisor, you may obtain an understanding of how the market environment
affected the performance of each Fund. The statistical information that follows
may help you understand each Fund's performance compared to that of relevant
market benchmarks.
It is important to keep in mind that the opinions expressed by personnel of the
Advisor are just that: informed opinions. They should not be considered to be
promises or advice. The opinions, like the statistics, cover the period through
the date on the cover of this report. The material risks of investing in each
Fund are spelled out in its prospectus, statement of additional information, and
other Fund regulatory filings.
Page 1
SHAREHOLDER LETTER
FIRST TRUST EXCHANGE-TRADED FUND II
SEMI-ANNUAL LETTER FROM THE CHAIRMAN AND CEO
MARCH 31, 2020
Dear Shareholders,
First Trust is pleased to provide you with the semi-annual report for certain
series of the First Trust Exchange-Traded Fund II (the "Funds"), which contains
detailed information about the Funds for the six months ended March 31, 2020.
I am sorry to report that the coronavirus (COVID-19) pandemic is still
dominating our daily lives, the economy and securities markets. Many of us have
learned the hard way that it is no fun sheltering in place for weeks on end, and
by hard way I mean at the behest of state and local government officials. It is
also not fun being furloughed from a job or losing a job outright for reasons
beyond one's control. As President Donald J. Trump has repeatedly said, the cure
cannot be worse than the problem itself. For those who do not follow the news
closely, the governors of Georgia, South Carolina, Tennessee and Texas announced
on or about April 20, 2020, that they intend to open some "nonessential"
businesses by early May. If nothing else, these could prove to be valuable test
cases for the rest of the states trying to strike a balance between fighting
COVID-19 and curbing the economic fallout stemming from the virus. While we
certainly trumpet the call for health and safety first, we also realize that we
need to find a way to get Americans back to work.
Suffice it to say that this virus is proving to be plenty stubborn. While I tend
to be largely U.S.-centric, it does not escape me that this fight is global in
scope. We now have proof that the virus can flare up again after seemingly being
mitigated. Singapore, which had been credited with having a successful blueprint
for curbing the spread of the virus, reported that it experienced back-to-back
days of more than 1,000 new cases in the third week of April. As a result, it
has extended its partial lockdown strategy another four weeks. COVID-19 impacts
business dealings at every level, especially the C-suite. Refinitiv, a global
provider of financial market data, reported that global mergers and acquisitions
deal activity totaled $762.6 billion year-to-date through April 17, 2020, down
33% from the same period a year ago, according to Reuters. The number of deals
declined by 20%. A recent survey by EY of more than 2,900 executives worldwide
found that 56% of them, despite the current crisis, are still planning an
acquisition in the next 12 months. The takeaway here is that, despite having to
navigate unchartered waters, more than one out of two executives are looking to
grow their companies over the next 12 months. I'll take that ratio in this
climate. At First Trust Advisors L.P., we have always believed in the
traditional buy-and-hold philosophy of investing. Investors should strongly
consider shifting their focus away from the next two quarters, which are likely
to be dismal, to what potentially lies beyond - a full-on recovery, in our
opinion.
The Federal Reserve, Treasury Department and Congress are all working with the
Trump Administration to pull together trillions of dollars of aid and stimulus
to help prop up workers, companies and municipalities in this time of need.
Health Care companies have ramped up their efforts to develop and manufacture
much needed testing equipment, medical supplies and therapeutics. Hopefully, at
some point in the near-future, one or more of these companies will deliver us a
present in the form of a vaccine.
Both the equity and debt markets in the U.S. have responded favorably to the
enormous financial support from the Federal government. The government has
responded faster and more robustly to the current crisis than it did in the
2008-2009 financial crisis. While still down, stock and bond valuations have
rebounded significantly from their lows reached in late March. We remain
optimistic about the second half of 2020 and 2021. Stay the course.
Thank you for giving First Trust the opportunity to play a role in your
financial future. We value our relationship with you and will report on the
Funds again in six months.
Sincerely,
/s/ James A. Bowen
James A. Bowen
Chairman of the Board of Trustees
Chief Executive Officer of First Trust Advisors L.P.
|
Page 2
MARKET OVERVIEW
FIRST TRUST EXCHANGE-TRADED FUND II
SEMI-ANNUAL REPORT
MARCH 31, 2020
ROBERT F. CAREY, CFA
SENIOR VICE PRESIDENT AND CHIEF MARKET STRATEGIST
FIRST TRUST ADVISORS L.P.
Mr. Carey is responsible for the overall management of research and analysis of
the First Trust product line. Mr. Carey has over 27 years of experience as an
Equity and Fixed-Income Analyst and is a recipient of the Chartered Financial
Analyst ("CFA") designation. He is a graduate of the University of Illinois at
Champaign-Urbana with a B.S. in Physics. He is also a member of the Investment
Analysts Society of Chicago and the CFA Institute. Mr. Carey has appeared as a
guest on such programs as Bloomberg TV, CNBC, and WBBM Radio, and has been
quoted by several publications, including The Wall Street Journal, The Wall
Street Reporter, Bloomberg News Service and Registered Rep.
STATE OF THE GLOBAL ECONOMY
The onset of the coronavirus (COVID-19) pandemic has inflicted tremendous damage
on the global economy. It single-handedly brought an end to the bull market in
stocks in the first quarter of 2020 (see below), although that nearly happened
in the fourth quarter of 2018. At this time, we don't know how long it will take
for the virus to run its course or for a vaccine to become available for the
masses. History suggests that vaccines take roughly 18 months to win approval
and go to market, but some are hoping for closer to 12 months this time around.
Perhaps an existing drug will be proven effective against the virus.
The International Monetary Fund ("IMF") has characterized the quarantine and
social distancing efforts accompanying the COVID-19 pandemic as the "Great
Lockdown." No country has been spared. The IMF adjusted its global economic
growth projections following the end of the first quarter of 2020. It now sees
world real gross domestic product ("GDP") growth declining by 3.0% in 2020, down
over six percentage points from its 3.3% growth projection prior to the onset of
the virus. Provided the pandemic fades in the second half of 2020, the IMF sees
the growth rate rising by 5.8% in 2021. U.S. real GDP growth is projected to be
down 5.9% in 2020, but up 4.7% in 2021. Emerging Markets and Developing Nations
are expected to come in at 1.0% in 2020 and 8.5% in 2021.
In addition to the COVID-19 developments, investors should also be aware that,
despite the Phase One trade deal signed with China in January 2020, there is
still an ongoing trade conflict between the U.S. and China, and who knows if the
virus might eventually get folded into the battle since it reportedly first
surfaced in China in the fourth quarter of 2019. President Donald J. Trump has
driven home this point at more than one of his press briefings. The Trump
Administration's implementation of tariffs, particularly against China, has been
operational for 24 months and counting.
GLOBAL EQUITIES MARKETS
For the six-month period ended March 31, 2020, the MSCI World ex USA and MSCI
Emerging Markets Indices posted total returns of -17.23% (USD) and -14.55%
(USD), respectively, according to Bloomberg. Over that same period, the U.S.
dollar declined by 0.33% against a basket of major currencies, as measured by
the U.S. Dollar Index (DXY). The slight dip in the dollar likely had little
influence on the performance of the two foreign stock indices, in our opinion.
With respect to U.S. equities, the S&P 500(R), S&P MidCap 400(R) and S&P
SmallCap 600(R) Indices posted total returns of -12.31%, -24.73% and -27.10%,
respectively, over the past six months. Large-capitalization (cap) stocks
clearly outperformed their mid- and small-cap counterparts as investors sought
to reduce their risk exposure due to the escalation in the trade war between the
U.S. and China and the onset of COVID-19 in the first quarter of 2020, in our
opinion. Ten of the 11 sectors that comprise the S&P 500(R) Index were down on a
total return basis. The top performer was Information Technology, up 0.75%,
while the worst result by far came from Energy, down 47.74%.
The S&P 500(R) Index closed at 2,584.59 on March 31, 2020, 23.67% below its
all-time closing high of 3,386.15 on February 19, 2020, according to Bloomberg.
The nearly 11-year bull market was no more. The S&P 500(R) Index was now in bear
market territory. A bear market entails a price decline of 20% or more from the
most recent high. Data from Goldman Sachs and CNBC indicates that the average
bear market since WWII has generated an average loss of 30.4%, has lasted 13
months and taken 21.9 months on average to recover. A Bloomberg survey of 19
equity strategists found that their average 2020 year-end price target for the
S&P 500(R) Index was 3,039 as of March 26, 2020, according to its own release.
The highest estimate was 3,500 while the lowest estimate was 2,650. Keep in
mind, earnings and revenue projections may become harder to come by in the
months ahead if more and more companies choose to suspend guidance.
Investors liquidated an estimated net $78.44 billion from U.S. Equity mutual
funds and exchange-traded funds ("ETFs") for the 12-month period ended March 31,
2020, according to Morningstar. International Equity mutual funds and ETFs,
however, took in an estimated net $7.36 billion over the same period. Investors
continue to favor passive over active funds. Passive U.S. Equity mutual funds
and ETFs reported estimated net inflows totaling $180.37 billion in the period,
compared to estimated net outflows for active U.S. Equity mutual funds and ETFs
totaling $258.81 billion. Passive International Equity mutual funds and ETFs
reported estimated net inflows totaling $73.19 billion, compared to estimated
net outflows for active International Equity mutual funds and ETFs totaling
$65.83 billion.
Page 3
FUND PERFORMANCE OVERVIEW (UNAUDITED)
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE)
The First Trust IPOX(R) Europe Equity Opportunities 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 IPOX(R)-100 Europe Index
(the "Index"). The shares of the Fund are listed and trade on The Nasdaq Stock
Market LLC under the ticker symbol "FPXE." The Fund will normally invest at
least 90% of its net assets (including investment borrowings) in the common
stocks and depositary receipts that comprise the Index. The Index is owned,
developed, maintained and sponsored by IPOX(R) Schuster LLC. The Index seeks to
measure the performance of the equity securities of the 100 largest and
typically most liquid initial public offerings ("IPOs") (including spin-offs and
equity carve-outs) of companies that are economically tied to Europe.
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
6 Months Ended 1 Year Ended Inception (10/4/18) Inception (10/4/18)
3/31/20 3/31/20 to 3/31/20 to 3/31/20
FUND PERFORMANCE
NAV -5.38% -1.33% -2.80% -4.14%
Market Price -5.22% -1.11% -2.52% -3.73%
INDEX PERFORMANCE
IPOX(R)-100 Europe Index -4.44% 0.32% -1.35% -2.00%
MSCI Europe Index -17.64% -15.50% -11.69% -16.89%
-------------------------------------------------------------------------------------------------------------------------
|
(See Notes to Fund Performance Overview on page 8.)
IPOX(R) and the Index are registered international trademarks of IPOX(R)
Schuster LLC ("IPOX") and have been licensed for use by First Trust. The Fund is
not sponsored, endorsed, sold or promoted by IPOX and IPOX makes no
representation regarding the advisability of trading in such Fund.
Page 4
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Health Care 32.69%
Consumer Discretionary 20.51
Utilities 10.87
Information Technology 9.69
Communication Services 9.12
Industrials 7.35
Financials 6.70
Real Estate 1.69
Materials 0.93
Energy 0.33
Consumer Staples 0.12
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Novartis AG 10.01%
Prosus N.V. 7.83
Sanofi 7.47
Ferrari N.V. 5.40
Orsted A/S 5.03
Siemens Healthineers AG 4.73
E. ON SE 3.31
Adyen N.V. 3.12
Alcon, Inc. 3.06
Spotify Technology S.A. 2.74
------
Total 52.70%
======
|
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
OCTOBER 4, 2018 - MARCH 31, 2020
First Trust IPOX(R) Europe IPOX(R)-100 MSCI Europe
Equity Opportunities ETF Europe Index Index
-------------------------- ------------ -----------
10/4/18 $10,000 $10,000 $10,000
3/31/19 9,715 9,769 9,836
9/30/19 10,132 10,255 10,091
3/31/20 9,587 9,800 8,311
|
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
BID/ASK MIDPOINT VS. NAV THROUGH MARCH 31, 2020
The following Frequency Distribution of Discounts and Premiums charts are
provided to show the frequency at which the bid/ask midpoint price for the Fund
was at a discount or premium to the daily NAV. The following tables are for
comparative purposes only and represent the period October 5, 2018 (commencement
of trading) through March 31, 2020. Shareholders may pay more than NAV when they
buy Fund shares and receive less than NAV when they sell those shares because
shares are bought and sold at current market price. Data presented represents
past performance and cannot be used to predict future results.
NUMBER OF DAYS BID/ASK MIDPOINT NUMBER OF DAYS BID/ASK MIDPOINT
AT/ABOVE NAV BELOW NAV
---------------------------------------- ----------------------------------------
0.00%- 0.50%- 1.00%- 0.00%- 0.50%- 1.00%-
FOR THE PERIOD 0.49% 0.99% 1.99% >=2.00% 0.49% 0.99% 1.99% >=2.00%
10/5/18 - 9/30/19 187 8 0 0 48 4 0 0
10/1/19 - 3/31/20 76 7 1 0 41 0 0 1
|
Page 5
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST DOW JONES INTERNATIONAL INTERNET ETF (FDNI)
The First Trust Dow Jones International Internet 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 Dow Jones International
Internet Index (the "Index"). The shares of the Fund are listed and trade on The
Nasdaq Stock Market LLC under the ticker symbol "FDNI." The Fund will normally
invest at least 90% of its net assets (including investment borrowings) in the
common stocks and depository receipts that comprise the Index. The Index is
developed, maintained and sponsored by S&P Dow Jones Indices LLC and is designed
to measure the performance of securities of non-US issuers whose primary
business focus is Internet-related.
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
6 Months Ended 1 Year Ended Inception (11/5/18) Inception (11/5/18)
3/31/20 3/31/20 to 3/31/20 to 3/31/20
FUND PERFORMANCE
NAV 8.78% 5.23% 12.99% 18.65%
Market Price 8.23% 4.16% 12.21% 17.50%
INDEX PERFORMANCE
Dow Jones International Internet Index 9.39% 6.10% 13.97% 20.09%
MSCI All Country World ex-USA Information
Technology Index -4.73% 1.27% 7.05% 10.00%
-------------------------------------------------------------------------------------------------------------------------
|
(See Notes to Fund Performance Overview on page 8.)
The Index is a product of S&P Dow Jones Indices LLC or its affiliates ("SPDJI"),
and has been licensed for use by First Trust. Standard & Poor's(R) and S&P(R)
are registered trademarks of Standard & Poor's Financial Services LLC ("S&P");
Dow Jones(R) is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow
Jones"); and these trademarks have been licensed for use by SPDJI and
sublicensed for certain purposes by First Trust. The Fund is not sponsored,
endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective
affiliates and none of such parties make any representation regarding the
advisability of investing in such product nor do they have any liability for any
errors, omissions, or interruptions of the Index.
Page 6
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
FIRST TRUST DOW JONES INTERNATIONAL INTERNET ETF (FDNI) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Consumer Discretionary 46.00%
Communication Services 37.27
Information Technology 14.75
Health Care 1.98
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Tencent Holdings Ltd. 11.62%
Naspers Ltd., Class N 9.83
Alibaba Group Holding Ltd., ADR 9.71
Shopify, Inc., Class A 6.87
Meituan Dianping, Class B 6.67
JD.com, Inc., ADR 4.86
Prosus N.V. 4.67
Baidu, Inc., ADR 4.37
NetEase, Inc., ADR 3.50
Adyen N.V. 3.25
------
Total 65.35%
======
|
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
NOVEMBER 5, 2018 - MARCH 31, 2020
First Trust Dow Jones Dow Jones International MSCI All Country World ex-USA
International Internet ETF Internet Index Information Technology Index
-------------------------- ----------------------- -----------------------------
11/5/18 $10,000 $10,000 $10,000
3/31/19 11,275 11,318 10,863
9/30/19 10,907 10,977 11,546
3/31/20 11,865 12,008 11,000
|
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
BID/ASK MIDPOINT VS. NAV THROUGH MARCH 31, 2020
The following Frequency Distribution of Discounts and Premiums charts are
provided to show the frequency at which the bid/ask midpoint price for the Fund
was at a discount or premium to the daily NAV. The following tables are for
comparative purposes only and represent the period November 6, 2018
(commencement of trading) through March 31, 2020. Shareholders may pay more than
NAV when they buy Fund shares and receive less than NAV when they sell those
shares because shares are bought and sold at current market price. Data
presented represents past performance and cannot be used to predict future
results.
NUMBER OF DAYS BID/ASK MIDPOINT NUMBER OF DAYS BID/ASK MIDPOINT
AT/ABOVE NAV BELOW NAV
---------------------------------------- ----------------------------------------
0.00%- 0.50%- 1.00%- 0.00%- 0.50%- 1.00%-
FOR THE PERIOD 0.49% 0.99% 1.99% >=2.00% 0.49% 0.99% 1.99% >=2.00%
11/6/18 - 9/30/19 104 17 0 0 88 12 3 1
10/1/19 - 3/31/20 74 14 6 2 20 5 1 4
|
Page 7
NOTES TO FUND PERFORMANCE OVERVIEW (UNAUDITED)
Total returns for the periods since inception are calculated from the inception
date of each Fund. "Average Annual Total Returns" represent the average change
in value of an investment over the periods indicated. "Cumulative Total Returns"
represent the total change in value of an investment over the periods indicated.
Each Fund's per share net asset value ("NAV") is the value of one share of the
Fund and is computed by dividing the value of all assets of the Fund (including
accrued interest and dividends), less all liabilities (including accrued
expenses and dividends declared but unpaid), by the total number of outstanding
shares. The price used to calculate market return ("Market Price") is determined
by using the midpoint between the highest bid and the lowest offer 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. Since shares of each Fund did not trade in the
secondary market until after the Fund's inception, for the period from inception
to the first day of secondary market trading in shares of the Fund, the NAV of
each Fund is used as a proxy for the secondary market trading price to calculate
market returns. NAV and market returns assume that all distributions have been
reinvested in each Fund at NAV and Market Price, respectively.
An index is a statistical composite that tracks a specified financial market or
sector. Unlike each Fund, the indices do not actually hold a portfolio of
securities and therefore do not incur the expenses incurred by each Fund. These
expenses negatively impact the performance of each Fund. Also, market returns do
not include brokerage commissions that may be payable on secondary market
transactions. If brokerage commissions were included, market returns would be
lower. The total returns presented reflect the reinvestment of dividends on
securities in the indices. The returns presented do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption or
sale of Fund shares. The investment return and principal value of shares of each
Fund will vary with changes in market conditions. Shares of each Fund may be
worth more or less than their original cost when they are redeemed or sold in
the market. Each Fund's past performance is no guarantee of future performance.
Page 8
FIRST TRUST EXCHANGE-TRADED FUND II
UNDERSTANDING YOUR FUND EXPENSES
MARCH 31, 2020 (UNAUDITED)
As a shareholder of First Trust IPOX(R) Europe Equity Opportunities ETF or First
Trust Dow Jones International Internet ETF (each a "Fund" and collectively, the
"Funds"), you incur two types of costs: (1) transaction costs; and (2) ongoing
costs, including management fees, distribution and/or service fees, if any, and
other Fund expenses. This Example is intended to help you understand your
ongoing costs (in U.S. dollars) of investing in the Funds and to compare these
costs with the ongoing costs of investing in other funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held through the six-month period ended March 31, 2020.
ACTUAL EXPENSES
The first line in the following table provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During the Six-Month
Period" to estimate the expenses you paid on your account during this six-month
period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line in the following table provides information about hypothetical
account values and hypothetical expenses based on each Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
each Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Funds and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs such as brokerage
commissions. Therefore, the second line in the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
------------------------------------------------------------------------------------------------------------------------
ANNUALIZED
EXPENSE RATIO EXPENSES PAID
BEGINNING ENDING BASED ON THE DURING THE
ACCOUNT VALUE ACCOUNT VALUE SIX-MONTH SIX-MONTH
OCTOBER 1, 2019 MARCH 31, 2020 PERIOD PERIOD (a)
------------------------------------------------------------------------------------------------------------------------
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE)
Actual $1,000.00 $ 946.20 0.70% $3.41
Hypothetical (5% return before expenses) $1,000.00 $1,021.50 0.70% $3.54
FIRST TRUST DOW JONES INTERNATIONAL INTERNET ETF (FDNI)
Actual $1,000.00 $1,087.80 0.65% $3.39
Hypothetical (5% return before expenses) $1,000.00 $1,021.75 0.65% $3.29
|
(a) Expenses are equal to the annualized expense ratio as indicated in the
table multiplied by the average account value over the period (October 1,
2019 through March 31, 2020), multiplied by 183/366 (to reflect the
six-month period).
Page 9
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.0%
AUSTRIA -- 0.3%
199 BAWAG Group AG (b) (c) (d) $ 5,551
--------------
CAYMAN ISLANDS -- 0.3%
759 Farfetch Ltd., Class A (e) 5,996
--------------
DENMARK -- 7.8%
107 Ascendis Pharma A/S, ADR (e) 12,050
145 Genmab A/S (b) (e) 29,126
112 Netcompany Group
A/S (b) (c) (d) (e) 5,144
938 Orsted A/S (b) (c) (d) 91,828
223 Scandinavian Tobacco Group
A/S (b) (c) (d) 2,239
80 Zealand Pharma A/S, ADR (e) 2,760
--------------
143,147
--------------
FINLAND -- 1.1%
552 Kojamo OYJ (b) 10,424
286 Terveystalo OYJ (b) (c) (d) 2,532
264 TietoEVRY OYJ (b) (e) 5,696
131 Tokmanni Group Corp. (b) (e) 1,299
--------------
19,951
--------------
FRANCE -- 12.1%
677 Amundi S.A. (b) (c) (d) 39,171
83 Gaztransport Et Technigaz
S.A. (b) 5,976
426 La Francaise des Jeux
SAEM (b) (c) (d) (e) 10,793
190 Neoen S.A. (b) (c) (d) (e) 5,948
1,574 Sanofi (b) 136,269
408 Worldline S.A. (b) (c) (d) (e) 24,080
--------------
222,237
--------------
GERMANY -- 20.0%
670 BioNTech SE, ADR (e) 39,128
441 Delivery Hero SE (b) (c) (d) (e) 32,424
446 DWS Group GmbH & Co.
KGaA (b) (c) (d) 10,828
5,895 E. ON SE (b) 60,469
392 Hapag-Lloyd AG (b) (c) (d) 30,430
368 HelloFresh SE (b) (e) 12,017
360 Knorr-Bremse AG (b) 31,650
294 MorphoSys AG, ADR (e) 7,224
240 Scout24 AG (b) (c) (d) 14,347
2,232 Siemens Healthineers
AG (b) (c) (d) 86,281
446 TeamViewer AG (b) (e) 18,135
817 Uniper SE (b) 20,068
90 Varta AG (b) (e) 6,333
--------------
369,334
--------------
IRELAND -- 0.4%
6,058 AIB Group PLC (b) (e) 6,717
--------------
ITALY -- 3.9%
1,209 Enav S.p.A. (b) (c) (d) 5,331
1,339 Infrastrutture Wireless Italiane
S.p.A. (b) (c) (d) 14,498
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
ITALY (CONTINUED)
1,806 Italgas S.p.A. (b) $ 9,881
1,401 Nexi S.p.A. (b) (c) (d) (e) 18,226
2,915 Poste Italiane S.p.A. (b) (c) (d) 24,535
--------------
72,471
--------------
JERSEY -- 0.4%
229 Wizz Air Holdings
PLC (b) (c) (d) (e) 6,446
--------------
LUXEMBOURG -- 3.8%
528 Ardagh Group S.A. 6,262
83 Globant S.A. (e) 7,294
198 Shurgard Self Storage S.A. (b) 5,874
411 Spotify Technology S.A. (e) 49,912
--------------
69,342
--------------
NETHERLANDS -- 19.9%
67 Adyen N.V. (c) (d) (e) 56,943
95 Argenx SE, ADR (e) 12,514
640 Ferrari N.V. (b) 98,582
568 GrandVision N.V. (b) (c) (d) 15,529
117 IMCD N.V. (b) 8,396
202 Intertrust N.V. (b) (c) (d) 2,543
319 Just Eat Takeaway.com
N.V. (b) (c) (d) (e) 24,124
2,040 Prosus N.V. (b) (e) 142,842
286 Signify N.V. (b) (c) (d) 5,543
--------------
367,016
--------------
NORWAY -- 1.3%
1,529 Adevinta ASA (b) (e) 13,842
406 Entra ASA (b) (c) (d) 4,850
373 Europris ASA (b) (c) (d) 1,082
233 Fjordkraft Holding
ASA (b) (c) (d) 1,515
281 Scatec Solar ASA (b) (c) (d) 3,522
--------------
24,811
--------------
SPAIN -- 2.1%
860 Cellnex Telecom S.A. (b) (c) (d) 39,012
--------------
SWEDEN -- 6.1%
235 AcadeMedia AB (b) (c) (d) 1,150
452 Bravida Holding AB (b) (c) (d) 3,169
240 Bygghemma Group First
AB (b) (e) 1,471
69 Cibus Nordic Real Estate AB (b) 808
214 Coor Service Management
Holding AB (b) (c) (d) 1,039
696 Embracer Group AB (b) (e) 6,833
2,127 EQT AB (b) (e) 25,291
405 Evolution Gaming Group
AB (b) (c) (d) 13,731
129 Inwido AB (b) 733
218 Karnov Group AB (b) (e) 1,134
203 Lifco AB, Class B (b) 7,442
303 Medicover AB, Class B (b) (e) 2,574
56 MIPS AB (b) (d) 1,254
197 Nobina AB (b) (c) (d) 1,065
121 NP3 Fastigheter AB (b) 849
|
Page 10 See Notes to Financial Statements
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
SWEDEN (CONTINUED)
412 Nyfosa AB (b) (e) $ 2,064
124 Oncopeptides AB (b) (c) (d) (e) 1,363
236 Paradox Interactive AB (b) 3,772
3,068 Samhallsbyggnadsbolaget i
Norden AB (b) 5,882
120 Sinch AB (b) (c) (d) (e) 4,640
59 Stillfront Group AB (b) (e) 2,579
1,537 Tele2 AB, Class B (b) 20,478
230 Thule Group AB (b) (c) (d) 3,968
--------------
113,289
--------------
SWITZERLAND -- 15.8%
1,091 Alcon, Inc. (b) (e) 55,893
136 CRISPR Therapeutics AG (e) 5,768
112 Galenica AG (b) (c) (d) 7,642
45 Medacta Group
S.A. (b) (c) (d) (e) 2,621
2,213 Novartis AG (b) 182,570
714 SIG Combibloc Group AG (b) 10,668
354 Softwareone Holding AG (b) (e) 6,815
223 Stadler Rail AG (b) (e) 10,278
67 VAT Group AG (b) (c) (d) 9,135
--------------
291,390
--------------
UNITED KINGDOM -- 3.2%
227 Atlantica Yield PLC 5,062
2,258 Avast PLC (b) (c) (d) 10,917
4,427 ConvaTec Group PLC (b) (c) (d) 10,179
1,004 Countryside Properties
PLC (b) (c) (d) 3,533
121 Endava PLC, ADR (e) 4,254
1,532 Finablr PLC (b) (c) (e) (f) 210
739 IntegraFin Holdings PLC (b) (d) 3,962
1,100 John Laing Group PLC (b) (c) (d) 4,584
1,116 Network International Holdings
PLC (b) (c) (d) (e) 5,426
4,235 Quilter PLC (b) (c) (d) 6,137
1,073 Trainline PLC (b) (c) (d) (e) 4,455
--------------
58,719
--------------
UNITED STATES -- 0.5%
110 SolarEdge Technologies, Inc. (e) 9,007
--------------
TOTAL INVESTMENTS -- 99.0% 1,824,436
(Cost $1,894,845) (g)
NET OTHER ASSETS AND
LIABILITIES -- 1.0% 18,706
--------------
NET ASSETS -- 100.0% $ 1,843,142
==============
|
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures adopted by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940, as
amended. At March 31, 2020, securities noted as such are valued at
$1,600,262 or 86.8% of net assets. Certain of these securities are fair
valued using a factor provided by a third-party pricing service due to the
change in value between the foreign markets' close and the New York Stock
Exchange ("NYSE") close exceeding a certain threshold. On days when this
threshold is not exceeded, these securities are typically valued at the
last sale price on the exchange on which they are principally traded.
(c) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act"), and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(e) Non-income producing security.
(f) Pursuant to procedures adopted by the Trust's Board of Trustees, this
security has been determined to be illiquid by First Trust Advisors, L.P.,
the Fund's advisor.
(g) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2020, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $89,255 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $159,664. The net unrealized depreciation was
$70,409.
ADR - American Depositary Receipt
See Notes to Financial Statements Page 11
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2020 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2020 PRICES INPUTS INPUTS
------------------------------------------------------
Common Stocks:
Cayman Islands $ 5,996 $ 5,996 $ -- $ --
Denmark 143,147 14,810 128,337 --
Germany 369,334 46,352 322,982 --
Luxembourg 69,342 63,468 5,874 --
Netherlands 367,016 69,457 297,559 --
Switzerland 291,390 5,768 285,622 --
United Kingdom 58,719 9,316 49,403 --
United States 9,007 9,007 -- --
Other Country
Categories* 510,485 -- 510,485 --
------------------------------------------------------
Total Investments $ 1,824,436 $ 224,174 $ 1,600,262 $ --
======================================================
|
* See Portfolio of Investments for country breakout.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
Euro 57.5%
Swiss Franc 15.6
United States Dollar 9.2
Danish Krone 7.0
Swedish Krona 6.2
British Pound Sterling 3.1
Norwegian Krone 1.4
------
Total 100.0%
======
|
Page 12 See Notes to Financial Statements
FIRST TRUST DOW JONES INTERNATIONAL INTERNET ETF (FDNI)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2020 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.3%
CANADA -- 6.8%
1,102 Shopify, Inc., Class A (b) $ 461,708
--------------
CAYMAN ISLANDS -- 48.7%
984 58.com, Inc., ADR (b) 47,940
3,355 Alibaba Group Holding Ltd.,
ADR (b) 652,480
604 Autohome, Inc., ADR (b) 42,896
2,916 Baidu, Inc., ADR (b) 293,904
8,075 JD.com, Inc., ADR (b) 327,037
37,590 Meituan Dianping,
Class B (b) (c) (d) 448,120
1,669 Momo, Inc., ADR 36,201
734 NetEase, Inc., ADR 235,585
1,906 Pagseguro Digital Ltd.,
Class A (b) 36,843
3,830 Pinduoduo, Inc., ADR (b) 137,995
2,092 Sea Ltd., ADR (b) 92,697
15,801 Tencent Holdings Ltd. (c) 781,006
4,343 Trip.com Group Ltd., ADR (b) 101,843
4,050 Vipshop Holdings Ltd., ADR (b) 63,099
--------------
3,297,646
--------------
GERMANY -- 3.8%
1,404 Delivery Hero SE (b) (c) (d) (e) 103,228
1,075 Scout24 AG (c) (d) (e) 64,262
1,329 United Internet AG (c) 38,645
1,410 Zalando SE (b) (c) (d) (e) 53,143
--------------
259,278
--------------
ISLE OF MAN -- 0.6%
6,143 GVC Holdings PLC (c) 42,551
--------------
ISRAEL -- 0.7%
495 Wix.com Ltd. (b) 49,906
--------------
JAPAN -- 5.9%
4,500 M3, Inc. (c) 132,737
5,000 Nexon Co., Ltd. (c) 81,704
8,700 Rakuten, Inc. (c) 65,590
28,200 Z Holdings Corp. (c) 89,906
2,100 ZOZO, Inc. (c) 28,185
--------------
398,122
--------------
LUXEMBOURG -- 1.9%
1,028 Spotify Technology S.A. (b) 124,840
--------------
NETHERLANDS -- 9.2%
257 Adyen N.V. (b) (d) (e) 218,423
4,488 Prosus N.V. (b) (c) 314,254
2,633 Yandex N.V., Class A (b) 89,654
--------------
622,331
--------------
NEW ZEALAND -- 0.7%
1,133 Xero Ltd. (b) (c) 47,122
--------------
SOUTH AFRICA -- 9.8%
4,652 Naspers Ltd., Class N (c) 661,116
--------------
SOUTH KOREA -- 5.6%
558 Kakao Corp. (c) 70,577
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
SOUTH KOREA (CONTINUED)
1,541 NAVER Corp. (c) $ 214,252
170 NCSoft Corp. (c) 90,730
--------------
375,559
--------------
UNITED KINGDOM -- 5.6%
1,295 Atlassian Corp. PLC, Class A (b) 177,752
9,852 Auto Trader Group PLC (c) (d) (e) 53,238
6,233 Ocado Group PLC (b) (c) 93,496
9,557 Rightmove PLC (c) 57,638
382,124
--------------
TOTAL INVESTMENTS -- 99.3% 6,722,303
(Cost $6,700,934) (f)
NET OTHER ASSETS AND
LIABILITIES -- 0.7% 50,654
--------------
NET ASSETS -- 100.0% $ 6,772,957
==============
|
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) Non-income producing security.
(c) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures adopted by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940, as
amended. At March 31, 2020, securities noted as such are valued at
$3,531,500 or 52.1% of net assets. Certain of these securities are fair
valued using a factor provided by a third-party pricing service due to the
change in value between the foreign markets' close and the NYSE close
exceeding a certain threshold. On days when this threshold is not
exceeded, these securities are typically valued at the last sale price on
the exchange on which they are principally traded.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the Securities Act of 1933, as
amended (the "1933 Act").
(e) This security is exempt from registration upon resale under Rule 144A of
the 1933 Act and may be resold in transactions exempt from registration,
normally to qualified institutional buyers. This security is not
restricted on the foreign exchange where it trades freely without any
additional registration. As such, it does not require the additional
disclosure required of restricted securities.
(f) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2020, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $669,359 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $647,990. The net unrealized appreciation was
$21,369.
ADR - American Depositary Receipt
See Notes to Financial Statements Page 13
FIRST TRUST DOW JONES INTERNATIONAL INTERNET ETF (FDNI)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2020 (UNAUDITED)
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2020 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2020 PRICES INPUTS INPUTS
------------------------------------------------------
Common Stocks:
Canada $ 461,708 $ 461,708 $ -- $ --
Cayman Islands 3,297,646 2,068,520 1,229,126 --
Israel 49,906 49,906 -- --
Luxembourg 124,840 124,840 -- --
Netherlands 622,331 308,077 314,254 --
United Kingdom 382,124 177,752 204,372 --
Other Country
Categories* 1,783,748 -- 1,783,748 --
------------------------------------------------------
Total Investments $ 6,722,303 $ 3,190,803 $ 3,531,500 $ --
======================================================
|
* See Portfolio of Investments for country breakout.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-----------------------------------------------------------
United States Dollar 37.3%
Hong Kong Dollar 18.3
Euro 11.8
South African Rand 9.8
Canadian Dollar 6.9
Japanese Yen 5.9
South Korean Won 5.6
British Pound Sterling 3.7
Australian Dollar 0.7
------
Total 100.0%
======
|
Page 14 See Notes to Financial Statements
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2020 (UNAUDITED)
FIRST TRUST FIRST TRUST
IPOX(R) EUROPE DOW JONES
EQUITY INTERNATIONAL
OPPORTUNITIES ETF INTERNET ETF
(FPXE) (FDNI)
---------------------- ----------------------
ASSETS:
Investments, at value ................................................. $ 1,824,436 $ 6,722,303
Cash .................................................................. 15,497 966
Foreign currency, at value ............................................ 157 --
Receivables:
Reclaims ........................................................... 3,477 17
Investment securities sold ......................................... -- 48,587
Dividends .......................................................... 673 4,789
---------------- ----------------
Total Assets ....................................................... 1,844,240 6,776,662
---------------- ----------------
LIABILITIES:
Investment advisory fees payable ...................................... 1,098 3,705
---------------- ----------------
Total Liabilities .................................................. 1,098 3,705
---------------- ----------------
NET ASSETS ............................................................ $ 1,843,142 $ 6,772,957
================ ================
NET ASSETS CONSIST OF:
Paid-in capital ....................................................... $ 2,043,269 $ 6,860,090
Par value ............................................................. 1,000 3,000
Accumulated distributable earnings (loss) ............................. (201,127) (90,133)
---------------- ----------------
NET ASSETS ............................................................ $ 1,843,142 $ 6,772,957
================ ================
NET ASSET VALUE, per share ............................................ $ 18.43 $ 22.58
================ ================
Number of shares outstanding (unlimited number of shares
authorized, par value $0.01 per share) ............................. 100,002 300,002
================ ================
Investments, at cost .................................................. $ 1,894,845 $ 6,700,934
================ ================
Foreign currency, at cost (proceeds) .................................. $ 158 $ --
================ ================
|
See Notes to Financial Statements Page 15
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2020 (UNAUDITED)
FIRST TRUST FIRST TRUST
IPOX(R) EUROPE DOW JONES
EQUITY INTERNATIONAL
OPPORTUNITIES ETF INTERNET ETF
(FPXE) (FDNI)
---------------------- ----------------------
INVESTMENT INCOME:
Dividends.............................................................. $ 13,817 $ 10,662
Foreign withholding tax................................................ (1,900) (559)
---------------- ----------------
Total investment income ............................................ 11,917 10,103
---------------- ----------------
EXPENSES:
Investment advisory fees............................................... 5,808 17,914
---------------- ----------------
Total expenses ..................................................... 5,808 17,914
---------------- ----------------
NET INVESTMENT INCOME (LOSS)........................................... 6,109 (7,811)
---------------- ----------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments ........................................................ (73,287) 12,806
In-kind redemptions ................................................ 123,710 --
Foreign currency transactions ...................................... (14) (133)
---------------- ----------------
Net realized gain (loss)............................................... 50,409 12,673
---------------- ----------------
Net change in unrealized appreciation (depreciation) on:
Investments ........................................................ (242,054) 144,501
Foreign currency translation ....................................... 53 (45)
---------------- ----------------
Net change in unrealized appreciation (depreciation)................... (242,001) 144,456
---------------- ----------------
NET REALIZED AND UNREALIZED GAIN (LOSS)................................ (191,592) 157,129
---------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS..................................................... $ (185,483) $ 149,318
================ ================
|
Page 16 See Notes to Financial Statements
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF CHANGES IN NET ASSETS
FIRST TRUST FIRST TRUST
IPOX(R) EUROPE EQUITY DOW JONES INTERNATIONAL
OPPORTUNITIES ETF INTERNET ETF
(FPXE) (FDNI)
------------------------------------ ------------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
3/31/2020 PERIOD ENDED 3/31/2020 PERIOD ENDED
(UNAUDITED) 9/30/2019 (a) (UNAUDITED) 9/30/2019 (a)
----------------- ----------------- ----------------- -----------------
OPERATIONS:
Net investment income (loss)........................... $ 6,109 $ 33,220 $ (7,811) $ 150,580
Net realized gain (loss)............................... 50,409 (177,869) 12,673 234,978
Net change in unrealized appreciation (depreciation)... (242,001) 171,625 144,456 (123,133)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets resulting
from operations..................................... (185,483) 26,976 149,318 262,425
--------------- --------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations.................................. (12,100) (30,520) (61,741) (91,831)
--------------- --------------- --------------- ---------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold.............................. 1,085,057 1,969,757 2,481,673 6,249,885
Cost of shares redeemed................................ (1,010,545) -- -- (2,216,772)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets resulting
from shareholder transactions....................... 74,512 1,969,757 2,481,673 4,033,113
--------------- --------------- --------------- ---------------
Total increase (decrease) in net assets................ (123,071) 1,966,213 2,569,250 4,203,707
NET ASSETS:
Beginning of period.................................... 1,966,213 -- 4,203,707 --
--------------- --------------- --------------- ---------------
End of period.......................................... $ 1,843,142 $ 1,966,213 $ 6,772,957 $ 4,203,707
=============== =============== =============== ===============
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period............... 100,002 -- 200,002 --
Shares sold........................................... 50,000 100,002 100,000 300,002
Shares redeemed....................................... (50,000) -- -- (100,000)
--------------- --------------- --------------- ---------------
Shares outstanding, end of period..................... 100,002 100,002 300,002 200,002
=============== =============== =============== ===============
|
(a) Inception dates for FPXE and FDNI are October 4, 2018 and November 5,
2018, respectively, which are consistent with the respective Fund's
commencement of investment operations and are the dates the initial
creation units were established.
See Notes to Financial Statements Page 17
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE)
SIX MONTHS ENDED
3/31/2020 PERIOD ENDED
(UNAUDITED) 9/30/2019 (a)
---------------- ----------------
Net asset value, beginning of period $ 19.66 $ 19.70
---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.13 0.33
Net realized and unrealized gain (loss) (1.17) (0.06)
---------- ----------
Total from investment operations (1.04) 0.27
---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.19) (0.31)
---------- ----------
Net asset value, end of period $ 18.43 $ 19.66
========== ==========
TOTAL RETURN (b) (5.38)% 1.32%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 1,843 $ 1,966
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.70% (c) 0.70% (c)
Ratio of net investment income (loss) to
average net assets 0.74% (c) 1.77% (c)
Portfolio turnover rate (d) 24% 67%
|
FIRST TRUST DOW JONES INTERNATIONAL INTERNET ETF (FDNI)
SIX MONTHS ENDED
3/31/2020 PERIOD ENDED
(UNAUDITED) 9/30/2019 (a)
---------------- ----------------
Net asset value, beginning of period $ 21.02 $ 19.69
---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.02) 0.75
Net realized and unrealized gain (loss) 1.89 1.04
---------- ----------
Total from investment operations 1.87 1.79
---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.31) (0.46)
---------- ----------
Net asset value, end of period $ 22.58 $ 21.02
========== ==========
TOTAL RETURN (b) 8.78% 9.07%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 6,773 $ 4,204
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.65% (c) 0.65% (c)
Ratio of net investment income (loss) to
average net assets (0.28)% (c) 4.42% (c)
Portfolio turnover rate (d) 9% 61%
|
(a) Inception dates for FPXE and FDNI are October 4, 2018 and November 5,
2018, respectively, which are consistent with the respective Fund's
commencement of investment operations and are the dates the initial
creation units were established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
Page 18 See Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
1. ORGANIZATION
First Trust Exchange-Traded Fund II (the "Trust") is an open-end management
investment company organized as a Massachusetts business trust on July 6, 2006,
and is registered with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended (the "1940 Act").
The Trust currently consists of sixteen exchanged-traded funds. This report
covers the two funds listed below:
First Trust IPOX(R) Europe Equity Opportunities ETF - (The Nasdaq Stock
Market LLC ("Nasdaq") ticker "FPXE")
First Trust Dow Jones International Internet ETF - (Nasdaq ticker "FDNI")
Each fund represents a separate series of shares of beneficial interest in the
Trust (each a "Fund" and collectively, the "Funds"). Unlike conventional mutual
funds, each Fund issues and redeems shares on a continuous basis, at net asset
value ("NAV"), only in large specified blocks consisting of 50,000 shares called
a "Creation Unit." Each Fund's Creation Units are generally issued and redeemed
in-kind for securities in which a Fund invests, and in certain circumstances,
for cash, and only to and from broker-dealers and large institutional investors
that have entered into participation agreements. Except when aggregated in
Creation Units, each Fund's shares are not redeemable securities. The investment
objective of each Fund is to seek investment results that correspond generally
to the price and yield (before the Fund's fees and expenses) of the following
indices:
FUND INDEX
First Trust IPOX(R) Europe Equity Opportunities ETF IPOX(R)-100 Europe Index
First Trust Dow Jones International Internet ETF Dow Jones International Internet Index
|
2. SIGNIFICANT ACCOUNTING POLICIES
The Funds are each considered an investment company and follow accounting and
reporting guidance under Financial Accounting Standards Board Accounting
Standards Codification Topic 946, "Financial Services-Investment Companies." The
following is a summary of significant accounting policies consistently followed
by the Funds in the preparation of the financial statements. The preparation of
the financial statements in accordance with accounting principles generally
accepted in the United States of America ("U.S. GAAP") requires management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
A. PORTFOLIO VALUATION
Each Fund's NAV is determined daily as of the close of regular trading on the
New York Stock Exchange ("NYSE"), normally 4:00 p.m. Eastern time, on each day
the NYSE is open for trading. If the NYSE closes early on a valuation day, the
NAV is determined as of that time. Foreign securities are priced using data
reflecting the earlier closing of the principal markets for those securities.
Each Fund's NAV is calculated by dividing the value of all assets of each Fund
(including accrued interest and dividends), less all liabilities (including
accrued expenses and dividends declared but unpaid), by the total number of
shares outstanding.
Each Fund's investments are valued daily at market value or, in the absence of
market value with respect to any portfolio securities, at fair value. Market
value prices represent last sale or official closing prices from a national or
foreign exchange (i.e., a regulated market) and are primarily obtained from
third-party pricing services. Fair value prices represent any prices not
considered market value prices and are either obtained from a third-party
pricing service or are determined by the Pricing Committee of the Funds'
investment advisor, First Trust Advisors L.P. ("First Trust" or the "Advisor"),
in accordance with valuation procedures adopted by the Trust's Board of
Trustees, and in accordance with provisions of the 1940 Act. Investments valued
by the Advisor's Pricing Committee, if any, are footnoted as such in the
footnotes to the Portfolio of Investments. Each Fund's investments are valued as
follows:
Common stocks and other equity securities listed on any national or
foreign exchange (excluding Nasdaq and the London Stock Exchange
Alternative Investment Market ("AIM")) are valued at the last sale price
on the exchange on which they are principally traded or, for Nasdaq and
AIM securities, the official closing price. Securities traded on more than
one securities exchange are valued at the last sale price or official
closing price, as applicable, at the close of the securities exchange
representing the principal market for such securities.
Shares of open-end funds are valued at fair value which is based on NAV
per share.
Securities traded in an over-the-counter market are fair valued at the
mean of their most recent bid and asked price, if available, and otherwise
at their closing bid price.
Certain securities may not be able to be priced by pre-established pricing
methods. Such securities may be valued by the Trust's Board of Trustees or its
delegate, the Advisor's Pricing Committee, at fair value. These securities
generally include, but are not limited to, restricted securities (securities
which may not be publicly sold without registration under the Securities Act of
1933, as amended) for which a third-party pricing service is unable to provide a
market price; securities whose trading has been formally suspended; a security
whose market or fair value price is not available from a pre-established pricing
Page 19
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
source; a security with respect to which an event has occurred that is likely to
materially affect the value of the security after the market has closed but
before the calculation of a Fund's NAV or make it difficult or impossible to
obtain a reliable market quotation; and a security whose price, as provided by
the third-party pricing service, does not reflect the security's fair value. As
a general principle, the current fair value of a security would appear to be the
amount which the owner might reasonably expect to receive for the security upon
its current sale. When fair value prices are used, generally they will differ
from market quotations or official closing prices on the applicable exchanges. A
variety of factors may be considered in determining the fair value of such
securities, including, but not limited to, the following:
1) the type of security;
2) the size of the holding;
3) the initial cost of the security;
4) transactions in comparable securities;
5) price quotes from dealers and/or third-party pricing services;
6) relationships among various securities;
7) information obtained by contacting the issuer, analysts, or the
appropriate stock exchange;
8) an analysis of the issuer's financial statements; and
9) the existence of merger proposals or tender offers that might affect
the value of the security.
If the securities in question are foreign securities, the following additional
information may be considered:
1) the value of similar foreign securities traded on other foreign
markets;
2) ADR trading of similar securities;
3) closed-end fund or exchange-traded fund trading of similar
securities;
4) foreign currency exchange activity;
5) the trading prices of financial products that are tied to baskets of
foreign securities;
6) factors relating to the event that precipitated the pricing problem;
7) whether the event is likely to recur; and
8) whether the effects of the event are isolated or whether they affect
entire markets, countries or regions.
In addition, differences between the prices used to calculate a Fund's NAV and
the prices used by such Fund's corresponding index could result in a difference
between a Fund's performance and the performance of its underlying index.
Because foreign markets may be open on different days than the days during which
investors may transact in the shares of a Fund, the value of the Fund's
securities may change on the days when investors are not able to transact in the
shares of the Fund. The value of securities denominated in foreign currencies is
converted into U.S. dollars using exchange rates determined daily as of the
close of regular trading on the NYSE. Any use of a different rate from the rates
used by a relevant index may adversely affect the Fund's ability to track the
index.
The Funds are subject to fair value accounting standards that define fair value,
establish the framework for measuring fair value and provide a three-level
hierarchy for fair valuation based upon the inputs to the valuation as of the
measurement date. The three levels of the fair value hierarchy are as follows:
o Level 1 - Level 1 inputs are quoted prices in active markets for
identical investments. An active market is a market in which
transactions for the investment occur with sufficient frequency and
volume to provide pricing information on an ongoing basis.
o Level 2 - Level 2 inputs are observable inputs, either directly or
indirectly, and include the following:
o Quoted prices for similar investments in active markets.
o Quoted prices for identical or similar investments in markets
that are non-active. A non-active market is a market where
there are few transactions for the investment, the prices are
not current, or price quotations vary substantially either
over time or among market makers, or in which little
information is released publicly.
o Inputs other than quoted prices that are observable for the
investment (for example, interest rates and yield curves
observable at commonly quoted intervals, volatilities,
prepayment speeds, loss severities, credit risks, and default
rates).
o Inputs that are derived principally from or corroborated by
observable market data by correlation or other means.
o Level 3 - Level 3 inputs are unobservable inputs. Unobservable
inputs may reflect the reporting entity's own assumptions about the
assumptions that market participants would use in pricing the
investment.
The inputs or methodologies used for valuing investments are not necessarily an
indication of the risk associated with investing in those investments. A summary
of the inputs used to value each Fund's investments as of March 31, 2020, is
included with each Fund's Portfolio of Investments.
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded as of the trade date. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
Dividend income is recorded on the ex-dividend date. Interest income, if any, is
recorded on the accrual basis.
Page 20
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
Withholding taxes and tax reclaims on foreign dividends have been provided for
in accordance with each Fund's understanding of the applicable country's tax
rules and rates.
C. FOREIGN CURRENCY
The books and records of the Funds are maintained in U.S. dollars. Foreign
currencies, investments and other assets and liabilities are translated into
U.S. dollars at the exchange rates prevailing at the end of the period.
Purchases and sales of investments and items of income and expense are
translated on the respective dates of such transactions. Unrealized gains and
losses on assets and liabilities, other than investments in securities, which
result from changes in foreign currency exchange rates have been included in
"Net change in unrealized appreciation (depreciation) on foreign currency
translation" on the Statements of Operations. Unrealized gains and losses on
investments in securities which result from changes in foreign exchange rates
are included with fluctuations arising from changes in market price and are
shown in "Net change in unrealized appreciation (depreciation) on investments"
on the Statements of Operations. Net realized foreign currency gains and losses
include the effect of changes in exchange rates between trade date and
settlement date on investment security transactions, foreign currency
transactions and interest and dividends received and are included in "Net
realized gain (loss) on foreign currency transactions" on the Statements of
Operations. The portion of foreign currency gains and losses related to
fluctuations in exchange rates between the initial purchase settlement date and
subsequent sale trade date is included in "Net realized gain (loss) on
investments" on the Statements of Operations.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income of each Fund, if any, are declared and paid
quarterly, or as the Board of Trustees may determine from time to time.
Distributions of net realized gains earned by each Fund, if any, are distributed
at least annually.
Distributions from net investment income and realized capital gains are
determined in accordance with federal income tax regulations, which may differ
from U.S. GAAP. Certain capital accounts in the financial statements are
periodically adjusted for permanent differences in order to reflect their tax
character. These permanent differences are primarily due to the varying
treatment of income and gain/loss on significantly modified portfolio securities
held by the Funds and have no impact on net assets or NAV per share. Temporary
differences, which arise from recognizing certain items of income, expense and
gain/loss in different periods for financial statement and tax purposes, will
reverse at some time in the future.
The tax character of distributions paid by each Fund during the fiscal period
ended September 30, 2019 was as follows:
Distributions Distributions Distributions
paid from paid from paid from
Ordinary Capital Return of
Income Gains Capital
------------- ------------- -------------
First Trust IPOX(R) Europe Equity Opportunities ETF $ 30,520 $ -- $ --
First Trust Dow Jones International Internet ETF 91,831 -- --
|
As of September 30, 2019, the components of distributable earnings on a tax
basis for each Fund were as follows:
Accumulated Net
Undistributed Capital and Unrealized
Ordinary Other Appreciation
Income Gain (Loss) (Depreciation)
------------- ------------- -------------
First Trust IPOX(R) Europe Equity Opportunities ETF $ 6,349 $ (177,688) $ 167,795
First Trust Dow Jones International Internet ETF 56,127 (82,176) (151,661)
|
E. INCOME TAXES
Each Fund intends to continue to qualify as a regulated investment company by
complying with the requirements under Subchapter M of the Internal Revenue Code
of 1986, as amended, which includes distributing substantially all of its net
investment income and net realized gains to shareholders. Accordingly, no
provision has been made for federal and state income taxes. However, due to the
timing and amount of distributions, each Fund may be subject to an excise tax of
4% of the amount by which approximately 98% of each Fund's taxable income
exceeds the distributions from such taxable income for the calendar year.
The Funds are subject to accounting standards that establish a minimum threshold
for recognizing, and a system for measuring, the benefits of a tax position
taken or expected to be taken in a tax return. The taxable year ending 2019
remains open to federal and state audit. As of March 31, 2020, management has
evaluated the application of these standards to the Funds, and has determined
that no provision for income tax is required in the Funds' financial statements
for uncertain tax positions.
Each Fund intends to utilize provisions of the federal income tax laws, which
allow it to carry a realized capital loss forward indefinitely following the
year of the loss and offset such loss against any future realized capital gains.
Each Fund is subject to certain limitations under U.S. tax rules on the use of
capital loss carryforwards and net unrealized built-in losses. These limitations
Page 21
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
apply when there has been a 50% change in ownership. At September 30, 2019, the
Funds had non-expiring capital loss carryforwards available for federal income
tax purposes as shown in the following table. To the extent that these loss
carryforwards are used to offset future capital gains, it is probable that the
capital gains so offset will not be distributed to each applicable Fund's
shareholders.
Non-Expiring
Capital Loss
Carryforward
----------------
First Trust IPOX(R) Europe Equity Opportunities ETF $ 177,688
First Trust Dow Jones International Internet ETF 82,176
|
Certain losses realized during the current fiscal year may be deferred and
treated as occurring on the first day of the following fiscal year for federal
income tax purposes. For the fiscal period ended September 30, 2019, the Funds
had no net late year ordinary or capital losses.
F. EXPENSES
Expenses, other than the investment advisory fee and other excluded expenses,
are paid by the Advisor (see Note 3).
First Trust has entered into licensing agreements with each of the following
"Licensors" for the respective Funds:
FUND LICENSOR
First Trust IPOX(R) Europe Equity Opportunities ETF IPOX(R) Schuster LLC
First Trust Dow Jones International Internet ETF S&P Dow Jones Indices LLC
|
The respective license agreements allow for the use of each Fund's respective
index and of certain trademarks and trade names of the respective Licensors. The
Funds are sub-licensees to the applicable license agreements. The Funds'
licensing fees are paid by First Trust from the unitary investment advisory fees
it receives from each of the Funds.
3. INVESTMENT ADVISORY FEE, AFFILIATED TRANSACTIONS AND OTHER FEE ARRANGEMENTS
First Trust, the investment advisor to the Funds, is a limited partnership with
one limited partner, Grace Partners of DuPage L.P., and one general partner, The
Charger Corporation. The Charger Corporation is an Illinois corporation
controlled by James A. Bowen, Chief Executive Officer of First Trust. First
Trust is responsible for the selection and ongoing monitoring of the securities
in each Fund's portfolio, managing the Funds' business affairs and providing
certain administrative services necessary for the management of the Funds.
Pursuant to the Investment Management Agreement between the Trust and the
Advisor, First Trust manages the investment of the Funds' assets and is
responsible for the expenses of each Fund including the cost of transfer agency,
custody, fund administration, legal, audit and other services and license fees
(if any), but excluding fee payments under the Investment Management Agreement,
interest, taxes, acquired fund fees and expenses, brokerage commissions and
other expenses connected with the execution of portfolio transactions,
distribution and service fees payable pursuant to a Rule 12b-1 plan, if any, and
extraordinary expenses, which are paid by each respective Fund. FPXE and FDNI
have each agreed to pay First Trust an annual unitary management fee equal to
0.70% and 0.65% of its average daily net assets, respectively.
The Trust has multiple service agreements with The Bank of New York Mellon
("BNYM"). Under the service agreements, BNYM performs custodial, fund
accounting, certain administrative services, and transfer agency services for
each Fund. As custodian, BNYM is responsible for custody of each Fund's assets.
As fund accountant and administrator, BNYM is responsible for maintaining the
books and records of each Fund's securities and cash. As transfer agent, BNYM is
responsible for maintaining shareholder records for each Fund. BNYM is a
subsidiary of The Bank of New York Mellon Corporation, a financial holding
company.
Each Trustee who is not an officer or employee of First Trust, any sub-advisor
or any of their affiliates ("Independent Trustees") is paid a fixed annual
retainer that is allocated equally among each fund in the First Trust Fund
Complex. Each Independent Trustee is also paid an annual per fund fee that
varies based on whether the fund is a closed-end or other actively managed fund,
a defined-outcome fund or is an index fund.
Additionally, the Lead Independent Trustee and the Chairmen of the Audit
Committee, Nominating and Governance Committee and Valuation Committee are paid
annual fees to serve in such capacities, with such compensation allocated pro
rata among each fund in the First Trust Fund Complex based on net assets.
Independent Trustees are reimbursed for travel and out-of-pocket expenses in
connection with all meetings. The Lead Independent Trustee and Committee
Chairmen rotate every three years. The officers and "Interested" Trustee receive
no compensation from the Trust for acting in such capacities.
Page 22
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
4. PURCHASES AND SALES OF SECURITIES
For the six months ended March 31, 2020, the cost of purchases and proceeds from
sales of investments for each Fund, excluding short-term investments and in-kind
transactions, were as follows:
Purchases Sales
---------------- --------------
First Trust IPOX(R) Europe Equity Opportunities ETF $ 387,096 $ 403,442
First Trust Dow Jones International Internet ETF 990,942 511,088
|
For the six months ended March 31, 2020, the cost of in-kind purchases and
proceeds from in-kind sales for each Fund were as follows:
Purchases Sales
---------------- --------------
First Trust IPOX(R) Europe Equity Opportunities ETF $ 1,084,047 $ 1,010,677
First Trust Dow Jones International Internet ETF 1,890,427 --
|
5. CREATIONS, REDEMPTIONS AND TRANSACTION FEES
Shares are created and redeemed by each Fund only in Creation Unit size
aggregations of 50,000 shares in transactions with broker- dealers or large
institutional investors that have entered into a participation agreement (an
"Authorized Participant"). In order to purchase Creation Units of a Fund, an
Authorized Participant must deposit (i) a designated portfolio of equity
securities determined by First Trust (the "Deposit Securities") and generally
make or receive a cash payment referred to as the "Cash Component," which is an
amount equal to the difference between the NAV of the Fund Shares (per Creation
Unit Aggregation) and the market value of the Deposit Securities, and/or (ii)
cash in lieu of all or a portion of the Deposit Securities. If the Cash
Component is a positive number (i.e., the NAV per Creation Unit Aggregation
exceeds the Deposit Amount), the Authorized Participant will deliver the Cash
Component. If the Cash Component is a negative number (i.e., the NAV per
Creation Unit Aggregation is less than the Deposit Amount), the Authorized
Participant will receive the Cash Component. Authorized Participants purchasing
Creation Units must pay to BNYM, as transfer agent, a creation fee (the
"Creation Transaction Fee") regardless of the number of Creation Units purchased
in the transaction. The Creation Transaction Fee may vary and is based on the
composition of the securities included in each Fund's portfolio and the
countries in which the transactions are settled. The Creation Transaction Fee
may increase or decrease with changes in each Fund's portfolio. The price for
each Creation Unit will equal the daily NAV per share times the number of shares
in a Creation Unit plus the fees described above and, if applicable, any
operational processing and brokerage costs, transfer fees or stamp taxes. When a
Fund permits an Authorized Participant to substitute cash or a different
security in lieu of depositing one or more of the requisite Deposit Securities,
the Authorized Participant may also be assessed an amount to cover the cost of
purchasing the Deposit Securities and/or disposing of the substituted
securities, including operational processing and brokerage costs, transfer fees,
stamp taxes, and part or all of the spread between the expected bid and offer
side of the market related to such Deposit Securities and/or substitute
securities.
Authorized Participants redeeming Creation Units must pay to BNYM, as transfer
agent, a redemption transaction fee (the "Redemption Transaction Fee"),
regardless of the number of Creation Units redeemed in the transaction. The
Redemption Transaction Fee may vary and is based on the composition of the
securities included in each Fund's portfolio and the countries in which the
transactions are settled. The Redemption Transaction Fee may increase or
decrease with changes in each Fund's portfolio. Each Fund reserves the right to
effect redemptions in cash. An Authorized Participant may request a cash
redemption in lieu of securities; however, each Fund may, in its discretion,
reject any such request.
6. DISTRIBUTION PLAN
The Board of Trustees adopted a Distribution and Service Plan pursuant to Rule
12b-1 under the 1940 Act. In accordance with the Rule 12b-1 plan, the Funds are
authorized to pay an amount up to 0.25% of their average daily net assets each
year to reimburse First Trust Portfolios L.P. ("FTP"), the distributor of the
Funds, for amounts expended to finance activities primarily intended to result
in the sale of Creation Units or the provision of investor services. FTP may
also use this amount to compensate securities dealers or other persons that are
Authorized Participants for providing distribution assistance, including
broker-dealer and shareholder support and educational and promotional services.
No 12b-1 fees are currently paid by the Funds, and pursuant to a contractual
arrangement, no 12b-1 fees will be paid any time before January 31, 2021.
Page 23
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
7. INDEMNIFICATION
The Trust, on behalf of the Funds, has a variety of indemnification obligations
under contracts with its service providers. The Trust's maximum exposure under
these arrangements is unknown. However, the Trust has not had prior claims or
losses pursuant to these contracts and expects the risk of loss to be remote.
8. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Funds
through the date the financial statements were issued, and has determined that
there were no subsequent events requiring recognition or disclosure in the
financial statements that have not already been disclosed.
Page 24
ADDITIONAL INFORMATION
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies and information on how each Fund voted proxies relating to
its portfolio securities during the most recent 12-month period ended June 30 is
available (1) without charge, upon request, by calling (800) 988-5891; (2) on
each Fund's website at www.ftportfolios.com; and (3) on the Securities and
Exchange Commission's ("SEC") website at www.sec.gov.
PORTFOLIO HOLDINGS
Each Fund files portfolio holdings information for each month in a fiscal
quarter within 60 days after the end of the relevant fiscal quarter on Form
N-PORT. Portfolio holdings information for the third month of each fiscal
quarter will be publicly available on the SEC's website at www.sec.gov. Each
Fund's complete schedule of portfolio holdings for the second and fourth
quarters of each fiscal year is included in the semi-annual and annual reports
to shareholders, respectively, and is filed with the SEC on Form N-CSR. The
semi-annual and annual report for each Fund is available to investors within 60
days after the period to which it relates. Each Fund's Forms N-PORT and Forms
N-CSR are available on the SEC's website listed above.
RISK CONSIDERATIONS
RISKS ARE INHERENT IN ALL INVESTING. CERTAIN GENERAL RISKS THAT MAY BE
APPLICABLE TO A FUND ARE IDENTIFIED BELOW, BUT NOT ALL OF THE MATERIAL RISKS
RELEVANT TO EACH FUND ARE INCLUDED IN THIS REPORT AND NOT ALL OF THE RISKS BELOW
APPLY TO EACH FUND. THE MATERIAL RISKS OF INVESTING IN EACH FUND ARE SPELLED OUT
IN ITS PROSPECTUS, STATEMENT OF ADDITIONAL INFORMATION AND OTHER REGULATORY
FILINGS. BEFORE INVESTING, YOU SHOULD CONSIDER EACH FUND'S INVESTMENT OBJECTIVE,
RISKS, CHARGES AND EXPENSES, AND READ EACH FUND'S PROSPECTUS AND STATEMENT OF
ADDITIONAL INFORMATION CAREFULLY. YOU CAN DOWNLOAD EACH FUND'S PROSPECTUS AT
WWW.FTPORTFOLIOS.COM OR CONTACT FIRST TRUST PORTFOLIOS L.P. AT (800) 621-1675 TO
REQUEST A PROSPECTUS, WHICH CONTAINS THIS AND OTHER INFORMATION ABOUT EACH FUND.
CONCENTRATION RISK. To the extent that a fund is able to invest a large
percentage of its assets in a single asset class or the securities of issuers
within the same country, state, region, industry or sector, an adverse economic,
business or political development may affect the value of the fund's investments
more than if the fund were more broadly diversified. A fund that tracks an index
will be concentrated to the extent the fund's corresponding index is
concentrated. A concentration makes a fund more susceptible to any single
occurrence and may subject the fund to greater market risk than a fund that is
not concentrated.
CREDIT 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
the related risk that the value of a security may decline because of concerns
about the issuer's ability to make such payments.
CYBER SECURITY RISK. The funds are susceptible to potential operational risks
through breaches in cyber security. A breach in cyber security refers to both
intentional and unintentional events that may cause a fund to lose proprietary
information, suffer data corruption or lose operational capacity. Such events
could cause a fund to incur regulatory penalties, reputational damage,
additional compliance costs associated with corrective measures and/or financial
loss. In addition, cyber security breaches of a fund's third-party service
providers, such as its administrator, transfer agent, custodian, or sub-advisor,
as applicable, or issuers in which the fund invests, can also subject a fund to
many of the same risks associated with direct cyber security breaches.
DERIVATIVES RISK. To the extent a fund uses derivative instruments such as
futures contracts, options contracts and swaps, the fund may experience 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 derivative.
These risks are heightened when a fund's portfolio managers use derivatives to
enhance the fund's return or as a substitute for a position or security, rather
than solely to hedge (or offset) the risk of a position or security held by the
fund.
EQUITY SECURITIES RISK. To the extent a fund invests in equity securities, the
value of the fund's shares will fluctuate with changes in the value of the
equity securities. Equity securities prices fluctuate for several reasons,
including changes in investors' perceptions of the financial condition of an
issuer or the general condition of the relevant stock market, such as market
volatility, or when political or economic events affecting the issuers occur. In
addition, common stock prices may be particularly sensitive to rising interest
rates, as the cost of capital rises and borrowing costs increase. 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.
ETF RISK. The shares of an ETF trade like common stock and represent an interest
in a portfolio of securities. The risks of owning an ETF generally reflect the
risks of owning the underlying securities, although lack of liquidity in an ETF
could result in it being more volatile and ETFs have management fees that
increase their costs. Shares of an ETF trade on an exchange at market prices
rather than net asset value, which may cause the shares to trade at a price
greater than net asset value (premium) or less than net asset value (discount).
In times of market stress, decisions by market makers to reduce or step away
Page 25
ADDITIONAL INFORMATION (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
from their role of providing a market for an ETF's shares, or decisions by an
ETF's authorized participants that they are unable or unwilling to proceed with
creation and/or redemption orders of an ETF's shares, could result in shares of
the ETF trading at a discount to net asset value and in greater than normal
intraday bid-ask spreads.
FIXED INCOME SECURITIES RISK. To the extent a fund invests in fixed income
securities, the fund will be subject to credit risk, income risk, interest rate
risk, liquidity risk and prepayment risk. Income risk is the risk that income
from a fund's fixed income investments could decline during periods of falling
interest rates. Interest rate risk is the risk that the value of a fund's fixed
income securities will decline because of rising interest rates. Liquidity risk
is the risk that a security cannot be purchased or sold at the time desired, or
cannot be purchased or sold without adversely affecting the price. Prepayment
risk is the risk that the securities will be redeemed or prepaid by the issuer,
resulting in lower interest payments received by the fund. In addition to these
risks, high yield securities, or "junk" bonds, are subject to greater market
fluctuations and risk of loss than securities with higher ratings, and the
market for high yield securities is generally smaller and less liquid than that
for investment grade securities.
INDEX CONSTITUENT RISK. Certain funds may be a constituent of one or more
indices. As a result, such a fund may be included in one or more index-tracking
exchange-traded funds or mutual funds. Being a component security of such a
vehicle could greatly affect the trading activity involving a fund, the size of
the fund and the market volatility of the fund. Inclusion in an index could
significantly increase demand for the fund and removal from an index could
result in outsized selling activity in a relatively short period of time. As a
result, a fund's net asset value could be negatively impacted and the fund's
market price may be significantly below its net asset value during certain
periods.
INDEX PROVIDER RISK. To the extent a fund seeks to track an index, it is subject
to Index Provider Risk. There is no assurance that the Index Provider will
compile the Index accurately, or that the Index will be determined, maintained,
constructed, reconstituted, rebalanced, composed, calculated or disseminated
accurately. To correct any such error, the Index Provider may carry out an
unscheduled rebalance or other modification of the Index constituents or
weightings, which may increase the fund's costs. The Index Provider does not
provide any representation or warranty in relation to the quality, accuracy or
completeness of data in the Index, and it does not guarantee that the Index will
be calculated in accordance with its stated methodology. Losses or costs
associated with any Index Provider errors generally will be borne by the fund
and its shareholders.
INVESTMENT COMPANIES RISK. To the extent a fund invests in the securities of
other investment vehicles, the fund will incur additional fees and expenses that
would not be present in a direct investment in those investment vehicles.
Furthermore, the fund's investment performance and risks are directly related to
the investment performance and risks of the investment vehicles in which the
fund invests.
LIBOR RISK. 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. In 2017, the United Kingdom's
Financial Conduct Authority announced that LIBOR will cease to be available for
use after 2021. 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 the fund or on certain
instruments in which the fund invests can be difficult to ascertain, and they
may vary depending on a variety of factors. Any such effects of the transition
away from LIBOR, as well as other unforeseen effects, could result in losses to
the fund.
MANAGEMENT RISK. To the extent that a fund is actively managed, it is subject to
management risk. In managing an actively-managed fund's investment portfolio,
the fund's portfolio managers will apply investment techniques and risk analyses
that may not have the desired result. There can be no guarantee that a fund will
meet its investment objective.
MARKET RISK. Securities held by a fund, as well as shares of a fund itself, are
subject to market fluctuations caused by factors such 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 of the risk of
loss associated with these market fluctuations. In addition, local, regional or
global events such as war, acts of terrorism, spread of infectious diseases or
other public health issues, recessions, or other events could have a significant
negative impact on a fund and its investments. Such events may affect certain
geographic regions, countries, sectors and industries more significantly than
others. 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.
NON-U.S. SECURITIES RISK. To the extent a fund invests in non-U.S. securities,
it is subject to additional risks not associated with securities of domestic
issuers. Non-U.S. securities are subject to higher volatility than securities of
domestic issuers due to: possible adverse political, social or economic
developments; restrictions on foreign investment or exchange of securities; lack
of liquidity; currency exchange rates; excessive taxation; government seizure of
assets; different legal or accounting standards; and less government supervision
and regulation of exchanges in foreign countries. Investments in non-U.S.
Page 26
ADDITIONAL INFORMATION (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2020 (UNAUDITED)
securities may involve higher costs than investments in U.S. securities,
including higher transaction and custody costs, as well as additional taxes
imposed by non-U.S. governments. These risks may be heightened for securities of
companies located, or with significant operations, in emerging market countries.
PASSIVE INVESTMENT RISK. To the extent a fund seeks to track an index, the fund
will invest in the securities included in, or representative of, the index
regardless of their investment merit. A fund generally will not attempt to take
defensive positions in declining markets.
NOT FDIC INSURED NOT BANK GUARANTEED MAY LOSE VALUE
Page 27
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FIRST TRUST
First Trust Exchange-Traded Fund II
INVESTMENT ADVISOR
First Trust Advisors L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
ADMINISTRATOR, CUSTODIAN,
FUND ACCOUNTANT &
TRANSFER AGENT
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
111 S. Wacker Drive
Chicago, IL 60606
LEGAL COUNSEL
Chapman and Cutler LLP
111 W. Monroe Street
Chicago, IL 60603
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