First Trust
Exchange-Traded Fund IV |
Ticker Symbol: |
HISF |
Exchange: |
Nasdaq |
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
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Management Fees |
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Distribution and Service (12b-1) Fees |
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Other Expenses |
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Acquired Fund Fees and Expenses |
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Total Annual Fund Operating Expenses |
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Fee Waiver and Expense Reimbursement(1)
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Net Annual Fund Operating Expenses(2)
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1 Year |
3 Years |
5 Years |
10 Years |
$ |
$ |
$ |
$ |
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1 Year |
5 Years |
Since
Inception |
Inception
Date |
Return Before Taxes |
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Return After Taxes on Distributions |
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Return After Taxes on Distributions and Sale of Shares |
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Blended Index(1) (reflects no deduction for fees, expenses or
taxes) |
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New Blended Index(2) (reflects no deduction for fees, expenses
or taxes) |
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Bloomberg U.S. Aggregate Bond Index (reflects no deduction for
fees, expenses or taxes) |
- |
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Russell 3000® Index (reflects no deduction for fees, expenses or
taxes) |
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Average Annual |
Cumulative | ||
|
1 Year |
5 Years |
Inception
(8/13/2014) |
5 Years |
Inception
(8/13/2014) |
Fund Performance |
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|
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Net Asset Value |
16.33% |
4.45% |
4.24% |
24.35% |
34.97% |
Market Price |
16.35% |
4.40% |
4.26% |
24.01% |
35.15% |
Index Performance |
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|
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Blended Index |
22.88% |
5.80% |
4.62% |
32.58% |
38.48% |
New Blended Index(1)
|
12.17% |
5.60% |
4.54% |
31.29% |
38.78% |
Bloomberg U.S. Aggregate Bond Index |
-0.48% |
3.10% |
3.13% |
16.46% |
24.93% |
Russell 3000® Index |
43.90% |
18.91% |
14.67% |
137.73% |
168.56% |
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Year Ended October 31, | ||||
|
2021 |
2020 |
2019 |
2018 |
2017 |
Net asset value, beginning of period |
$44.98 |
$50.62 |
$47.72 |
$50.68 |
$49.89 |
Income from investment operations: |
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Net investment income (loss) |
1.47 |
1.46 |
1.63 |
1.69 |
1.59 |
Net realized and unrealized gain (loss) |
5.80(a)
|
(5.07) |
3.34 |
(2.26) |
1.10(b)
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Total from investment operations |
7.27 |
(3.61) |
4.97 |
(0.57) |
2.66 |
Distributions paid to shareholders from: |
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|
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Net investment income |
(1.91) |
(1.97) |
(2.07) |
(2.10) |
(1.65) |
Net realized gain |
— |
— |
— |
— |
(0.22) |
Return of capital |
— |
(0.06) |
— |
(0.29) |
— |
Total distributions |
(1.91) |
(2.03) |
(2.07) |
(2.39) |
(1.87) |
Net asset value, end of period |
$50.34 |
$44.98 |
$50.62 |
$47.72 |
$50.68 |
Total Return (c) |
16.33% (a)
|
(7.19)% |
10.60% |
(1.21)% |
5.40% (b)
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Ratios/supplemental data: |
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Net assets, end of period (in 000’s) |
$70,477 |
$60,719 |
$91,120 |
$83,504 |
$96,286 |
Ratios to average net assets: |
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Ratio of total expenses to average net assets (d)
|
0.85% |
0.85% |
0.85% |
0.86% (e)
|
0.85% |
Ratio of net expenses to average net assets (d)
|
0.42% |
0.46% |
0.50% |
0.50% (e)
|
0.52% |
Ratio of net investment income (loss) to average net assets |
2.94% |
3.08% |
3.21% |
3.40% |
3.10% |
Portfolio turnover rate (f)
|
101% |
118% |
91% |
113% |
119% |
First Trust
Exchange-Traded Fund IV |
FUND NAME |
TICKER SYMBOL |
EXCHANGE |
First Trust High Income Strategic Focus ETF
(formerly, First Trust Strategic Income ETF) |
HISF |
Nasdaq |
1 | |
3 | |
3 | |
4 | |
11 | |
14 | |
22 | |
24 | |
25 | |
26 | |
27 | |
28 | |
31 | |
35 | |
37 | |
37 | |
37 | |
A-1 | |
B-1 | |
C-1 |
Portfolio Turnover Rate
| |
Fiscal Year Ended October 31, | |
2021 |
2020 |
101% |
118% |
Name and
Year of Birth |
Position
and Offices
with Trust |
Term of
Office and
Year First
Elected or
Appointed |
Principal Occupations
During Past 5 Years |
Number of
Portfolios
in the First
Trust Fund
Complex
Overseen
by Trustee |
Other
Trusteeships or
Directorships
Held by
Trustee
During the
Past 5 Years |
TRUSTEE WHO IS AN INTERESTED PERSON OF THE TRUST | |||||
James A. Bowen (1)
1955 |
Chairman of the
Board and Trustee |
•Indefinite term
•Since inception |
Chief Executive Officer, First Trust
Advisors L.P. and First Trust Portfolios
L.P.; Chairman of the Board of Directors,
BondWave LLC (Software Development
Company) and Stonebridge Advisors LLC
(Investment Advisor) |
217 Portfolios |
None |
INDEPENDENT TRUSTEES | |||||
Richard E. Erickson
1951 |
Trustee |
•Indefinite term
•Since inception |
Physician; Officer, Wheaton Orthopedics;
Limited Partner, Gundersen Real Estate
Limited Partnership (June 1992 to
December 2016) |
217 Portfolios |
None |
Thomas R. Kadlec
1957 |
Trustee |
•Indefinite term
•Since inception |
President, ADM Investor Services, Inc.
(Futures Commission Merchant) |
217 Portfolios |
Director of ADM
Investor Services,
Inc., ADM Investor
Services
International,
Futures Industry
Association, and
National Futures
Association |
Name and
Year of Birth |
Position
and Offices
with Trust |
Term of
Office and
Year First
Elected or
Appointed |
Principal Occupations
During Past 5 Years |
Number of
Portfolios
in the First
Trust Fund
Complex
Overseen
by Trustee |
Other
Trusteeships or
Directorships
Held by
Trustee
During the
Past 5 Years |
INDEPENDENT TRUSTEES | |||||
Denise M. Keefe
1964 |
Trustee |
•Indefinite term
•2021 |
Executive Vice President, Advocate
Aurora Health and President, Advocate
Aurora Continuing Health Division
(Integrated Healthcare System) |
217 Portfolios |
Director and Board
Chair of Advocate
Home Health
Services, Advocate
Home Care
Products and
Advocate Hospice;
Director and Board
Chair of Aurora At
Home (since
2018); Director of
Advocate
Physician Partners
Accountable Care
Organization;
Director and Board
Chair of RML Long
Term Acute Care
Hospitals; and
Director of Senior
Helpers (since
2021) |
Robert F. Keith
1956 |
Trustee |
•Indefinite term
•Since inception |
President, Hibs Enterprises (Financial and
Management Consulting) |
217 Portfolios |
Director of Trust
Company of
Illinois |
Niel B. Nielson
1954 |
Trustee |
•Indefinite term
•Since inception |
Senior Advisor (August 2018 to present),
Managing Director and Chief Operating
Officer (January 2015 to August 2018),
Pelita Harapan Educational Foundation
(Educational Products and Services) |
217 Portfolios |
None |
Name and
Year of Birth |
Position and
Offices with Trust |
Term of Office and
Length of Service |
Principal Occupations
During Past 5 Years |
OFFICERS OF THE TRUST | |||
James M. Dykas
1966 |
President and Chief
Executive Officer |
•Indefinite term
•Since January 2016 |
Managing Director and Chief Financial Officer, First
Trust Advisors L.P. and First Trust Portfolios L.P.;
Chief Financial Officer, BondWave LLC (Software
Development Company) and Stonebridge Advisors
LLC (Investment Advisor) |
W. Scott Jardine
1960 |
Secretary and Chief Legal
Officer |
•Indefinite term
•Since inception |
General Counsel, First Trust Advisors L.P. and First
Trust Portfolios L.P.; Secretary and General Counsel,
BondWave LLC; and Secretary, Stonebridge Advisors
LLC |
Daniel J. Lindquist
1970 |
Vice President |
•Indefinite term
•Since inception |
Managing Director, First Trust Advisors L.P. and First
Trust Portfolios L.P. |
Kristi A. Maher
1966 |
Chief Compliance Officer
and Assistant Secretary |
•Indefinite term
•Chief Compliance
Officer since January
2011
•Assistant Secretary
since inception |
Deputy General Counsel, First Trust Advisors L.P.
and First Trust Portfolios L.P. |
Donald P. Swade
1972 |
Treasurer, Chief Financial
Officer and Chief
Accounting Officer |
•Indefinite term
•Since January 2016 |
Senior Vice President, First Trust Advisors L.P. and
First Trust Portfolios L.P. |
Roger F. Testin
1966 |
Vice President |
•Indefinite term
•Since inception |
Senior Vice President, First Trust Advisors L.P. and
First Trust Portfolios L.P. |
Stan Ueland
1970 |
Vice President |
•Indefinite term
•Since inception |
Senior Vice President, First Trust Advisors L.P. and
First Trust Portfolios L.P. |
Name of Trustee |
Total Compensation from
the Fund (1)
|
Total Compensation from
the First Trust Fund Complex (2)
|
Richard E. Erickson |
$3,968 |
$509,393 |
Thomas R. Kadlec |
$3,965 |
$509,393 |
Denise M. Keefe (3)
|
$– |
$125,813 |
Robert F. Keith |
$3,960 |
$499,393 |
Niel B. Nielson |
$3,968 |
$519,393 |
Trustee |
Dollar Range of
Equity Securities in the
Fund
(Number of Shares
Held) |
Aggregate Dollar
Range of
Equity Securities in All
Registered
Investment Companies
Overseen by Trustee in
the
First Trust Fund
Complex |
Interested Trustee | ||
James A. Bowen |
None |
Over $100,000 |
Independent Trustees | ||
Richard E. Erickson |
None |
Over $100,000 |
Thomas R. Kadlec |
None |
Over $100,000 |
Denise M. Keefe(1)
|
None |
None |
Robert F. Keith |
None |
Over $100,000 |
Niel B. Nielson |
None |
Over $100,000 |
Amount of Unitary Fees
|
Amount of Fees Waived By First Trust
| ||||
Fiscal Year Ended October 31, |
Fiscal Year Ended October 31, | ||||
2021 |
2020 |
2019 |
2021 |
2020 |
2019 |
$290,388 |
$312,632 |
$408,693 |
$290,630 |
$265,076 |
$284,380 |
Name |
Position with
First Trust |
Length of Service
with First Trust |
Principal Occupation During
Past Five Years |
Daniel J. Lindquist |
Chairman of the
Investment Committee
and Managing Director |
Since 2004 |
Chairman of the Investment Committee
and Managing Director (2012 to present),
Senior Vice President (2005 to 2012), First Trust
Advisors L.P. and First Trust Portfolios L.P. |
David G. McGarel |
Chief Investment Officer,
Chief Operating Officer
and Managing Director |
Since 1997 |
Chief Operating Officer and
Managing Director (2012 to present),
First Trust Advisors L. P. and First Trust Portfolios L.P. |
Chris A. Peterson |
Senior Vice President |
Since 2000 |
Senior Vice President, First Trust Advisors L.P. |
William Housey |
Managing Director of
Fixed Income |
Since 2010 |
Senior Vice President and Senior Portfolio Manager,
First Trust Advisors L.P. |
Steve Collins |
Senior Vice President |
Since 2007 |
Senior Vice President (2019 to present),
Vice President (2016-2019), First Trust Advisors L.P. |
Portfolio Managers |
Registered
Investment Companies
Number of Accounts
($ Assets) |
Other Pooled
Investment Vehicles
Number of Accounts
($ Assets) |
Other Accounts
Number of Accounts
($ Assets) |
Daniel J. Lindquist |
115 ($99,445,314,020) |
42 ($1,982,541,546) |
1,387 ($611,203,487 |
David G. McGarel |
116 ($99,448,719,865) |
42 ($1,982,541,546) |
1,387 ($611,203,487 |
Chris A. Peterson |
116 ($99,448,719,865) |
42 ($1,982,541,546) |
1,387 ($611,203,487 |
William Housey |
9 ($7,265,101,481) |
1 ($1,096,581) |
N/A |
Steve Collins |
1 ($30,523,301) |
N/A |
N/A |
Aggregate Amount of Brokerage Commissions
| ||
Fiscal Year Ended October 31, | ||
2021 |
2020 |
2019 |
$31,762 |
$44,958 |
$35,182 |
Total
Non-Expiring
Capital Loss
Available |
$4,077,444 |
NAME OF BENEFICIAL OWNER |
% OF
OUTSTANDING
SHARES OWNED |
FIRST TRUST HIGH INCOME STRATEGIC FOCUS INCOME ETF | |
LPL Financial Corp. |
20.15% |
Merrill Lynch, Pierce, Fenner & Smith Inc. |
13.05% |
TD Ameritrade Clearing Inc. |
11.75% |
National Financial Services LLC |
11.69% |
Pershing LLC |
11.56% |
Charles Schwab & Co., Inc. |
9.38% |
RBC Capital Markets, LLC |
5.32% |
AAA |
An obligation rated “AAA” has the highest rating assigned by Standard & Poor’s. The obligor’s capacity to meet
its financial commitment on the obligation is extremely strong. |
AA |
An obligation rated “AA” differs from the highest rated obligations only in small degree. The obligor’s capacity
to meet its financial commitment on the obligation is very strong. |
A |
An obligation rated “A” is somewhat more susceptible to the adverse effects of changes in circumstances and
economic conditions than obligations in higher rated categories. However, the obligor’s capacity to meet its
financial commitment on the obligation is still strong. |
BBB |
An obligation rated “BBB” exhibits adequate protection parameters. However, adverse economic conditions
or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation. |
BB |
An obligation rated “BB” is less vulnerable to nonpayment than other speculative issues. However, it faces
major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could
lead to the obligor’s inadequate capacity to meet its financial commitment on the obligation. |
B |
An obligation rated “B” is more vulnerable to nonpayment than obligations rated “BB,” but the obligor
currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or
economic conditions will likely impair the obligor’s capacity or willingness to meet its financial commitment on
the obligation. |
CCC |
An obligation rated “CCC” is currently vulnerable to nonpayment, and is dependent upon favorable business,
financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the
event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to
meet its financial commitment on the obligation. |
CC |
An obligation rated “CC” is currently highly vulnerable to nonpayment. The “CC” rating is used when a default
has not yet occurred but S&P expects default to be a virtual certainty regardless of the anticipated time to
default. |
C |
An obligation rated “C” is currently highly vulnerable to nonpayment and the obligation is expected to have
lower relative seniority or lower ultimate recovery compared to obligations that are rated higher. |
D |
An obligation rated “D” is in default or in breach of an imputed promise. For non-hybrid capital instruments,
the “D” rating category is used when payments on an obligation are not made on the date due unless S&P
believes that such payments will be made within five business days in the absence of a stated grace period or
within the earlier of the stated grace period or 30 calendar days. The “D” rating also will be used upon the
filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual
certainty, for example due to automatic stay provisions. An obligation’s rating is lowered to ‘D’ if it is subject to
a distressed exchange offer. |
Aaa |
Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk. |
Aa |
Obligations rated Aa are judged to be of high quality and are subject to very low credit risk. |
A |
Obligations rated A are judged to be upper-medium grade and are subject to low credit risk. |
Baa |
Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may
possess certain speculative characteristics. |
Ba |
Obligations rated Ba are judged to be speculative and are subject to substantial credit risk. |
B |
Obligations rated B are considered speculative and are subject to high credit risk. |
Caa |
Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk. |
Ca |
Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of
recovery of principal and interest. |
C |
Obligations rated C are the lowest rated and are typically in default, with little prospect for recovery of
principal or interest. |
AAA |
Highest credit quality. ‘AAA’ ratings denote the lowest expectation of default risk. They are assigned only in
cases of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely
to be adversely affected by foreseeable events. |
AA |
Very high credit quality. ‘AA’ ratings denote expectations of very low default risk. They indicate very strong
capacity for payment of financial commitments. This capacity is not significantly vulnerable to foreseeable
events. |
A |
High credit quality. ‘A’ ratings denote expectations of low default risk. The capacity for payment of financial
commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business
or economic conditions than is the case for higher ratings. |
BBB |
Good credit quality. ‘BBB’ ratings indicate that expectations of default risk are currently low. The capacity for
payment of financial commitments is considered adequate but adverse business or economic conditions are
more likely to impair this capacity. |
BB |
Speculative. ‘BB’ ratings indicate an elevated vulnerability to default risk, particularly in the event of adverse
changes in business or economic conditions over time; however, business or financial flexibility exists which
supports the servicing of financial commitments. |
B |
Highly speculative. ‘B’ ratings indicate that material default risk is present, but a limited margin of safety
remains. Financial commitments are currently being met; however, capacity for continued payment is
vulnerable to deterioration in the business and economic environment. |
CCC |
Substantial credit risk. Default is a real possibility. |
CC |
Very high levels of credit risk. Default of some kind appears probable. |
C |
Exceptionally high levels of credit risk. Default is imminent or inevitable, or the issuer is in standstill.
Conditions that are indicative of a ‘C’ category rating for an issuer include:
•the issuer has entered into a grace or cure period following non-payment of a material financial obligation;
•the issuer has entered into a temporary negotiated waiver or standstill agreement following a payment
default on a material financial obligation; or
•Fitch otherwise believes a condition of ‘RD’ or ‘D’ to be imminent or inevitable, including through the formal
announcement of a distressed debt exchange. |
RD |
Restricted default. ‘RD’ ratings indicate an issuer that in Fitch’s opinion has experienced an uncured payment
default on a bond, loan or other material financial obligation but which has not entered into bankruptcy
filings, administration, receivership, liquidation or other formal winding-up procedure, and which has not
otherwise ceased operating. This would include:
•the selective payment default on a specific class or currency of debt;
•the uncured expiry of any applicable grace period, cure period or default forbearance period following a
payment default on a bank loan, capital markets security or other material financial obligation;
•the extension of multiple waivers or forbearance periods upon a payment default on one or more material
financial obligations, either in series or in parallel; or
•execution of a distressed debt exchange on one or more material financial obligations. |
D |
Default. ‘D’ ratings indicate an issuer that in Fitch’s opinion has entered into bankruptcy filings,
administration, receivership, liquidation or other formal winding-up procedure, or which has otherwise ceased
business. |