UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number
First Trust Exchange-Traded Fund
(Exact name of registrant as specified in charter)
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
(Address of principal executive offices) (Zip code)
W. Scott Jardine, Esq.
First Trust Portfolios L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
(Name and address of agent for service)
Registrant's telephone number, including area code:
Date of reporting period:
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. § 3507.
Item 1. Reports to Shareholders.
(a) Following is a copy of the semi-annual reports transmitted to shareholders pursuant to Rule 30e-1 under the Act.
First Trust Dow Jones Select
MicroCap Index Fund
FDM | NYSE ARCA, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust Dow Jones Select MicroCap Index Fund (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/FDM. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust Dow Jones Select MicroCap Index Fund | $30 | 0.60%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $171,479,044% |
| Total number of portfolio holdings | $158% |
| Portfolio turnover rate | $5% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| VSE Corp. | 2.3% |
| Powell Industries, Inc. | 2.2% |
| Crescent Energy, Inc., Class A | 2.0% |
| CRA International, Inc. | 2.0% |
| ACM Research, Inc., Class A | 1.8% |
| ScanSource, Inc. | 1.8% |
| Genco Shipping & Trading Ltd. | 1.5% |
| Barrett Business Services, Inc. | 1.4% |
| CECO Environmental Corp. | 1.4% |
| Cullinan Therapeutics, Inc. | 1.4% |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/FDM to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
Dow Jones Select MicroCap IndexSM (“Index”) is a product of S&P Dow Jones Indices, LLC or its affiliates (“SPDJI”) and has been licensed for use by First Trust. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® 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(s) nor do they have any liability for any errors, omissions, or interruptions of the Index.
First Trust Morningstar
Dividend Leaders Index Fund
FDL | NYSE ARCA, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust Morningstar Dividend Leaders Index Fund (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/FDL. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust Morningstar Dividend Leaders Index Fund | $22 | 0.43%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $3,870,824,700% |
| Total number of portfolio holdings | $101% |
| Portfolio turnover rate | $35% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| Chevron Corp. | 8.8% |
| Verizon Communications, Inc. | 8.3% |
| AbbVie, Inc. | 8.1% |
| Pfizer, Inc. | 6.9% |
| Philip Morris International, Inc. | 5.7% |
| Altria Group, Inc. | 4.8% |
| International Business Machines Corp. | 4.5% |
| United Parcel Service, Inc., Class B | 3.4% |
| Gilead Sciences, Inc. | 2.9% |
| CVS Health Corp. | 2.4% |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/FDL to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
Morningstar® and Morningstar® Dividend Leaders IndexSM are registered trademarks and service marks of Morningstar, Inc. (“Morningstar”) and have been licensed for use by First Trust on behalf of the Fund. The Fund is not sponsored, endorsed, issued, sold or promoted by Morningstar and Morningstar makes no representation regarding the advisability of investing in the Fund.
First Trust US Equity Opportunities ETF
FPX | NYSE ARCA, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust US Equity Opportunities ETF (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/FPX. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust US Equity Opportunities ETF | $28 | 0.55%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $700,546,055% |
| Total number of portfolio holdings | $103% |
| Portfolio turnover rate | $40% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| Regeneron Pharmaceuticals, Inc. | 9.2% |
| Carrier Global Corp. | 6.8% |
| Airbnb, Inc., Class A | 6.2% |
| Samsara, Inc., Class A | 4.8% |
| Otis Worldwide Corp. | 3.5% |
| Constellation Energy Corp. | 3.1% |
| Palantir Technologies, Inc., Class A | 2.8% |
| Crowdstrike Holdings, Inc., Class A | 2.8% |
| DraftKings, Inc., Class A | 2.6% |
| DoorDash, Inc., Class A | 2.6% |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/FPX to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
First Trust NYSE® Arca®
Biotechnology Index Fund
FBT | NYSE ARCA, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust NYSE® Arca® Biotechnology Index Fund (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/FBT. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust NYSE® Arca® Biotechnology Index Fund | $26 | 0.53%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $1,108,229,996% |
| Total number of portfolio holdings | $31% |
| Portfolio turnover rate | $52% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| Alnylam Pharmaceuticals, Inc. | 5.2% |
| Corcept Therapeutics, Inc. | 4.4% |
| United Therapeutics Corp. | 4.3% |
| Halozyme Therapeutics, Inc. | 4.3% |
| Vertex Pharmaceuticals, Inc. | 3.8% |
| Biogen, Inc. | 3.7% |
| Amgen, Inc. | 3.7% |
| Regeneron Pharmaceuticals, Inc. | 3.7% |
| Natera, Inc. | 3.6% |
| Argenx SE, ADR | 3.6% |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/FBT to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
Source ICE Data Indices, LLC, is used with permission. “NYSE®” is a service/trade mark of ICE Data Indices, LLC or its affiliates. This trademark has been licensed, along with the NYSE® Arca® Biotechnology Index (the “Index”) for use by First Trust Portfolios L.P. in connection with the First Trust NYSE® Arca® Biotechnology Index Fund (the “Product”). Neither First Trust Portfolios L.P., First Trust Exchange-Traded Fund (the “Trust”) nor the Product, as applicable, is sponsored, endorsed, sold or promoted by ICE Data Indices, LLC, its affiliates or its Third Party Suppliers (“ICE Data and its Suppliers”). ICE Data and its Suppliers make no representations or warranties regarding the advisability of investing in securities generally, in the Product particularly, the Trust or the ability of the Index to track general market performance. Past performance of an Index is not an indicator of or a guarantee of future results.
ICE DATA AND ITS SUPPLIERS DISCLAIM ANY AND ALL WARRANTIES AND REPRESENTATIONS, EXPRESS AND/OR IMPLIED, INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, INCLUDING THE INDICES, INDEX DATA AND ANY INFORMATION INCLUDED IN, RELATED TO, OR DERIVED THEREFROM (“INDEX DATA”). ICE DATA AND ITS SUPPLIERS SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY WITH RESPECT TO THE ADEQUACY, ACCURACY, TIMELINESS OR COMPLETENESS OF THE INDICES AND THE INDEX DATA, WHICH ARE PROVIDED ON AN “AS IS” BASIS AND YOUR USE IS AT YOUR OWN RISK.
First Trust Dow Jones Internet Index Fund
FDN | NYSE ARCA, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust Dow Jones Internet Index Fund (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/FDN. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust Dow Jones Internet Index Fund | $26 | 0.49%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $6,023,664,877% |
| Total number of portfolio holdings | $43% |
| Portfolio turnover rate | $20% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| Amazon.com, Inc. | 10.1% |
| Meta Platforms, Inc., Class A | 9.4% |
| Netflix, Inc. | 6.5% |
| Alphabet, Inc., Class A | 5.2% |
| Salesforce, Inc. | 5.1% |
| Arista Networks, Inc. | 4.9% |
| Cisco Systems, Inc. | 4.5% |
| Booking Holdings, Inc. | 4.5% |
| Airbnb, Inc., Class A | 4.4% |
| Alphabet, Inc., Class C | 4.3% |
Any amount shown as 0.0% represents less than 0.1%.
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/FDN to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
Dow Jones Internet Composite IndexSM (“Index”) is a product of S&P Dow Jones Indices, LLC or its affiliates (“SPDJI”) and has been licensed for use by First Trust. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® 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(s) nor do they have any liability for any errors, omissions, or interruptions of the Index.
First Trust Capital Strength® ETF
FTCS | NASDAQ, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust Capital Strength® ETF (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/FTCS. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust Capital Strength® ETF | $27 | 0.52%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $8,576,789,996% |
| Total number of portfolio holdings | $50% |
| Portfolio turnover rate | $44% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| Apple, Inc. | 2.5% |
| Amphenol Corp., Class A | 2.4% |
| Costco Wholesale Corp. | 2.3% |
| TJX (The) Cos., Inc. | 2.3% |
| Regeneron Pharmaceuticals, Inc. | 2.3% |
| Walmart, Inc. | 2.2% |
| Motorola Solutions, Inc. | 2.2% |
| Moody’s Corp. | 2.2% |
| Microsoft Corp. | 2.2% |
| Colgate-Palmolive Co. | 2.2% |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/FTCS to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
Nasdaq® and The Capital StrengthTM Index (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.
First Trust Value Line®
Dividend Index Fund
FVD | NYSE ARCA, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust Value Line® Dividend Index Fund (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/FVD. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust Value Line® Dividend Index Fund | $31 | 0.61%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $9,202,015,806% |
| Total number of portfolio holdings | $204% |
| Portfolio turnover rate | $47% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| ONE Gas, Inc. | 0.5% |
| UnitedHealth Group, Inc. | 0.5% |
| Houlihan Lokey, Inc. | 0.5% |
| Commerce Bancshares, Inc. | 0.5% |
| Toyota Motor Corp., ADR | 0.5% |
| Infosys Ltd., ADR | 0.5% |
| Tootsie Roll Industries, Inc. | 0.5% |
| Juniper Networks, Inc. | 0.5% |
| McCormick & Co., Inc. | 0.5% |
| AT&T, Inc. | 0.5% |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/FVD to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
Value Line® and Value Line® Dividend Index are trademarks or registered trademarks of Value Line, Inc. (“Value Line”) and have been licensed for use for certain purposes by First Trust. The Fund is not sponsored, endorsed, recommended, sold or promoted by Value Line and Value Line makes no representation regarding the advisability of investing in products utilizing such strategy.
First Trust Growth StrengthTM ETF
FTGS | NASDAQ, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust Growth StrengthTM ETF (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/FTGS. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust Growth StrengthTM ETF | $32 | 0.60%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $481,245,598% |
| Total number of portfolio holdings | $51% |
| Portfolio turnover rate | $37% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| NVIDIA Corp. | 3.0% |
| Arista Networks, Inc. | 2.7% |
| Monolithic Power Systems, Inc. | 2.6% |
| Tesla, Inc. | 2.5% |
| Broadcom, Inc. | 2.5% |
| KLA Corp. | 2.5% |
| Applied Materials, Inc. | 2.3% |
| Amphenol Corp., Class A | 2.3% |
| Palo Alto Networks, Inc. | 2.3% |
| Deckers Outdoor Corp. | 2.3% |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/FTGS to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
Nasdaq® and The Growth StrengthTM Index (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.
First Trust Indxx Aerospace & Defense ETF
MISL | NYSE ARCA, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust Indxx Aerospace & Defense ETF (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/MISL. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust Indxx Aerospace & Defense ETF | $31 | 0.60%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $65,831,675% |
| Total number of portfolio holdings | $35% |
| Portfolio turnover rate | $10% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| Boeing (The) Co. | 8.1% |
| TransDigm Group, Inc. | 7.9% |
| Lockheed Martin Corp. | 7.8% |
| General Dynamics Corp. | 7.6% |
| RTX Corp. | 7.6% |
| Howmet Aerospace, Inc. | 4.6% |
| HEICO Corp. | 4.4% |
| Leidos Holdings, Inc. | 4.4% |
| L3Harris Technologies, Inc. | 4.2% |
| Woodward, Inc. | 3.6% |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/MISL to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
Indxx and Indxx US Aerospace & Defense Index (“Index”) are trademarks of Indxx, Inc. (“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.
First Trust Bloomberg
Inflation Sensitive Equity ETF
FTIF | NYSE ARCA, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust Bloomberg Inflation Sensitive Equity ETF (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/FTIF. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust Bloomberg Inflation Sensitive Equity ETF | $31 | 0.60%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $2,274,329% |
| Total number of portfolio holdings | $51% |
| Portfolio turnover rate | $27% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| Carlisle Cos., Inc. | 2.5% |
| Diamondback Energy, Inc. | 2.5% |
| Weatherford International PLC | 2.4% |
| Westinghouse Air Brake Technologies Corp. | 2.4% |
| Valero Energy Corp. | 2.3% |
| Permian Resources Corp. | 2.3% |
| Marathon Oil Corp. | 2.3% |
| Dover Corp. | 2.3% |
| Cummins, Inc. | 2.2% |
| Advanced Drainage Systems, Inc. | 2.2% |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/FTIF to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
“Bloomberg®” and Bloomberg Inflation Sensitive Equity Index licensed herein (the “Indices”) are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator of the Indices (collectively, “Bloomberg”) and have been licensed for use for certain purposes by First Trust Advisors L.P. (the “Licensee”). Bloomberg is not affiliated with the Licensee, and Bloomberg does not approve, endorse, review, or recommend the financial products referenced herein (the “Financial Products”). Bloomberg does not guarantee the timeliness, accurateness, or completeness of any data or information relating to the Indices or the Financial Products.
First Trust NASDAQ-100
Equal Weighted Index Fund
QQEW | NASDAQ, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust NASDAQ-100 Equal Weighted Index Fund (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/QQEW. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust NASDAQ-100 Equal Weighted Index Fund | $28 | 0.55%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $2,065,092,870% |
| Total number of portfolio holdings | $104% |
| Portfolio turnover rate | $9% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| Datadog, Inc., Class A | 1.1% |
| MongoDB, Inc. | 1.1% |
| Atlassian Corp., Class A | 1.1% |
| Tesla, Inc. | 1.1% |
| Zscaler, Inc. | 1.1% |
| Baker Hughes Co. | 1.1% |
| Palo Alto Networks, Inc. | 1.1% |
| Diamondback Energy, Inc. | 1.0% |
| Adobe, Inc. | 1.0% |
| Intuit, Inc. | 1.0% |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/QQEW to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
Nasdaq®, Nasdaq-100®, Nasdaq-100 Index®, and Nasdaq-100 Equal WeightedTM Index (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.
First Trust NASDAQ-100-Technology
Sector Index Fund
QTEC | NASDAQ, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust NASDAQ-100-Technology Sector Index Fund (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/QTEC. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust NASDAQ-100-Technology Sector Index Fund | $29 | 0.54%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $4,108,891,022% |
| Total number of portfolio holdings | $44% |
| Portfolio turnover rate | $11% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| Datadog, Inc., Class A | 2.6% |
| MongoDB, Inc. | 2.6% |
| Atlassian Corp., Class A | 2.6% |
| Zscaler, Inc. | 2.6% |
| Palo Alto Networks, Inc. | 2.5% |
| Adobe, Inc. | 2.5% |
| Intuit, Inc. | 2.5% |
| Fortinet, Inc. | 2.5% |
| Autodesk, Inc. | 2.4% |
| ARM Holdings PLC, ADR | 2.4% |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/QTEC to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
Nasdaq®, Nasdaq-100®, Nasdaq-100 Index®, and Nasdaq-100 Technology SectorTM Index (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.
First Trust NASDAQ-100 Ex-Technology
Sector Index Fund
QQXT | NASDAQ, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust NASDAQ-100 Ex-Technology Sector Index Fund (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/QQXT. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust NASDAQ-100 Ex-Technology Sector Index Fund | $30 | 0.60%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $132,129,950% |
| Total number of portfolio holdings | $62% |
| Portfolio turnover rate | $12% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| Tesla, Inc. | 1.8% |
| Baker Hughes Co. | 1.8% |
| Diamondback Energy, Inc. | 1.8% |
| Warner Bros. Discovery, Inc. | 1.8% |
| Biogen, Inc. | 1.8% |
| Charter Communications, Inc., Class A | 1.8% |
| Intuitive Surgical, Inc. | 1.8% |
| MercadoLibre, Inc. | 1.8% |
| Amazon.com, Inc. | 1.7% |
| Comcast Corp., Class A | 1.7% |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/QQXT to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
Nasdaq®, Nasdaq-100®, Nasdaq-100 Index®, and Nasdaq-100 Ex-Tech SectorTM Index (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.
First Trust NASDAQ® Clean Edge®
Green Energy Index Fund
QCLN | NASDAQ, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust NASDAQ® Clean Edge® Green Energy Index Fund (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/QCLN. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust NASDAQ® Clean Edge® Green Energy Index Fund | $25 | 0.56%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $692,976,171% |
| Total number of portfolio holdings | $58% |
| Portfolio turnover rate | $13% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| Goldman Sachs Financial Square Treasury Obligations Fund - Institutional Class | 10.2% |
| Tesla, Inc. | 8.8% |
| ON Semiconductor Corp. | 7.4% |
| First Solar, Inc. | 6.6% |
| Enphase Energy, Inc. | 6.1% |
| Albemarle Corp. | 5.0% |
| Rivian Automotive, Inc., Class A | 4.9% |
| Universal Display Corp. | 4.5% |
| Acuity Brands, Inc. | 3.4% |
| Brookfield Renewable Partners, L.P. | 3.2% |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/QCLN to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
Nasdaq®, Clean Edge®, and Nasdaq® Clean Edge® Green EnergyTM Index (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.
First Trust S&P REIT Index Fund
FRI | NYSE ARCA, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust S&P REIT Index Fund (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/FRI. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust S&P REIT Index Fund | $24 | 0.49%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $116,839,555% |
| Total number of portfolio holdings | $134% |
| Portfolio turnover rate | $3% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| Prologis, Inc. | 9.9% |
| Equinix, Inc. | 6.8% |
| Welltower, Inc. | 5.9% |
| Simon Property Group, Inc. | 4.7% |
| Digital Realty Trust, Inc. | 4.7% |
| Realty Income Corp. | 4.4% |
| Public Storage | 4.3% |
| Extra Space Storage, Inc. | 3.1% |
| VICI Properties, Inc. | 2.8% |
| AvalonBay Communities, Inc. | 2.8% |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/FRI to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
S&P United States REIT Index (“Index”) is a product of S&P Dow Jones Indices, LLC or its affiliates (“SPDJI”) and has been licensed for use by First Trust. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® 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(s) nor do they have any liability for any errors, omissions, or interruptions of the Index.
First Trust Water ETF
FIW | NYSE ARCA, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust Water ETF (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/FIW. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust Water ETF | $26 | 0.51%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $1,667,565,465% |
| Total number of portfolio holdings | $39% |
| Portfolio turnover rate | $10% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| Veralto Corp. | 4.2% |
| American Water Works Co., Inc. | 4.2% |
| Xylem, Inc. | 4.1% |
| Ecolab, Inc. | 4.1% |
| Roper Technologies, Inc. | 4.0% |
| Agilent Technologies, Inc. | 3.6% |
| Essential Utilities, Inc. | 3.6% |
| Ferguson PLC | 3.5% |
| AECOM | 3.3% |
| Tetra Tech, Inc. | 3.3% |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/FIW to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
First Trust Natural Gas ETF
FCG | NYSE ARCA, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust Natural Gas ETF (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/FCG. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust Natural Gas ETF | $30 | 0.58%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $410,826,364% |
| Total number of portfolio holdings | $45% |
| Portfolio turnover rate | $25% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| Western Midstream Partners, L.P. | 5.0% |
| Hess Midstream, L.P., Class A | 4.9% |
| EOG Resources, Inc. | 4.4% |
| ConocoPhillips | 4.4% |
| Occidental Petroleum Corp. | 4.3% |
| Diamondback Energy, Inc. | 4.2% |
| Devon Energy Corp. | 3.9% |
| APA Corp. | 3.6% |
| Coterra Energy, Inc. | 3.6% |
| EQT Corp. | 3.5% |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/FCG to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
First Trust NASDAQ®
ABA Community Bank Index Fund
QABA | NASDAQ, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust NASDAQ® ABA Community Bank Index Fund (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/QABA. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust NASDAQ® ABA Community Bank Index Fund | $29 | 0.60%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $57,521,244% |
| Total number of portfolio holdings | $128% |
| Portfolio turnover rate | $3% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| Commerce Bancshares, Inc. | 4.4% |
| Wintrust Financial Corp. | 3.7% |
| Bank OZK | 2.8% |
| United Bankshares, Inc. | 2.7% |
| First Financial Bankshares, Inc. | 2.6% |
| Hancock Whitney Corp. | 2.5% |
| UMB Financial Corp. | 2.5% |
| International Bancshares Corp. | 2.2% |
| TFS Financial Corp. | 2.2% |
| Ameris Bancorp | 2.1% |
Any amount shown as 0.0% represents less than 0.1%.
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/QABA to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
Nasdaq®, Nasdaq OMX®, OMX®, American Bankers Association®, ABA® and Nasdaq OMX® ABA Community BankTM Index (the “Index”) are registered trademarks and service marks of Nasdaq, Inc. and American Bankers Associations, 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.
First Trust Dividend StrengthTM ETF
FTDS | NASDAQ, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust Dividend StrengthTM ETF (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/FTDS. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust Dividend StrengthTM ETF | $36 | 0.70%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $21,808,115% |
| Total number of portfolio holdings | $51% |
| Portfolio turnover rate | $57% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| QUALCOMM, Inc. | 2.5% |
| Garmin Ltd. | 2.3% |
| Synovus Financial Corp. | 2.3% |
| Microchip Technology, Inc. | 2.2% |
| Equitable Holdings, Inc. | 2.2% |
| Stifel Financial Corp. | 2.2% |
| Skyworks Solutions, Inc. | 2.2% |
| Dick’s Sporting Goods, Inc. | 2.2% |
| Honeywell International, Inc. | 2.2% |
| Zions Bancorp N.A. | 2.2% |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/FTDS to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
Nasdaq® and The Dividend StrengthTM Index (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.
First Trust Dow 30 Equal Weight ETF
EDOW | NYSE ARCA, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust Dow 30 Equal Weight ETF (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/EDOW. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust Dow 30 Equal Weight ETF | $25 | 0.50%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $227,943,952% |
| Total number of portfolio holdings | $31% |
| Portfolio turnover rate | $12% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| Salesforce, Inc. | 3.7% |
| Amazon.com, Inc. | 3.5% |
| Amgen, Inc. | 3.5% |
| JPMorgan Chase & Co. | 3.4% |
| Cisco Systems, Inc. | 3.4% |
| Verizon Communications, Inc. | 3.4% |
| Caterpillar, Inc. | 3.4% |
| American Express Co. | 3.4% |
| Boeing (The) Co. | 3.4% |
| Chevron Corp. | 3.4% |
Any amount shown as 0.0% represents less than 0.1%.
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/EDOW to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
Dow Jones Industrial Average® Equal Weight Index (“Index”) is a product of S&P Dow Jones Indices, LLC or its affiliates (“SPDJI”) and has been licensed for use by First Trust. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® 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(s) nor do they have any liability for any errors, omissions, or interruptions of the Index.
First Trust Lunt U.S. Factor Rotation ETF
FCTR | CBOE BZX EXCHANGE, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust Lunt U.S. Factor Rotation ETF (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/FCTR. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust Lunt U.S. Factor Rotation ETF | $34 | 0.65%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $71,394,353% |
| Total number of portfolio holdings | $171% |
| Portfolio turnover rate | $220% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| Vertiv Holdings Co., Class A | 2.1% |
| NVIDIA Corp. | 1.6% |
| Coinbase Global, Inc., Class A | 1.6% |
| Vistra Corp. | 1.5% |
| Paychex, Inc. | 1.4% |
| Illinois Tool Works, Inc. | 1.3% |
| Brown & Brown, Inc. | 1.3% |
| Colgate-Palmolive Co. | 1.3% |
| Sysco Corp. | 1.2% |
| Procter & Gamble (The) Co. | 1.2% |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/FCTR to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
Lunt Capital Management, Inc. (“Lunt”) and Lunt Capital Large Cap Factor Rotation Index (“Lunt Index”) are trademarks of Lunt and have been licensed for use for certain purposes by First Trust. The First Trust Lunt U.S. Factor Rotation ETF is based on the Lunt Index and is not sponsored, endorsed, sold or promoted by Lunt, and Lunt makes no representation regarding the advisability of trading in such fund. Lunt has contracted with Nasdaq, Inc. to calculate and maintain the Lunt Index. The Fund is not sponsored, endorsed, sold or promoted by Nasdaq, Inc. or its affiliates (Nasdaq, with its affiliates, hereinafter referred to as the “Corporations”). The Corporations have not passed on the legality or suitability of, or the accuracy or adequacy of descriptions and disclosures relating to, the Fund. The Corporations make no representation or warranty, express or implied to the owners of the Fund or any member of the public regarding the advisability of investing in securities generally or in the Fund particularly, or the ability of the Lunt Index to track general stock performance.
First Trust S&P 500
Diversified Free Cash Flow ETF
FCFY | NYSE ARCA, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the First Trust S&P 500 Diversified Free Cash Flow ETF (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/FCFY. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| First Trust S&P 500 Diversified Free Cash Flow ETF | $30 | 0.60%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $1,129,211% |
| Total number of portfolio holdings | $101% |
| Portfolio turnover rate | $30% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The tables below show the investment makeup of the Fund, representing the percentage of total investments of the Fund.
| HP, Inc. | 3.7% |
| Skyworks Solutions, Inc. | 3.6% |
| Hewlett Packard Enterprise Co. | 3.5% |
| Warner Bros. Discovery, Inc. | 2.6% |
| Cisco Systems, Inc. | 2.6% |
| AT&T, Inc. | 2.5% |
| NetApp, Inc. | 2.4% |
| Synchrony Financial | 2.3% |
| QUALCOMM, Inc. | 2.1% |
| Electronic Arts, Inc. | 2.1% |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/FCFY to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
S&P 500® Sector-Neutral FCF Index (“Index”) is a product of S&P Dow Jones Indices, LLC or its affiliates (“SPDJI”) and has been licensed for use by First Trust. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® 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(s) nor do they have any liability for any errors, omissions, or interruptions of the Index.
FT Vest Gold Strategy Quarterly Buffer ETF
BGLD | CBOE BZX EXCHANGE, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the FT Vest Gold Strategy Quarterly Buffer ETF (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/BGLD. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| FT Vest Gold Strategy Quarterly Buffer ETF | $47 | 0.90%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $29,421,473% |
| Total number of portfolio holdings | $5% |
| Portfolio turnover rate | $0% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The table below shows the investment makeup of the Fund, representing the percentage of net assets of the Fund.
| U.S. Treasury Bills | 93.8% |
| Money Market Funds | 0.6% |
| Purchased Options | 6.0% |
| Written Options | (0.4%) |
| Net Other Assets and Liabilities | 0.0% |
| Total | 100.0% |
Any amount shown as 0.0% represents less than 0.1%.
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/BGLD to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
The Fund is not sponsored, endorsed, sold or promoted by SPDR® Gold Trust and World Gold Trust Services, LLC, (together with their affiliates hereinafter referred to as the “Corporations”). The Corporations have not passed on the legality or suitability of, or the accuracy or adequacy of, descriptions and disclosures relating to the Fund or the FLEX Options. The Corporations make no representations or warranties, express or implied, regarding the advisability of investing in the Fund or the FLEX Options or results to be obtained by the Fund or the FLEX Options, shareholders or any other person or entity from use of the Underlying ETF. The Corporations have no liability in connection with the management, administration, marketing or trading of the Fund or the FLEX Options.
FT Vest Gold Strategy Target Income ETF®
IGLD | CBOE BZX EXCHANGE, INC.
SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
This semi-annual shareholder report contains important information about the FT Vest Gold Strategy Target Income ETF® (the “Fund”) for the period of January 1, 2024 to June 30, 2024 (the “Period”). You can find additional information about the Fund at www.ftportfolios.com/fund-documents/etf/IGLD. You can also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS?
(Based on a hypothetical $10,000 investment)
| Fund | Costs of a $10,000 investment | Costs paid as a percentage
of a $10,000 investment |
| FT Vest Gold Strategy Target Income ETF® | $44 | 0.85%(1) |
KEY FUND STATISTICS (As of June 30, 2024)
| Fund net assets | $98,084,248% |
| Total number of portfolio holdings | $5% |
| Portfolio turnover rate | $0% |
WHAT DID THE FUND INVEST IN? (As of June 30, 2024)
The table below shows the investment makeup of the Fund, representing the percentage of net assets of the Fund.
| U.S. Treasury Bills | 128.5% |
| Money Market Funds | 0.1% |
| Purchased Options | 0.2% |
| Written Options | (29.9%) |
| Net Other Assets and Liabilities | 1.1% |
| Total | 100.0% |
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
Visit www.ftportfolios.com/fund-documents/etf/IGLD to view additional information about the Fund such as the prospectus, financial information, Fund holdings and proxy voting information. You may also request this information by contacting us at 1-800-621-1675 or info@ftportfolios.com.
OTHER INFORMATION
The Fund is not sponsored, endorsed, sold or promoted by SPDR® Gold Trust and World Gold Trust Services, LLC, (together with their affiliates hereinafter referred to as the “Corporations”). The Corporations have not passed on the legality or suitability of, or the accuracy or adequacy of, descriptions and disclosures relating to the Fund or the FLEX Options. The Corporations make no representations or warranties, express or implied, regarding the advisability of investing in the Fund or the FLEX Options or results to be obtained by the Fund or the FLEX Options, shareholders or any other person or entity from use of the Underlying ETF. The Corporations have no liability in connection with the management, administration, marketing or trading of the Fund or the FLEX Options.
(b) Not applicable.
Item 2. Code of Ethics.
The First Trust Exchange-Traded Fund (“Registrant”) has adopted a code of ethics that applies to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions (“Code of Ethics”). During the period covered by this Form N-CSR, there were no substantive amendments to the Code of Ethics and there were no waivers from the Code of Ethics granted to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.
A copy of the currently effective Code of Ethics will be filed with the Registrant’s annual Form N-CSR.
Item 3. Audit Committee Financial Expert.
Not applicable to semi-annual reports on Form N-CSR.
Item 4. Principal Accountant Fees and Services.
Not applicable to semi-annual reports on Form N-CSR.
Item 5. Audit Committee of Listed Registrants.
| (a) | Not applicable to semi-annual reports on Form N-CSR. |
| (b) | Not applicable to the Registrant. |
Item 6. Investments.
| (a) | The Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included in the Financial Statements and Other Information filed under Item 7 of this Form N-CSR. |
| (b) | Not applicable to the Registrant. |
Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies.
| (a) | Following is a copy of the semi-annual financial statements required, and for the periods specified, by Regulation S-X. |
Semi-Annual Financial
Statements and
Other Information |
For the Six Months Ended
June 30, 2024 |
First Trust Exchange-Traded Fund
First Trust Dow Jones Select MicroCap Index Fund (FDM) |
First Trust Morningstar Dividend Leaders Index Fund (FDL) |
First Trust US Equity Opportunities ETF (FPX) |
First Trust NYSE® Arca® Biotechnology Index Fund (FBT) |
First Trust Dow Jones Internet Index Fund (FDN) |
First Trust Capital Strength® ETF (FTCS) |
First Trust Value Line® Dividend Index Fund (FVD) |
First Trust Growth StrengthTM ETF (FTGS) |
First Trust Indxx Aerospace & Defense ETF (MISL) |
First Trust Bloomberg Inflation Sensitive Equity ETF (FTIF) |
First Trust Exchange-Traded Fund
Semi-Annual Financial Statements and Other Information
June 30, 2024
Performance and Risk Disclosure
There is no assurance that any series of First Trust Exchange-Traded Fund (the “Trust”) described in this report (each such series is referred to as a “Fund” and collectively, as the “Funds”) 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’s shares may therefore be less than what you paid for them. Accordingly, you can lose money by investing in a Fund.
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.
First Trust Advisors L.P., the Funds’ advisor, may also periodically provide additional information on Fund performance on each Fund’s webpage at www.ftportfolios.com.
This report contains information that may help you evaluate your investment. It includes details about each Fund and presents data that provides insight into each Fund’s performance and investment approach.
The material risks of investing in each Fund are spelled out in its prospectus, statement of additional information, and other Fund regulatory filings.
First Trust Dow Jones Select MicroCap Index Fund (FDM)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
| | |
|
| Aerospace & Defense — 2.0% | |
| | |
| National Presto Industries, Inc. | |
| | |
| Air Freight & Logistics — | |
| Radiant Logistics, Inc. (a) | |
| | |
| Amalgamated Financial Corp. | |
| | |
| | |
| Business First Bancshares, Inc. | |
| Capital City Bank Group, Inc. | |
| Coastal Financial Corp. (a) | |
| CrossFirst Bankshares, Inc. (a) | |
| Esquire Financial Holdings, Inc. | |
| | |
| | |
| | |
| Great Southern Bancorp, Inc. | |
| | |
| | |
| HomeTrust Bancshares, Inc. | |
| | |
| | |
| MainStreet Bancshares, Inc. | |
| | |
| MidWestOne Financial Group, Inc. | |
| | |
| | |
| Northeast Community Bancorp, Inc. | |
| | |
| | |
| | |
| Orange County Bancorp, Inc. | |
| | |
| | |
| South Plains Financial, Inc. | |
| Southern Missouri Bancorp, Inc. | |
| | |
| | |
| | |
| | |
| Cullinan Therapeutics, Inc. (a) | |
| Voyager Therapeutics, Inc. (a) | |
| | |
| | |
|
| | |
| Bridge Investment Group Holdings, Inc., Class A | |
| Diamond Hill Investment Group, Inc. | |
| Heritage Global, Inc. (a) | |
| | |
| | |
| | |
| Core Molding Technologies, Inc. (a) | |
| Intrepid Potash, Inc. (a) | |
| | |
| | |
| CECO Environmental Corp. (a) | |
| Liquidity Services, Inc. (a) | |
| | |
| | |
| | |
| | |
| | |
| | |
| Cambium Networks Corp. (a) | |
| | |
| Construction & Engineering | |
| Limbach Holdings, Inc. (a) | |
| | |
| | |
| | |
| Atlanticus Holdings Corp. (a) | |
| EZCORP, Inc., Class A (a) | |
| Regional Management Corp. | |
| | |
| | |
| | |
| Diversified Consumer Services | |
| | |
| Lincoln Educational Services Corp. (a) | |
| | |
| | |
| One Liberty Properties, Inc. | |
| Diversified Telecommunication | |
| | |
See Notes to Financial Statements
First Trust Dow Jones Select MicroCap Index Fund (FDM)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
COMMON STOCKS (Continued) |
| Electric Utilities — 0.5% | |
| Genie Energy Ltd., Class B | |
| Electrical Equipment — 3.4% | |
| | |
| | |
| | |
| | |
| Electronic Equipment, Instruments & Components | |
| | |
| Climb Global Solutions, Inc. | |
| Kimball Electronics, Inc. (a) | |
| | |
| Vishay Precision Group, Inc. (a) | |
| | |
| Energy Equipment & Services | |
| | |
| Forum Energy Technologies, Inc. (a) | |
| KLX Energy Services Holdings, Inc. (a) | |
| Mammoth Energy Services, Inc. (a) | |
| Ranger Energy Services, Inc. | |
| Solaris Oilfield Infrastructure, Inc., Class A | |
| TETRA Technologies, Inc. (a) | |
| | |
| | |
| Vivid Seats, Inc., Class A (a) | |
| Financial Services — 1.8% | |
| | |
| | |
| | |
| | |
| | |
| OraSure Technologies, Inc. (a) | |
| | |
| Community Health Systems, Inc. (a) | |
| Hotels, Restaurants & Leisure | |
| | |
| El Pollo Loco Holdings, Inc. (a) | |
| Inspired Entertainment, Inc. (a) | |
| | |
| | |
|
| Hotels, Restaurants & Leisure (Continued) | |
| ONE Group Hospitality (The), Inc. (a) | |
| | |
| RCI Hospitality Holdings, Inc. | |
| | |
| Household Durables — 0.4% | |
| | |
| | |
| | |
| Household Products — 1.1% | |
| Central Garden & Pet Co. (a) | |
| | |
| | |
| | |
| Ambac Financial Group, Inc. (a) | |
| Greenlight Capital Re Ltd., Class A (a) | |
| Kingsway Financial Services, Inc. (a) | |
| | |
| Interactive Media & Services | |
| | |
| | |
| Hackett Group (The), Inc. | |
| Information Services Group, Inc. | |
| | |
| | |
| Johnson Outdoors, Inc., Class A | |
| | |
| MasterCraft Boat Holdings, Inc. (a) | |
| | |
| | |
| | |
| Gencor Industries, Inc. (a) | |
| Mayville Engineering Co., Inc. (a) | |
| | |
| | |
| | |
| | |
| Genco Shipping & Trading Ltd. | |
| Pangaea Logistics Solutions Ltd. | |
| | |
See Notes to Financial Statements
First Trust Dow Jones Select MicroCap Index Fund (FDM)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
COMMON STOCKS (Continued) |
| | |
| Entravision Communications Corp., Class A | |
| Townsquare Media, Inc., Class A | |
| | |
| | |
| | |
| Haynes International, Inc. | |
| | |
| Ramaco Resources, Inc., Class A | |
| | |
| | |
| | |
| | |
| Oil, Gas & Consumable Fuels | |
| | |
| | |
| Centrus Energy Corp., Class A (a) | |
| Crescent Energy, Inc., Class A | |
| Evolution Petroleum Corp. | |
| | |
| | |
| Overseas Shipholding Group, Inc., Class A | |
| REX American Resources Corp. (a) | |
| | |
| | |
| | |
| | |
| | |
| Paper & Forest Products — | |
| Clearwater Paper Corp. (a) | |
| | |
| Assertio Holdings, Inc. (a) | |
| | |
| Phibro Animal Health Corp., Class A | |
| | |
| | |
| Professional Services — 3.5% | |
| Barrett Business Services, Inc. | |
| | |
| RCM Technologies, Inc. (a) | |
| | |
| | |
|
| | |
| RMR Group (The), Inc., Class A | |
| | |
| | |
| Semiconductors & Semiconductor Equipment | |
| ACM Research, Inc., Class A (a) | |
| | |
| | |
| | |
| | |
| | |
| | |
| Big 5 Sporting Goods Corp. | |
| Build-A-Bear Workshop, Inc. | |
| Haverty Furniture Cos., Inc. | |
| OneWater Marine, Inc., Class A (a) | |
| | |
| Technology Hardware, Storage | |
| CompoSecure, Inc., Class A | |
| | |
| | |
| | |
| DXP Enterprises, Inc. (a) | |
| Hudson Technologies, Inc. (a) | |
| Titan Machinery, Inc. (a) | |
| | |
| | |
| Artesian Resources Corp., Class A | |
| Consolidated Water Co., Ltd. | |
| | |
| Wireless Telecommunication | |
| | |
| | |
| | |
See Notes to Financial Statements
First Trust Dow Jones Select MicroCap Index Fund (FDM)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
MONEY MARKET FUNDS — 0.1% |
| Dreyfus Government Cash Management Fund, Institutional Shares - 5.19% (b) | |
| | |
|
|
| Total Investments — 100.0% | |
| | |
| Net Other Assets and Liabilities — (0.0)% | |
| | |
| Non-income producing security. |
| Rate shown reflects yield as of June 30, 2024. |
Abbreviations throughout the Portfolio of Investments: |
| – Real Estate Investment Trusts |
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| | | | |
| | | | |
| See Portfolio of Investments for industry breakout. |
See Notes to Financial Statements
First Trust Morningstar Dividend Leaders Index Fund (FDL)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
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|
| Air Freight & Logistics — | |
| United Parcel Service, Inc., Class B | |
| | |
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| Citizens Financial Group, Inc. | |
| Columbia Banking System, Inc. | |
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| | |
| First Interstate BancSystem, Inc., Class A | |
| Huntington Bancshares, Inc. | |
| | |
| PNC Financial Services Group (The), Inc. | |
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| Artisan Partners Asset Management, Inc., Class A | |
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| Janus Henderson Group PLC | |
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| T. Rowe Price Group, Inc. | |
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|
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| LyondellBasell Industries N.V., Class A | |
| Scotts Miracle-Gro (The) Co. | |
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| Diversified Telecommunication | |
| Verizon Communications, Inc. | |
| Electric Utilities — 10.1% | |
| | |
| | |
| American Electric Power Co., Inc. | |
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| Pinnacle West Capital Corp. | |
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| Portland General Electric Co. | |
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| Financial Services — 0.2% | |
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| New Jersey Resources Corp. | |
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See Notes to Financial Statements
First Trust Morningstar Dividend Leaders Index Fund (FDL)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
COMMON STOCKS (Continued) |
| Hotels, Restaurants & Leisure | |
| | |
| | |
| | |
| | |
| Household Durables — 0.3% | |
| | |
| Household Products — 1.6% | |
| | |
| | |
| | |
| | |
| Fidelity National Financial, Inc. | |
| First American Financial Corp. | |
| | |
| Prudential Financial, Inc. | |
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| | |
| International Business Machines Corp. | |
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| Stanley Black & Decker, Inc. | |
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| | |
| Interpublic Group of (The) Cos., Inc. | |
| Nexstar Media Group, Inc. | |
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| | |
| Northwestern Energy Group, Inc. | |
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| | |
| Oil, Gas & Consumable Fuels | |
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| | |
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|
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| Professional Services — 0.1% | |
| | |
| | |
| | |
| Textiles, Apparel & Luxury | |
| | |
| | |
| | |
| Philip Morris International, Inc. | |
| | |
| | |
| MSC Industrial Direct Co., Inc., Class A | |
| | |
| | |
MONEY MARKET FUNDS — 0.0% |
| Dreyfus Government Cash Management Fund, Institutional Shares - 5.19% (a) | |
| | |
|
|
| Total Investments — 99.7% | |
| | |
| Net Other Assets and Liabilities — 0.3% | |
| | |
| Rate shown reflects yield as of June 30, 2024. |
See Notes to Financial Statements
First Trust Morningstar Dividend Leaders Index Fund (FDL)Portfolio of Investments (Continued)June 30, 2024 (Unaudited)
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| | | | |
| | | | |
| See Portfolio of Investments for industry breakout. |
See Notes to Financial Statements
First Trust US Equity Opportunities ETF (FPX)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
| | |
|
| Aerospace & Defense — 1.3% | |
| | |
| | |
| | |
| | |
| Vita Coco (The) Co., Inc. (a) | |
| | |
| | |
| Dyne Therapeutics, Inc. (a) | |
| Keros Therapeutics, Inc. (a) | |
| Kymera Therapeutics, Inc. (a) | |
| Nuvalent, Inc., Class A (a) | |
| Regeneron Pharmaceuticals, Inc. (a) | |
| REVOLUTION Medicines, Inc. (a) | |
| Roivant Sciences Ltd. (a) | |
| United Therapeutics Corp. (a) | |
| | |
| | |
| | |
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| | |
| Hayward Holdings, Inc. (a) | |
| | |
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| AssetMark Financial Holdings, Inc. (a) | |
| | |
| | |
| Coinbase Global, Inc., Class A (a) | |
| Robinhood Markets, Inc., Class A (a) | |
| StepStone Group, Inc., Class A | |
| | |
| | |
| | |
| ACV Auctions, Inc., Class A (a) | |
| | |
| | |
| | |
| | |
| Diversified Consumer Services | |
| | |
| | |
|
| Diversified Telecommunication | |
| AST SpaceMobile, Inc. (a) (b) | |
| Electric Utilities — 3.8% | |
| Constellation Energy Corp. | |
| | |
| | |
| Electrical Equipment — 5.8% | |
| | |
| NEXTracker, Inc., Class A (a) | |
| Vertiv Holdings Co., Class A | |
| | |
| Electronic Equipment, Instruments & Components | |
| | |
| Insight Enterprises, Inc. (a) | |
| | |
| | |
| Energy Equipment & Services | |
| Kodiak Gas Services, Inc. | |
| | |
| Endeavor Group Holdings, Inc., Class A (b) | |
| ROBLOX Corp., Class A (a) | |
| | |
| Financial Services — 4.4% | |
| Corebridge Financial, Inc. | |
| | |
| Jackson Financial, Inc., Class A | |
| Mr. Cooper Group, Inc. (a) | |
| Rocket Cos., Inc., Class A (a) | |
| Shift4 Payments, Inc., Class A (a) | |
| | |
| | |
| | |
| GE HealthCare Technologies, Inc. | |
| | |
| PROCEPT BioRobotics Corp. (a) | |
| | |
| TransMedics Group, Inc. (a) | |
| | |
| | |
| | |
| Hims & Hers Health, Inc. (a) | |
See Notes to Financial Statements
First Trust US Equity Opportunities ETF (FPX)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
COMMON STOCKS (Continued) |
| Health Care Providers & Services (Continued) | |
| | |
| Tenet Healthcare Corp. (a) | |
| | |
| | |
| Doximity, Inc., Class A (a) | |
| Hotels, Restaurants & Leisure | |
| Airbnb, Inc., Class A (a) | |
| DoorDash, Inc., Class A (a) | |
| DraftKings, Inc., Class A (a) | |
| Dutch Bros, Inc., Class A (a) | |
| | |
| Sweetgreen, Inc., Class A (a) | |
| | |
| | |
| Fidelity National Financial, Inc. | |
| Oscar Health, Inc., Class A (a) | |
| Ryan Specialty Holdings, Inc. | |
| | |
| Interactive Media & Services | |
| Reddit, Inc., Class A (a) | |
| | |
| Cloudflare, Inc., Class A (a) | |
| Kyndryl Holdings, Inc. (a) | |
| Snowflake, Inc., Class A (a) | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Oil, Gas & Consumable Fuels | |
| | |
| | |
| | |
| Equitrans Midstream Corp. | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| Elanco Animal Health, Inc. (a) | |
| | |
| | |
| Professional Services — 0.9% | |
| | |
| UL Solutions, Inc., Class A | |
| | |
| | |
| Semiconductors & Semiconductor Equipment | |
| Credo Technology Group Holding Ltd. (a) | |
| | |
| | |
| | |
| AppLovin Corp., Class A (a) | |
| Bentley Systems, Inc., Class B | |
| CCC Intelligent Solutions Holdings, Inc. (a) | |
| Crowdstrike Holdings, Inc., Class A (a) | |
| Informatica, Inc., Class A (a) | |
| Palantir Technologies, Inc., Class A (a) | |
| Rubrik, Inc., Class A (a) | |
| Samsara, Inc., Class A (a) | |
| Vertex, Inc., Class A (a) | |
| | |
| | |
| | |
| Technology Hardware, Storage | |
| Hewlett Packard Enterprise Co. | |
| | |
| Core & Main, Inc., Class A (a) | |
| | |
| | |
MONEY MARKET FUNDS — 0.2% |
| Dreyfus Government Cash Management Fund, Institutional Shares - 5.19% (c) | |
| | |
See Notes to Financial Statements
First Trust US Equity Opportunities ETF (FPX)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
REPURCHASE AGREEMENTS — 0.2% |
| Bank of America Corp., 5.31% (c), dated 06/28/24, due 07/01/24, with a maturity value of $383,922. Collateralized by U.S. Treasury Securities, interest rates of 0.00% to 4.63%, due 08/15/24 to 11/15/47. The value of the collateral including accrued interest is $391,427. (d) | |
| Mizuho Financial Group, Inc., 5.32% (c), dated 06/28/24, due 07/01/24, with a maturity value of $1,000,443. Collateralized by U.S. Treasury Securities, interest rates of 0.50% to 5.00%, due 07/31/24 to 09/30/29. The value of the collateral including accrued interest is $1,020,000. (d) | |
| Total Repurchase Agreements | |
| | |
|
|
| Total Investments — 100.2% | |
| | |
| Net Other Assets and Liabilities — (0.2)% | |
| | |
| Non-income producing security. |
| All or a portion of this security is on loan (see Note 2D - Securities Lending in the Notes to Financial Statements). The remaining contractual maturity of all of the securities lending transactions is overnight and continuous. The aggregate value of such securities, including those sold and pending settlement, is $1,333,262 and the total value of the collateral held by the Fund is $1,383,752. |
| Rate shown reflects yield as of June 30, 2024. |
| This security serves as collateral for securities on loan. |
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| | | | |
| | | | |
| | | | |
| See Portfolio of Investments for industry 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) | |
| |
| |
| 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. |
| At June 30, 2024, 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
First Trust US Equity Opportunities ETF (FPX)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) The Fund’s investments in repurchase agreements were all subject to an enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis were as follows:
|
Total gross amount presented on the Statements of Assets and Liabilities(3) | |
| |
| |
| The amount is included in “Investments, at value” on the Statements of Assets and Liabilities. |
| At June 30, 2024, the value of the collateral received from each seller exceeded the value of the repurchase agreements. |
See Notes to Financial Statements
First Trust NYSE® Arca® Biotechnology Index Fund (FBT)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
| | |
|
| | |
| ACADIA Pharmaceuticals, Inc. (a) | |
| | |
| Alnylam Pharmaceuticals, Inc. (a) | |
| | |
| | |
| Beam Therapeutics, Inc. (a) | |
| | |
| | |
| BioMarin Pharmaceutical, Inc. (a) | |
| | |
| Catalyst Pharmaceuticals, Inc. (a) | |
| | |
| | |
| | |
| | |
| Halozyme Therapeutics, Inc. (a) | |
| | |
| | |
| | |
| Neurocrine Biosciences, Inc. (a) | |
| Regeneron Pharmaceuticals, Inc. (a) | |
| United Therapeutics Corp. (a) | |
| Vertex Pharmaceuticals, Inc. (a) | |
| | |
| Life Sciences Tools & Services | |
| | |
| | |
| Mettler-Toledo International, Inc. (a) | |
| | |
| | |
| | |
| | |
| Corcept Therapeutics, Inc. (a) | |
| Intra-Cellular Therapies, Inc. (a) | |
| | |
| | |
| | |
| | |
MONEY MARKET FUNDS — 0.1% |
| Dreyfus Government Cash Management Fund, Institutional Shares - 5.19% (b) | |
| | |
|
|
| Total Investments — 100.1% | |
| | |
| Net Other Assets and Liabilities — (0.1)% | |
| | |
| Non-income producing security. |
| Rate shown reflects yield as of June 30, 2024. |
Abbreviations throughout the Portfolio of Investments: |
| – American Depositary Receipt |
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| | | | |
| | | | |
| See Portfolio of Investments for industry breakout. |
See Notes to Financial Statements
First Trust Dow Jones Internet Index Fund (FDN)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
| | |
|
| | |
| | |
| | |
| | |
| | |
| Arista Networks, Inc. (a) | |
| | |
| | |
| | |
| | |
| | |
| | |
| ROBLOX Corp., Class A (a) | |
| | |
| Financial Services — 3.7% | |
| PayPal Holdings, Inc. (a) | |
| | |
| | |
| Veeva Systems, Inc., Class A (a) | |
| | |
| Hotels, Restaurants & Leisure | |
| Airbnb, Inc., Class A (a) | |
| | |
| DoorDash, Inc., Class A (a) | |
| DraftKings, Inc., Class A (a) | |
| | |
| Interactive Media & Services | |
| | |
| | |
| Meta Platforms, Inc., Class A | |
| Pinterest, Inc., Class A (a) | |
| | |
| ZoomInfo Technologies, Inc. (a) | |
| | |
| | |
| Akamai Technologies, Inc. (a) | |
| Cloudflare, Inc., Class A (a) | |
| GoDaddy, Inc., Class A (a) | |
| | |
| Snowflake, Inc., Class A (a) | |
| | |
| Professional Services — 0.6% | |
| | |
| | |
| Atlassian Corp., Class A (a) | |
| | |
|
| | |
| | |
| Confluent, Inc., Class A (a) | |
| Datadog, Inc., Class A (a) | |
| | |
| Dropbox, Inc., Class A (a) | |
| | |
| Marathon Digital Holdings, Inc. (a) (b) | |
| Nutanix, Inc., Class A (a) | |
| | |
| Smartsheet, Inc., Class A (a) | |
| Workday, Inc., Class A (a) | |
| Zoom Video Communications, Inc., Class A (a) | |
| | |
| | |
| | |
| | |
| | |
MONEY MARKET FUNDS — 0.0% |
| Morgan Stanley Institutional Liquidity Funds - Treasury Portfolio - Institutional Class - 5.14% (c) | |
| | |
| | |
REPURCHASE AGREEMENTS — 0.0% |
| Mizuho Financial Group, Inc., 5.32% (c), dated 06/28/24, due 07/01/24, with a maturity value of $120,338. Collateralized by U.S. Treasury Securities, interest rates of 0.50% to 5.00%, due 07/31/24 to 09/30/29. The value of the collateral including accrued interest is $122,691. (d) | |
| | |
|
|
| Total Investments — 100.0% | |
| | |
| Net Other Assets and Liabilities — (0.0)% | |
| | |
See Notes to Financial Statements
First Trust Dow Jones Internet Index Fund (FDN)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | Non-income producing security. |
| All or a portion of this security is on loan (see Note 2D - Securities Lending in the Notes to Financial Statements). The remaining contractual maturity of all of the securities lending transactions is overnight and continuous. The aggregate value of such securities, including those sold and pending settlement, is $117,909 and the total value of the collateral held by the Fund is $120,285. |
| Rate shown reflects yield as of June 30, 2024. |
| This security serves as collateral for securities on loan. |
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| | | | |
| | | | |
| | | | |
| See Portfolio of Investments for industry 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) | |
| |
| |
| 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. |
| At June 30, 2024, 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. |
The Fund’s investments in repurchase agreements were all subject to an enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis were as follows:
|
Total gross amount presented on the Statements of Assets and Liabilities(3) | |
| |
| |
| The amount is included in “Investments, at value” on the Statements of Assets and Liabilities. |
| At June 30, 2024, the value of the collateral received from each seller exceeded the value of the repurchase agreements. |
See Notes to Financial Statements
First Trust Capital Strength® ETF (FTCS)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
| | |
|
| Aerospace & Defense — 3.9% | |
| | |
| | |
| | |
| | |
| | |
| Monster Beverage Corp. (a) | |
| | |
| | |
| | |
| | |
| Regeneron Pharmaceuticals, Inc. (a) | |
| | |
| | |
| Ameriprise Financial, Inc. | |
| | |
| Raymond James Financial, Inc. | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Martin Marietta Materials, Inc. | |
| Consumer Staples Distribution | |
| | |
| | |
| | |
| | |
| Packaging Corp. of America | |
| | |
| | |
| Electronic Equipment, Instruments & Components | |
| | |
| | |
|
| Financial Services — 3.8% | |
| Mastercard, Inc., Class A | |
| | |
| | |
| | |
| Mondelez International, Inc., Class A | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Household Products — 6.3% | |
| | |
| | |
| Procter & Gamble (The) Co. | |
| | |
| Industrial Conglomerates — | |
| Honeywell International, Inc. | |
| | |
| | |
| Marsh & McLennan Cos., Inc. | |
| | |
| | |
| | |
| Cognizant Technology Solutions Corp., Class A | |
| | |
| Illinois Tool Works, Inc. | |
| | |
| | |
| Oil, Gas & Consumable Fuels | |
| | |
| | |
| | |
See Notes to Financial Statements
First Trust Capital Strength® ETF (FTCS)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
COMMON STOCKS (Continued) |
| Professional Services — 3.8% | |
| Automatic Data Processing, Inc. | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Technology Hardware, Storage | |
| | |
|
|
| Total Investments — 99.9% | |
| | |
| Net Other Assets and Liabilities — 0.1% | |
| | |
| Non-income producing security. |
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| See Portfolio of Investments for industry breakout. |
See Notes to Financial Statements
First Trust Value Line® Dividend Index Fund (FVD)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
| | |
|
| Aerospace & Defense — 3.0% | |
| | |
| Huntington Ingalls Industries, Inc. | |
| L3Harris Technologies, Inc. | |
| | |
| | |
| | |
| | |
| Air Freight & Logistics — | |
| C.H. Robinson Worldwide, Inc. | |
| United Parcel Service, Inc., Class B | |
| | |
| | |
| | |
| | |
| Honda Motor Co., Ltd., ADR | |
| | |
| | |
| | |
| | |
| Bank of Nova Scotia (The) | |
| Canadian Imperial Bank of Commerce | |
| Commerce Bancshares, Inc. | |
| | |
| | |
| Toronto-Dominion (The) Bank | |
| | |
| | |
| Brown-Forman Corp., Class B | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Johnson Controls International PLC | |
| | |
| | |
|
| | |
| Bank of New York Mellon (The) Corp. | |
| | |
| | |
| Goldman Sachs Group (The), Inc. | |
| | |
| Intercontinental Exchange, Inc. | |
| | |
| | |
| T. Rowe Price Group, Inc. | |
| | |
| | |
| Air Products and Chemicals, Inc. | |
| | |
| | |
| Sensient Technologies Corp. | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Consumer Staples Distribution | |
| | |
| | |
| | |
| Packaging Corp. of America | |
| | |
| | |
| | |
| | |
| | |
| Diversified Telecommunication | |
| | |
| | |
| | |
| Verizon Communications, Inc. | |
| | |
| Electric Utilities — 6.9% | |
| | |
See Notes to Financial Statements
First Trust Value Line® Dividend Index Fund (FVD)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
COMMON STOCKS (Continued) |
| Electric Utilities (Continued) | |
| | |
| American Electric Power Co., Inc. | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Electrical Equipment — 1.0% | |
| | |
| | |
| | |
| Electronic Equipment, Instruments & Components | |
| | |
| Financial Services — 0.5% | |
| Jack Henry & Associates, Inc. | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Mondelez International, Inc., Class A | |
| Tootsie Roll Industries, Inc. | |
| | |
| | |
| | |
| Chesapeake Utilities Corp. | |
| | |
| New Jersey Resources Corp. | |
| Northwest Natural Holding Co. | |
| | |
|
| Gas Utilities (Continued) | |
| | |
| Southwest Gas Holdings, Inc. | |
| | |
| | |
| | |
| Canadian National Railway Co. | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Baxter International, Inc. | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Hotels, Restaurants & Leisure | |
| | |
| | |
| | |
| | |
| Household Durables — 0.5% | |
| | |
| Household Products — 2.9% | |
| | |
| | |
| | |
| Procter & Gamble (The) Co. | |
| Reynolds Consumer Products, Inc. | |
| | |
| | |
| Industrial Conglomerates — | |
| | |
| Honeywell International, Inc. | |
| | |
| | |
| | |
See Notes to Financial Statements
First Trust Value Line® Dividend Index Fund (FVD)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
COMMON STOCKS (Continued) |
| | |
| | |
| | |
| | |
| | |
| Erie Indemnity Co., Class A | |
| Hanover Insurance Group (The), Inc. | |
| Marsh & McLennan Cos., Inc. | |
| Selective Insurance Group, Inc. | |
| | |
| Travelers (The) Cos., Inc. | |
| | |
| | |
| | |
| | |
| | |
| Cognizant Technology Solutions Corp., Class A | |
| | |
| International Business Machines Corp. | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Illinois Tool Works, Inc. | |
| Lincoln Electric Holdings, Inc. | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Consolidated Edison, Inc. | |
| | |
| | |
| Public Service Enterprise Group, Inc. | |
| | |
| | |
| | |
| | |
|
| Oil, Gas & Consumable Fuels | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Professional Services — 3.9% | |
| Automatic Data Processing, Inc. | |
| Booz Allen Hamilton Holding Corp. | |
| Broadridge Financial Solutions, Inc. | |
| | |
| | |
| | |
| | |
| | |
| | |
| Semiconductors & Semiconductor Equipment | |
| | |
| | |
| | |
| | |
| Dolby Laboratories, Inc., Class A | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
See Notes to Financial Statements
First Trust Value Line® Dividend Index Fund (FVD)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
COMMON STOCKS (Continued) |
| Textiles, Apparel & Luxury | |
| | |
| | |
| | |
| British American Tobacco PLC, ADR | |
| Philip Morris International, Inc. | |
| | |
| | |
| | |
| | |
| | |
| MSC Industrial Direct Co., Inc., Class A | |
| | |
| | |
| | |
| American States Water Co. | |
| California Water Service Group | |
| Essential Utilities, Inc. | |
| | |
| Wireless Telecommunication | |
| America Movil S.A.B. de C.V., ADR | |
| Rogers Communications, Inc., Class B | |
| | |
| | |
| | |
| | |
MONEY MARKET FUNDS — 0.1% |
| Dreyfus Government Cash Management Fund, Institutional Shares - 5.19% (a) | |
| | |
|
|
| Total Investments — 99.9% | |
| | |
| Net Other Assets and Liabilities — 0.1% | |
| | |
| Rate shown reflects yield as of June 30, 2024. |
Abbreviations throughout the Portfolio of Investments: |
| – American Depositary Receipt |
| – Real Estate Investment Trusts |
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| | | | |
| | | | |
| See Portfolio of Investments for industry breakout. |
See Notes to Financial Statements
First Trust Growth StrengthTM ETF (FTGS)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
| | |
|
| | |
| | |
| | |
| Regeneron Pharmaceuticals, Inc. (a) | |
| | |
| | |
| | |
| Ameriprise Financial, Inc. | |
| | |
| | |
| | |
| CF Industries Holdings, Inc. | |
| | |
| | |
| | |
| Arista Networks, Inc. (a) | |
| | |
| Martin Marietta Materials, Inc. | |
| | |
| | |
| Electronic Equipment, Instruments & Components | |
| | |
| | |
| | |
| Energy Equipment & Services | |
| | |
| | |
| | |
| | |
| | |
| Financial Services — 7.4% | |
| Apollo Global Management, Inc. | |
| | |
| Mastercard, Inc., Class A | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| Hotels, Restaurants & Leisure | |
| Chipotle Mexican Grill, Inc. (a) | |
| Household Durables — 3.7% | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Interactive Media & Services | |
| | |
| Meta Platforms, Inc., Class A | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Oil, Gas & Consumable Fuels | |
| | |
| | |
| | |
| Semiconductors & Semiconductor Equipment | |
| | |
| | |
| | |
| | |
| Monolithic Power Systems, Inc. | |
| | |
| | |
| | |
| Cadence Design Systems, Inc. (a) | |
| | |
| Palo Alto Networks, Inc. (a) | |
| | |
See Notes to Financial Statements
First Trust Growth StrengthTM ETF (FTGS)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
COMMON STOCKS (Continued) |
| | |
| | |
| Workday, Inc., Class A (a) | |
| | |
| | |
| | |
| Textiles, Apparel & Luxury | |
| Deckers Outdoor Corp. (a) | |
| | |
| | |
| | |
| | |
MONEY MARKET FUNDS — 0.1% |
| Dreyfus Government Cash Management Fund, Institutional Shares - 5.19% (b) | |
| | |
|
|
| Total Investments — 100.0% | |
| | |
| Net Other Assets and Liabilities — (0.0)% | |
| | |
| Non-income producing security. |
| Rate shown reflects yield as of June 30, 2024. |
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| | | | |
| | | | |
| See Portfolio of Investments for industry breakout. |
See Notes to Financial Statements
First Trust Indxx Aerospace & Defense ETF (MISL)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
| | |
|
| Aerospace & Defense — 83.2% | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Huntington Ingalls Industries, Inc. | |
| Intuitive Machines, Inc. (a) | |
| Kratos Defense & Security Solutions, Inc. (a) | |
| L3Harris Technologies, Inc. | |
| | |
| | |
| Mercury Systems, Inc. (a) | |
| | |
| National Presto Industries, Inc. | |
| | |
| | |
| | |
| Spirit AeroSystems Holdings, Inc., Class A (a) | |
| | |
| | |
| | |
| Virgin Galactic Holdings, Inc. (a) | |
| | |
| | |
| Diversified Telecommunication | |
| AST SpaceMobile, Inc. (a) | |
| Professional Services — 15.7% | |
| CACI International, Inc., Class A (a) | |
| | |
| | |
| | |
| Science Applications International Corp. | |
| | |
| | |
| | |
| | |
MONEY MARKET FUNDS — 0.1% |
| Dreyfus Government Cash Management Fund, Institutional Shares - 5.19% (b) | |
| | |
|
|
| Total Investments — 100.0% | |
| | |
| Net Other Assets and Liabilities — (0.0)% | |
| | |
| Non-income producing security. |
| Rate shown reflects yield as of June 30, 2024. |
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| | | | |
| | | | |
| See Portfolio of Investments for industry breakout. |
See Notes to Financial Statements
First Trust Bloomberg Inflation Sensitive Equity ETF (FTIF)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
| | |
|
| Aerospace & Defense — 4.1% | |
| | |
| | |
| | |
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| Advanced Drainage Systems, Inc. | |
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| CF Industries Holdings, Inc. | |
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| LyondellBasell Industries N.V., Class A | |
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| Packaging Corp. of America | |
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| Electrical Equipment — 1.7% | |
| Rockwell Automation, Inc. | |
| Electronic Equipment, Instruments & Components | |
| Keysight Technologies, Inc. (a) | |
| Energy Equipment & Services | |
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| Patterson-UTI Energy, Inc. | |
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| Weatherford International PLC (a) | |
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| Hotel & Resort REITs — 3.5% | |
| Host Hotels & Resorts, Inc. | |
| Ryman Hospitality Properties, Inc. | |
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| Industrial Conglomerates — | |
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| Westinghouse Air Brake Technologies Corp. | |
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| Cleveland-Cliffs, Inc. (a) | |
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| Oil, Gas & Consumable Fuels | |
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| PBF Energy, Inc., Class A | |
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| Southwestern Energy Co. (a) | |
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| Essex Property Trust, Inc. | |
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| Simon Property Group, Inc. | |
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| Gaming and Leisure Properties, Inc. | |
| Lamar Advertising Co., Class A | |
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See Notes to Financial Statements
First Trust Bloomberg Inflation Sensitive Equity ETF (FTIF)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
MONEY MARKET FUNDS — 0.2% |
| Dreyfus Government Cash Management Fund, Institutional Shares - 5.19% (b) | |
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| Total Investments — 99.9% | |
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| Net Other Assets and Liabilities — 0.1% | |
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| Non-income producing security. |
| Rate shown reflects yield as of June 30, 2024. |
Abbreviations throughout the Portfolio of Investments: |
| – Real Estate Investment Trusts |
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
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| See Portfolio of Investments for industry breakout. |
See Notes to Financial Statements
First Trust Exchange-Traded FundStatements of Assets and Liabilities
June 30, 2024 (Unaudited)
| First Trust Dow Jones Select MicroCap Index Fund
(FDM) | First Trust Morningstar Dividend Leaders Index Fund
(FDL) | First Trust US Equity Opportunities ETF
(FPX) | First Trust NYSE® Arca® Biotechnology Index Fund
(FBT) |
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Investment securities sold | | | | |
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Securities lending income | | | | |
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Investment securities purchased | | | | |
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Shareholder reporting fees | | | | |
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Collateral for securities on loan | | | | |
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Accumulated distributable earnings (loss) | | | | |
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NET ASSET VALUE, per share | | | | |
Number of shares outstanding (unlimited number of shares authorized, par value $0.01 per share) | | | | |
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Securities on loan, at value | | | | |
See Notes to Financial Statements
First Trust Dow Jones Internet Index Fund
(FDN) | First Trust Capital Strength® ETF
(FTCS) | First Trust Value Line® Dividend Index Fund
(FVD) | First Trust Growth StrengthTM ETF
(FTGS) | First Trust Indxx Aerospace & Defense ETF
(MISL) | First Trust Bloomberg Inflation Sensitive Equity ETF
(FTIF) |
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See Notes to Financial Statements
First Trust Exchange-Traded FundStatements of Operations
For the Six Months Ended June 30, 2024 (Unaudited)
| First Trust Dow Jones Select MicroCap Index Fund
(FDM) | First Trust Morningstar Dividend Leaders Index Fund
(FDL) | First Trust US Equity Opportunities ETF
(FPX) |
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Securities lending income (net of fees) | | | |
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Accounting and administration fees | | | |
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Shareholder reporting fees | | | |
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Trustees’ fees and expenses | | | |
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Less fees waived by the investment advisor | | | |
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NET INVESTMENT INCOME (LOSS) | | | |
|
NET REALIZED AND UNREALIZED GAIN (LOSS): | | | |
Net realized gain (loss) on: | | | |
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Foreign currency transactions | | | |
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Net change in unrealized appreciation (depreciation) on: | | | |
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Foreign currency translation | | | |
Net change in unrealized appreciation (depreciation) | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | | |
| Fund is subject to a unitary fee (see Note 3 in the Notes to Financial Statements). |
See Notes to Financial Statements
First Trust NYSE® Arca® Biotechnology Index Fund
(FBT) | First Trust Dow Jones Internet Index Fund
(FDN) | First Trust Capital Strength® ETF
(FTCS) | First Trust Value Line® Dividend Index Fund
(FVD) | First Trust Growth StrengthTM ETF
(FTGS) |
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See Notes to Financial Statements
First Trust Exchange-Traded FundStatements of Operations (Continued)
For the Six Months Ended June 30, 2024 (Unaudited)
| First Trust Indxx Aerospace & Defense ETF
(MISL) | First Trust Bloomberg Inflation Sensitive Equity ETF
(FTIF) |
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Securities lending income (net of fees) | | |
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Accounting and administration fees | | |
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Shareholder reporting fees | | |
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Trustees’ fees and expenses | | |
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Less fees waived by the investment advisor | | |
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NET INVESTMENT INCOME (LOSS) | | |
|
NET REALIZED AND UNREALIZED GAIN (LOSS): | | |
Net realized gain (loss) on: | | |
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Foreign currency transactions | | |
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Net change in unrealized appreciation (depreciation) on: | | |
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Foreign currency translation | | |
Net change in unrealized appreciation (depreciation) | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | |
| Fund is subject to a unitary fee (see Note 3 in the Notes to Financial Statements). |
See Notes to Financial Statements
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First Trust Exchange-Traded FundStatements of Changes in Net Assets
| First Trust Dow Jones Select MicroCap Index Fund (FDM) | First Trust Morningstar Dividend Leaders Index Fund (FDL) |
| Six Months
Ended
6/30/2024 (Unaudited) | | Six Months
Ended
6/30/2024 (Unaudited) | |
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Net investment income (loss) | | | | |
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Net change in unrealized appreciation (depreciation) | | | | |
Net increase (decrease) in net assets resulting from operations | | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS FROM: | | | | |
| | | | |
|
SHAREHOLDER TRANSACTIONS: | | | | |
Proceeds from shares sold | | | | |
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Net increase (decrease) in net assets resulting from shareholder transactions | | | | |
Total increase (decrease) in net assets | | | | |
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CHANGES IN SHARES OUTSTANDING: | | | | |
Shares outstanding, beginning of period | | | | |
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Shares outstanding, end of period | | | | |
See Notes to Financial Statements
First Trust US Equity Opportunities ETF (FPX) | First Trust NYSE® Arca® Biotechnology Index Fund (FBT) | First Trust Dow Jones Internet Index Fund (FDN) |
Six Months
Ended
6/30/2024 (Unaudited) | | Six Months
Ended
6/30/2024 (Unaudited) | | Six Months
Ended
6/30/2024 (Unaudited) | |
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See Notes to Financial Statements
First Trust Exchange-Traded FundStatements of Changes in Net Assets (Continued)
| First Trust Capital Strength® ETF (FTCS) | First Trust Value Line® Dividend Index Fund (FVD) |
| Six Months
Ended
6/30/2024 (Unaudited) | | Six Months
Ended
6/30/2024 (Unaudited) | |
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Net investment income (loss) | | | | |
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Net change in unrealized appreciation (depreciation) | | | | |
Net increase (decrease) in net assets resulting from operations | | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS FROM: | | | | |
| | | | |
|
SHAREHOLDER TRANSACTIONS: | | | | |
Proceeds from shares sold | | | | |
| | | | |
Net increase (decrease) in net assets resulting from shareholder transactions | | | | |
Total increase (decrease) in net assets | | | | |
|
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CHANGES IN SHARES OUTSTANDING: | | | | |
Shares outstanding, beginning of period | | | | |
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Shares outstanding, end of period | | | | |
| Inception date is March 13, 2023, which is consistent with the commencement of investment operations and is the date the initial creation units were established. |
See Notes to Financial Statements
First Trust Growth StrengthTM ETF (FTGS) | First Trust Indxx Aerospace & Defense ETF (MISL) | First Trust Bloomberg Inflation Sensitive Equity ETF (FTIF) |
Six Months
Ended
6/30/2024 (Unaudited) | | Six Months
Ended
6/30/2024 (Unaudited) | | Six Months
Ended
6/30/2024 (Unaudited) | Period
Ended
12/31/2023 (a) |
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See Notes to Financial Statements
First Trust Exchange-Traded FundFinancial Highlights
For a share outstanding throughout each period First Trust Dow Jones Select MicroCap Index Fund (FDM)
| Six Months
Ended
6/30/2024
(Unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
Income from investment operations: | | | | | | |
Net investment income (loss) | | | | | | |
Net realized and unrealized gain (loss) | | | | | | |
Total from investment operations | | | | | | |
Distributions paid to shareholders from: | | | | | | |
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Net asset value, end of period | | | | | | |
| | | | | | |
|
Ratios to average net assets/supplemental data: | | | | | | |
Net assets, end of period (in 000’s) | | | | | | |
Ratio of total expenses to average net assets | | | | | | |
Ratio of net expenses to average net assets | | | | | | |
Ratio of net investment income (loss) to average net assets | | | | | | |
Portfolio turnover rate (d) | | | | | | |
| Based on average shares outstanding. |
| 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. |
| |
| 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
First Trust Exchange-Traded FundFinancial Highlights (Continued)
For a share outstanding throughout each period First Trust Morningstar Dividend Leaders Index Fund (FDL)
| Six Months
Ended
6/30/2024
(Unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
Income from investment operations: | | | | | | |
Net investment income (loss) | | | | | | |
Net realized and unrealized gain (loss) | | | | | | |
Total from investment operations | | | | | | |
Distributions paid to shareholders from: | | | | | | |
| | | | | | |
Net asset value, end of period | | | | | | |
| | | | | | |
|
Ratios to average net assets/supplemental data: | | | | | | |
Net assets, end of period (in 000’s) | | | | | | |
Ratio of total expenses to average net assets | | | | | | |
Ratio of net expenses to average net assets | | | | | | |
Ratio of net investment income (loss) to average net assets | | | | | | |
Portfolio turnover rate (d) | | | | | | |
| Based on average shares outstanding. |
| 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. |
| |
| 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
First Trust Exchange-Traded FundFinancial Highlights (Continued)
For a share outstanding throughout each period First Trust US Equity Opportunities ETF (FPX)
| Six Months
Ended
6/30/2024
(Unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
Income from investment operations: | | | | | | |
Net investment income (loss) | | | | | | |
Net realized and unrealized gain (loss) | | | | | | |
Total from investment operations | | | | | | |
Distributions paid to shareholders from: | | | | | | |
| | | | | | |
Net asset value, end of period | | | | | | |
| | | | | | |
|
Ratios to average net assets/supplemental data: | | | | | | |
Net assets, end of period (in 000’s) | | | | | | |
Ratio of total expenses to average net assets | | | | | | |
Ratio of net investment income (loss) to average net assets | | | | | | |
Portfolio turnover rate (g) | | | | | | |
| Amount represents less than $0.01. |
| Based on average shares outstanding. |
| 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. |
| |
| Ratio of total expenses to average net assets and ratio of net investment income (loss) to average net assets do not reflect the Fund’s proportionate share of expenses and income of underlying investment companies in which the Fund invests. |
| Amount is less than 0.01%. |
| 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
First Trust Exchange-Traded FundFinancial Highlights (Continued)
For a share outstanding throughout each period First Trust NYSE® Arca® Biotechnology Index Fund (FBT)
| Six Months
Ended
6/30/2024
(Unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
Income from investment operations: | | | | | | |
Net investment income (loss) | | | | | | |
Net realized and unrealized gain (loss) | | | | | | |
Total from investment operations | | | | | | |
Net asset value, end of period | | | | | | |
| | | | | | |
|
Ratios to average net assets/supplemental data: | | | | | | |
Net assets, end of period (in 000’s) | | | | | | |
Ratio of total expenses to average net assets | | | | | | |
Ratio of net investment income (loss) to average net assets | | | | | | |
Portfolio turnover rate (d) | | | | | | |
| Based on average shares outstanding. |
| 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. |
| |
| 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
First Trust Exchange-Traded FundFinancial Highlights (Continued)
For a share outstanding throughout each period First Trust Dow Jones Internet Index Fund (FDN)
| Six Months
Ended
6/30/2024
(Unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
Income from investment operations: | | | | | | |
Net investment income (loss) | | | | | | |
Net realized and unrealized gain (loss) | | | | | | |
Total from investment operations | | | | | | |
Net asset value, end of period | | | | | | |
| | | | | | |
|
Ratios to average net assets/supplemental data: | | | | | | |
Net assets, end of period (in 000’s) | | | | | | |
Ratio of total expenses to average net assets | | | | | | |
Ratio of net investment income (loss) to average net assets | | | | | | |
Portfolio turnover rate (d) | | | | | | |
| Based on average shares outstanding. |
| 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. |
| |
| 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
First Trust Exchange-Traded FundFinancial Highlights (Continued)
For a share outstanding throughout each period First Trust Capital Strength® ETF (FTCS)
| Six Months
Ended
6/30/2024
(Unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
Income from investment operations: | | | | | | |
Net investment income (loss) | | | | | | |
Net realized and unrealized gain (loss) | | | | | | |
Total from investment operations | | | | | | |
Distributions paid to shareholders from: | | | | | | |
| | | | | | |
Net asset value, end of period | | | | | | |
| | | | | | |
|
Ratios to average net assets/supplemental data: | | | | | | |
Net assets, end of period (in 000’s) | | | | | | |
Ratio of total expenses to average net assets | | | | | | |
Ratio of net investment income (loss) to average net assets | | | | | | |
Portfolio turnover rate (d) | | | | | | |
| Based on average shares outstanding. |
| 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. |
| |
| 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
First Trust Exchange-Traded FundFinancial Highlights (Continued)
For a share outstanding throughout each period First Trust Value Line® Dividend Index Fund (FVD)
| Six Months
Ended
6/30/2024
(Unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
Income from investment operations: | | | | | | |
Net investment income (loss) | | | | | | |
Net realized and unrealized gain (loss) | | | | | | |
Total from investment operations | | | | | | |
Distributions paid to shareholders from: | | | | | | |
| | | | | | |
Net asset value, end of period | | | | | | |
| | | | | | |
|
Ratios to average net assets/supplemental data: | | | | | | |
Net assets, end of period (in 000’s) | | | | | | |
Ratio of total expenses to average net assets | | | | | | |
Ratio of net expenses to average net assets | | | | | | |
Ratio of net investment income (loss) to average net assets | | | | | | |
Portfolio turnover rate (d) | | | | | | |
| Based on average shares outstanding. |
| 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. |
| |
| 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
First Trust Exchange-Traded FundFinancial Highlights (Continued)
For a share outstanding throughout each period First Trust Growth StrengthTM ETF (FTGS)
| Six Months
Ended
6/30/2024
(Unaudited) | | Period
Ended
12/31/2022 (a) |
|
Net asset value, beginning of period | | | |
Income from investment operations: | | | |
Net investment income (loss) | | | |
Net realized and unrealized gain (loss) | | | |
Total from investment operations | | | |
Distributions paid to shareholders from: | | | |
| | | |
| | | |
| | | |
Net asset value, end of period | | | |
| | | |
|
Ratios to average net assets/supplemental data: | | | |
Net assets, end of period (in 000’s) | | | |
Ratio of total expenses to average net assets | | | |
Ratio of net investment income (loss) to average net assets | | | |
Portfolio turnover rate (f) | | | |
| Inception date is October 25, 2022, which is consistent with the commencement of investment operations and is the date the initial creation units were established. |
| Based on average shares outstanding. |
| Amount represents less than $0.01. |
| 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. |
| |
| 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
First Trust Exchange-Traded FundFinancial Highlights (Continued)
For a share outstanding throughout each period First Trust Indxx Aerospace & Defense ETF (MISL)
| Six Months
Ended
6/30/2024
(Unaudited) | | Period
Ended
12/31/2022 (a) |
|
Net asset value, beginning of period | | | |
Income from investment operations: | | | |
Net investment income (loss) | | | |
Net realized and unrealized gain (loss) | | | |
Total from investment operations | | | |
Distributions paid to shareholders from: | | | |
| | | |
| | | |
| | | |
Net asset value, end of period | | | |
| | | |
|
Ratios to average net assets/supplemental data: | | | |
Net assets, end of period (in 000’s) | | | |
Ratio of total expenses to average net assets | | | |
Ratio of net investment income (loss) to average net assets | | | |
Portfolio turnover rate (e) | | | |
| Inception date is October 25, 2022, which is consistent with the commencement of investment operations and is the date the initial creation units were established. |
| Based on average shares outstanding. |
| 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. |
| |
| 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
First Trust Exchange-Traded FundFinancial Highlights (Continued)
For a share outstanding throughout each period First Trust Bloomberg Inflation Sensitive Equity ETF (FTIF)
| Six Months
Ended
6/30/2024
(Unaudited) | Period
Ended
12/31/2023 (a) |
|
Net asset value, beginning of period | | |
Income from investment operations: | | |
Net investment income (loss) (b) | | |
Net realized and unrealized gain (loss) | | |
Total from investment operations | | |
Distributions paid to shareholders from: | | |
| | |
Net asset value, end of period | | |
| | |
|
Ratios to average net assets/supplemental data: | | |
Net assets, end of period (in 000’s) | | |
Ratio of total expenses to average net assets | | |
Ratio of net investment income (loss) to average net assets | | |
Portfolio turnover rate (e) | | |
| Inception date is March 13, 2023, which is consistent with the commencement of investment operations and is the date the initial creation units were established. |
| Based on average shares outstanding. |
| 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. |
| |
| 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
Notes to Financial Statements
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) 1. Organization
First Trust Exchange-Traded Fund (the “Trust”) is an open-end management investment company organized as a Massachusetts business trust on August 8, 2003, and is registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended (the “1940 Act”).
This report covers the ten funds (each a “Fund” and collectively, the “Funds”) listed below:
First Trust Dow Jones Select MicroCap Index Fund – (NYSE Arca, Inc. (“NYSE Arca”) ticker “FDM”) |
First Trust Morningstar Dividend Leaders Index Fund – (NYSE Arca ticker “FDL”) |
First Trust US Equity Opportunities ETF – (NYSE Arca ticker “FPX”) |
First Trust NYSE® Arca® Biotechnology Index Fund – (NYSE Arca ticker “FBT”) |
First Trust Dow Jones Internet Index Fund – (NYSE Arca ticker “FDN”) |
First Trust Capital Strength® ETF – (Nasdaq, Inc. (“Nasdaq”) ticker “FTCS”) |
First Trust Value Line® Dividend Index Fund – (NYSE Arca ticker “FVD”) |
First Trust Growth StrengthTM ETF – (Nasdaq ticker “FTGS”) |
First Trust Indxx Aerospace & Defense ETF – (NYSE Arca ticker “MISL”) |
First Trust Bloomberg Inflation Sensitive Equity ETF – (NYSE Arca ticker “FTIF”) |
Each of FDN, FDL, FPX, FTGS, MISL and FTIF operates as a non-diversified series of the Trust. Each of FDM, FBT, FTCS and FVD operates as a diversified open-end management investment company as defined in section 5(b) of the 1940 Act. Each Fund represents a separate series of shares of beneficial interest in the Trust. Unlike conventional mutual funds, each Fund issues and redeems shares on a continuous basis at net asset value (“NAV”), only in large blocks of shares known as “Creation Units.” 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:
| |
First Trust Dow Jones Select MicroCap Index Fund | Dow Jones Select MicroCap IndexSM |
First Trust Morningstar Dividend Leaders Index Fund | Morningstar® Dividend Leaders IndexSM |
First Trust US Equity Opportunities ETF | |
First Trust NYSE® Arca® Biotechnology Index Fund | NYSE® Arca® Biotechnology Index |
First Trust Dow Jones Internet Index Fund | Dow Jones Internet Composite IndexSM |
First Trust Capital Strength® ETF | The Capital StrengthTM Index |
First Trust Value Line® Dividend Index Fund | Value Line® Dividend Index |
First Trust Growth StrengthTM ETF | The Growth StrengthTM Index |
First Trust Indxx Aerospace & Defense ETF | Indxx US Aerospace & Defense Index |
First Trust Bloomberg Inflation Sensitive Equity ETF | Bloomberg Inflation Sensitive Equity 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.
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. 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 readily available market quotations such as last sale or official closing prices from a national
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) 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 approved by the Trust’s Board of Trustees, and in accordance with provisions of the 1940 Act and rules thereunder. 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 primary exchange for such securities.
Shares of open-end funds are valued based on NAV per share.
Equity securities traded in an over-the-counter market are valued at the close price or the last trade price.
Overnight repurchase agreements are valued at amortized cost when it represents the most appropriate reflection of fair market value.
Certain securities may not be able to be priced by pre-established pricing methods. Such securities may be valued by 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 last sale price on the exchange on which they are principally traded or, for Nasdaq and AIM securities, the official closing price;
3)
the size of the holding;
4)
the initial cost of the security;
5)
transactions in comparable securities;
6)
price quotes from dealers and/or third-party pricing services;
7)
relationships among various securities;
8)
information obtained by contacting the issuer, analysts, or the appropriate stock exchange;
9)
an analysis of the issuer’s financial statements;
10)
the existence of merger proposals or tender offers that might affect the value of the security; and
11)
other relevant factors.
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.
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:
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) • 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.
• 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.
• 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 June 30, 2024, 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 are 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 requires 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.
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)
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) 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 for FDL, FTCS, and FVD. Prior to June 10, 2024 for FDM, FBT, and FDN’s securities lending agent was BBH. For FPX, and effective June 10, 2024 for FDM, FBT, and FDN the Bank of New York Mellon (“BNY”) 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 June 30, 2024, only FPX and FDN had securities in the securities lending program. During the six months ended June 30, 2024, FDM, FPX, FBT, and FDN participated in the securities lending program.
In the event of a default by a borrower with respect to any loan, BNY 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 BNY to exercise these remedies, a Fund sustains losses as a result of a borrower’s default, BNY 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 BNY.
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 BNY 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 are 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 June 30, 2024, were received as collateral for lending securities.
F. 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 capital gains earned by each Fund, if any, are distributed at least annually. Each Fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
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 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.
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) The tax character of distributions paid by each Fund during the fiscal period ended December 31, 2023 was as follows:
| Distributions
paid from
Ordinary
Income | Distributions
paid from
Capital
Gains | Distributions
paid from
Return of
Capital |
First Trust Dow Jones Select MicroCap Index Fund | | | |
First Trust Morningstar Dividend Leaders Index Fund | | | |
First Trust US Equity Opportunities ETF | | | |
First Trust NYSE® Arca® Biotechnology Index Fund | | | |
First Trust Dow Jones Internet Index Fund | | | |
First Trust Capital Strength® ETF | | | |
First Trust Value Line® Dividend Index Fund | | | |
First Trust Growth StrengthTM ETF | | | |
First Trust Indxx Aerospace & Defense ETF | | | |
First Trust Bloomberg Inflation Sensitive Equity ETF | | | |
As of December 31, 2023, the components of distributable earnings on a tax basis for each Fund were as follows:
| Undistributed
Ordinary
Income | Accumulated
Capital and
Other
Gain (Loss) | Net
Unrealized
Appreciation
(Depreciation) |
First Trust Dow Jones Select MicroCap Index Fund | | | |
First Trust Morningstar Dividend Leaders Index Fund | | | |
First Trust US Equity Opportunities ETF | | | |
First Trust NYSE® Arca® Biotechnology Index Fund | | | |
First Trust Dow Jones Internet Index Fund | | | |
First Trust Capital Strength® ETF | | | |
First Trust Value Line® Dividend Index Fund | | | |
First Trust Growth StrengthTM ETF | | | |
First Trust Indxx Aerospace & Defense ETF | | | |
First Trust Bloomberg Inflation Sensitive Equity ETF | | | |
Each Fund intends to qualify or 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. For all the Funds, with the exception of FTGS, MISL, and FTIF, the taxable years ended 2020, 2021, 2022, and 2023 remain open to federal and state audit. For FTGS and MISL, the taxable period ended 2022 and year ended 2023 remain open to federal and state audit. For FTIF, the taxable period ended 2023 remains open to federal and state audit. As of June 30, 2024, 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 apply when there has been a 50% change in ownership. At December 31, 2023, for federal income tax purposes, each applicable Fund had a capital loss carryforward available that is shown in the following table, to the extent provided by regulations, to offset future capital gains. 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.
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited)
| Non-Expiring
Capital Loss
Carryforwards |
First Trust Dow Jones Select MicroCap Index Fund | |
First Trust Morningstar Dividend Leaders Index Fund | |
First Trust US Equity Opportunities ETF | |
First Trust NYSE® Arca® Biotechnology Index Fund | |
First Trust Dow Jones Internet Index Fund | |
First Trust Capital Strength® ETF | |
First Trust Value Line® Dividend Index Fund* | |
First Trust Growth StrengthTM ETF | |
First Trust Indxx Aerospace & Defense ETF | |
First Trust Bloomberg Inflation Sensitive Equity ETF | |
| $11,007,161 of First Trust Value Line® Dividend Index Fund’s non-expiring 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 $364,518 per year. |
Certain losses realized during the current fiscal period 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 December 31, 2023, the Funds had no net late year ordinary or capital losses.
As of June 30, 2024, the aggregate cost, gross unrealized appreciation, gross unrealized depreciation, and net unrealized appreciation/(depreciation) on investments (including short positions and derivatives, if any) for federal income tax purposes were as follows:
| | Gross Unrealized
Appreciation | Gross Unrealized
(Depreciation) | Net Unrealized
Appreciation
(Depreciation) |
First Trust Dow Jones Select MicroCap Index Fund | | | | |
First Trust Morningstar Dividend Leaders Index Fund | | | | |
First Trust US Equity Opportunities ETF | | | | |
First Trust NYSE® Arca® Biotechnology Index Fund | | | | |
First Trust Dow Jones Internet Index Fund | | | | |
First Trust Capital Strength® ETF | | | | |
First Trust Value Line® Dividend Index Fund | | | | |
First Trust Growth StrengthTM ETF | | | | |
First Trust Indxx Aerospace & Defense ETF | | | | |
First Trust Bloomberg Inflation Sensitive Equity ETF | | | | |
Expenses that are directly related to one of the Funds are charged directly to the respective Fund, except for First Trust Growth StrengthTM ETF, First Trust Indxx Aerospace & Defense ETF, and First Trust Bloomberg Inflation Sensitive Equity 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:
| |
First Trust Dow Jones Select MicroCap Index Fund | S&P Dow Jones Indices, LLC |
First Trust Morningstar Dividend Leaders Index Fund | |
First Trust US Equity Opportunities ETF | |
First Trust NYSE® Arca® Biotechnology Index Fund | |
First Trust Dow Jones Internet Index Fund | S&P Dow Jones Indices, LLC |
First Trust Capital Strength® ETF | |
First Trust Value Line® Dividend Index Fund | Value Line Publishing, LLC |
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) | |
First Trust Growth StrengthTM ETF | |
First Trust Indxx Aerospace & Defense ETF | |
First Trust Bloomberg Inflation Sensitive Equity ETF | Bloomberg Index Services Limited |
The respective license agreements allow for the use by First Trust of certain trademarks and trade names of the respective Licensors. The Funds are sub-licensees to the applicable license agreement. The respective Funds are required to pay licensing fees, which are shown on the Statements of Operations.
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 Unitary Fee Funds, First Trust is paid an annual unitary management fee based on a percentage of each 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, license and other services, and excluding fee payments under the Investment Management Agreement, distribution and service fees pursuant to a Rule 12b-1 plan, if any, brokerage expenses, acquired fund fees and expenses, taxes, interest, and extraordinary expenses. The annual unitary management fee payable by each Fund to First Trust for these services will be reduced at certain levels of each Fund’s net assets (“breakpoints”) and calculated pursuant to the following schedule:
| | | |
Fund net assets up to and including $2.5 billion | | | |
Fund net assets greater than $2.5 billion up to and including $5 billion | | | |
Fund net assets greater than $5 billion up to and including $7.5 billion | | | |
Fund net assets greater than $7.5 billion up to and including $10 billion | | | |
Fund net assets greater than $10 billion up to and including $15 billion | | | |
Fund net assets greater than $15 billion | | | |
For the First Trust Dow Jones Select MicroCap Index Fund, First Trust Morningstar Dividend Leaders Index Fund, First Trust US Equity Opportunities ETF, First Trust NYSE® Arca® Biotechnology Index Fund, First Trust Dow Jones Internet Index Fund, First Trust Capital Strength® ETF and First Trust Value Line Dividend Index Fund (such Funds, the “Expense Cap Funds”), First Trust is paid an annual management fee of each Fund’s average daily net assets and calculated pursuant to the following schedule:
| | | | | | | |
Fund net assets up to and including $2.5 billion | | | | | | | |
Fund net assets greater than $2.5 billion up to and including $5 billion | | | | | | | |
Fund net assets greater than $5 billion up to and including $7.5 billion | | | | | | | |
Fund net assets greater than $7.5 billion up to and including $10 billion | | | | | | | |
Fund net assets greater than $10 billion up to and including $15 billion | | | | | | | |
Fund net assets greater than $15 billion | | | | | | | |
For the Expense Cap Funds, the Trust and the Advisor have entered into an Expense Reimbursement and Fee Waiver Agreement (“Agreement”) in which First Trust has agreed to waive fees and/or reimburse Fund expenses to the extent that the operating expenses of each Fund (excluding interest expense, brokerage commissions and other trading expenses, acquired fund fees and expenses, taxes
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) and extraordinary expenses) exceed the following amount as a percentage of average daily net assets per year (the “Expense Cap”). The Expense Cap will be in effect until at least April 30, 2025.
| |
First Trust Dow Jones Select MicroCap Index Fund | |
First Trust Morningstar Dividend Leaders Index Fund | |
First Trust US Equity Opportunities ETF | |
First Trust NYSE® Arca® Biotechnology Index Fund | |
First Trust Dow Jones Internet Index Fund | |
First Trust Capital Strength® ETF | |
First Trust Value Line® Dividend Index Fund | |
The Trust has multiple service agreements with BNY. Under the service agreements, BNY performs custodial, fund accounting, certain administrative services, and transfer agency services for each Fund. As custodian, BNY is responsible for custody of each Fund’s assets. As fund accountant and administrator, BNY is responsible for maintaining the books and records of each Fund’s securities and cash. As transfer agent, BNY is responsible for maintaining shareholder records for each Fund. BNY 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 target outcome fund or an index fund.
Additionally, the Chairs of the Audit Committee, Nominating and Governance Committee and Valuation Committee, the Vice Chair of the Audit Committee, the Lead Independent Trustee and the Vice Lead Independent Trustee 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 Committee Chairs, the Audit Committee Vice Chair, the Lead Independent Trustee and the Vice Lead Independent Trustee rotate periodically in serving in such capacities. The officers and “Interested” Trustee receive no compensation from the Trust for acting in such capacities.
4. Purchases and Sales of Securities
For the six months ended June 30, 2024, the cost of purchases and proceeds from sales of investments for each Fund, excluding short-term investments and in-kind transactions, were as follows:
| | |
First Trust Dow Jones Select MicroCap Index Fund | | |
First Trust Morningstar Dividend Leaders Index Fund | | |
First Trust US Equity Opportunities ETF | | |
First Trust NYSE® Arca® Biotechnology Index Fund | | |
First Trust Dow Jones Internet Index Fund | | |
First Trust Capital Strength® ETF | | |
First Trust Value Line® Dividend Index Fund | | |
First Trust Growth StrengthTM ETF | | |
First Trust Indxx Aerospace & Defense ETF | | |
First Trust Bloomberg Inflation Sensitive Equity ETF | | |
For the six months ended June 30, 2024, the cost of in-kind purchases and proceeds from in-kind sales for each Fund were as follows:
| | |
First Trust Dow Jones Select MicroCap Index Fund | | |
First Trust Morningstar Dividend Leaders Index Fund | | |
First Trust US Equity Opportunities ETF | | |
First Trust NYSE® Arca® Biotechnology Index Fund | | |
First Trust Dow Jones Internet Index Fund | | |
First Trust Capital Strength® ETF | | |
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) | | |
First Trust Value Line® Dividend Index Fund | | |
First Trust Growth StrengthTM ETF | | |
First Trust Indxx Aerospace & Defense ETF | | |
First Trust Bloomberg Inflation Sensitive Equity ETF | | |
5. Creations, Redemptions and Transaction Fees
Each Fund generally issues and redeems its shares in primary market transactions through a creation and redemption mechanism and does not sell or redeem individual shares. Instead, financial entities known as “Authorized Participants” have contractual arrangements with a Fund or one of the Fund’s service providers to purchase and redeem Fund shares directly with the Fund in Creation Units. Prior to the start of trading on every business day, a Fund publishes through the National Securities Clearing Corporation the “basket” of securities, cash or other assets that it will accept in exchange for a Creation Unit of the Fund’s shares. An Authorized Participant that wishes to effectuate a creation of a Fund’s shares deposits with the Fund the “basket” of securities, cash or other assets identified by the Fund that day, and then receives the Creation Unit of the Fund’s shares in return for those assets. After purchasing a Creation Unit, the Authorized Participant may continue to hold the Fund’s shares or sell them in the secondary market. The redemption process is the reverse of the purchase process: the Authorized Participant redeems a Creation Unit of a Fund’s shares for a basket of securities, cash or other assets. The combination of the creation and redemption process with secondary market trading in a Fund’s shares and underlying securities provides arbitrage opportunities that are designed to help keep the market price of a Fund’s shares at or close to the NAV per share of the Fund.
Each Fund imposes fees in connection with the purchase of Creation Units. These fees may vary based upon various fact-based circumstances, including, but not limited to, the composition of the securities included in the Creation Unit or the countries in which the transactions are settled. The price for each Creation Unit will equal the daily NAV per share of a Fund 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, stamp taxes and part or all of the spread between the expected bid and offer side of the market related to the securities comprising the creation basket.
Each Fund also imposes fees in connection with the redemption of Creation Units. These fees may vary based upon various fact-based circumstances, including, but not limited to, the composition of the securities included in the Creation Unit or the countries in which the transactions are settled. The price received for each Creation Unit will equal the daily NAV per share of a Fund times the number of shares in a Creation Unit, minus the fees described above and, if applicable, any 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 the securities comprising the redemption basket. Investors who use the services of a broker or other such intermediary in addition to an Authorized Participant to effect a redemption of a Creation Unit may also be assessed an amount to cover the cost of such services. The redemption fee charged by a Fund will comply with Rule 22c-2 of the 1940 Act which limits redemption fees to no more than 2% of the value of the shares redeemed.
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 April 30, 2025.
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.
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) 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.
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) Changes in and Disagreements with Accountants (Item 8 of Form N-CSR)
There were no changes in or disagreements with the Funds’ accountants during the six months ended June 30, 2024.
Proxy Disclosures (Item 9 of Form N-CSR)
There were no matters submitted for vote by shareholders of any Fund during the six months ended June 30, 2024.
Remuneration Paid to Directors, Officers, and Others (Item 10 of Form N-CSR)
For the Expense Cap Funds (as defined in the Notes to Financial Statements), the applicable aggregate remuneration paid by each Fund during the period covered by the report is included in the Statements of Operations. For the Unitary Fee Funds (as defined in the Notes to Financial Statements), Independent Trustees and any member of any advisory board of each Fund are compensated through the unitary management fee paid by each Fund to the advisor and not directly by each Fund. The investment advisory fee paid is included in the Statements of Operations.
Statement Regarding the Basis for the Board’s Approval of Investment Advisory Contract (Item 11 of Form N-CSR)
The Board of Trustees of First Trust Exchange-Traded Fund (the “Trust”), including the Independent Trustees, unanimously approved the continuation of the Investment Management Agreement (the “Agreement”) with First Trust Advisors L.P. (the “Advisor”) on behalf of the following series of the Trust (each a “Fund” and collectively, the “Funds”):
First Trust Capital Strength® ETF (FTCS)
First Trust Dow Jones Internet Index Fund (FDN)
First Trust Dow Jones Select MicroCap Index Fund (FDM)
First Trust Morningstar Dividend Leaders Index Fund (FDL)
First Trust NYSE Arca Biotechnology Index Fund (FBT)
First Trust US Equity Opportunities ETF (FPX)
First Trust Value Line® Dividend Index Fund (FVD)
The Board approved the continuation of the Agreement for each Fund for a one-year period ending June 30, 2025 at a meeting held on June 2–3, 2024. The Board determined for each Fund that the continuation of the Agreement is in the best interests of the Fund in light of the nature, extent and quality of the services provided and such other matters as the Board considered to be relevant in the exercise of its business judgment.
To reach this determination for each Fund, the Board considered its duties under the Investment Company Act of 1940, as amended (the “1940 Act”), as well as under the general principles of state law, in reviewing and approving advisory contracts; the requirements of the 1940 Act in such matters; the fiduciary duty of investment advisors with respect to advisory agreements and compensation; the standards used by courts in determining whether investment company boards have fulfilled their duties; and the factors to be considered by the Board in voting on such agreements. At meetings held on April 16, 2024, April 25, 2024 and June 2–3, 2024, the Board, including the Independent Trustees, reviewed materials provided by the Advisor responding to requests for information from counsel to the Independent Trustees, submitted on behalf of the Independent Trustees, that, among other things, outlined: the services provided by the Advisor to each Fund (including the relevant personnel responsible for these services and their experience); the advisory fee rate schedule payable by each Fund as compared to fees charged to a peer group of funds (the “Expense Group”) and a broad peer universe of funds (the “Expense Universe”), each assembled by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent source, and as compared to fees charged to other clients of the Advisor, including other exchange-traded funds (“ETFs”) managed by the Advisor; the expense ratio of each Fund as compared to expense ratios of the funds in the Fund’s Expense Group and Expense Universe; performance information for each Fund, including comparisons of each Fund’s performance to that of one or more relevant benchmark indexes and to that of a performance group of funds and a broad performance universe of funds (the “Performance Universe”), each assembled by Broadridge; the nature of expenses incurred in providing services to each Fund and the potential for the Advisor to realize economies of scale, if any; profitability and other financial data for the Advisor; any indirect benefits to the Advisor and its affiliate, First Trust Portfolios L.P. (“FTP”); and information on the Advisor’s compliance program. The Board reviewed initial materials with the Advisor at the meeting held on April 25, 2024, prior to which the Independent Trustees and their counsel met separately to discuss the information provided by the Advisor. Following the April 25, 2024 meeting, counsel to the Independent Trustees, on behalf of the Independent Trustees, requested certain clarifications and supplements to the materials provided, and the information provided in response to those requests was considered at an executive session of the Independent Trustees and their counsel held prior to the June 2–3, 2024 meeting, as well as at the June meeting. The Board applied its business judgment to determine
Other Information (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) whether the arrangement between the Trust and the Advisor continues to be a reasonable business arrangement from each Fund’s perspective. The Board determined that, given the totality of the information provided with respect to the Agreement, the Board had received sufficient information to renew the Agreement. The Board considered that shareholders chose to invest or remain invested in a Fund knowing that the Advisor manages the Fund and knowing the Fund’s advisory fee.
In reviewing the Agreement for each Fund, the Board considered the nature, extent and quality of the services provided by the Advisor under the Agreement. The Board considered that the Advisor is responsible for the overall management and administration of the Trust and each Fund and reviewed all of the services provided by the Advisor to the Funds, as well as the background and experience of the persons responsible for such services. In reviewing the services provided, the Board noted the compliance program that had been developed by the Advisor and considered that it includes a robust program for monitoring the Advisor’s and each Fund’s compliance with the 1940 Act, as well as each Fund’s compliance with its investment objective, policies and restrictions. The Board also considered a report from the Advisor with respect to its risk management functions related to the operation of the Funds. Finally, as part of the Board’s consideration of the Advisor’s services, the Advisor, in its written materials and at the April 25, 2024 meeting, described to the Board the scope of its ongoing investment in additional personnel and infrastructure to maintain and improve the quality of services provided to the Funds and the other funds in the First Trust Fund Complex. In light of the information presented and the considerations made, the Board concluded that the nature, extent and quality of the services provided to the Trust and each Fund by the Advisor under the Agreement have been and are expected to remain satisfactory and that the Advisor has managed each Fund consistent with its investment objective, policies and restrictions.
The Board considered the advisory fee rate schedule payable by each Fund under the Agreement for the services provided. The Board considered that the Advisor agreed to extend the current expense cap for each Fund through April 30, 2026. The Board received and reviewed information showing the fee rates and expense ratios of the peer funds in the Expense Groups, as well as advisory and unitary fee rates charged by the Advisor to other fund (including ETFs) and non-fund clients, as applicable. Because each Fund’s Expense Group included peer funds that pay a unitary fee, the Board determined that expense ratios were the most relevant comparative data point. Based on the information provided, the Board noted that the total (net) expense ratio for each Fund was above the median total (net) expense ratio of the peer funds in its respective Expense Group. With respect to the Expense Groups, the Board discussed with Broadridge its methodology for assembling peer groups and discussed with the Advisor limitations in creating peer groups for index ETFs, including differences in underlying indexes and index-tracking methodologies that can result in greater management complexities across seemingly comparable ETFs, and different business models that may affect the pricing of services among ETF sponsors. The Board took these limitations and differences into account in considering the peer data. With respect to fees charged to other non-ETF clients, the Board considered differences between the Funds and other non-ETF clients that limited their comparability. In considering the advisory fee rate schedules overall, the Board also considered the Advisor’s statement that it seeks to meet investor needs through innovative and value-added investment solutions and the Advisor’s demonstrated long-term commitment to each Fund and the other funds in the First Trust Fund Complex.
The Board considered performance information for each Fund. The Board noted the process it has established for monitoring each Fund’s performance and portfolio risk on an ongoing basis, which includes quarterly performance reporting from the Advisor for the Funds. The Board determined that this process continues to be effective for reviewing each Fund’s performance. The Board received and reviewed information for periods ended December 31, 2023 regarding the performance of each Fund’s underlying index, the correlation between each Fund’s performance and that of its underlying index, each Fund’s tracking difference and each Fund’s excess return as compared to its benchmark index. Based on the information provided and its ongoing review of performance, the Board concluded that each Fund was correlated to its underlying index and that the tracking difference for each Fund was within a reasonable range. In addition, the Board reviewed data prepared by Broadridge comparing each Fund’s performance to that of its respective Performance Universe and to that of a broad-based benchmark index and noted the Advisor’s discussion of FTCS’s, FDL’s and FVD’s performance at the April 25, 2024 meeting. However, given each Fund’s objective of seeking investment results that correspond generally to the performance of its underlying index, the Board placed more emphasis on its review of correlation and tracking difference.
On the basis of all the information provided on the fees, expenses and performance of each Fund and the ongoing oversight by the Board, the Board concluded that the advisory fee for each Fund continues to be reasonable and appropriate in light of the nature, extent and quality of the services provided by the Advisor to each Fund under the Agreement.
The Board considered information and discussed with the Advisor whether there were any economies of scale in connection with providing advisory services to the Funds at current asset levels and whether the Funds may benefit from any economies of scale. The Board noted that the advisory fee rate schedule for each Fund includes breakpoints pursuant to which the advisory fee rate will be
Other Information (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) reduced as assets of the Fund meet certain thresholds. The Board considered the Advisor’s statement that it believes that its expenses relating to providing advisory services to the Funds will increase during the next twelve months as the Advisor continues to build infrastructure and add new staff. The Board concluded that the advisory fee rate schedule for each Fund reflects an appropriate level of sharing of any economies of scale that may be realized in the management of the Fund at current asset levels. The Board considered the revenues and allocated costs (including the allocation methodology) of the Advisor in serving as investment advisor to each Fund for the twelve months ended December 31, 2023 and the estimated profitability level for each Fund calculated by the Advisor based on such data, as well as complex-wide and product-line profitability data, for the same period. The Board noted the inherent limitations in the profitability analysis and concluded that, based on the information provided, the Advisor’s profitability level for each Fund was not unreasonable. In addition, the Board considered indirect benefits described by the Advisor that may be realized from its relationship with the Funds. The Board considered that the Advisor had identified as an indirect benefit to the Advisor and FTP their exposure to investors and brokers who, absent their exposure to the Funds, may have had no dealings with the Advisor or FTP, and noted that the Advisor does not utilize soft dollars in connection with the Funds. The Board concluded that the character and amount of potential indirect benefits to the Advisor were not unreasonable.
Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, unanimously determined that the terms of the Agreement continue to be fair and reasonable and that the continuation of the Agreement is in the best interests of each Fund. No single factor was determinative in the Board’s analysis.
The Board of Trustees of First Trust Exchange-Traded Fund (the “Trust”), including the Independent Trustees, unanimously approved the continuation of the Investment Management Agreements (as applicable to a specific Fund, the “Agreement” and collectively, the “Agreements”) with First Trust Advisors L.P. (the “Advisor”) on behalf of the following series of the Trust (each a “Fund” and collectively, the “Funds”):
First Trust Bloomberg Inflation Sensitive Equity ETF (FTIF)
First Trust Growth StrengthTM ETF (FTGS)
First Trust Indxx Aerospace & Defense ETF (MISL)
The Board approved the continuation of the Agreement for each Fund for a one-year period ending June 30, 2025 at a meeting held on June 2–3, 2024. The Board determined for each Fund that the continuation of the Agreement is in the best interests of the Fund in light of the nature, extent and quality of the services provided and such other matters as the Board considered to be relevant in the exercise of its business judgment.
To reach this determination for each Fund, the Board considered its duties under the Investment Company Act of 1940, as amended (the “1940 Act”), as well as under the general principles of state law, in reviewing and approving advisory contracts; the requirements of the 1940 Act in such matters; the fiduciary duty of investment advisors with respect to advisory agreements and compensation; the standards used by courts in determining whether investment company boards have fulfilled their duties; and the factors to be considered by the Board in voting on such agreements. At meetings held on April 16, 2024, April 25, 2024 and June 2–3, 2024, the Board, including the Independent Trustees, reviewed materials provided by the Advisor responding to requests for information from counsel to the Independent Trustees, submitted on behalf of the Independent Trustees, that, among other things, outlined: the services provided by the Advisor to each Fund (including the relevant personnel responsible for these services and their experience); the unitary fee rate schedule payable by each Fund as compared to fees charged to a peer group of funds (the “Expense Group”) and a broad peer universe of funds (the “Expense Universe”), each assembled by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent source, and as compared to fees charged to other clients of the Advisor, including other exchange-traded funds (“ETFs”) managed by the Advisor; the expense ratio of each Fund as compared to expense ratios of the funds in the Fund’s Expense Group and Expense Universe; performance information for each Fund, including, as applicable, comparisons of each Fund’s performance to that of one or more relevant benchmark indexes and to that of a performance group of funds and a broad performance universe of funds (the “Performance Universe”), each assembled by Broadridge; the nature of expenses incurred in providing services to each Fund and the potential for the Advisor to realize economies of scale, if any; profitability and other financial data for the Advisor; any indirect benefits to the Advisor and its affiliate, First Trust Portfolios L.P. (“FTP”); and information on the Advisor’s compliance program. The Board reviewed initial materials with the Advisor at the meeting held on April 25, 2024, prior to which the Independent Trustees and their counsel met separately to discuss the information provided by the Advisor. Following the April 25, 2024 meeting, counsel to the Independent Trustees, on behalf of the Independent Trustees, requested certain clarifications and supplements to the materials provided, and the information provided in response to those requests was considered at an executive session of the Independent Trustees and their counsel held prior to the June 2–3, 2024 meeting, as well as at the June meeting. The Board applied its business judgment to determine whether the arrangement between the Trust and the Advisor continues to be a reasonable business arrangement
Other Information (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) from each Fund’s perspective. The Board determined that, given the totality of the information provided with respect to the Agreements, the Board had received sufficient information to renew the Agreements. The Board considered that shareholders chose to invest or remain invested in a Fund knowing that the Advisor manages the Fund and knowing the Fund’s unitary fee.
In reviewing the Agreement for each Fund, the Board considered the nature, extent and quality of the services provided by the Advisor under the Agreement. The Board considered that the Advisor is responsible for the overall management and administration of the Trust and each Fund and reviewed all of the services provided by the Advisor to the Funds, as well as the background and experience of the persons responsible for such services. In reviewing the services provided, the Board noted the compliance program that had been developed by the Advisor and considered that it includes a robust program for monitoring the Advisor’s and each Fund’s compliance with the 1940 Act, as well as each Fund’s compliance with its investment objective, policies and restrictions. The Board also considered a report from the Advisor with respect to its risk management functions related to the operation of the Funds. Finally, as part of the Board’s consideration of the Advisor’s services, the Advisor, in its written materials and at the April 25, 2024 meeting, described to the Board the scope of its ongoing investment in additional personnel and infrastructure to maintain and improve the quality of services provided to the Funds and the other funds in the First Trust Fund Complex. In light of the information presented and the considerations made, the Board concluded that the nature, extent and quality of the services provided to the Trust and each Fund by the Advisor under the Agreements have been and are expected to remain satisfactory and that the Advisor has managed each Fund consistent with its investment objective, policies and restrictions.
The Board considered the unitary fee rate schedule payable by each Fund under the applicable Agreement for the services provided. The Board considered that as part of the unitary fee the Advisor is responsible for each Fund’s expenses, including the cost of transfer agency, custody, fund administration, legal, audit and other services and license fees, if any, but excluding the fee payment under the applicable Agreement and interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution and service fees pursuant to a Rule 12b-1 plan, if any, and extraordinary expenses, if any. The Board received and reviewed information showing the fee rates and expense ratios of the peer funds in the Expense Groups, as well as advisory and unitary fee rates charged by the Advisor to other fund (including ETFs) and non-fund clients, as applicable. Because each Fund pays a unitary fee, the Board determined that expense ratios were the most relevant comparative data point. Based on the information provided, the Board noted that the total (net) expense ratio for each Fund was above the median total (net) expense ratio of the peer funds in its respective Expense Group. With respect to the Expense Groups, the Board discussed with Broadridge its methodology for assembling peer groups and discussed with the Advisor limitations in creating peer groups for index ETFs, including differences in underlying indexes and index-tracking methodologies that can result in greater management complexities across seemingly comparable ETFs, and different business models that may affect the pricing of services among ETF sponsors. The Board took these limitations and differences into account in considering the peer data. With respect to fees charged to other non-ETF clients, the Board considered differences between the Funds and other non-ETF clients that limited their comparability. In considering the unitary fee rate schedules overall, the Board also considered the Advisor’s statement that it seeks to meet investor needs through innovative and value-added investment solutions and the Advisor’s demonstrated long-term commitment to each Fund and the other funds in the First Trust Fund Complex.
The Board considered performance information for each Fund. The Board noted the process it has established for monitoring each Fund’s performance and portfolio risk on an ongoing basis, which includes quarterly performance reporting from the Advisor for the Funds. The Board determined that this process continues to be effective for reviewing each Fund’s performance. The Board received and reviewed, as applicable, information for the one-year period ended December 31, 2023 regarding the performance of each Fund’s underlying index, the correlation between each Fund’s performance and that of its underlying index, each Fund’s tracking difference and each Fund’s excess return as compared to its benchmark index. Based on the information provided and its ongoing review of performance, the Board concluded that each applicable Fund was correlated to its underlying index and that the tracking difference for each Fund was within a reasonable range. In addition, the Board reviewed data prepared by Broadridge comparing each Fund’s performance to that of its respective Performance Universe and to that of a broad-based benchmark index. However, given each Fund’s objective of seeking investment results that correspond generally to the performance of its underlying index, the Board placed more emphasis on its review of correlation and tracking difference. Because FTIF commenced operations on March 13, 2023 and therefore has a limited performance history, comparative performance information for FTIF was not reviewed.
On the basis of all the information provided on the unitary fee and performance, as applicable, of each Fund and the ongoing oversight by the Board, the Board concluded that the unitary fee for each Fund continues to be reasonable and appropriate in light of the nature, extent and quality of the services provided by the Advisor to each Fund under the Agreements.
Other Information (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) The Board considered information and discussed with the Advisor whether there were any economies of scale in connection with providing advisory services to the Funds at current asset levels and whether the Funds may benefit from any economies of scale. The Board noted that the unitary fee rate schedule for each Fund includes breakpoints pursuant to which the unitary fee rate will be reduced as assets of the Fund meet certain thresholds. The Board considered the Advisor’s statement that it believes that its expenses relating to providing advisory services to the Funds will increase during the next twelve months as the Advisor continues to build infrastructure and add new staff. The Board also noted that under the unitary fee structure, any reduction in expenses associated with the management and operations of the Funds would benefit the Advisor, but that the unitary fee structure provides a level of certainty in expenses for shareholders of the Funds. The Board concluded that the unitary fee rate schedule for each Fund reflects an appropriate level of sharing of any economies of scale that may be realized in the management of the Fund at current asset levels. The Board considered the revenues and allocated costs (including the allocation methodology) of the Advisor in serving as investment advisor to each of FTGS and MISL for the twelve months ended December 31, 2023 and to FTIF for the period from inception through December 31, 2023 and the estimated profitability level for each Fund calculated by the Advisor based on such data, as well as complex-wide and product-line profitability data, for the twelve months ended December 31, 2023. The Board noted the inherent limitations in the profitability analysis and concluded that, based on the information provided, the Advisor’s profitability level for each Fund was not unreasonable. In addition, the Board considered indirect benefits described by the Advisor that may be realized from its relationship with the Funds. The Board considered that the Advisor had identified as an indirect benefit to the Advisor and FTP their exposure to investors and brokers who, absent their exposure to the Funds, may have had no dealings with the Advisor or FTP, and noted that the Advisor does not utilize soft dollars in connection with the Funds. The Board concluded that the character and amount of potential indirect benefits to the Advisor were not unreasonable.
Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, unanimously determined that the terms of the Agreements continue to be fair and reasonable and that the continuation of the Agreements is in the best interests of each Fund. No single factor was determinative in the Board’s analysis.
Dow Jones®, Dow Jones Internet Composite IndexSM and Dow Jones Select MicroCap IndexSM (“S&P Dow Jones Indexes”) are products of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”) and have been licensed for use by First Trust. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® 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 Funds are 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 products nor do they have any liability for any errors, omissions, or interruptions of the S&P Dow Jones Indexes.
Morningstar® and Morningstar® Dividend Leaders IndexSM are registered trademarks and service marks of Morningstar, Inc. (“Morningstar”) and have been licensed for use by First Trust on behalf of the Fund. The Fund is not sponsored, endorsed, issued, sold or promoted by Morningstar and Morningstar makes no representation regarding the advisability of investing in the Fund.
IPOX® and IPOX®-100 U.S. Index are registered international trademarks and service marks of IPOX® 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. IPOX® is an international trademark of IPOX Schuster LLC. Index of Initial Public Offerings (IPOX) and IPOX Derivatives Patent No. US 7,698,197.
Source ICE Data Indices, LLC (“ICE Data”), is used with permission. “NYSE®” and “NYSE® Arca®” are service/trademarks of ICE Data Indices, LLC or its affiliates. These trademarks have been licensed, along with the NYSE® Arca® Biotechnology Index (the “Index”) for use by First Trust Advisors L.P. in connection with First Trust NYSE® Arca® Biotechnology Index Fund (the “Product”). Neither First Trust Advisors L.P., First Trust Exchange-Traded Fund (the “Trust”) nor the Product, as applicable, is sponsored, endorsed, sold or promoted by ICE Data Indices, LLC, its affiliates or its Third Party Suppliers (“ICE Data and its Suppliers”). ICE Data and its Suppliers make no representations or warranties regarding the advisability of investing in securities generally, in the Product particularly, the Trust or the ability of the Index to track general market performance. Past performance of an Index is not an indicator of or a guarantee of future results.
ICE DATA AND ITS SUPPLIERS DISCLAIM ANY AND ALL WARRANTIES AND REPRESENTATIONS, EXPRESS AND/OR IMPLIED, INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, INCLUDING THE INDICES, INDEX DATA AND ANY INFORMATION INCLUDED IN, RELATED TO, OR DERIVED THEREFROM (“INDEX DATA”). ICE DATA AND ITS SUPPLIERS SHALL NOT BE SUBJECT TO ANY DAMAGES OR
Other Information (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) LIABILITY WITH RESPECT TO THE ADEQUACY, ACCURACY, TIMELINESS OR COMPLETENESS OF THE INDICES AND THE INDEX DATA, WHICH ARE PROVIDED ON AN “AS IS” BASIS AND YOUR USE IS AT YOUR OWN RISK.
Nasdaq®, The Capital StrengthTM Index and The Growth StrengthTM 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 Funds have not been passed on by the Corporations as to their legality or suitability. The Funds are not issued, endorsed, sold or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUNDS.
Value Line® and Value Line® Dividend Index are trademarks or registered trademarks of Value Line, Inc. (“Value Line”) and have been licensed for use for certain purposes by First Trust. The Fund is not sponsored, endorsed, recommended, sold or promoted by Value Line and Value Line makes no representation regarding the advisability of investing in products utilizing such strategy.
Indxx and Indxx US Aerospace & Defense Index (“Index”) are trademarks of Indxx, Inc. (“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 products. The Index is determined, composed and calculated by Indxx without regard to First Trust or the Fund.
Bloomberg® and Bloomberg Inflation Sensitive Equity Index licensed herein (the “Indices”) are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator of the Indices (collectively, “Bloomberg”), and have been licensed for use for certain purposes by First Trust Advisors L.P. (the “Licensee”). Bloomberg is not affiliated with the Licensee, and Bloomberg does not approve, endorse, review, or recommend the financial products referenced herein (the “Financial Products”). Bloomberg does not guarantee the timeliness, accurateness, or completeness of any data or information relating to the Index or the Financial Products.
Semi-Annual Financial
Statements and
Other Information |
For the Six Months Ended
June 30, 2024 |
First Trust Exchange-Traded Fund
First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW) |
First Trust NASDAQ-100-Technology Sector Index Fund (QTEC) |
First Trust NASDAQ-100 Ex-Technology Sector Index Fund (QQXT) |
First Trust NASDAQ® Clean Edge® Green Energy Index Fund (QCLN) |
First Trust S&P REIT Index Fund (FRI) |
First Trust Water ETF (FIW) |
First Trust Natural Gas ETF (FCG) |
First Trust NASDAQ® ABA Community Bank Index Fund (QABA) |
First Trust Exchange-Traded Fund
Semi-Annual Financial Statements and Other Information
June 30, 2024
Performance and Risk Disclosure
There is no assurance that any series of First Trust Exchange-Traded Fund (the “Trust”) described in this report (each such series is referred to as a “Fund” and collectively, as the “Funds”) 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’s shares may therefore be less than what you paid for them. Accordingly, you can lose money by investing in a Fund.
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.
First Trust Advisors L.P., the Funds’ advisor, may also periodically provide additional information on Fund performance on each Fund’s webpage at www.ftportfolios.com.
This report contains information that may help you evaluate your investment. It includes details about each Fund and presents data that provides insight into each Fund’s performance and investment approach.
The material risks of investing in each Fund are spelled out in its prospectus, statement of additional information, and other Fund regulatory filings.
First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
| | |
|
| | |
| | |
| | |
| Coca-Cola Europacific Partners PLC | |
| | |
| Monster Beverage Corp. (a) | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Regeneron Pharmaceuticals, Inc. (a) | |
| Vertex Pharmaceuticals, Inc. (a) | |
| | |
| | |
| | |
| | |
| PDD Holdings, Inc., ADR (a) | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Consumer Staples Distribution | |
| | |
| | |
| Walgreens Boots Alliance, Inc. | |
| | |
| Electric Utilities — 3.9% | |
| American Electric Power Co., Inc. | |
| Constellation Energy Corp. | |
| | |
| | |
| | |
| | |
|
| Electronic Equipment, Instruments & Components | |
| | |
| Energy Equipment & Services | |
| | |
| | |
| | |
| | |
| Take-Two Interactive Software, Inc. (a) | |
| Warner Bros. Discovery, Inc. (a) | |
| | |
| Financial Services — 1.0% | |
| PayPal Holdings, Inc. (a) | |
| | |
| | |
| Mondelez International, Inc., Class A | |
| | |
| | |
| | |
| Old Dominion Freight Line, Inc. | |
| | |
| | |
| | |
| GE HealthCare Technologies, Inc. | |
| IDEXX Laboratories, Inc. (a) | |
| Intuitive Surgical, Inc. (a) | |
| | |
| Hotels, Restaurants & Leisure | |
| Airbnb, Inc., Class A (a) | |
| | |
| DoorDash, Inc., Class A (a) | |
| Marriott International, Inc., Class A | |
| | |
| | |
| Industrial Conglomerates — | |
| Honeywell International, Inc. | |
| Interactive Media & Services | |
| | |
See Notes to Financial Statements
First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
COMMON STOCKS (Continued) |
| Interactive Media & Services (Continued) | |
| | |
| Meta Platforms, Inc., Class A | |
| | |
| | |
| Cognizant Technology Solutions Corp., Class A | |
| | |
| | |
| Life Sciences Tools & Services | |
| | |
| | |
| | |
| | |
| Charter Communications, Inc., Class A (a) | |
| | |
| Trade Desk (The), Inc., Class A (a) | |
| | |
| Oil, Gas & Consumable Fuels | |
| | |
| | |
| | |
| Professional Services — 2.9% | |
| Automatic Data Processing, Inc. | |
| | |
| | |
| | |
| | |
| | |
| Semiconductors & Semiconductor Equipment | |
| Advanced Micro Devices, Inc. (a) | |
| | |
| | |
| ARM Holdings PLC, ADR (a) | |
| | |
| | |
| GLOBALFOUNDRIES, Inc. (a) (b) | |
| | |
| | |
| | |
| | |
|
| Semiconductors & Semiconductor Equipment (Continued) | |
| | |
| Microchip Technology, Inc. | |
| | |
| | |
| | |
| ON Semiconductor Corp. (a) | |
| | |
| | |
| | |
| | |
| | |
| | |
| Atlassian Corp., Class A (a) | |
| | |
| Cadence Design Systems, Inc. (a) | |
| Crowdstrike Holdings, Inc., Class A (a) | |
| Datadog, Inc., Class A (a) | |
| | |
| | |
| | |
| Palo Alto Networks, Inc. (a) | |
| | |
| | |
| Workday, Inc., Class A (a) | |
| | |
| | |
| | |
| O’Reilly Automotive, Inc. (a) | |
| | |
| | |
| Technology Hardware, Storage | |
| | |
| Textiles, Apparel & Luxury | |
| Lululemon Athletica, Inc. (a) | |
| | |
| | |
| Wireless Telecommunication | |
| | |
| | |
| | |
See Notes to Financial Statements
First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
MONEY MARKET FUNDS — 0.4% |
| Dreyfus Government Cash Management Fund, Institutional Shares - 5.19% (c) | |
| Goldman Sachs Financial Square Treasury Obligations Fund - Institutional Class - 5.11% (c) (d) | |
| | |
| | |
|
|
| Total Investments — 100.4% | |
| | |
| Net Other Assets and Liabilities — (0.4)% | |
| | |
| Non-income producing security. |
| All or a portion of this security is on loan (see Note 2D - Securities Lending in the Notes to Financial Statements). The remaining contractual maturity of all of the securities lending transactions is overnight and continuous. The aggregate value of such securities, including those sold and pending settlement, is $6,885,466 and the total value of the collateral held by the Fund is $7,034,154. |
| Rate shown reflects yield as of June 30, 2024. |
| This security serves as collateral for securities on loan. |
Abbreviations throughout the Portfolio of Investments: |
| – American Depositary Receipt |
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| | | | |
| | | | |
| See Portfolio of Investments for industry 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) | |
| |
| |
| 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. |
| At June 30, 2024, 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
First Trust NASDAQ-100-Technology Sector Index Fund (QTEC)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
| | |
|
| | |
| PDD Holdings, Inc., ADR (a) | |
| Electronic Equipment, Instruments & Components | |
| | |
| Hotels, Restaurants & Leisure | |
| DoorDash, Inc., Class A (a) | |
| Interactive Media & Services | |
| | |
| | |
| Meta Platforms, Inc., Class A | |
| | |
| | |
| Cognizant Technology Solutions Corp., Class A | |
| | |
| | |
| Semiconductors & Semiconductor Equipment | |
| Advanced Micro Devices, Inc. (a) | |
| | |
| | |
| ARM Holdings PLC, ADR (a) | |
| | |
| | |
| GLOBALFOUNDRIES, Inc. (a) (b) | |
| | |
| | |
| | |
| | |
| Microchip Technology, Inc. | |
| | |
| | |
| | |
| ON Semiconductor Corp. (a) | |
| | |
| | |
| | |
| | |
| | |
| | |
| Atlassian Corp., Class A (a) | |
| | |
| | |
|
| | |
| Cadence Design Systems, Inc. (a) | |
| Crowdstrike Holdings, Inc., Class A (a) | |
| Datadog, Inc., Class A (a) | |
| | |
| | |
| | |
| Palo Alto Networks, Inc. (a) | |
| | |
| | |
| Workday, Inc., Class A (a) | |
| | |
| | |
| Technology Hardware, Storage | |
| | |
| | |
| | |
MONEY MARKET FUNDS — 1.4% |
| Dreyfus Government Cash Management Fund, Institutional Shares - 5.19% (c) | |
| Goldman Sachs Financial Square Treasury Obligations Fund - Institutional Class - 5.11% (c) (d) | |
| | |
| | |
|
|
| Total Investments — 101.4% | |
| | |
| Net Other Assets and Liabilities — (1.4)% | |
| | |
| Non-income producing security. |
| All or a portion of this security is on loan (see Note 2D - Securities Lending in the Notes to Financial Statements). The remaining contractual maturity of all of the securities lending transactions is overnight and continuous. The aggregate value of such securities, including those sold and pending settlement, is $55,903,232 and the total value of the collateral held by the Fund is $57,152,032. |
| Rate shown reflects yield as of June 30, 2024. |
| This security serves as collateral for securities on loan. |
Abbreviations throughout the Portfolio of Investments: |
| – American Depositary Receipt |
See Notes to Financial Statements
First Trust NASDAQ-100-Technology Sector Index Fund (QTEC)Portfolio of Investments (Continued)June 30, 2024 (Unaudited)
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| | | | |
| | | | |
| See Portfolio of Investments for industry 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) | |
| |
| |
| 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. |
| At June 30, 2024, 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
First Trust NASDAQ-100 Ex-Technology Sector Index Fund (QQXT)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
| | |
COMMON STOCKS (a) — 100.0% |
| | |
| | |
| | |
| Coca-Cola Europacific Partners PLC | |
| | |
| Monster Beverage Corp. (b) | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Regeneron Pharmaceuticals, Inc. (b) | |
| Vertex Pharmaceuticals, Inc. (b) | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Consumer Staples Distribution | |
| | |
| | |
| Walgreens Boots Alliance, Inc. | |
| | |
| Electric Utilities — 6.7% | |
| American Electric Power Co., Inc. | |
| Constellation Energy Corp. | |
| | |
| | |
| | |
| Energy Equipment & Services | |
| | |
| | |
|
| | |
| | |
| | |
| Take-Two Interactive Software, Inc. (b) | |
| Warner Bros. Discovery, Inc. (b) | |
| | |
| Financial Services — 1.6% | |
| PayPal Holdings, Inc. (b) | |
| | |
| | |
| Mondelez International, Inc., Class A | |
| | |
| | |
| | |
| Old Dominion Freight Line, Inc. | |
| | |
| | |
| | |
| GE HealthCare Technologies, Inc. | |
| IDEXX Laboratories, Inc. (b) | |
| Intuitive Surgical, Inc. (b) | |
| | |
| Hotels, Restaurants & Leisure | |
| Airbnb, Inc., Class A (b) | |
| | |
| Marriott International, Inc., Class A | |
| | |
| | |
| Industrial Conglomerates — | |
| Honeywell International, Inc. | |
| Life Sciences Tools & Services | |
| | |
| | |
| | |
| | |
| Charter Communications, Inc., Class A (b) | |
| | |
| Trade Desk (The), Inc., Class A (b) | |
| | |
See Notes to Financial Statements
First Trust NASDAQ-100 Ex-Technology Sector Index Fund (QQXT)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
COMMON STOCKS (a) (Continued) |
| Oil, Gas & Consumable Fuels | |
| | |
| | |
| | |
| Professional Services — 5.0% | |
| Automatic Data Processing, Inc. | |
| | |
| | |
| | |
| | |
| | |
| | |
| O’Reilly Automotive, Inc. (b) | |
| | |
| | |
| Textiles, Apparel & Luxury | |
| Lululemon Athletica, Inc. (b) | |
| | |
| | |
| Wireless Telecommunication | |
| | |
| | |
| | |
MONEY MARKET FUNDS — 0.1% |
| Goldman Sachs Financial Square Treasury Obligations Fund - Institutional Class - 5.11% (d) (e) | |
| Morgan Stanley Institutional Liquidity Funds - Treasury Portfolio - Institutional Class - 5.14% (d) | |
| | |
| | |
|
|
| Total Investments — 100.1% | |
| | |
| Net Other Assets and Liabilities — (0.1)% | |
| | |
| The industry allocation is based on Standard & Poor’s Global Industry Classification Standard (GICS), and is different than the industry sector classification system used by the Index to select securities, which is the Industry Classification Benchmark (ICB) system, which is maintained by FTSE International Limited. |
| Non-income producing security. |
| All or a portion of this security is on loan (see Note 2D - Securities Lending in the Notes to Financial Statements). The remaining contractual maturity of all of the securities lending transactions is overnight and continuous. The aggregate value of such securities, including those sold and pending settlement, is $49,184 and the total value of the collateral held by the Fund is $49,600. |
| Rate shown reflects yield as of June 30, 2024. |
| This security serves as collateral for securities on loan. |
Abbreviations throughout the Portfolio of Investments: |
| – American Depositary Receipt |
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| | | | |
| | | | |
| See Portfolio of Investments for industry breakout. |
See Notes to Financial Statements
First Trust NASDAQ-100 Ex-Technology Sector Index Fund (QQXT)Portfolio of Investments (Continued)June 30, 2024 (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) | |
| |
| |
| 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. |
| At June 30, 2024, 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
First Trust NASDAQ® Clean Edge® Green Energy Index Fund (QCLN)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
| | |
|
| | |
| | |
| Lucid Group, Inc. (a) (b) | |
| Polestar Automotive Holding UK PLC, Class A, ADR (a) | |
| Rivian Automotive, Inc., Class A (a) (b) | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| LanzaTech Global, Inc. (a) (b) | |
| Construction & Engineering | |
| Ameresco, Inc., Class A (a) | |
| Electrical Equipment — 18.7% | |
| | |
| American Superconductor Corp. (a) | |
| Array Technologies, Inc. (a) | |
| Ballard Power Systems, Inc. (a) (b) | |
| Blink Charging Co. (a) (b) | |
| Bloom Energy Corp., Class A (a) (b) | |
| ChargePoint Holdings, Inc. (a) (b) | |
| | |
| | |
| FuelCell Energy, Inc. (a) (b) | |
| | |
| NEXTracker, Inc., Class A (a) | |
| | |
| Shoals Technologies Group, Inc., Class A (a) | |
| Sociedad Quimica y Minera de Chile S.A., ADR (b) | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| Electronic Equipment, Instruments & Components | |
| Advanced Energy Industries, Inc. | |
| | |
| | |
| Financial Services — 1.7% | |
| Hannon Armstrong Sustainable Infrastructure Capital, Inc. | |
| Independent Power and Renewable Electricity | |
| | |
| Atlantica Sustainable Infrastructure PLC | |
| Brookfield Renewable Partners, L.P. (c) | |
| Clearway Energy, Inc., Class C | |
| Montauk Renewables, Inc. (a) | |
| NextEra Energy Partners, L.P. (c) (d) | |
| | |
| ReNew Energy Global PLC, Class A (a) | |
| Sunnova Energy International, Inc. (a) (b) | |
| | |
| | |
| Lion Electric (The) Co. (a) (b) | |
| | |
| MP Materials Corp. (a) (b) | |
| Oil, Gas & Consumable Fuels | |
| Clean Energy Fuels Corp. (a) | |
| Semiconductors & Semiconductor Equipment | |
| Allegro MicroSystems, Inc. (a) | |
| | |
| | |
| Maxeon Solar Technologies Ltd. (a) (b) | |
| Navitas Semiconductor Corp. (a) | |
| ON Semiconductor Corp. (a) | |
| | |
| SolarEdge Technologies, Inc. (a) | |
| | |
| | |
| | |
See Notes to Financial Statements
First Trust NASDAQ® Clean Edge® Green Energy Index Fund (QCLN)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
COMMON STOCKS (Continued) |
| | |
| | |
| | |
| | |
MONEY MARKET FUNDS — 11.5% |
| Dreyfus Government Cash Management Fund, Institutional Shares - 5.19% (e) | |
| Goldman Sachs Financial Square Treasury Obligations Fund - Institutional Class - 5.11% (e) (f) | |
| | |
| | |
|
|
| Total Investments — 111.3% | |
| | |
| Net Other Assets and Liabilities — (11.3)% | |
| | |
| Non-income producing security. |
| All or a portion of this security is on loan (see Note 2D - Securities Lending in the Notes to Financial Statements). The remaining contractual maturity of all of the securities lending transactions is overnight and continuous. The aggregate value of such securities, including those sold and pending settlement, is $72,620,388 and the total value of the collateral held by the Fund is $78,769,434. |
| Security is a Master Limited Partnership (“MLP”). |
| This security is taxed as a “C” corporation for federal income tax purposes. |
| Rate shown reflects yield as of June 30, 2024. |
| This security serves as collateral for securities on loan. |
Abbreviations throughout the Portfolio of Investments: |
| – American Depositary Receipt |
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| | | | |
| | | | |
| See Portfolio of Investments for industry 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) | |
| |
| |
| 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. |
| At June 30, 2024, 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
First Trust S&P REIT Index Fund (FRI)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
| | |
|
| Data Center REITs — 11.5% | |
| Digital Realty Trust, Inc. | |
| | |
| | |
| | |
| Alexander & Baldwin, Inc. | |
| Alpine Income Property Trust, Inc. | |
| American Assets Trust, Inc. | |
| Armada Hoffler Properties, Inc. | |
| Broadstone Net Lease, Inc. | |
| | |
| Empire State Realty Trust, Inc., Class A | |
| Essential Properties Realty Trust, Inc. | |
| Gladstone Commercial Corp. | |
| | |
| NexPoint Diversified Real Estate Trust | |
| One Liberty Properties, Inc. | |
| | |
| | |
| Health Care REITs — 13.9% | |
| Alexandria Real Estate Equities, Inc. | |
| American Healthcare REIT, Inc. | |
| | |
| Community Healthcare Trust, Inc. | |
| Diversified Healthcare Trust | |
| Global Medical REIT, Inc. | |
| Healthcare Realty Trust, Inc. | |
| Healthpeak Properties, Inc. | |
| | |
| Medical Properties Trust, Inc. | |
| National Health Investors, Inc. | |
| Omega Healthcare Investors, Inc. | |
| Sabra Health Care REIT, Inc. | |
| Universal Health Realty Income Trust | |
| | |
| | |
| | |
| Hotel & Resort REITs — 3.4% | |
| Apple Hospitality REIT, Inc. | |
| Ashford Hospitality Trust, Inc. (a) | |
| Braemar Hotels & Resorts, Inc. | |
| | |
| DiamondRock Hospitality Co. | |
| | |
|
| Hotel & Resort REITs (Continued) | |
| Host Hotels & Resorts, Inc. | |
| Park Hotels & Resorts, Inc. | |
| | |
| | |
| Ryman Hospitality Properties, Inc. | |
| | |
| Summit Hotel Properties, Inc. | |
| Sunstone Hotel Investors, Inc. | |
| Xenia Hotels & Resorts, Inc. | |
| | |
| | |
| Americold Realty Trust, Inc. | |
| EastGroup Properties, Inc. | |
| First Industrial Realty Trust, Inc. | |
| Industrial Logistics Properties Trust | |
| Innovative Industrial Properties, Inc. | |
| | |
| Plymouth Industrial REIT, Inc. | |
| | |
| Rexford Industrial Realty, Inc. | |
| | |
| | |
| | |
| | |
| Apartment Investment and Management Co., Class A (a) | |
| AvalonBay Communities, Inc. | |
| | |
| | |
| | |
| | |
| | |
| | |
| Essex Property Trust, Inc. | |
| Independence Realty Trust, Inc. | |
| Mid-America Apartment Communities, Inc. | |
| NexPoint Residential Trust, Inc. | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
See Notes to Financial Statements
First Trust S&P REIT Index Fund (FRI)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
COMMON STOCKS (Continued) |
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| | |
| | |
| Easterly Government Properties, Inc. | |
| | |
| Franklin Street Properties Corp. | |
| Highwoods Properties, Inc. | |
| Hudson Pacific Properties, Inc. | |
| | |
| | |
| NET Lease Office Properties | |
| Office Properties Income Trust | |
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| | |
| | |
| Piedmont Office Realty Trust, Inc., Class A | |
| Postal Realty Trust, Inc., Class A | |
| | |
| | |
| | |
| Other Specialized REITs — | |
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| | |
| Four Corners Property Trust, Inc. | |
| Gaming and Leisure Properties, Inc. | |
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| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Brixmor Property Group, Inc. | |
| CBL & Associates Properties, Inc. | |
| Federal Realty Investment Trust | |
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| InvenTrust Properties Corp. | |
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| Phillips Edison & Co., Inc. | |
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|
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| Retail Opportunity Investments Corp. | |
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| Simon Property Group, Inc. | |
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| Self-Storage REITs — 8.6% | |
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| Extra Space Storage, Inc. | |
| National Storage Affiliates Trust | |
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| Single-Family Residential | |
| American Homes 4 Rent, Class A | |
| Equity LifeStyle Properties, Inc. | |
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MONEY MARKET FUNDS — 0.1% |
| Morgan Stanley Institutional Liquidity Funds - Treasury Portfolio - Institutional Class - 5.14% (b) | |
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|
|
| Total Investments — 99.7% | |
| | |
| Net Other Assets and Liabilities — 0.3% | |
| | |
| Non-income producing security. |
| Rate shown reflects yield as of June 30, 2024. |
Abbreviations throughout the Portfolio of Investments: |
| – Real Estate Investment Trusts |
See Notes to Financial Statements
First Trust S&P REIT Index Fund (FRI)Portfolio of Investments (Continued)June 30, 2024 (Unaudited)
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| | | | |
| | | | |
| See Portfolio of Investments for sub-industry breakout. |
See Notes to Financial Statements
First Trust Water ETF (FIW)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
| | |
|
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| | |
| | |
| | |
| Advanced Drainage Systems, Inc. | |
| Zurn Elkay Water Solutions Corp. | |
| | |
| | |
| | |
| | |
| | |
| | |
| Montrose Environmental Group, Inc. (a) | |
| | |
| | |
| | |
| Construction & Engineering | |
| | |
| | |
| | |
| | |
| Electronic Equipment, Instruments & Components | |
| | |
| | |
| | |
| | |
| IDEXX Laboratories, Inc. (a) | |
| Life Sciences Tools & Services | |
| Agilent Technologies, Inc. | |
| | |
| | |
| | |
| | |
| Franklin Electric Co., Inc. | |
| | |
| | |
| | |
| Mueller Water Products, Inc., Class A | |
| | |
| | |
|
| | |
| Watts Water Technologies, Inc., Class A | |
| | |
| | |
| | |
| Algonquin Power & Utilities Corp. (b) | |
| | |
| | |
| | |
| Core & Main, Inc., Class A (a) | |
| | |
| | |
| | |
| American States Water Co. | |
| American Water Works Co., Inc. | |
| California Water Service Group | |
| Cia de Saneamento Basico do Estado de Sao Paulo, ADR | |
| Essential Utilities, Inc. | |
| | |
| | |
| | |
| | |
MONEY MARKET FUNDS — 0.1% |
| Morgan Stanley Institutional Liquidity Funds - Treasury Portfolio - Institutional Class - 5.14% (c) | |
| | |
See Notes to Financial Statements
First Trust Water ETF (FIW)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
REPURCHASE AGREEMENTS — 1.8% |
| JPMorgan Chase & Co., 5.32% (c), dated 06/28/24, due 07/01/24, with a maturity value of $14,956,011. Collateralized by U.S. Treasury Securities, interest rates of 2.63% to 6.25%, due 07/31/29 to 08/15/32. The value of the collateral including accrued interest is $15,248,372. (d) | |
| Mizuho Financial Group, Inc., 5.32% (c), dated 06/28/24, due 07/01/24, with a maturity value of $15,566,460. Collateralized by U.S. Treasury Securities, interest rates of 0.50% to 5.00%, due 07/31/24 to 09/30/29. The value of the collateral including accrued interest is $15,870,756. (d) | |
| Total Repurchase Agreements | |
| | |
|
|
| Total Investments — 101.8% | |
| | |
| Net Other Assets and Liabilities — (1.8)% | |
| | |
| Non-income producing security. |
| All or a portion of this security is on loan (see Note 2D - Securities Lending in the Notes to Financial Statements). The remaining contractual maturity of all of the securities lending transactions is overnight and continuous. The aggregate value of such securities, including those sold and pending settlement, is $29,300,000 and the total value of the collateral held by the Fund is $30,508,945. |
| Rate shown reflects yield as of June 30, 2024. |
| This security serves as collateral for securities on loan. |
Abbreviations throughout the Portfolio of Investments: |
| – American Depositary Receipt |
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| | | | |
| | | | |
| | | | |
| See Portfolio of Investments for industry 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) | |
| |
| |
| 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. |
| At June 30, 2024, 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
First Trust Water ETF (FIW)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) The Fund’s investments in repurchase agreements were all subject to an enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis were as follows:
|
Total gross amount presented on the Statements of Assets and Liabilities(3) | |
| |
| |
| The amount is included in “Investments, at value” on the Statements of Assets and Liabilities. |
| At June 30, 2024, the value of the collateral received from each seller exceeded the value of the repurchase agreements. |
See Notes to Financial Statements
First Trust Natural Gas ETF (FCG)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
| | |
|
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| | |
| Oil, Gas & Consumable Fuels | |
| | |
| Antero Resources Corp. (a) | |
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| | |
| California Resources Corp. | |
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| | |
| | |
| | |
| | |
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| | |
| Crescent Energy, Inc., Class A | |
| | |
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| | |
| | |
| Granite Ridge Resources, Inc. | |
| Gulfport Energy Corp. (a) | |
| Hess Midstream, L.P., Class A (b) (c) | |
| | |
| Magnolia Oil & Gas Corp., Class A | |
| | |
| | |
| | |
| | |
| Occidental Petroleum Corp. | |
| | |
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| | |
| Riley Exploration Permian, Inc. | |
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| Summit Midstream Partners L.P. (a) (c) | |
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| Vista Energy SAB de CV, ADR (a) | |
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|
| Oil, Gas & Consumable Fuels (Continued) | |
| Western Midstream Partners, L.P. (c) | |
| Woodside Energy Group Ltd., ADR | |
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| | |
MONEY MARKET FUNDS — 0.1% |
| Morgan Stanley Institutional Liquidity Funds - Treasury Portfolio - Institutional Class - 5.14% (d) | |
| | |
|
|
| Total Investments — 100.0% | |
| | |
| Net Other Assets and Liabilities — (0.0)% | |
| | |
| Non-income producing security. |
| This security is taxed as a “C” corporation for federal income tax purposes. |
| Security is a Master Limited Partnership (“MLP”). |
| Rate shown reflects yield as of June 30, 2024. |
Abbreviations throughout the Portfolio of Investments: |
| – American Depositary Receipt |
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| | | | |
| | | | |
| See Portfolio of Investments for industry breakout. |
See Notes to Financial Statements
First Trust NASDAQ® ABA Community Bank Index Fund (QABA)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
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|
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| Amalgamated Financial Corp. | |
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| Bridgewater Bancshares, Inc. (a) | |
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| Burke & Herbert Financial Services Corp. | |
| Business First Bancshares, Inc. | |
| | |
| Capital City Bank Group, Inc. | |
| Capitol Federal Financial, Inc. | |
| Carter Bankshares, Inc. (a) | |
| | |
| Citizens Financial Services, Inc. | |
| | |
| | |
| Coastal Financial Corp. (a) | |
| Columbia Financial, Inc. (a) | |
| Commerce Bancshares, Inc. | |
| Community Trust Bancorp, Inc. | |
| Community West Bancshares | |
| | |
| CrossFirst Bankshares, Inc. (a) | |
| | |
| Dime Community Bancshares, Inc. | |
| | |
| | |
| Enterprise Financial Services Corp. | |
| Esquire Financial Holdings, Inc. | |
| Farmers National Banc Corp. | |
| Financial Institutions, Inc. | |
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| First Community Bankshares, Inc. | |
| | |
| First Financial Bankshares, Inc. | |
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|
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| First Interstate BancSystem, Inc., Class A | |
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| First Mid Bancshares, Inc. | |
| First of Long Island (The) Corp. | |
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| German American Bancorp, Inc. | |
| Great Southern Bancorp, Inc. | |
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| Hingham Institution for (The) Savings (b) | |
| HomeTrust Bancshares, Inc. | |
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| Independent Bank Group, Inc. | |
| International Bancshares Corp. | |
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| Midland States Bancorp, Inc. | |
| MidWestOne Financial Group, Inc. | |
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| Northeast Community Bancorp, Inc. | |
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| Northwest Bancshares, Inc. | |
| OceanFirst Financial Corp. | |
| | |
| Orrstown Financial Services, Inc. | |
| Pacific Premier Bancorp, Inc. | |
| | |
| Peapack-Gladstone Financial Corp. | |
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| | |
| Republic Bancorp, Inc., Class A | |
See Notes to Financial Statements
First Trust NASDAQ® ABA Community Bank Index Fund (QABA)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
COMMON STOCKS (Continued) |
| | |
| | |
| Sandy Spring Bancorp, Inc. | |
| Seacoast Banking Corp. of Florida | |
| | |
| | |
| Simmons First National Corp., Class A | |
| South Plains Financial, Inc. | |
| Southern California Bancorp (a) | |
| Southern Missouri Bancorp, Inc. | |
| Southside Bancshares, Inc. | |
| Stock Yards Bancorp, Inc. | |
| Texas Capital Bancshares, Inc. (a) | |
| | |
| Third Coast Bancshares, Inc. (a) | |
| | |
| | |
| Triumph Financial, Inc. (a) | |
| | |
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| United Community Banks, Inc. | |
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| Washington Trust Bancorp, Inc. | |
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| Financial Services — 1.8% | |
| Cass Information Systems, Inc. | |
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| Waterstone Financial, Inc. | |
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MONEY MARKET FUNDS — 0.1% |
| Dreyfus Government Cash Management Fund, Institutional Shares - 5.19% (c) | |
| | |
| | |
REPURCHASE AGREEMENTS — 0.0% |
| Mizuho Financial Group, Inc., 5.32% (c), dated 06/28/24, due 07/01/24, with a maturity value of $10,405. Collateralized by U.S. Treasury Securities, interest rates of 0.50% to 5.00%, due 07/31/24 to 09/30/29. The value of the collateral including accrued interest is $10,608. (d) | |
| | |
|
|
| Total Investments — 100.0% | |
| | |
| Net Other Assets and Liabilities — 0.0% | |
| | |
| Non-income producing security. |
| All or a portion of this security is on loan (see Note 2D - Securities Lending in the Notes to Financial Statements). The remaining contractual maturity of all of the securities lending transactions is overnight and continuous. The aggregate value of such securities, including those sold and pending settlement, is $10,375 and the total value of the collateral held by the Fund is $10,400. |
| Rate shown reflects yield as of June 30, 2024. |
| This security serves as collateral for securities on loan. |
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| | | | |
| | | | |
| | | | |
| See Portfolio of Investments for industry breakout. |
See Notes to Financial Statements
First Trust NASDAQ® ABA Community Bank Index Fund (QABA)Portfolio of Investments (Continued)June 30, 2024 (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) | |
| |
| |
| 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. |
| At June 30, 2024, 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. |
The Fund’s investments in repurchase agreements were all subject to an enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis were as follows:
|
Total gross amount presented on the Statements of Assets and Liabilities(3) | |
| |
| |
| The amount is included in “Investments, at value” on the Statements of Assets and Liabilities. |
| At June 30, 2024, the value of the collateral received from each seller exceeded the value of the repurchase agreements. |
See Notes to Financial Statements
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First Trust Exchange-Traded FundStatements of Assets and Liabilities
June 30, 2024 (Unaudited)
| First Trust NASDAQ-100 Equal Weighted Index Fund
(QQEW) | First Trust NASDAQ-100- Technology Sector Index Fund
(QTEC) | First Trust NASDAQ-100 Ex-Technology Sector Index Fund
(QQXT) |
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Investment securities sold | | | |
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Securities lending income | | | |
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Collateral for securities on loan | | | |
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Shareholder reporting fees | | | |
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Investment securities purchased | | | |
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Accumulated distributable earnings (loss) | | | |
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NET ASSET VALUE, per share | | | |
Number of shares outstanding (unlimited number of shares authorized, par value $0.01 per share) | | | |
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Securities on loan, at value | | | |
See Notes to Financial Statements
First Trust NASDAQ® Clean Edge® Green Energy Index Fund
(QCLN) | First Trust S&P REIT Index Fund
(FRI) | First Trust Water ETF
(FIW) | First Trust Natural Gas ETF
(FCG) | First Trust NASDAQ® ABA Community Bank Index Fund
(QABA) |
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See Notes to Financial Statements
First Trust Exchange-Traded FundStatements of Operations
For the Six Months Ended June 30, 2024 (Unaudited)
| First Trust NASDAQ-100 Equal Weighted Index Fund
(QQEW) | First Trust NASDAQ-100- Technology Sector Index Fund
(QTEC) | First Trust NASDAQ-100 Ex-Technology Sector Index Fund
(QQXT) |
| | | |
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Securities lending income (net of fees) | | | |
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Accounting and administration fees | | | |
Shareholder reporting fees | | | |
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Trustees’ fees and expenses | | | |
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Less fees waived by the investment advisor | | | |
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NET INVESTMENT INCOME (LOSS) | | | |
|
NET REALIZED AND UNREALIZED GAIN (LOSS): | | | |
Net realized gain (loss) on: | | | |
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Foreign currency transactions | | | |
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Net change in unrealized appreciation (depreciation) on: | | | |
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Foreign currency translation | | | |
Net change in unrealized appreciation (depreciation) | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | | |
See Notes to Financial Statements
First Trust NASDAQ® Clean Edge® Green Energy Index Fund
(QCLN) | First Trust S&P REIT Index Fund
(FRI) | First Trust Water ETF
(FIW) | First Trust Natural Gas ETF
(FCG) | First Trust NASDAQ® ABA Community Bank Index Fund
(QABA) |
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See Notes to Financial Statements
First Trust Exchange-Traded FundStatements of Changes in Net Assets
| First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW) | First Trust NASDAQ-100- Technology Sector Index Fund (QTEC) |
| Six Months
Ended
6/30/2024 (Unaudited) | | Six Months
Ended
6/30/2024 (Unaudited) | |
| | | | |
Net investment income (loss) | | | | |
| | | | |
Net change in unrealized appreciation (depreciation) | | | | |
Net increase (decrease) in net assets resulting from operations | | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS FROM: | | | | |
| | | | |
|
SHAREHOLDER TRANSACTIONS: | | | | |
Proceeds from shares sold | | | | |
| | | | |
Net increase (decrease) in net assets resulting from shareholder transactions | | | | |
Total increase (decrease) in net assets | | | | |
|
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|
CHANGES IN SHARES OUTSTANDING: | | | | |
Shares outstanding, beginning of period | | | | |
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Shares outstanding, end of period | | | | |
See Notes to Financial Statements
First Trust NASDAQ-100 Ex- Technology Sector Index Fund (QQXT) | First Trust NASDAQ® Clean Edge® Green Energy Index Fund (QCLN) | First Trust S&P REIT Index Fund (FRI) | First Trust Water ETF (FIW) |
Six Months
Ended
6/30/2024 (Unaudited) | | Six Months
Ended
6/30/2024 (Unaudited) | | Six Months
Ended
6/30/2024 (Unaudited) | | Six Months
Ended
6/30/2024 (Unaudited) | |
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See Notes to Financial Statements
First Trust Exchange-Traded FundStatements of Changes in Net Assets (Continued)
| First Trust Natural Gas ETF (FCG) | First Trust NASDAQ® ABA Community Bank Index Fund (QABA) |
| Six Months
Ended
6/30/2024 (Unaudited) | | Six Months
Ended
6/30/2024 (Unaudited) | |
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Net investment income (loss) | | | | |
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Net change in unrealized appreciation (depreciation) | | | | |
Net increase (decrease) in net assets resulting from operations | | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS FROM: | | | | |
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|
SHAREHOLDER TRANSACTIONS: | | | | |
Proceeds from shares sold | | | | |
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Net increase (decrease) in net assets resulting from shareholder transactions | | | | |
Total increase (decrease) in net assets | | | | |
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CHANGES IN SHARES OUTSTANDING: | | | | |
Shares outstanding, beginning of period | | | | |
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Shares outstanding, end of period | | | | |
See Notes to Financial Statements
First Trust Exchange-Traded FundFinancial Highlights
For a share outstanding throughout each period First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW)
| Six Months
Ended
6/30/2024
(Unaudited) | |
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Net asset value, beginning of period | | | | | | |
Income from investment operations: | | | | | | |
Net investment income (loss) | | | | | | |
Net realized and unrealized gain (loss) | | | | | | |
Total from investment operations | | | | | | |
Distributions paid to shareholders from: | | | | | | |
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Net asset value, end of period | | | | | | |
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|
Ratios to average net assets/supplemental data: | | | | | | |
Net assets, end of period (in 000’s) | | | | | | |
Ratio of total expenses to average net assets | | | | | | |
Ratio of net investment income (loss) to average net assets | | | | | | |
Portfolio turnover rate (d) | | | | | | |
| Based on average shares outstanding. |
| 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. |
| |
| 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
First Trust Exchange-Traded FundFinancial Highlights (Continued)
For a share outstanding throughout each period First Trust NASDAQ-100-Technology Sector Index Fund (QTEC)
| Six Months
Ended
6/30/2024
(Unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
Income from investment operations: | | | | | | |
Net investment income (loss) | | | | | | |
Net realized and unrealized gain (loss) | | | | | | |
Total from investment operations | | | | | | |
Distributions paid to shareholders from: | | | | | | |
| | | | | | |
Net asset value, end of period | | | | | | |
| | | | | | |
|
Ratios to average net assets/supplemental data: | | | | | | |
Net assets, end of period (in 000’s) | | | | | | |
Ratio of total expenses to average net assets | | | | | | |
Ratio of net investment income (loss) to average net assets | | | | | | |
Portfolio turnover rate (d) | | | | | | |
| Based on average shares outstanding. |
| 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. |
| |
| 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
First Trust Exchange-Traded FundFinancial Highlights (Continued)
For a share outstanding throughout each period First Trust NASDAQ-100 Ex-Technology Sector Index Fund (QQXT)
| Six Months
Ended
6/30/2024
(Unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
Income from investment operations: | | | | | | |
Net investment income (loss) | | | | | | |
Net realized and unrealized gain (loss) | | | | | | |
Total from investment operations | | | | | | |
Distributions paid to shareholders from: | | | | | | |
| | | | | | |
Net asset value, end of period | | | | | | |
| | | | | | |
|
Ratios to average net assets/supplemental data: | | | | | | |
Net assets, end of period (in 000’s) | | | | | | |
Ratio of total expenses to average net assets | | | | | | |
Ratio of net expenses to average net assets | | | | | | |
Ratio of net investment income (loss) to average net assets | | | | | | |
Portfolio turnover rate (d) | | | | | | |
| Based on average shares outstanding. |
| 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. |
| |
| 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
First Trust Exchange-Traded FundFinancial Highlights (Continued)
For a share outstanding throughout each period First Trust NASDAQ® Clean Edge® Green Energy Index Fund (QCLN)
| Six Months
Ended
6/30/2024
(Unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
Income from investment operations: | | | | | | |
Net investment income (loss) | | | | | | |
Net realized and unrealized gain (loss) | | | | | | |
Total from investment operations | | | | | | |
Distributions paid to shareholders from: | | | | | | |
| | | | | | |
Net asset value, end of period | | | | | | |
| | | | | | |
|
Ratios to average net assets/supplemental data: | | | | | | |
Net assets, end of period (in 000’s) | | | | | | |
Ratio of total expenses to average net assets | | | | | | |
Ratio of net expenses to average net assets | | | | | | |
Ratio of net investment income (loss) to average net assets | | | | | | |
Portfolio turnover rate (d) | | | | | | |
| Based on average shares outstanding. |
| 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. |
| |
| 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
First Trust Exchange-Traded FundFinancial Highlights (Continued)
For a share outstanding throughout each period First Trust S&P REIT Index Fund (FRI)
| Six Months
Ended
6/30/2024
(Unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
Income from investment operations: | | | | | | |
Net investment income (loss) | | | | | | |
Net realized and unrealized gain (loss) | | | | | | |
Total from investment operations | | | | | | |
Distributions paid to shareholders from: | | | | | | |
| | | | | | |
Net asset value, end of period | | | | | | |
| | | | | | |
|
Ratios to average net assets/supplemental data: | | | | | | |
Net assets, end of period (in 000’s) | | | | | | |
Ratio of total expenses to average net assets | | | | | | |
Ratio of net expenses to average net assets | | | | | | |
Ratio of net investment income (loss) to average net assets | | | | | | |
Portfolio turnover rate (d) | | | | | | |
| Based on average shares outstanding. |
| 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. |
| |
| 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
First Trust Exchange-Traded FundFinancial Highlights (Continued)
For a share outstanding throughout each period First Trust Water ETF (FIW)
| Six Months
Ended
6/30/2024
(Unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
Income from investment operations: | | | | | | |
Net investment income (loss) | | | | | | |
Net realized and unrealized gain (loss) | | | | | | |
Total from investment operations | | | | | | |
Distributions paid to shareholders from: | | | | | | |
| | | | | | |
Net asset value, end of period | | | | | | |
| | | | | | |
|
Ratios to average net assets/supplemental data: | | | | | | |
Net assets, end of period (in 000’s) | | | | | | |
Ratio of total expenses to average net assets | | | | | | |
Ratio of net investment income (loss) to average net assets | | | | | | |
Portfolio turnover rate (d) | | | | | | |
| Based on average shares outstanding. |
| 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. |
| |
| 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
First Trust Exchange-Traded FundFinancial Highlights (Continued)
For a share outstanding throughout each period First Trust Natural Gas ETF (FCG)
| Six Months
Ended
6/30/2024
(Unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
Income from investment operations: | | | | | | |
Net investment income (loss) | | | | | | |
Net realized and unrealized gain (loss) | | | | | | |
Total from investment operations | | | | | | |
Distributions paid to shareholders from: | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Net asset value, end of period | | | | | | |
| | | | | | |
|
Ratios to average net assets/supplemental data: | | | | | | |
Net assets, end of period (in 000’s) | | | | | | |
Ratio of total expenses to average net assets | | | | | | |
Ratio of net expenses to average net assets | | | | | | |
Ratio of net investment income (loss) to average net assets | | | | | | |
Portfolio turnover rate (e) | | | | | | |
| Based on average shares outstanding. |
| 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. |
| |
| For the year ended December 31, 2021, ratio reflects excise tax of 0.01%, which is not included in the expense cap. |
| 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
First Trust Exchange-Traded FundFinancial Highlights (Continued)
For a share outstanding throughout each period First Trust NASDAQ® ABA Community Bank Index Fund (QABA)
| Six Months
Ended
6/30/2024
(Unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
Income from investment operations: | | | | | | |
Net investment income (loss) | | | | | | |
Net realized and unrealized gain (loss) | | | | | | |
Total from investment operations | | | | | | |
Distributions paid to shareholders from: | | | | | | |
| | | | | | |
Net asset value, end of period | | | | | | |
| | | | | | |
|
Ratios to average net assets/supplemental data: | | | | | | |
Net assets, end of period (in 000’s) | | | | | | |
Ratio of total expenses to average net assets | | | | | | |
Ratio of net expenses to average net assets | | | | | | |
Ratio of net investment income (loss) to average net assets | | | | | | |
Portfolio turnover rate (d) | | | | | | |
| Based on average shares outstanding. |
| 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. |
| |
| 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
Notes to Financial Statements
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) 1. Organization
First Trust Exchange-Traded Fund (the “Trust”) is an open-end management investment company organized as a Massachusetts business trust on August 8, 2003, and is registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended (the “1940 Act”).
This report covers the eight funds (each a “Fund” and collectively, the “Funds”) listed below:
First Trust NASDAQ-100 Equal Weighted Index Fund – (Nasdaq, Inc. (“Nasdaq”) ticker “QQEW”) |
First Trust NASDAQ-100-Technology Sector Index Fund – (Nasdaq ticker “QTEC”) |
First Trust NASDAQ-100 Ex-Technology Sector Index Fund – (Nasdaq ticker “QQXT”) |
First Trust NASDAQ® Clean Edge® Green Energy Index Fund – (Nasdaq ticker “QCLN”) |
First Trust S&P REIT Index Fund – (NYSE Arca, Inc. (“NYSE Arca”) ticker “FRI”) |
First Trust Water ETF – (NYSE Arca ticker “FIW”) |
First Trust Natural Gas ETF – (NYSE Arca ticker “FCG”) |
First Trust NASDAQ® ABA Community Bank Index Fund – (Nasdaq ticker “QABA”) |
QCLN operates as a non-diversified series of the Trust. Each of QQEW, QTEC, QQXT, FRI, FIW, FCG and QABA operates as a diversified open-end management investment company as defined in Section 5(b) of the 1940 Act. Each Fund represents a separate series of shares of beneficial interest in the Trust. Unlike conventional mutual funds, each Fund issues and redeems shares on a continuous basis at net asset value (“NAV”), only in large blocks of shares known as “Creation Units.” 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:
| |
First Trust NASDAQ-100 Equal Weighted Index Fund | Nasdaq-100 Equal WeightedTM Index |
First Trust NASDAQ-100-Technology Sector Index Fund | Nasdaq-100 Technology SectorTM Index |
First Trust NASDAQ-100 Ex-Technology Sector Index Fund | Nasdaq-100 Ex-Tech SectorTM Index |
First Trust NASDAQ® Clean Edge® Green Energy Index Fund | Nasdaq® Clean Edge® Green EnergyTM Index |
First Trust S&P REIT Index Fund | S&P United States REIT Index |
| ISE Clean Edge WaterTM Index |
First Trust Natural Gas ETF | ISE-Revere Natural GasTM Index |
First Trust NASDAQ® ABA Community Bank Index Fund | Nasdaq OMX® ABA Community BankTM 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.
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. 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 readily available market quotations such as 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 approved by the Trust’s Board of Trustees, and in accordance with provisions of the 1940 Act and rules
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) thereunder. 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, real estate investment trusts (“REITs”), master limited partnerships (“MLPs”) 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 primary exchange for such securities.
Shares of open-end funds are valued based on NAV per share.
Equity securities traded in an over-the-counter market are valued at the close price or the last trade price.
Overnight repurchase agreements are valued at amortized cost when it represents the most appropriate reflection of fair market value.
Certain securities may not be able to be priced by pre-established pricing methods. Such securities may be valued by 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 last sale price on the exchange on which they are principally traded or, for Nasdaq and AIM securities, the official closing price;
3)
the size of the holding;
4)
the initial cost of the security;
5)
transactions in comparable securities;
6)
price quotes from dealers and/or third-party pricing services;
7)
relationships among various securities;
8)
information obtained by contacting the issuer, analysts, or the appropriate stock exchange;
9)
an analysis of the issuer’s financial statements;
10)
the existence of merger proposals or tender offers that might affect the value of the security; and
11)
other relevant factors.
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.
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:
• 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.
• 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.
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) 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.
• 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 June 30, 2024, 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 MLPs generally are comprised of return of capital and investment income. A Fund records estimated return of capital and investment income based on historical information available from each MLP. These estimates may subsequently be revised based on information received from the MLPs after their tax reporting periods are concluded.
Distributions received from a Fund’s investments in REITs may be comprised of return of capital, capital gains, and income. The actual character of the amounts received during the year are 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 requires 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.
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
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) agent and is responsible for executing the lending of the portfolio securities to creditworthy borrowers with the exception of FIW, FCG, and QABA. Prior to June 10, 2024, FIW, FCG, and QABA’s securities agent was BBH. Effective June 10, 2024, the Bank of New York Mellon (“BNY”) acts as FIW, FCG, and QABA’s 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 June 30, 2024, QQEW, QTEC, QQXT, QCLN, FIW, and QABA had securities in the securities lending program. During the six months ended June 30, 2024, all the Funds, except FRI, participated in the securities lending program.
In the event of a default by a borrower with respect to any loan, BBH or BNY 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 and BNY to exercise these remedies, a Fund sustains losses as a result of a borrower’s default, BBH or BNY 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 or BNY.
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 or BNY 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 are 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 June 30, 2024, were received as collateral for lending securities.
F. 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 capital gains earned by each Fund, if any, are distributed at least annually. Each Fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
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 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.
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) The tax character of distributions paid by each Fund during the fiscal year ended December 31, 2023 was as follows:
| Distributions
paid from
Ordinary
Income | Distributions
paid from
Capital
Gains | Distributions
paid from
Return of
Capital |
First Trust NASDAQ-100 Equal Weighted Index Fund | | | |
First Trust NASDAQ-100-Technology Sector Index Fund | | | |
First Trust NASDAQ-100 Ex-Technology Sector Index Fund | | | |
First Trust NASDAQ® Clean Edge® Green Energy Index Fund | | | |
First Trust S&P REIT Index Fund | | | |
| | | |
First Trust Natural Gas ETF | | | |
First Trust NASDAQ® ABA Community Bank Index Fund | | | |
As of December 31, 2023, the components of distributable earnings on a tax basis for each Fund were as follows:
| Undistributed
Ordinary
Income | Accumulated
Capital and
Other
Gain (Loss) | Net
Unrealized
Appreciation
(Depreciation) |
First Trust NASDAQ-100 Equal Weighted Index Fund | | | |
First Trust NASDAQ-100-Technology Sector Index Fund | | | |
First Trust NASDAQ-100 Ex-Technology Sector Index Fund | | | |
First Trust NASDAQ® Clean Edge® Green Energy Index Fund | | | |
First Trust S&P REIT Index Fund | | | |
| | | |
First Trust Natural Gas ETF | | | |
First Trust NASDAQ® ABA Community Bank Index Fund | | | |
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 years ended 2020, 2021, 2022, and 2023 remain open to federal and state audit. As of June 30, 2024, 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 apply when there has been a 50% change in ownership. At December 31, 2023, for federal income tax purposes, each applicable Fund had a capital loss carryforward available that is shown in the following table, to the extent provided by regulations, to offset future capital gains. 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
Carryforwards |
First Trust NASDAQ-100 Equal Weighted Index Fund | |
First Trust NASDAQ-100-Technology Sector Index Fund | |
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) | Non-Expiring Capital Loss Carryforwards |
First Trust NASDAQ-100 Ex-Technology Sector Index Fund | |
First Trust NASDAQ® Clean Edge® Green Energy Index Fund | |
First Trust S&P REIT Index Fund | |
| |
First Trust Natural Gas ETF | |
First Trust NASDAQ® ABA Community Bank Index Fund | |
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 December 31, 2023, the Funds had no net late year ordinary or capital losses.
As of June 30, 2024, the aggregate cost, gross unrealized appreciation, gross unrealized depreciation, and net unrealized appreciation/(depreciation) on investments (including short positions and derivatives, if any) for federal income tax purposes were as follows:
| | Gross Unrealized
Appreciation | Gross Unrealized
(Depreciation) | Net Unrealized
Appreciation
(Depreciation) |
First Trust NASDAQ-100 Equal Weighted Index Fund | | | | |
First Trust NASDAQ-100-Technology Sector Index Fund | | | | |
First Trust NASDAQ-100 Ex-Technology Sector Index Fund | | | | |
First Trust NASDAQ® Clean Edge® Green Energy Index Fund | | | | |
First Trust S&P REIT Index Fund | | | | |
| | | | |
First Trust Natural Gas ETF | | | | |
First Trust NASDAQ® ABA Community Bank Index Fund | | | | |
Expenses that are directly related to one of the Funds are charged directly to the respective Fund. 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:
| |
First Trust NASDAQ-100 Equal Weighted Index Fund | |
First Trust NASDAQ-100-Technology Sector Index Fund | |
First Trust NASDAQ-100 Ex-Technology Sector Index Fund | |
First Trust NASDAQ® Clean Edge® Green Energy Index Fund | Nasdaq, Inc. and Clean Edge® |
First Trust S&P REIT Index Fund | S&P Dow Jones Indices LLC |
| |
First Trust Natural Gas ETF | |
First Trust NASDAQ® ABA Community Bank Index Fund | Nasdaq, Inc. and American Bankers Association |
The respective license agreements allow for the use by First Trust of certain trademarks and trade names of the respective Licensors. The Funds are sub-licensees to the applicable license agreement. The respective Funds are required to pay licensing fees, which are shown on the Statements of Operations.
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (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.
The management fee payable by each Fund to First Trust for these services will be reduced at certain levels of each Fund’s net assets (“breakpoints”) and calculated pursuant to the following schedule:
| | | | | | | | |
Fund net assets up to and including $2.5 billion | | | | | | | | |
Fund net assets greater than $2.5 billion up to and including $5 billion | | | | | | | | |
Fund net assets greater than $5 billion up to and including $7.5 billion | | | | | | | | |
Fund net assets greater than $7.5 billion up to and including $10 billion | | | | | | | | |
Fund net assets greater than $10 billion up to and including $15 billion | | | | | | | | |
Fund net assets greater than $15 billion | | | | | | | | |
The Trust and the Advisor have entered into an Expense Reimbursement and Fee Waiver Agreement (“Agreement”) in which First Trust has agreed to waive fees and/or reimburse Fund expenses to the extent that the operating expenses of each 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”). The Expense Cap will be in effect until at least April 30, 2025.
| |
First Trust NASDAQ-100 Equal Weighted Index Fund | |
First Trust NASDAQ-100-Technology Sector Index Fund | |
First Trust NASDAQ-100 Ex-Technology Sector Index Fund | |
First Trust NASDAQ® Clean Edge® Green Energy Index Fund | |
First Trust S&P REIT Index Fund | |
| |
First Trust Natural Gas ETF | |
First Trust NASDAQ® ABA Community Bank Index Fund | |
The Trust has multiple service agreements with BNY. Under the service agreements, BNY performs custodial, fund accounting, certain administrative services, and transfer agency services for each Fund. As custodian, BNY is responsible for custody of each Fund’s assets. As fund accountant and administrator, BNY is responsible for maintaining the books and records of each Fund’s securities and cash. As transfer agent, BNY is responsible for maintaining shareholder records for each Fund. BNY 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 target outcome fund or an index fund.
Additionally, the Chairs of the Audit Committee, Nominating and Governance Committee and Valuation Committee, the Vice Chair of the Audit Committee, the Lead Independent Trustee and the Vice Lead Independent Trustee 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 Committee Chairs, the Audit Committee Vice Chair, the Lead Independent Trustee and the Vice Lead Independent Trustee rotate periodically in serving in such capacities. The officers and “Interested” Trustee receive no compensation from the Trust for acting in such capacities.
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) 4. Purchases and Sales of Securities
For the six months ended June 30, 2024, the cost of purchases and proceeds from sales of investments for each Fund, excluding short-term investments and in-kind transactions, were as follows:
| | |
First Trust NASDAQ-100 Equal Weighted Index Fund | | |
First Trust NASDAQ-100-Technology Sector Index Fund | | |
First Trust NASDAQ-100 Ex-Technology Sector Index Fund | | |
First Trust NASDAQ® Clean Edge® Green Energy Index Fund | | |
First Trust S&P REIT Index Fund | | |
| | |
First Trust Natural Gas ETF | | |
First Trust NASDAQ® ABA Community Bank Index Fund | | |
For the six months ended June 30, 2024, the cost of in-kind purchases and proceeds from in-kind sales for each Fund were as follows:
| | |
First Trust NASDAQ-100 Equal Weighted Index Fund | | |
First Trust NASDAQ-100-Technology Sector Index Fund | | |
First Trust NASDAQ-100 Ex-Technology Sector Index Fund | | |
First Trust NASDAQ® Clean Edge® Green Energy Index Fund | | |
First Trust S&P REIT Index Fund | | |
| | |
First Trust Natural Gas ETF | | |
First Trust NASDAQ® ABA Community Bank Index Fund | | |
5. Creations, Redemptions and Transaction Fees
Each Fund generally issues and redeems its shares in primary market transactions through a creation and redemption mechanism and does not sell or redeem individual shares. Instead, financial entities known as “Authorized Participants” have contractual arrangements with a Fund or one of the Fund’s service providers to purchase and redeem Fund shares directly with the Fund in Creation Units. Prior to the start of trading on every business day, a Fund publishes through the National Securities Clearing Corporation the “basket” of securities, cash or other assets that it will accept in exchange for a Creation Unit of the Fund’s shares. An Authorized Participant that wishes to effectuate a creation of a Fund’s shares deposits with the Fund the “basket” of securities, cash or other assets identified by the Fund that day, and then receives the Creation Unit of the Fund’s shares in return for those assets. After purchasing a Creation Unit, the Authorized Participant may continue to hold the Fund’s shares or sell them in the secondary market. The redemption process is the reverse of the purchase process: the Authorized Participant redeems a Creation Unit of a Fund’s shares for a basket of securities, cash or other assets. The combination of the creation and redemption process with secondary market trading in a Fund’s shares and underlying securities provides arbitrage opportunities that are designed to help keep the market price of a Fund’s shares at or close to the NAV per share of the Fund.
Each Fund imposes fees in connection with the purchase of Creation Units. These fees may vary based upon various fact-based circumstances, including, but not limited to, the composition of the securities included in the Creation Unit or the countries in which the transactions are settled. The price for each Creation Unit will equal the daily NAV per share of a Fund 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, stamp taxes and part or all of the spread between the expected bid and offer side of the market related to the securities comprising the creation basket.
Each Fund also imposes fees in connection with the redemption of Creation Units. These fees may vary based upon various fact-based circumstances, including, but not limited to, the composition of the securities included in the Creation Unit or the countries in which the transactions are settled. The price received for each Creation Unit will equal the daily NAV per share of a Fund times the number of shares in a Creation Unit, minus the fees described above and, if applicable, any 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 the securities comprising the redemption basket. Investors who use the services of a broker or other such intermediary in addition to an Authorized
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) Participant to effect a redemption of a Creation Unit may also be assessed an amount to cover the cost of such services. The redemption fee charged by a Fund will comply with Rule 22c-2 of the 1940 Act which limits redemption fees to no more than 2% of the value of the shares redeemed.
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 April 30, 2025.
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.
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.
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) Changes in and Disagreements with Accountants (Item 8 of Form N-CSR)
There were no changes in or disagreements with the Funds’ accountants during the six months ended June 30, 2024.
Proxy Disclosures (Item 9 of Form N-CSR)
There were no matters submitted for vote by shareholders of any Fund during the six months ended June 30, 2024.
Remuneration Paid to Directors, Officers, and Others (Item 10 of Form N-CSR)
The applicable aggregate remuneration paid by each Fund during the period covered by the report is included in the Statements of Operations.
Statement Regarding the Basis for the Board’s Approval of Investment Advisory Contract (Item 11 of Form N-CSR)
The Board of Trustees of First Trust Exchange-Traded Fund (the “Trust”), including the Independent Trustees, unanimously approved the continuation of the Investment Management Agreement (the “Agreement”) with First Trust Advisors L.P. (the “Advisor”) on behalf of the following series of the Trust (each a “Fund” and collectively, the “Funds”):
First Trust NASDAQ® ABA Community Bank Index Fund (QABA)
First Trust NASDAQ® Clean Edge® Green Energy Index Fund (QCLN)
First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW)
First Trust NASDAQ-100 Ex-Technology Sector Index Fund (QQXT)
First Trust NASDAQ-100-Technology Sector Index Fund (QTEC)
First Trust Natural Gas ETF (FCG)
First Trust S&P REIT Index Fund (FRI)
First Trust Water ETF (FIW)
The Board approved the continuation of the Agreement for each Fund for a one-year period ending June 30, 2025 at a meeting held on June 2–3, 2024. The Board determined for each Fund that the continuation of the Agreement is in the best interests of the Fund in light of the nature, extent and quality of the services provided and such other matters as the Board considered to be relevant in the exercise of its business judgment.
To reach this determination for each Fund, the Board considered its duties under the Investment Company Act of 1940, as amended (the “1940 Act”), as well as under the general principles of state law, in reviewing and approving advisory contracts; the requirements of the 1940 Act in such matters; the fiduciary duty of investment advisors with respect to advisory agreements and compensation; the standards used by courts in determining whether investment company boards have fulfilled their duties; and the factors to be considered by the Board in voting on such agreements. At meetings held on April 16, 2024, April 25, 2024 and June 2–3, 2024, the Board, including the Independent Trustees, reviewed materials provided by the Advisor responding to requests for information from counsel to the Independent Trustees, submitted on behalf of the Independent Trustees, that, among other things, outlined: the services provided by the Advisor to each Fund (including the relevant personnel responsible for these services and their experience); the advisory fee rate schedule payable by each Fund as compared to fees charged to a peer group of funds (the “Expense Group”) and a broad peer universe of funds (the “Expense Universe”), each assembled by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent source, and as compared to fees charged to other clients of the Advisor, including other exchange-traded funds (“ETFs”) managed by the Advisor; the expense ratio of each Fund as compared to expense ratios of the funds in the Fund’s Expense Group and Expense Universe; performance information for each Fund, including comparisons of each Fund’s performance to that of one or more relevant benchmark indexes and to that of a performance group of funds and a broad performance universe of funds (the “Performance Universe”), each assembled by Broadridge; the nature of expenses incurred in providing services to each Fund and the potential for the Advisor to realize economies of scale, if any; profitability and other financial data for the Advisor; any indirect benefits to the Advisor and its affiliate, First Trust Portfolios L.P. (“FTP”); and information on the Advisor’s compliance program. The Board reviewed initial materials with the Advisor at the meeting held on April 25, 2024, prior to which the Independent Trustees and their counsel met separately to discuss the information provided by the Advisor. Following the April 25, 2024 meeting, counsel to the Independent Trustees, on behalf of the Independent Trustees, requested certain clarifications and supplements to the materials provided, and the information provided in response to those requests was considered at an executive session of the Independent Trustees and their counsel held prior to the June 2–3, 2024 meeting, as well as at the June meeting. The Board applied its business judgment to determine whether the arrangement between the Trust and the Advisor continues to be a reasonable business arrangement from each Fund’s perspective. The Board determined that, given the totality of the information provided with respect to the Agreement, the Board had
Other Information (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) received sufficient information to renew the Agreement. The Board considered that shareholders chose to invest or remain invested in a Fund knowing that the Advisor manages the Fund and knowing the Fund’s advisory fee.
In reviewing the Agreement for each Fund, the Board considered the nature, extent and quality of the services provided by the Advisor under the Agreement. The Board considered that the Advisor is responsible for the overall management and administration of the Trust and each Fund and reviewed all of the services provided by the Advisor to the Funds, as well as the background and experience of the persons responsible for such services. In reviewing the services provided, the Board noted the compliance program that had been developed by the Advisor and considered that it includes a robust program for monitoring the Advisor’s and each Fund’s compliance with the 1940 Act, as well as each Fund’s compliance with its investment objective, policies and restrictions. The Board also considered a report from the Advisor with respect to its risk management functions related to the operation of the Funds. Finally, as part of the Board’s consideration of the Advisor’s services, the Advisor, in its written materials and at the April 25, 2024 meeting, described to the Board the scope of its ongoing investment in additional personnel and infrastructure to maintain and improve the quality of services provided to the Funds and the other funds in the First Trust Fund Complex. In light of the information presented and the considerations made, the Board concluded that the nature, extent and quality of the services provided to the Trust and each Fund by the Advisor under the Agreement have been and are expected to remain satisfactory and that the Advisor has managed each Fund consistent with its investment objective, policies and restrictions.
The Board considered the advisory fee rate schedule payable by each Fund under the Agreement for the services provided. The Board considered that the Advisor agreed to extend the current expense cap for each Fund through April 30, 2026. The Board received and reviewed information showing the fee rates and expense ratios of the peer funds in the Expense Groups, as well as advisory and unitary fee rates charged by the Advisor to other fund (including ETFs) and non-fund clients, as applicable. Because each Fund’s Expense Group included peer funds that pay a unitary fee, the Board determined that expense ratios were the most relevant comparative data point. Based on the information provided, the Board noted that the total (net) expense ratio for each Fund was above the median total (net) expense ratio of the peer funds in its respective Expense Group. With respect to the Expense Groups, the Board discussed with Broadridge its methodology for assembling peer groups and discussed with the Advisor limitations in creating peer groups for index ETFs, including differences in underlying indexes and index-tracking methodologies that can result in greater management complexities across seemingly comparable ETFs, and different business models that may affect the pricing of services among ETF sponsors. The Board took these limitations and differences into account in considering the peer data. With respect to fees charged to other non-ETF clients, the Board considered differences between the Funds and other non-ETF clients that limited their comparability. In considering the advisory fee rate schedules overall, the Board also considered the Advisor’s statement that it seeks to meet investor needs through innovative and value-added investment solutions and the Advisor’s demonstrated long-term commitment to each Fund and the other funds in the First Trust Fund Complex.
The Board considered performance information for each Fund. The Board noted the process it has established for monitoring each Fund’s performance and portfolio risk on an ongoing basis, which includes quarterly performance reporting from the Advisor for the Funds. The Board determined that this process continues to be effective for reviewing each Fund’s performance. The Board received and reviewed information for periods ended December 31, 2023 regarding the performance of each Fund’s underlying index, the correlation between each Fund’s performance and that of its underlying index, each Fund’s tracking difference and each Fund’s excess return as compared to its benchmark index. Based on the information provided and its ongoing review of performance, the Board concluded that each Fund was correlated to its underlying index and that the tracking difference for each Fund was within a reasonable range. In addition, the Board reviewed data prepared by Broadridge comparing each Fund’s performance to that of its respective Performance Universe and to that of a broad-based benchmark index and noted the Advisor’s discussion of QQEW’s performance at the April 25, 2024 meeting. However, given each Fund’s objective of seeking investment results that correspond generally to the performance of its underlying index, the Board placed more emphasis on its review of correlation and tracking difference.
On the basis of all the information provided on the fees, expenses and performance of each Fund and the ongoing oversight by the Board, the Board concluded that the advisory fee for each Fund continues to be reasonable and appropriate in light of the nature, extent and quality of the services provided by the Advisor to each Fund under the Agreement.
The Board considered information and discussed with the Advisor whether there were any economies of scale in connection with providing advisory services to the Funds at current asset levels and whether the Funds may benefit from any economies of scale. The Board noted that the advisory fee rate schedule for each Fund includes breakpoints pursuant to which the advisory fee rate will be reduced as assets of the Fund meet certain thresholds. The Board considered the Advisor’s statement that it believes that its expenses relating to providing advisory services to the Funds will increase during the next twelve months as the Advisor continues to build infrastructure and add new staff. The Board concluded that the advisory fee rate schedule for each Fund reflects an appropriate level of
Other Information (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) sharing of any economies of scale that may be realized in the management of the Fund at current asset levels. The Board considered the revenues and allocated costs (including the allocation methodology) of the Advisor in serving as investment advisor to each Fund for the twelve months ended December 31, 2023 and the estimated profitability level for each Fund calculated by the Advisor based on such data, as well as complex-wide and product-line profitability data, for the same period. The Board noted the inherent limitations in the profitability analysis and concluded that, based on the information provided, the Advisor’s profitability level for each Fund was not unreasonable. In addition, the Board considered indirect benefits described by the Advisor that may be realized from its relationship with the Funds. The Board considered that the Advisor had identified as an indirect benefit to the Advisor and FTP their exposure to investors and brokers who, absent their exposure to the Funds, may have had no dealings with the Advisor or FTP, and noted that the Advisor does not utilize soft dollars in connection with the Funds. The Board concluded that the character and amount of potential indirect benefits to the Advisor were not unreasonable.
Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, unanimously determined that the terms of the Agreement continue to be fair and reasonable and that the continuation of the Agreement is in the best interests of each Fund. No single factor was determinative in the Board’s analysis.
Nasdaq®, Nasdaq-100®, Nasdaq-100 Index®, Clean Edge®, OMX®, Nasdaq OMX®, Nasdaq-100 Equal WeightedTM Index,
Nasdaq-100 Technology SectorTM Index, Nasdaq-100 Ex-Tech SectorTM Index, Nasdaq® Clean Edge® Green EnergyTM Index, ISE Clean Edge WaterTM Index, ISE-Revere Natural GasTM Index and Nasdaq OMX® ABA Community BankTM Index (“the Nasdaq Indexes”) are registered trademarks and service marks of Nasdaq, Inc., Clean Edge, Inc., and American Bankers Association, respectively, (together with their affiliates hereinafter referred to as the “Corporations”), and are licensed for use by First Trust. The Funds have not been passed on by the Corporations as to their legality or suitability. The Funds are not issued, endorsed, sold or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUNDS.
S&P United States REIT Index (“Index”) is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”) and has been licensed for use by First Trust. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® 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 on 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 the errors, omissions or interruptions of the Index.
Semi-Annual Financial
Statements and
Other Information |
For the Six Months Ended
June 30, 2024 |
First Trust Exchange-Traded Fund
First Trust Dividend StrengthTM ETF (FTDS) |
First Trust Dow 30 Equal Weight ETF (EDOW) |
First Trust Lunt U.S. Factor Rotation ETF (FCTR) |
First Trust S&P 500 Diversified Free Cash Flow ETF (FCFY) |
First Trust Exchange-Traded Fund
Semi-Annual Financial Statements and Other Information
June 30, 2024
Performance and Risk Disclosure
There is no assurance that any series of First Trust Exchange-Traded Fund (the “Trust”) described in this report (each such series is referred to as a “Fund” and collectively, as the “Funds”) 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’s shares may therefore be less than what you paid for them. Accordingly, you can lose money by investing in a Fund.
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.
First Trust Advisors L.P., the Funds’ advisor, may also periodically provide additional information on Fund performance on each Fund’s webpage at www.ftportfolios.com.
This report contains information that may help you evaluate your investment. It includes details about each Fund and presents data that provides insight into each Fund’s performance and investment approach.
The material risks of investing in each Fund are spelled out in its prospectus, statement of additional information, and other Fund regulatory filings.
First Trust Dividend StrengthTM ETF (FTDS)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
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| Aerospace & Defense — 5.8% | |
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| Huntington Ingalls Industries, Inc. | |
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| Commerce Bancshares, Inc. | |
| Cullen/Frost Bankers, Inc. | |
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| Johnson Controls International PLC | |
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| CF Industries Holdings, Inc. | |
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| Consumer Staples Distribution | |
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| Financial Services — 4.3% | |
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| Archer-Daniels-Midland Co. | |
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| Hotels, Restaurants & Leisure | |
| Wyndham Hotels & Resorts, Inc. | |
| Household Durables — 2.3% | |
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| Industrial Conglomerates — | |
| Honeywell International, Inc. | |
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| Cincinnati Financial Corp. | |
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| Interpublic Group of (The) Cos., Inc. | |
| Oil, Gas & Consumable Fuels | |
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| Professional Services — 2.0% | |
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| Semiconductors & Semiconductor Equipment | |
| Microchip Technology, Inc. | |
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| Dick’s Sporting Goods, Inc. | |
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See Notes to Financial Statements
First Trust Dividend StrengthTM ETF (FTDS)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
MONEY MARKET FUNDS — 0.1% |
| Morgan Stanley Institutional Liquidity Funds - Treasury Portfolio - Institutional Class - 5.14% (a) | |
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| Total Investments — 100.1% | |
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| Net Other Assets and Liabilities — (0.1)% | |
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| Rate shown reflects yield as of June 30, 2024. |
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
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| See Portfolio of Investments for industry breakout. |
See Notes to Financial Statements
First Trust Dow 30 Equal Weight ETF (EDOW)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
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| Aerospace & Defense — 3.4% | |
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| Goldman Sachs Group (The), Inc. | |
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| Consumer Staples Distribution | |
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| Diversified Telecommunication | |
| Verizon Communications, Inc. | |
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| Financial Services — 3.2% | |
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| Hotels, Restaurants & Leisure | |
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| Household Products — 3.3% | |
| Procter & Gamble (The) Co. | |
| Industrial Conglomerates — | |
| | |
| Honeywell International, Inc. | |
| | |
| | |
| Travelers (The) Cos., Inc. | |
| | |
| International Business Machines Corp. | |
| | |
|
| | |
| | |
| Oil, Gas & Consumable Fuels | |
| | |
| | |
| | |
| | |
| | |
| Semiconductors & Semiconductor Equipment | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Technology Hardware, Storage | |
| | |
| Textiles, Apparel & Luxury | |
| | |
| | |
| | |
MONEY MARKET FUNDS — 0.0% |
| Dreyfus Government Cash Management Fund, Institutional Shares - 5.19% (b) | |
| | |
|
|
| Total Investments — 100.0% | |
| | |
| Net Other Assets and Liabilities — 0.0% | |
| | |
| Non-income producing security. |
| Rate shown reflects yield as of June 30, 2024. |
See Notes to Financial Statements
First Trust Dow 30 Equal Weight ETF (EDOW)Portfolio of Investments (Continued)June 30, 2024 (Unaudited)
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| | | | |
| | | | |
| See Portfolio of Investments for industry breakout. |
See Notes to Financial Statements
First Trust Lunt U.S. Factor Rotation ETF (FCTR)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
| | |
|
| Aerospace & Defense — 2.5% | |
| Axon Enterprise, Inc. (a) | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Citizens Financial Group, Inc. | |
| Huntington Bancshares, Inc. | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Monster Beverage Corp. (a) | |
| | |
| | |
| | |
| Regeneron Pharmaceuticals, Inc. (a) | |
| | |
| Builders FirstSource, Inc. (a) | |
| | |
| | |
| | |
| | |
| | |
| Ameriprise Financial, Inc. | |
| Ares Management Corp., Class A | |
| Bank of New York Mellon (The) Corp. | |
| Coinbase Global, Inc., Class A (a) | |
| FactSet Research Systems, Inc. | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Arista Networks, Inc. (a) | |
| | |
| | |
| | |
| Construction & Engineering | |
| | |
| | |
| Capital One Financial Corp. | |
| | |
| | |
| Consumer Staples Distribution | |
| | |
| | |
| | |
| Walgreens Boots Alliance, Inc. | |
| | |
| | |
| | |
| Diversified Telecommunication | |
| | |
| Electric Utilities — 1.3% | |
| Constellation Energy Corp. | |
| | |
| | |
| Electrical Equipment — 3.1% | |
| | |
| | |
| Vertiv Holdings Co., Class A | |
| | |
| Electronic Equipment, Instruments & Components | |
| | |
See Notes to Financial Statements
First Trust Lunt U.S. Factor Rotation ETF (FCTR)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
COMMON STOCKS (Continued) |
| | |
| | |
| Warner Bros. Discovery, Inc. (a) | |
| | |
| Financial Services — 4.1% | |
| Apollo Global Management, Inc. | |
| Berkshire Hathaway, Inc., Class B (a) | |
| Corebridge Financial, Inc. | |
| | |
| | |
| Mastercard, Inc., Class A | |
| | |
| | |
| | |
| Archer-Daniels-Midland Co. | |
| | |
| | |
| | |
| | |
| Lamb Weston Holdings, Inc. | |
| Mondelez International, Inc., Class A | |
| Tyson Foods, Inc., Class A | |
| | |
| | |
| | |
| | |
| Uber Technologies, Inc. (a) | |
| | |
| | |
| | |
| Intuitive Surgical, Inc. (a) | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| Hotels, Restaurants & Leisure | |
| | |
| Chipotle Mexican Grill, Inc. (a) | |
| | |
| DraftKings, Inc., Class A (a) | |
| Hilton Worldwide Holdings, Inc. | |
| | |
| Royal Caribbean Cruises Ltd. (a) | |
| | |
| | |
| Household Durables — 0.7% | |
| | |
| | |
| | |
| Household Products — 3.2% | |
| Church & Dwight Co., Inc. | |
| | |
| Procter & Gamble (The) Co. | |
| | |
| Independent Power and Renewable Electricity | |
| | |
| Industrial Conglomerates — | |
| Honeywell International, Inc. | |
| | |
| American International Group, Inc. | |
| | |
| Arch Capital Group Ltd. (a) | |
| | |
| | |
| Cincinnati Financial Corp. | |
| | |
| Hartford Financial Services Group (The), Inc. | |
| | |
| | |
| Marsh & McLennan Cos., Inc. | |
| Principal Financial Group, Inc. | |
| Prudential Financial, Inc. | |
| Travelers (The) Cos., Inc. | |
| | |
| | |
| Interactive Media & Services | |
| Meta Platforms, Inc., Class A | |
See Notes to Financial Statements
First Trust Lunt U.S. Factor Rotation ETF (FCTR)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
COMMON STOCKS (Continued) |
| | |
| | |
| | |
| | |
| | |
| | |
| Illinois Tool Works, Inc. | |
| Lincoln Electric Holdings, Inc. | |
| | |
| | |
| | |
| Westinghouse Air Brake Technologies Corp. | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Oil, Gas & Consumable Fuels | |
| | |
| | |
| | |
| | |
| | |
| | |
| Williams (The) Cos., Inc. | |
| | |
| Passenger Airlines — 1.2% | |
| | |
| United Airlines Holdings, Inc. (a) | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Professional Services — 4.1% | |
| Automatic Data Processing, Inc. | |
| Booz Allen Hamilton Holding Corp. | |
| Broadridge Financial Solutions, Inc. | |
| | |
|
| Professional Services (Continued) | |
| | |
| | |
| | |
| | |
| | |
| Semiconductors & Semiconductor Equipment | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Cadence Design Systems, Inc. (a) | |
| | |
| Manhattan Associates, Inc. (a) | |
| | |
| Nutanix, Inc., Class A (a) | |
| Palantir Technologies, Inc., Class A (a) | |
| | |
| | |
| | |
| | |
| | |
| | |
| O’Reilly Automotive, Inc. (a) | |
| | |
| | |
| | |
| Technology Hardware, Storage | |
| | |
| Hewlett Packard Enterprise Co. | |
| | |
| Textiles, Apparel & Luxury | |
| Deckers Outdoor Corp. (a) | |
| | |
| | |
| | |
| | |
| | |
See Notes to Financial Statements
First Trust Lunt U.S. Factor Rotation ETF (FCTR)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
COMMON STOCKS (Continued) |
| Wireless Telecommunication | |
| | |
| | |
| | |
MONEY MARKET FUNDS — 0.1% |
| Morgan Stanley Institutional Liquidity Funds - Treasury Portfolio - Institutional Class - 5.14% (b) | |
| | |
|
|
| Total Investments — 100.0% | |
| | |
| Net Other Assets and Liabilities — 0.0% | |
| | |
| Non-income producing security. |
| Rate shown reflects yield as of June 30, 2024. |
Abbreviations throughout the Portfolio of Investments: |
| – Real Estate Investment Trusts |
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| | | | |
| | | | |
| See Portfolio of Investments for industry breakout. |
See Notes to Financial Statements
First Trust S&P 500 Diversified Free Cash Flow ETF (FCFY)Portfolio of InvestmentsJune 30, 2024 (Unaudited)
| | |
|
| Aerospace & Defense — 0.8% | |
| Huntington Ingalls Industries, Inc. | |
| | |
| | |
| Air Freight & Logistics — | |
| C.H. Robinson Worldwide, Inc. | |
| Expeditors International of Washington, Inc. | |
| | |
| | |
| Citizens Financial Group, Inc. | |
| Huntington Bancshares, Inc. | |
| | |
| | |
| | |
| | |
| | |
| Molson Coors Beverage Co., Class B | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Builders FirstSource, Inc. (a) | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| CF Industries Holdings, Inc. | |
| | |
| LyondellBasell Industries N.V., Class A | |
| | |
| | |
| | |
| | |
| | |
|
| Communications Equipment (Continued) | |
| | |
| | |
| | |
| | |
| Capital One Financial Corp. | |
| Discover Financial Services | |
| | |
| | |
| Consumer Staples Distribution | |
| | |
| Diversified Telecommunication | |
| | |
| Electronic Equipment, Instruments & Components | |
| | |
| | |
| | |
| Warner Bros. Discovery, Inc. (a) | |
| | |
| | |
| Archer-Daniels-Midland Co. | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Molina Healthcare, Inc. (a) | |
| | |
| | |
| | |
| Alexandria Real Estate Equities, Inc. | |
See Notes to Financial Statements
First Trust S&P 500 Diversified Free Cash Flow ETF (FCFY)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
COMMON STOCKS (Continued) |
| Hotel & Resort REITs — 0.3% | |
| Host Hotels & Resorts, Inc. | |
| Hotels, Restaurants & Leisure | |
| | |
| | |
| | |
| Household Durables — 4.4% | |
| | |
| | |
| Mohawk Industries, Inc. (a) | |
| | |
| | |
| | |
| Household Products — 0.6% | |
| | |
| Industrial Conglomerates — | |
| | |
| | |
| American International Group, Inc. | |
| Arch Capital Group Ltd. (a) | |
| | |
| | |
| Prudential Financial, Inc. | |
| | |
| Interactive Media & Services | |
| | |
| | |
| Cognizant Technology Solutions Corp., Class A | |
| International Business Machines Corp. | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| Public Service Enterprise Group, Inc. | |
| | |
| | |
| | |
| | |
| Oil, Gas & Consumable Fuels | |
| | |
| | |
| | |
| Occidental Petroleum Corp. | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Professional Services — 1.2% | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Simon Property Group, Inc. | |
| | |
| Semiconductors & Semiconductor Equipment | |
| Microchip Technology, Inc. | |
| | |
| | |
| | |
| | |
| | |
| | |
| Technology Hardware, Storage | |
| Hewlett Packard Enterprise Co. | |
| | |
| | |
| | |
See Notes to Financial Statements
First Trust S&P 500 Diversified Free Cash Flow ETF (FCFY)Portfolio of Investments (Continued)June 30, 2024 (Unaudited) | | |
COMMON STOCKS (Continued) |
| Textiles, Apparel & Luxury | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
MONEY MARKET FUNDS — 0.1% |
| Dreyfus Government Cash Management Fund, Institutional Shares - 5.19% (b) | |
| | |
|
|
| Total Investments — 99.9% | |
| | |
| Net Other Assets and Liabilities — 0.1% | |
| | |
| Non-income producing security. |
| Rate shown reflects yield as of June 30, 2024. |
Abbreviations throughout the Portfolio of Investments: |
| – Real Estate Investment Trusts |
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| | | | |
| | | | |
| See Portfolio of Investments for industry breakout. |
See Notes to Financial Statements
First Trust Exchange-Traded FundStatements of Assets and Liabilities
June 30, 2024 (Unaudited)
| First Trust Dividend StrengthTM ETF
(FTDS) | First Trust Dow 30 Equal Weight ETF
(EDOW) | First Trust Lunt U.S. Factor Rotation ETF
(FCTR) | First Trust S&P 500 Diversified Free Cash Flow ETF
(FCFY) |
| | | | |
| | | | |
| | | | |
| | | | |
Investment securities sold | | | | |
| | | | |
| | | | |
| | | | |
|
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
Shareholder reporting fees | | | | |
| | | | |
| | | | |
| | | | |
| | | | |
|
| | | | |
| | | | |
| | | | |
Accumulated distributable earnings (loss) | | | | |
| | | | |
NET ASSET VALUE, per share | | | | |
Number of shares outstanding (unlimited number of shares authorized, par value $0.01 per share) | | | | |
| | | | |
See Notes to Financial Statements
First Trust Exchange-Traded FundStatements of Operations
For the Six Months Ended June 30, 2024 (Unaudited)
| First Trust Dividend StrengthTM ETF
(FTDS) | First Trust Dow 30 Equal Weight ETF
(EDOW) | First Trust Lunt U.S. Factor Rotation ETF
(FCTR) | First Trust S&P 500 Diversified Free Cash Flow ETF
(FCFY) |
| | | | |
| | | | |
| | | | |
| | | | |
|
| | | | |
| | | | |
| | | | |
| | | | |
Accounting and administration fees | | | | |
Trustees’ fees and expenses | | | | |
| | | | |
Shareholder reporting fees | | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
Less fees waived by the investment advisor | | | | |
| | | | |
NET INVESTMENT INCOME (LOSS) | | | | |
|
NET REALIZED AND UNREALIZED GAIN (LOSS): | | | | |
Net realized gain (loss) on: | | | | |
| | | | |
| | | | |
| | | | |
Net change in unrealized appreciation (depreciation) on investments | | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | | | |
| Fund is subject to a unitary fee (see Note 3 in the Notes to Financial Statements). |
See Notes to Financial Statements
First Trust Exchange-Traded FundStatements of Changes in Net Assets
| First Trust Dividend StrengthTM ETF (FTDS) | First Trust Dow 30 Equal Weight ETF (EDOW) |
| Six Months
Ended
6/30/2024 (Unaudited) | | Six Months
Ended
6/30/2024 (Unaudited) | |
| | | | |
Net investment income (loss) | | | | |
| | | | |
Net increase from payment by the advisor | | | | |
Net change in unrealized appreciation (depreciation) | | | | |
Net increase (decrease) in net assets resulting from operations | | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS FROM: | | | | |
| | | | |
|
SHAREHOLDER TRANSACTIONS: | | | | |
Proceeds from shares sold | | | | |
| | | | |
Net increase (decrease) in net assets resulting from shareholder transactions | | | | |
Total increase (decrease) in net assets | | | | |
|
| | | | |
| | | | |
| | | | |
|
CHANGES IN SHARES OUTSTANDING: | | | | |
Shares outstanding, beginning of period | | | | |
| | | | |
| | | | |
Shares outstanding, end of period | | | | |
| Inception date is August 23, 2023, which is consistent with the commencement of investment operations and is the date the initial creation units were established. |
See Notes to Financial Statements
First Trust Lunt U.S. Factor Rotation ETF (FCTR) | First Trust S&P 500 Diversified Free Cash Flow ETF (FCFY) |
Six Months
Ended
6/30/2024 (Unaudited) | | Six Months
Ended
6/30/2024 (Unaudited) | Period
Ended
12/31/2023 (a) |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
| | | |
| | | |
|
| | | |
| | | |
| | | |
| | | |
| | | |
|
| | | |
| | | |
| | | |
|
| | | |
| | | |
| | | |
| | | |
| | | |
See Notes to Financial Statements
First Trust Exchange-Traded FundFinancial Highlights
For a share outstanding throughout each period First Trust Dividend StrengthTM ETF (FTDS)
| Six Months
Ended
6/30/2024
(Unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
Income from investment operations: | | | | | | |
Net investment income (loss) | | | | | | |
Net realized and unrealized gain (loss) | | | | | | |
Total from investment operations | | | | | | |
Distributions paid to shareholders from: | | | | | | |
| | | | | | |
Net asset value, end of period | | | | | | |
| | | | | | |
|
Ratios to average net assets/supplemental data: | | | | | | |
Net assets, end of period (in 000’s) | | | | | | |
Ratio of total expenses to average net assets | | | | | | |
Ratio of net expenses to average net assets | | | | | | |
Ratio of net investment income (loss) to average net assets | | | | | | |
Portfolio turnover rate (d) | | | | | | |
| Based on average shares outstanding. |
| 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. |
| |
| 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. |
| The variation in the portfolio turnover rate is due to the change in the Fund’s underlying index effective April 29, 2022, which resulted in a complete rebalance of the Fund’s portfolio. |
See Notes to Financial Statements
First Trust Exchange-Traded FundFinancial Highlights (Continued)
For a share outstanding throughout each period First Trust Dow 30 Equal Weight ETF (EDOW)
| Six Months
Ended
6/30/2024
(Unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
Income from investment operations: | | | | | | |
Net investment income (loss) | | | | | | |
Net realized and unrealized gain (loss) | | | | | | |
Total from investment operations | | | | | | |
Distributions paid to shareholders from: | | | | | | |
| | | | | | |
Net asset value, end of period | | | | | | |
| | | | | | |
|
Ratios to average net assets/supplemental data: | | | | | | |
Net assets, end of period (in 000’s) | | | | | | |
Ratio of total expenses to average net assets | | | | | | |
Ratio of net investment income (loss) to average net assets | | | | | | |
Portfolio turnover rate (d) | | | | | | |
| Based on average shares outstanding. |
| 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. |
| |
| 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
First Trust Exchange-Traded FundFinancial Highlights (Continued)
For a share outstanding throughout each period First Trust Lunt U.S. Factor Rotation ETF (FCTR)
| Six Months
Ended
6/30/2024
(Unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
Income from investment operations: | | | | | | |
Net investment income (loss) | | | | | | |
Net realized and unrealized gain (loss) | | | | | | |
Total from investment operations | | | | | | |
Distributions paid to shareholders from: | | | | | | |
| | | | | | |
Net asset value, end of period | | | | | | |
| | | | | | |
|
Ratios to average net assets/supplemental data: | | | | | | |
Net assets, end of period (in 000’s) | | | | | | |
Ratio of total expenses to average net assets | | | | | | |
Ratio of net investment income (loss) to average net assets | | | | | | |
Portfolio turnover rate (e) | | | | | | |
| Based on average shares outstanding. |
| The Fund received a payment from the advisor in the amount of $25,082, which represents less than $0.01 per share. Since the advisor reimbursed the Fund, there was no effect on the Fund’s total return. |
| 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. |
| |
| 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
First Trust Exchange-Traded FundFinancial Highlights (Continued)
For a share outstanding throughout each period First Trust S&P 500 Diversified Free Cash Flow ETF (FCFY)
| Six Months
Ended
6/30/2024
(Unaudited) | Period
Ended
12/31/2023 (a) |
|
Net asset value, beginning of period | | |
Income from investment operations: | | |
Net investment income (loss) (b) | | |
Net realized and unrealized gain (loss) | | |
Total from investment operations | | |
Distributions paid to shareholders from: | | |
| | |
Net asset value, end of period | | |
| | |
|
Ratios to average net assets/supplemental data: | | |
Net assets, end of period (in 000’s) | | |
Ratio of total expenses to average net assets | | |
Ratio of net investment income (loss) to average net assets | | |
Portfolio turnover rate (e) | | |
| Inception date is August 23, 2023, which is consistent with the commencement of investment operations and is the date the initial creation units were established. |
| Based on average shares outstanding. |
| 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. |
| |
| 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
Notes to Financial Statements
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) 1. Organization
First Trust Exchange-Traded Fund (the “Trust”) is an open-end management investment company organized as a Massachusetts business trust on August 8, 2003, and is registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended (the “1940 Act”).
This report covers the four funds (each a “Fund” and collectively, the “Funds”) listed below:
First Trust Dividend StrengthTM ETF – (Nasdaq, Inc. (“Nasdaq”) ticker “FTDS”) |
First Trust Dow 30 Equal Weight ETF – (NYSE Arca, Inc. (“NYSE Arca”) ticker “EDOW”) |
First Trust Lunt U.S. Factor Rotation ETF – (Cboe BZX Exchange, Inc. ticker “FCTR”) |
First Trust S&P 500 Diversified Free Cash Flow ETF – (NYSE Arca ticker “FCFY”) |
FCFY operates as a non-diversified series of the Trust. Each of FTDS, EDOW and FCTR operates as a diversified open-end management investment company as defined in Section 5(b) of the 1940 Act. Each Fund represents a separate series of shares of beneficial interest in the Trust. Unlike conventional mutual funds, each Fund issues and redeems shares on a continuous basis at net asset value (“NAV”), only in large blocks of shares known as “Creation Units.” 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:
| |
First Trust Dividend StrengthTM ETF | The Dividend StrengthTM Index |
First Trust Dow 30 Equal Weight ETF | Dow Jones Industrial Average® Equal Weight Index |
First Trust Lunt U.S. Factor Rotation ETF | Lunt Capital Large Cap Factor Rotation Index |
First Trust S&P 500 Diversified Free Cash Flow ETF | S&P 500® Sector-Neutral FCF 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.
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. 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 readily available market quotations such as 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 approved by the Trust’s Board of Trustees, and in accordance with provisions of the 1940 Act and rules thereunder. 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 primary exchange for such securities.
Shares of open-end funds are valued based on NAV per share.
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) Equity securities traded in an over-the-counter market are valued at the close price or the last trade price.
Overnight repurchase agreements are valued at amortized cost when it represents the most appropriate reflection of fair market value.
Certain securities may not be able to be priced by pre-established pricing methods. Such securities may be valued by 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 last sale price on the exchange on which they are principally traded or, for Nasdaq and AIM securities, the official closing price;
3)
the size of the holding;
4)
the initial cost of the security;
5)
transactions in comparable securities;
6)
price quotes from dealers and/or third-party pricing services;
7)
relationships among various securities;
8)
information obtained by contacting the issuer, analysts, or the appropriate stock exchange;
9)
an analysis of the issuer’s financial statements;
10)
the existence of merger proposals or tender offers that might affect the value of the security; and
11)
other relevant factors.
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.
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:
• 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.
• 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.
• 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 June 30, 2024, is included with each Fund’s Portfolio of Investments.
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) 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 are 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 requires 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.
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 June 30, 2024, none of the Funds had securities in the securities lending program. During the six months ended June 30, 2024, none of the Funds participated 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
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) 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.
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 are 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 June 30, 2024, were received as collateral for lending securities. There were no repurchase agreements held by the Funds as of June 30, 2024.
F. 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 capital gains earned by each Fund, if any, are distributed at least annually. Each Fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
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 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 December 31, 2023 was as follows:
| Distributions
paid from
Ordinary
Income | Distributions
paid from
Capital
Gains | Distributions
paid from
Return of
Capital |
First Trust Dividend StrengthTM ETF | | | |
First Trust Dow 30 Equal Weight ETF | | | |
First Trust Lunt U.S. Factor Rotation ETF | | | |
First Trust S&P 500 Diversified Free Cash Flow ETF | | | |
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) As of December 31, 2023, the components of distributable earnings on a tax basis for each Fund were as follows:
| Undistributed
Ordinary
Income | Accumulated
Capital and
Other
Gain (Loss) | Net
Unrealized
Appreciation
(Depreciation) |
First Trust Dividend StrengthTM ETF | | | |
First Trust Dow 30 Equal Weight ETF | | | |
First Trust Lunt U.S. Factor Rotation ETF | | | |
First Trust S&P 500 Diversified Free Cash Flow ETF | | | |
Each Fund intends to qualify or 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. For FTDS, EDOW, and FCTR, the taxable years ended 2020, 2021, 2022, and 2023 remain open to federal and state audit. For FCFY, the taxable period ended 2023 remains open to federal and state audit. As of June 30, 2024, 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 apply when there has been a 50% change in ownership. At December 31, 2023, for federal income tax purposes, each applicable Fund had a capital loss carryforward available that is shown in the following table, to the extent provided by regulations, to offset future capital gains. 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
Carryforwards |
First Trust Dividend StrengthTM ETF | |
First Trust Dow 30 Equal Weight ETF* | |
First Trust Lunt U.S. Factor Rotation ETF | |
First Trust S&P 500 Diversified Free Cash Flow ETF | |
| $3,196,504 of First Trust Dow 30 Equal Weight ETF’s non-expiring 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 $212,620 per year. |
Certain losses realized during the current fiscal period 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 December 31, 2023, the Funds had no net late year ordinary or capital losses.
As of June 30, 2024, the aggregate cost, gross unrealized appreciation, gross unrealized depreciation, and net unrealized appreciation/(depreciation) on investments (including short positions and derivatives, if any) for federal income tax purposes were as follows:
| | Gross Unrealized
Appreciation | Gross Unrealized
(Depreciation) | Net Unrealized
Appreciation
(Depreciation) |
First Trust Dividend StrengthTM ETF | | | | |
First Trust Dow 30 Equal Weight ETF | | | | |
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) | | Gross Unrealized Appreciation | Gross Unrealized (Depreciation) | Net Unrealized Appreciation (Depreciation) |
First Trust Lunt U.S. Factor Rotation ETF | | | | |
First Trust S&P 500 Diversified Free Cash Flow ETF | | | | |
Expenses that are directly related to First Trust Dividend StrengthTM ETF (the “Non-Unitary Fee Fund”) are charged directly to the Fund. Expenses for First Trust Dow 30 Equal Weight ETF, First Trust Lunt U.S. Factor Rotation ETF, and First Trust S&P 500 Diversified Free Cash Flow ETF (the “Unitary Fee Funds”), 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:
| |
First Trust Dividend StrengthTM ETF | |
First Trust Dow 30 Equal Weight ETF | S&P Dow Jones Indices LLC |
First Trust Lunt U.S. Factor Rotation ETF | Lunt Capital Management, Inc. |
First Trust S&P 500 Diversified Free Cash Flow ETF | S&P Dow Jones Indices LLC |
The respective license agreements allow for the use by First Trust 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.
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.
The management fee payable by First Trust Dividend StrengthTM ETF to First Trust for these services will be reduced at certain levels of First Trust Dividend StrengthTM ETF’s net assets (“breakpoints”) and calculated pursuant to the following schedule:
| |
Fund net assets up to and including $2.5 billion | |
Fund net assets greater than $2.5 billion up to and including $5 billion | |
Fund net assets greater than $5 billion up to and including $7.5 billion | |
Fund net assets greater than $7.5 billion up to and including $10 billion | |
Fund net assets greater than $10 billion up to and including $15 billion | |
Fund net assets greater than $15 billion | |
For the First Trust Dividend StrengthTM ETF, the Trust and the Advisor have entered into an Expense Reimbursement and Fee Waiver Agreement (“Agreement”) in which First Trust has agreed to waive fees and/or reimburse Fund expenses to the extent that the operating expenses of the Fund (excluding interest expense, brokerage commissions and other trading expenses, acquired fund fees and expenses, taxes and extraordinary expenses) exceed 0.70% of average daily net assets per year (the “Expense Cap”). The Expense Cap will be in effect until at least April 30, 2025.
For the Unitary Fee Funds, First Trust is paid an annual unitary management fee 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, licensing and other services, but excluding fee payments under the Investment Management Agreement, distribution and service fees pursuant to a Rule 12b-1 plan, if any, brokerage commissions and other expenses connected with the execution of portfolio transactions,
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) acquired fund fees and expenses, taxes, interest, and extraordinary expenses. The annual unitary management fee payable by each Fund to First Trust for these services will be reduced at certain levels of each Fund’s net assets (“breakpoints”) and calculated pursuant to the following schedule:
| | | |
Fund net assets up to and including $2.5 billion | | | |
Fund net assets greater than $2.5 billion up to and including $5 billion | | | |
Fund net assets greater than $5 billion up to and including $7.5 billion | | | |
Fund net assets greater than $7.5 billion up to and including $10 billion | | | |
Fund net assets greater than $10 billion up to and including $15 billion | | | |
Fund net assets greater than $15 billion | | | |
For the fiscal year ended December 31, 2023, FCTR received a payment from the Advisor in the amount of $25,082 in connection with a trade error.
The Trust has multiple service agreements with The Bank of New York Mellon (“BNY”). Under the service agreements, BNY performs custodial, fund accounting, certain administrative services, and transfer agency services for each Fund. As custodian, BNY is responsible for custody of each Fund’s assets. As fund accountant and administrator, BNY is responsible for maintaining the books and records of each Fund’s securities and cash. As transfer agent, BNY is responsible for maintaining shareholder records for each Fund. BNY 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 target outcome fund or an index fund.
Additionally, the Chairs of the Audit Committee, Nominating and Governance Committee and Valuation Committee, the Vice Chair of the Audit Committee, the Lead Independent Trustee and the Vice Lead Independent Trustee 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 Committee Chairs, the Audit Committee Vice Chair, the Lead Independent Trustee and the Vice Lead Independent Trustee rotate periodically in serving in such capacities. The officers and “Interested” Trustee receive no compensation from the Trust for acting in such capacities.
4. Purchases and Sales of Securities
For the six months ended June 30, 2024, the cost of purchases and proceeds from sales of investments for each Fund, excluding short-term investments and in-kind transactions, were as follows:
| | |
First Trust Dividend StrengthTM ETF | | |
First Trust Dow 30 Equal Weight ETF | | |
First Trust Lunt U.S. Factor Rotation ETF | | |
First Trust S&P 500 Diversified Free Cash Flow ETF | | |
For the six months ended June 30, 2024, the cost of in-kind purchases and proceeds from in-kind sales for each Fund were as follows:
| | |
First Trust Dividend StrengthTM ETF | | |
First Trust Dow 30 Equal Weight ETF | | |
First Trust Lunt U.S. Factor Rotation ETF | | |
First Trust S&P 500 Diversified Free Cash Flow ETF | | |
5. Creations, Redemptions and Transaction Fees
Each Fund generally issues and redeems its shares in primary market transactions through a creation and redemption mechanism and does not sell or redeem individual shares. Instead, financial entities known as “Authorized Participants” have contractual arrangements with a Fund or one of the Fund’s service providers to purchase and redeem Fund shares directly with the Fund in Creation Units. Prior
Notes to Financial Statements (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) to the start of trading on every business day, a Fund publishes through the National Securities Clearing Corporation the “basket” of securities, cash or other assets that it will accept in exchange for a Creation Unit of the Fund’s shares. An Authorized Participant that wishes to effectuate a creation of a Fund’s shares deposits with the Fund the “basket” of securities, cash or other assets identified by the Fund that day, and then receives the Creation Unit of the Fund’s shares in return for those assets. After purchasing a Creation Unit, the Authorized Participant may continue to hold the Fund’s shares or sell them in the secondary market. The redemption process is the reverse of the purchase process: the Authorized Participant redeems a Creation Unit of a Fund’s shares for a basket of securities, cash or other assets. The combination of the creation and redemption process with secondary market trading in a Fund’s shares and underlying securities provides arbitrage opportunities that are designed to help keep the market price of a Fund’s shares at or close to the NAV per share of the Fund.
Each Fund imposes fees in connection with the purchase of Creation Units. These fees may vary based upon various fact-based circumstances, including, but not limited to, the composition of the securities included in the Creation Unit or the countries in which the transactions are settled. The price for each Creation Unit will equal the daily NAV per share of a Fund 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, stamp taxes and part or all of the spread between the expected bid and offer side of the market related to the securities comprising the creation basket.
Each Fund also imposes fees in connection with the redemption of Creation Units. These fees may vary based upon various fact-based circumstances, including, but not limited to, the composition of the securities included in the Creation Unit or the countries in which the transactions are settled. The price received for each Creation Unit will equal the daily NAV per share of a Fund times the number of shares in a Creation Unit, minus the fees described above and, if applicable, any 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 the securities comprising the redemption basket. Investors who use the services of a broker or other such intermediary in addition to an Authorized Participant to effect a redemption of a Creation Unit may also be assessed an amount to cover the cost of such services. The redemption fee charged by a Fund will comply with Rule 22c-2 of the 1940 Act which limits redemption fees to no more than 2% of the value of the shares redeemed.
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 April 30, 2025 for FTDS, EDOW, and FCTR, and August 22, 2025 for FCFY.
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.
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.
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) Changes in and Disagreements with Accountants (Item 8 of Form N-CSR)
There were no changes in or disagreements with the Funds’ accountants during the six months ended June 30, 2024.
Proxy Disclosures (Item 9 of Form N-CSR)
There were no matters submitted for vote by shareholders of any Fund during the six months ended June 30, 2024.
Remuneration Paid to Directors, Officers, and Others (Item 10 of Form N-CSR)
For the Non-Unitary Fee Fund (as defined in the Notes to Financial Statements), the applicable aggregate remuneration paid by the Fund during the period covered by the report is included in the Statements of Operations. For the Unitary Fee Funds (as defined in the Notes to Financial Statements), Independent Trustees and any member of any advisory board of each Fund are compensated through the unitary management fee paid by each Fund to the advisor and not directly by each Fund. The investment advisory fee paid is included in the Statements of Operations.
Statement Regarding the Basis for the Board’s Approval of Investment Advisory Contract (Item 11 of Form N-CSR)
The Board of Trustees of First Trust Exchange-Traded Fund (the “Trust”), including the Independent Trustees, unanimously approved the continuation of the Investment Management Agreements (as applicable to a specific Fund, the “Agreement” and collectively, the “Agreements”) with First Trust Advisors L.P. (the “Advisor”) on behalf of the following series of the Trust (each a “Fund” and collectively, the “Funds”):
First Trust Dividend StrengthTM ETF (FTDS)
First Trust Dow 30 Equal Weight ETF (EDOW)
First Trust Lunt U.S. Factor Rotation ETF (FCTR)
The Board approved the continuation of the Agreement for each Fund for a one-year period ending June 30, 2025 at a meeting held on June 2–3, 2024. The Board determined for each Fund that the continuation of the Agreement is in the best interests of the Fund in light of the nature, extent and quality of the services provided and such other matters as the Board considered to be relevant in the exercise of its business judgment.
To reach this determination for each Fund, the Board considered its duties under the Investment Company Act of 1940, as amended (the “1940 Act”), as well as under the general principles of state law, in reviewing and approving advisory contracts; the requirements of the 1940 Act in such matters; the fiduciary duty of investment advisors with respect to advisory agreements and compensation; the standards used by courts in determining whether investment company boards have fulfilled their duties; and the factors to be considered by the Board in voting on such agreements. At meetings held on April 16, 2024, April 25, 2024 and June 2–3, 2024, the Board, including the Independent Trustees, reviewed materials provided by the Advisor responding to requests for information from counsel to the Independent Trustees, submitted on behalf of the Independent Trustees, that, among other things, outlined: the services provided by the Advisor to each Fund (including the relevant personnel responsible for these services and their experience); the advisory fee rate schedule payable by FTDS and the unitary fee rate schedules payable by each of EDOW and FCTR (each a “Unitary Fee Fund” and collectively, the “Unitary Fee Funds”) as compared to fees charged to a peer group of funds (the “Expense Group”) and a broad peer universe of funds (the “Expense Universe”), each assembled by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent source, and as compared to fees charged to other clients of the Advisor, including other exchange-traded funds (“ETFs”) managed by the Advisor; the expense ratio of each Fund as compared to expense ratios of the funds in the Fund’s Expense Group and Expense Universe; performance information for each Fund, including comparisons of each Fund’s performance to that of one or more relevant benchmark indexes and to that of a performance group of funds and a broad performance universe of funds (the “Performance Universe”), each assembled by Broadridge; the nature of expenses incurred in providing services to each Fund and the potential for the Advisor to realize economies of scale, if any; profitability and other financial data for the Advisor; any indirect benefits to the Advisor and its affiliate, First Trust Portfolios L.P. (“FTP”); and information on the Advisor’s compliance program. The Board reviewed initial materials with the Advisor at the meeting held on April 25, 2024, prior to which the Independent Trustees and their counsel met separately to discuss the information provided by the Advisor. Following the April 25, 2024 meeting, counsel to the Independent Trustees, on behalf of the Independent Trustees, requested certain clarifications and supplements to the materials provided, and the information provided in response to those requests was considered at an executive session of the Independent Trustees and their counsel held prior to the June 2–3, 2024 meeting, as well as at the June meeting. The Board applied its business judgment to determine whether the arrangement between the Trust and the Advisor continues to be a reasonable business arrangement from each Fund’s perspective. The Board determined that, given the totality of the information provided with respect to the Agreements, the Board had
Other Information (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) received sufficient information to renew the Agreements. The Board considered that shareholders chose to invest or remain invested in a Fund knowing that the Advisor manages the Fund and knowing FTDS’s advisory fee and the Unitary Fee Funds’ unitary fees.
In reviewing the Agreement for each Fund, the Board considered the nature, extent and quality of the services provided by the Advisor under the Agreement. The Board considered that the Advisor is responsible for the overall management and administration of the Trust and each Fund and reviewed all of the services provided by the Advisor to the Funds, as well as the background and experience of the persons responsible for such services. In reviewing the services provided, the Board noted the compliance program that had been developed by the Advisor and considered that it includes a robust program for monitoring the Advisor’s and each Fund’s compliance with the 1940 Act, as well as each Fund’s compliance with its investment objective, policies and restrictions. The Board also considered a report from the Advisor with respect to its risk management functions related to the operation of the Funds. Finally, as part of the Board’s consideration of the Advisor’s services, the Advisor, in its written materials and at the April 25, 2024 meeting, described to the Board the scope of its ongoing investment in additional personnel and infrastructure to maintain and improve the quality of services provided to the Funds and the other funds in the First Trust Fund Complex. In light of the information presented and the considerations made, the Board concluded that the nature, extent and quality of the services provided to the Trust and each Fund by the Advisor under the Agreements have been and are expected to remain satisfactory and that the Advisor has managed each Fund consistent with its investment objective, policies and restrictions.
With respect to FTDS, the Board considered the advisory fee rate schedule payable by FTDS under the Agreement for the services provided. The Board considered that the Advisor agreed to extend the current expense cap for FTDS through April 30, 2026. The Board received and reviewed information showing the fee rates and expense ratios of the peer funds in FTDS’s Expense Group, as well as advisory and unitary fee rates charged by the Advisor to other fund (including ETFs) and non-fund clients, as applicable. Because FTDS’s Expense Group included peer funds that pay a unitary fee, the Board determined that expense ratios were the most relevant comparative data point. Based on the information provided, the Board noted that the total (net) expense ratio for FTDS was above the median total (net) expense ratio of the peer funds in its Expense Group. With respect to FTDS’s Expense Group, the Board discussed with Broadridge its methodology for assembling peer groups and discussed with the Advisor limitations in creating peer groups for index ETFs, including differences in underlying indexes and index-tracking methodologies that can result in greater management complexities across seemingly comparable ETFs, and different business models that may affect the pricing of services among ETF sponsors. The Board took these limitations and differences into account in considering the peer data. With respect to fees charged to other non-ETF clients, the Board considered differences between FTDS and other non-ETF clients that limited their comparability. In considering the advisory fee rate schedule for FTDS overall, the Board also considered the Advisor’s statement that it seeks to meet investor needs through innovative and value-added investment solutions and the Advisor’s demonstrated long-term commitment to FTDS and the other funds in the First Trust Fund Complex.
With respect to each Unitary Fee Fund, the Board considered the unitary fee rate schedule payable by each Fund under the applicable Agreement for the services provided. The Board considered that as part of the unitary fee the Advisor is responsible for each Fund’s expenses, including the cost of transfer agency, custody, fund administration, legal, audit and other services and license fees, if any, but excluding the fee payment under the applicable Agreement and interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution and service fees pursuant to a Rule 12b-1 plan, if any, and extraordinary expenses, if any. The Board received and reviewed information showing the fee rates and expense ratios of the peer funds in the Unitary Fee Funds’ Expense Groups, as well as advisory and unitary fee rates charged by the Advisor to other fund (including ETFs) and non-fund clients, as applicable. Because each Unitary Fee Fund pays a unitary fee, the Board determined that expense ratios were the most relevant comparative data point. Based on the information provided, the Board noted that the total (net) expense ratio for each Unitary Fee Fund was above the median total (net) expense ratio of the peer funds in its respective Expense Group. With respect to the Expense Groups for the Unitary Fee Funds, the Board discussed with Broadridge its methodology for assembling peer groups and discussed with the Advisor limitations in creating peer groups for index ETFs, including differences in underlying indexes and index-tracking methodologies that can result in greater management complexities across seemingly comparable ETFs and different business models that may affect the pricing of services among ETF sponsors. The Board took these limitations and differences into account in considering the peer data. With respect to fees charged to other non-ETF clients, the Board considered differences between the Unitary Fee Funds and other non-ETF clients that limited their comparability. In considering the unitary fee rate schedules for the Unitary Fee Funds overall, the Board also considered the Advisor’s statement that it seeks to meet investor needs through innovative and value-added investment solutions and the Advisor’s demonstrated long-term commitment to each Unitary Fee Fund and the other funds in the First Trust Fund Complex.
The Board considered performance information for each Fund. The Board noted the process it has established for monitoring each Fund’s performance and portfolio risk on an ongoing basis, which includes quarterly performance reporting from the Advisor for the
Other Information (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) Funds. The Board determined that this process continues to be effective for reviewing each Fund’s performance. The Board received and reviewed information for periods ended December 31, 2023 regarding the performance of each Fund’s underlying index, the correlation between each Fund’s performance and that of its underlying index, each Fund’s tracking difference and each Fund’s excess return as compared to its benchmark index. With respect to FTDS, the Board noted that during 2022, it approved changes to the Fund’s investment objective and, effective April 29, 2022, the Fund changed its name and ticker symbol and began tracking The Dividend Strength™ Index, and that the performance information included a blend of the old and new indexes. The Board also noted that during 2015, FTDS changed its underlying index. Based on the information provided for each Fund and its ongoing review of performance, the Board concluded that each Fund was correlated to its underlying index and that the tracking difference for each Fund was within a reasonable range. In addition, the Board reviewed data prepared by Broadridge comparing each Fund’s performance to that of its respective Performance Universe and to that of a broad-based benchmark index and noted the Advisor’s discussion of FCTR’s performance at the April 25, 2024 meeting. However, given each Fund’s objective of seeking investment results that correspond generally to the performance of its underlying index, the Board placed more emphasis on its review of correlation and tracking difference.
On the basis of all the information provided on the fees and expenses of FTDS, the unitary fees of the Unitary Fee Funds and the performance of each Fund and the ongoing oversight by the Board, the Board concluded that the advisory fee for FTDS and the unitary fee for each Unitary Fee Fund continue to be reasonable and appropriate in light of the nature, extent and quality of the services provided by the Advisor to each Fund under the Agreements.
The Board considered information and discussed with the Advisor whether there were any economies of scale in connection with providing advisory services to the Funds at current asset levels and whether the Funds may benefit from any economies of scale. The Board noted that the advisory fee rate schedule for FTDS and the unitary fee rate schedule for each Unitary Fee Fund include breakpoints pursuant to which the fee rate will be reduced as assets of the Fund meet certain thresholds. The Board considered the Advisor’s statement that it believes that its expenses relating to providing advisory services to the Funds will increase during the next twelve months as the Advisor continues to build infrastructure and add new staff. For the Unitary Fee Funds, the Board also noted that under the unitary fee structure, any reduction in expenses associated with the management and operations of the Unitary Fee Funds would benefit the Advisor, but that the unitary fee structure provides a level of certainty in expenses for shareholders of the Unitary Fee Funds. The Board concluded that the advisory fee rate schedule for FTDS and the unitary fee rate schedule for each Unitary Fee Fund reflect an appropriate level of sharing of any economies of scale that may be realized in the management of the Fund at current asset levels. The Board considered the revenues and allocated costs (including the allocation methodology) of the Advisor in serving as investment advisor to each Fund for the twelve months ended December 31, 2023 and the estimated profitability level for each Fund calculated by the Advisor based on such data, as well as complex-wide and product-line profitability data, for the same period. The Board noted the inherent limitations in the profitability analysis and concluded that, based on the information provided, the Advisor’s profitability level for each Fund was not unreasonable. In addition, the Board considered indirect benefits described by the Advisor that may be realized from its relationship with the Funds. The Board considered that the Advisor had identified as an indirect benefit to the Advisor and FTP their exposure to investors and brokers who, absent their exposure to the Funds, may have had no dealings with the Advisor or FTP, and noted that the Advisor does not utilize soft dollars in connection with the Funds. The Board concluded that the character and amount of potential indirect benefits to the Advisor were not unreasonable.
Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, unanimously determined that the terms of the Agreements continue to be fair and reasonable and that the continuation of the Agreements is in the best interests of each Fund. No single factor was determinative in the Board’s analysis.
Nasdaq® and The Dividend StrengthTM 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 Funds have not been passed on by the Corporations as to their legality or suitability. The Funds are not issued, endorsed, sold or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUNDS.
Dow Jones Industrial Average® Equal Weight Index and S&P 500® Sector-Neutral FCF Index are products of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”) and have been licensed for use by First Trust. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® 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 Funds are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates and none of such parties make any
Other Information (Continued)
First Trust Exchange-Traded FundJune 30, 2024 (Unaudited) representation regarding the advisability of investing in such products nor do they have any liability for any errors, omissions, or interruptions of the S&P Dow Jones Indexes.
Lunt Capital Management, Inc. (“Lunt”) and the Lunt Capital Large Cap Factor Rotation Index (“Lunt Index”) are trademarks of Lunt and have been licensed for use for certain purposes by First Trust. The First Trust Lunt U.S. Factor Rotation ETF is based on the Lunt Index and is not sponsored, endorsed, sold or promoted by Lunt, and Lunt makes no representation regarding the advisability of trading in such fund. Lunt has contracted with Nasdaq, Inc. to calculate and maintain the Lunt Index. The Fund is not sponsored, endorsed, sold or promoted by Nasdaq, Inc. or its affiliates (Nasdaq, with its affiliates, hereinafter referred to as the “Corporations”). The Corporations have not passed on the legality or suitability of, or the accuracy or adequacy of descriptions and disclosures relating to, the Fund. The Corporations make no representation or warranty, express or implied to the owners of the fund or any member of the public regarding the advisability of investing in securities generally or in the fund particularly, or the ability of the Lunt Index to track general stock performance.
Semi-Annual Consolidated
Financial Statements
and Other Information |
For the Six Months Ended
June 30, 2024 |
First Trust Exchange-Traded Fund
FT Vest Gold Strategy Quarterly Buffer ETF (BGLD) |
FT Vest Gold Strategy Quarterly Buffer ETF (BGLD)
Semi-Annual Consolidated Financial Statements and Other Information
June 30, 2024
Performance and Risk Disclosure
There is no assurance that FT Vest Gold Strategy Quarterly Buffer ETF (the “Fund”) will achieve its investment objective. The 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’s shares may therefore be less than what you paid for them. Accordingly, you can lose money by investing in the Fund.
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.
First Trust Advisors L.P., the Fund’s advisor, may also periodically provide additional information on Fund performance on the Fund’s webpage at www.ftportfolios.com.
This report contains information that may help you evaluate your investment in the Fund. It includes details about the Fund and presents data that provides insight into the Fund’s performance and investment approach.
The material risks of investing in the Fund are spelled out in its prospectus, statement of additional information, and other Fund regulatory filings.
FT Vest Gold Strategy Quarterly Buffer ETF (BGLD)Consolidated Portfolio of InvestmentsJune 30, 2024 (Unaudited)
| | | | |
U.S. TREASURY BILLS — 93.8% |
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MONEY MARKET FUNDS — 0.6% |
| Dreyfus Government Cash Management Fund, Institutional Shares - 5.19% (c) | |
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| Total Investments — 94.4% | |
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| | | | | |
|
| Call Options Purchased — 6.0% | |
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|
| Call Options Written — (0.4)% | |
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| (Premiums received $55,589) | | | | |
| Put Options Written — (0.0)% | |
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| (Premiums received $157,292) | | | | |
| | |
| (Premiums received $212,881) | |
| Net Other Assets and Liabilities — 0.0% | |
| | |
| All or a portion of this security is segregated as collateral for the options written. At June 30, 2024, the segregated value of this security amounts to $4,627,996. |
| |
| Rate shown reflects yield as of June 30, 2024. |
See Notes to Consolidated Financial Statements
FT Vest Gold Strategy Quarterly Buffer ETF (BGLD)Consolidated Portfolio of Investments (Continued)June 30, 2024 (Unaudited)
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Consolidated Financial Statements):
|
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
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| | | | |
| | | | |
| | | | |
|
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
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See Notes to Consolidated Financial Statements
FT Vest Gold Strategy Quarterly Buffer ETF (BGLD)Consolidated Statement of Assets and Liabilities
June 30, 2024 (Unaudited)
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| |
Options contracts purchased, at value | |
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Cash segregated as collateral for open written options contracts | |
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| |
|
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Options contracts written, at value | |
Investment advisory fees payable | |
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| |
|
| |
| |
| |
Accumulated distributable earnings (loss) | |
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NET ASSET VALUE, per share | |
Number of shares outstanding (unlimited number of shares authorized, par value $0.01 per share) | |
| |
Premiums paid on options contracts purchased | |
Premiums received on options contracts written | |
See Notes to Consolidated Financial Statements
FT Vest Gold Strategy Quarterly Buffer ETF (BGLD)Consolidated Statement of Operations
For the Six Months Ended June 30, 2024 (Unaudited)
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| |
| |
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NET INVESTMENT INCOME (LOSS) | |
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NET REALIZED AND UNREALIZED GAIN (LOSS): | |
Net realized gain (loss) on: | |
| |
Purchased options contracts | |
Written options contracts | |
| |
Net change in unrealized appreciation (depreciation) on: | |
| |
Purchased options contracts | |
Written options contracts | |
Net change in unrealized appreciation (depreciation) | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | |
See Notes to Consolidated Financial Statements
FT Vest Gold Strategy Quarterly Buffer ETF (BGLD)Consolidated Statements of Changes in Net Assets
| Six Months
Ended
6/30/2024 (Unaudited) | |
| | |
Net investment income (loss) | | |
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Net change in unrealized appreciation (depreciation) | | |
Net increase (decrease) in net assets resulting from operations | | |
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DISTRIBUTIONS TO SHAREHOLDERS FROM: | | |
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Total distributions to shareholders | | |
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SHAREHOLDER TRANSACTIONS: | | |
Proceeds from shares sold | | |
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Net increase (decrease) in net assets resulting from shareholder transactions | | |
Total increase (decrease) in net assets | | |
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CHANGES IN SHARES OUTSTANDING: | | |
Shares outstanding, beginning of period | | |
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Shares outstanding, end of period | | |
See Notes to Consolidated Financial Statements
FT Vest Gold Strategy Quarterly Buffer ETF (BGLD)Consolidated Financial Highlights
For a share outstanding throughout each period
| Six Months
Ended
6/30/2024
(Unaudited) | | Period
Ended
12/31/2021 (a) |
| | |
Net asset value, beginning of period | | | | |
Income from investment operations: | | | | |
Net investment income (loss) | | | | |
Net realized and unrealized gain (loss) | | | | |
Total from investment operations | | | | |
Distributions paid to shareholders from: | | | | |
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Net asset value, end of period | | | | |
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|
Ratios to average net assets/supplemental data: | | | | |
Net assets, end of period (in 000’s) | | | | |
Ratio of total expenses to average net assets | | | | |
Ratio of net investment income (loss) to average net assets | | | | |
Portfolio turnover rate (f) | | | | |
| Inception date is January 20, 2021, which is consistent with the commencement of investment operations and is the date the initial creation units were established. |
| Based on average shares outstanding. |
| 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. |
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| Ratio of total expenses to average net assets and ratio of net investment income (loss) to average net assets do not reflect the Fund’s proportionate share of expenses and income of underlying investment companies in which the Fund invests. |
| 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, derivatives and in-kind transactions. |
See Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
FT Vest Gold Strategy Quarterly Buffer ETF (BGLD)June 30, 2024 (Unaudited) 1. Organization
First Trust Exchange-Traded Fund (the “Trust”) is an open-end management investment company organized as a Massachusetts business trust on August 8, 2003, and is registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended (the “1940 Act”).
This report covers the FT Vest Gold Strategy Quarterly Buffer ETF (the “Fund”), a non-diversified series of the Trust, which trades under the ticker “BGLD” on Cboe BZX Exchange, Inc. The Fund represents a separate series of shares of beneficial interest in the Trust. Unlike conventional mutual funds, the Fund issues and redeems shares on a continuous basis, at net asset value (“NAV”), only in large blocks of shares known as “Creation Units.”
The Fund is an actively managed exchange-traded fund. The Fund’s investment objective is to seek to provide investors with returns (before fees and expenses) that match the price return of the SPDR® Gold Trust (the “Underlying ETF”), up to a predetermined upside cap of 9.70% while providing a buffer (before fees and expenses) against Underlying ETF losses between -5% and -15% over the period from June 3, 2024 to August 30, 2024 (the “Target Outcome Period”). Prior to June 3, 2024, the Fund’s investment objective included an upside cap of 9.27% and 10.50% and a Target Outcome Period of March 1, 2024 to May 31, 2024 and December 1, 2023 to February 29, 2024, respectively. Under normal market conditions, the Fund will invest substantially all of its assets in U.S. Treasury securities, cash and cash equivalents, and in the shares of a wholly-owned subsidiary (the “Subsidiary”) that holds FLexible EXchange® Options (“FLEX Options”) that reference the price performance of the Underlying ETF. The Subsidiary is wholly-owned by the Fund and is organized under the laws of the Cayman Islands. The Fund does not invest directly in FLEX Options on the Underlying ETF. The Fund gains exposure to these investments exclusively by investing in the Subsidiary. The Fund will invest up to approximately 25% of its total assets in the Subsidiary. As of June 30, 2024 the Fund invested 21.34% of the Fund’s total assets in the Subsidiary. There can be no assurance that the Fund will achieve its investment objective. The Fund may not be appropriate for all investors.
2. Significant Accounting Policies
The Fund is considered an investment company and follows accounting and reporting guidance under Financial Accounting Standards Board Accounting Standards Codification Topic 946, “Financial Services-Investment Companies.” The consolidated financial statements include the accounts on a consolidated basis of the Subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of the consolidated financial statements. The preparation of the consolidated 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 consolidated financial statements. Actual results could differ from those estimates.
The 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. The Fund’s NAV is calculated 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 shares outstanding.
The 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 readily available market quotations such as 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 Fund’s investment advisor, First Trust Advisors L.P. (“First Trust” or the “Advisor”), in accordance with valuation procedures approved by the Trust’s Board of Trustees, and in accordance with provisions of the 1940 Act and rules thereunder. Investments valued by the Advisor’s Pricing Committee, if any, are footnoted as such in the footnotes to the Consolidated Portfolio of Investments. The Fund’s investments are valued as follows:
Exchange-traded options contracts (other than FLEX Option contracts) are valued at the closing price in the market where such contracts are principally traded. If no closing price is available, exchange-traded options contracts are valued at the mean of their most recent bid and ask price, if both are available. Over-the-counter options contracts are valued as follows, depending on the market in which the instrument trades: (1) the mean of their most recent bid and ask price, if available; or (2) a price based on
Notes to Consolidated Financial Statements (Continued)
FT Vest Gold Strategy Quarterly Buffer ETF (BGLD)June 30, 2024 (Unaudited) the equivalent exchange-traded option. FLEX Option contracts are normally valued using a model-based price provided by a third-party pricing vendor. On days when a trade in a FLEX Option contract occurs, the trade price will be used to value such FLEX Option contracts in lieu of the model price.
U.S. Treasuries are valued on the basis of valuations provided by a third-party pricing service approved by the Trust’s Board of Trustees.
Shares of open-end funds are valued based on NAV per share.
If the Fund’s investments are not able to be priced by pre-established pricing methods, such investments may be valued by the Trust’s Board of Trustees or its delegate, the Advisor’s Pricing Committee, at fair value. A variety of factors may be considered in determining the fair value of such investments.
Valuing the Fund’s holdings using fair value pricing will result in using prices for those holdings that may differ from current market valuations. The Subsidiary’s holdings will be valued in the same manner as the Fund’s holdings.
The Fund is 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:
• 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.
• 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.
• 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 the Fund’s investments as of June 30, 2024, is included with the Fund’s Consolidated Portfolio of Investments.
B. Investment Transactions and Investment Income
Investment transactions are recorded as of the trade date. Realized gains and losses from investment transactions are recorded on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income, if any, is recorded daily on the accrual basis. Amortization of premiums and accretion of discounts are recorded using the effective interest method.
FLEX Options are customized equity or index option contracts that trade on an exchange, but provide investors with the ability to customize key contract terms like exercise prices, styles and expiration dates. FLEX Options are guaranteed for settlement by the Options Clearing Corporation.
The Fund, through the Subsidiary, purchases and sells call and put FLEX Options based on the performance of the Underlying ETF. The FLEX Options that the Subsidiary holds that reference the Underlying ETF will give the Subsidiary the right to receive or deliver shares of the Underlying ETF on the option expiration date at a strike price, depending on whether the option is a put or call option and whether the Subsidiary purchases or sells the option. The FLEX Options held by the Subsidiary are European style options, which are exercisable at the strike price only on the FLEX Option expiration date.
When the Subsidiary writes (sells) an option, an amount equal to the premium received by the Subsidiary is included in “Options contracts written, at value” on the Consolidated Statement of Assets and Liabilities. Gain or loss on written options is presented
Notes to Consolidated Financial Statements (Continued)
FT Vest Gold Strategy Quarterly Buffer ETF (BGLD)June 30, 2024 (Unaudited) separately as “Net realized gain (loss) on written options contracts” on the Consolidated Statement of Operations. When the Subsidiary purchases a call or put option, the premium paid represents the cost of the call or put option, which is included in “Options contracts purchased, at value” on the Consolidated Statement of Assets and Liabilities. Gain or loss on purchased options is included in “Net realized gain (loss) on purchased options contracts” on the Consolidated Statement of Operations.
D. Dividends and Distributions to Shareholders
Dividends from net investment income of the Fund, if any, are declared and paid annually, or as the Board of Trustees may determine from time to time. Distributions of net realized capital gains earned by the Fund, if any, are distributed at least annually. The Fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
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 consolidated 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 Fund 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 consolidated financial statement and tax purposes, will reverse at some time in the future.
The tax character of distributions paid during the fiscal year ended December 31, 2023 was as follows:
As of December 31, 2023, the components of distributable earnings on a tax basis for the Fund were as follows:
Undistributed ordinary income | |
Accumulated capital and other gain (loss) | |
Net unrealized appreciation (depreciation) | |
The 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 (the “Code”), 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, the Fund may be subject to an excise tax of 4% of the amount by which approximately 98% of the Fund’s taxable income exceeds the distributions from such taxable income for the calendar year.
The Subsidiary is classified as a controlled foreign corporation under Subchapter N of the Code. Therefore, the Fund is required to increase its taxable income by its share of the Subsidiary’s income, whether or not such earnings are distributed by the Subsidiary to the Fund. Net investment losses of the Subsidiary cannot be deducted by the Fund in the current period nor carried forward to offset taxable income in future periods.
The Fund is 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 years ended 2021, 2022, and 2023 remain open to federal and state audit. As of June 30, 2024, management has evaluated the application of these standards to the Fund and has determined that no provision for income tax is required in the Fund’s consolidated financial statements for uncertain tax positions.
The 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. The 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 apply when there has been a 50% change in ownership. At December 31, 2023, for federal income tax purposes, the Fund had $619 of non-expiring capital loss carryforwards available, to the extent provided by regulations, to offset future capital gains. 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 the Fund’s shareholders.
Notes to Consolidated Financial Statements (Continued)
FT Vest Gold Strategy Quarterly Buffer ETF (BGLD)June 30, 2024 (Unaudited) 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 December 31, 2023, the Fund had no net late year ordinary or capital losses.
As of June 30, 2024, the aggregate cost, gross unrealized appreciation, gross unrealized depreciation, and net unrealized appreciation/(depreciation) on investments (including short positions and derivatives, if any) for federal income tax purposes were as follows:
| Gross Unrealized
Appreciation | Gross Unrealized
(Depreciation) | Net Unrealized
Appreciation
(Depreciation) |
| | | |
Expenses, other than the investment advisory fee and other excluded expenses, are paid by the Advisor (see Note 3).
3. Investment Advisory Fee, Affiliated Transactions and Other Fee Arrangements
First Trust, the investment advisor to the Fund, 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 ongoing monitoring of the Fund’s and the Subsidiary’s investment portfolios, managing the Fund’s business affairs and providing certain administrative services necessary for the management of the Fund.
First Trust is responsible for the expenses of the Fund and the Subsidiary including the cost of transfer agency, sub-advisory, custody, fund administration, legal, audit and other services, but excluding fee payments under the Investment Management Agreement, interest, taxes, acquired fund fees and expenses, if any, 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. The annual unitary management fee payable by the Fund to First Trust for these services will be reduced at certain levels of the Fund’s net assets (“breakpoints”) and calculated pursuant to the following schedule:
| |
Fund net assets up to and including $2.5 billion | |
Fund net assets greater than $2.5 billion up to and including $5 billion | |
Fund net assets greater than $5 billion up to and including $7.5 billion | |
Fund net assets greater than $7.5 billion up to and including $10 billion | |
Fund net assets greater than $10 billion | |
The Subsidiary does not pay First Trust a separate management fee.
Vest Financial LLC (“Vest”), an affiliate of First Trust, serves as the Fund’s sub-advisor and manages the Fund’s portfolio subject to First Trust’s supervision. Pursuant to the Investment Management Agreement, between the Trust, on behalf of the Fund, and the Advisor, and the Investment Sub-Advisory Agreement among the Trust, on behalf of the Fund, the Advisor and Vest, First Trust will supervise Vest and its management of the investment of the Fund’s assets and will pay Vest for its services as the Fund’s sub-advisor a sub-advisory fee equal to 50% of any remaining monthly unitary management fee paid to the Advisor after the average Fund’s expenses accrued during the most recent twelve months are subtracted from the unitary management fee for that month.
The Trust has multiple service agreements with The Bank of New York Mellon (“BNY”). Under the service agreements, BNY performs custodial, fund accounting, certain administrative services, and transfer agency services for the Fund. As custodian, BNY is responsible for custody of the Fund’s assets. As fund accountant and administrator, BNY is responsible for maintaining the books and records of the Fund’s securities and cash. As transfer agent, BNY is responsible for maintaining shareholder records for the Fund. BNY 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 target outcome fund or an index fund.
Notes to Consolidated Financial Statements (Continued)
FT Vest Gold Strategy Quarterly Buffer ETF (BGLD)June 30, 2024 (Unaudited) Additionally, the Chairs of the Audit Committee, Nominating and Governance Committee and Valuation Committee, the Vice Chair of the Audit Committee, the Lead Independent Trustee and the Vice Lead Independent Trustee 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 Committee Chairs, the Audit Committee Vice Chair, the Lead Independent Trustee and the Vice Lead Independent Trustee rotate periodically in serving in such capacities. The officers and “Interested” Trustee receive no compensation from the Trust for acting in such capacities.
4. Purchases and Sales of Securities
For the six months ended June 30, 2024, the cost of purchases and proceeds from sales of investments, excluding short-term investments, derivatives, and in-kind transactions, were $0 and $0, respectively.
For the six months ended June 30, 2024, the Fund had no in-kind transactions.
5. Derivative Transactions
The following table presents the types of derivatives held by the Subsidiary at June 30, 2024, the primary underlying risk exposure and the location of these instruments as presented on the Consolidated Statement of Assets and Liabilities.
| | | |
| | Consolidated
Statement of Assets and
Liabilities Location | | Consolidated
Statement of Assets and
Liabilities Location | |
| | Options contracts purchased, at value | | Options contracts written, at value | |
The following table presents the amount of net realized gain (loss) and change in net unrealized appreciation (depreciation) recognized for the six months ended June 30, 2024, on derivative instruments, as well as the primary underlying risk exposure associated with the instruments.
Consolidated Statement of Operations Location | |
| |
Net realized gain (loss) on: | |
Purchased options contracts | |
Written options contracts | |
Net change in unrealized appreciation (depreciation) on: | |
Purchased options contracts | |
Written options contracts | |
During the six months ended June 30, 2024, the premiums for purchased options contracts opened were $3,804,998 and the premiums for purchased options contracts closed, exercised and expired were $3,906,429.
During the six months ended June 30, 2024, the premiums for written options contracts opened were $416,198 and the premiums for written options contracts closed, exercised and expired were $526,470.
The Fund does not have the right to offset financial assets and financial liabilities related to options contracts on the Consolidated Statement of Assets and Liabilities.
6. Creations, Redemptions and Transaction Fees
The Fund generally issues and redeems its shares in primary market transactions through a creation and redemption mechanism and does not sell or redeem individual shares. Instead, financial entities known as “Authorized Participants” have contractual arrangements with the Fund or one of the Fund’s service providers to purchase and redeem Fund shares directly with the Fund in Creation Units. Prior to the start of trading on every business day, the Fund publishes through the National Securities Clearing Corporation the “basket” of securities, cash or other assets that it will accept in exchange for a Creation Unit of the Fund’s shares. An Authorized Participant that wishes to effectuate a creation of the Fund’s shares deposits with the Fund the “basket” of securities, cash or other assets identified by the Fund that day, and then receives the Creation Unit of the Fund’s shares in return for those assets. After
Notes to Consolidated Financial Statements (Continued)
FT Vest Gold Strategy Quarterly Buffer ETF (BGLD)June 30, 2024 (Unaudited) purchasing a Creation Unit, the Authorized Participant may continue to hold the Fund’s shares or sell them in the secondary market. The redemption process is the reverse of the purchase process: the Authorized Participant redeems a Creation Unit of the Fund’s shares for a basket of securities, cash or other assets. The combination of the creation and redemption process with secondary market trading in the Fund’s shares and underlying securities provides arbitrage opportunities that are designed to help keep the market price of the Fund’s shares at or close to the NAV per share of the Fund.
The Fund imposes fees in connection with the purchase of Creation Units. These fees may vary based upon various fact-based circumstances, including, but not limited to, the composition of the securities included in the Creation Unit or the countries in which the transactions are settled. The price for each Creation Unit will equal the daily NAV per share of the Fund 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, stamp taxes and part or all of the spread between the expected bid and offer side of the market related to the securities comprising the creation basket.
The Fund also imposes fees in connection with the redemption of Creation Units. These fees may vary based upon various fact-based circumstances, including, but not limited to, the composition of the securities included in the Creation Unit or the countries in which the transactions are settled. The price received for each Creation Unit will equal the daily NAV per share of the Fund times the number of shares in a Creation Unit, minus the fees described above and, if applicable, any 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 the securities comprising the redemption basket. Investors who use the services of a broker or other such intermediary in addition to an Authorized Participant to effect a redemption of a Creation Unit may also be assessed an amount to cover the cost of such services. The redemption fee charged by the Fund will comply with Rule 22c-2 of the 1940 Act which limits redemption fees to no more than 2% of the value of the shares redeemed.
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 Fund is authorized to pay an amount up to 0.25% of its average daily net assets each year to reimburse First Trust Portfolios L.P. (“FTP”), the distributor of the Fund, 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 Fund, and pursuant to a contractual arrangement, no 12b-1 fees will be paid any time before April 30, 2025.
The Trust, on behalf of the Fund, 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.
Management has evaluated the impact of all subsequent events on the Fund through the date the consolidated financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in the consolidated financial statements that have not already been disclosed.
FT Vest Gold Strategy Quarterly Buffer ETF (BGLD)June 30, 2024 (Unaudited) Changes in and Disagreements with Accountants (Item 8 of Form N-CSR)
There were no changes in or disagreements with the Fund’s accountants during the six months ended June 30, 2024.
Proxy Disclosures (Item 9 of Form N-CSR)
There were no matters submitted for vote by shareholders of the Fund during the six months ended June 30, 2024.
Remuneration Paid to Directors, Officers, and Others (Item 10 of Form N-CSR)
Independent Trustees and any member of any advisory board of the Fund are compensated through the unitary management fee paid by the Fund to the advisor and not directly by the Fund. The investment advisory fee paid is included in the Consolidated Statement of Operations.
Statement Regarding the Basis for the Board’s Approval of Investment Advisory Contract (Item 11 of Form N-CSR)
The Board of Trustees of First Trust Exchange-Traded Fund (the “Trust”), including the Independent Trustees, unanimously approved the continuation of the Investment Management Agreement (the “Advisory Agreement”) with First Trust Advisors L.P. (the “Advisor”) on behalf of the FT Vest Gold Strategy Quarterly Buffer ETF (the “Fund”) and the Investment Sub-Advisory Agreement (the “Sub-Advisory Agreement” and together with the Advisory Agreement, the “Agreements”) among the Trust, on behalf of the Fund, the Advisor and Vest Financial LLC (the “Sub-Advisor”). The Board approved the continuation of the Agreements for a one-year period ending June 30, 2025 at a meeting held on June 2–3, 2024. The Board determined that the continuation of the Agreements is in the best interests of the Fund in light of the nature, extent and quality of the services provided and such other matters as the Board considered to be relevant in the exercise of its business judgment.
To reach this determination, the Board considered its duties under the Investment Company Act of 1940, as amended (the “1940 Act”), as well as under the general principles of state law, in reviewing and approving advisory contracts; the requirements of the 1940 Act in such matters; the fiduciary duty of investment advisors with respect to advisory agreements and compensation; the standards used by courts in determining whether investment company boards have fulfilled their duties; and the factors to be considered by the Board in voting on such agreements. At meetings held on April 16, 2024, April 25, 2024 and June 2–3, 2024, the Board, including the Independent Trustees, reviewed materials provided by the Advisor and the Sub-Advisor responding to requests for information from counsel to the Independent Trustees, submitted on behalf of the Independent Trustees, that, among other things, outlined: the services provided by the Advisor and the Sub-Advisor to the Fund (including the relevant personnel responsible for these services and their experience); the unitary fee rate schedule payable by the Fund as compared to fees charged to a peer group of funds (the “Expense Group”) and a broad peer universe of funds (the “Expense Universe”), each assembled by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent source, and as compared to fees charged to other clients of the Advisor, including other exchange-traded funds (“ETFs”) managed by the Advisor; the sub-advisory fee as compared to fees charged to other clients of the Sub-Advisor; the expense ratio of the Fund as compared to expense ratios of the funds in the Fund’s Expense Group and Expense Universe; performance information for the Fund, including comparisons of the Fund’s performance to that of one or more relevant benchmark indexes and to that of a performance group of funds and a broad performance universe of funds (the “Performance Universe”), each assembled by Broadridge; the nature of expenses incurred in providing services to the Fund and the potential for the Advisor and the Sub-Advisor to realize economies of scale, if any; profitability and other financial data for the Advisor; financial data for the Sub-Advisor; any indirect benefits to the Advisor and its affiliates, First Trust Portfolios L.P. (“FTP”) and First Trust Capital Partners, LLC (“FTCP”), and the Sub-Advisor; and information on the Advisor’s and the Sub-Advisor’s compliance programs. The Board reviewed initial materials with the Advisor at the meeting held on April 25, 2024, prior to which the Independent Trustees and their counsel met separately to discuss the information provided by the Advisor and the Sub-Advisor. Following the April 25, 2024 meeting, counsel to the Independent Trustees, on behalf of the Independent Trustees, requested certain clarifications and supplements to the materials provided, and the information provided in response to those requests was considered at an executive session of the Independent Trustees and their counsel held prior to the June 2–3, 2024 meeting, as well as at the June meeting. The Board applied its business judgment to determine whether the arrangements between the Trust and the Advisor and among the Trust, the Advisor and the Sub-Advisor continue to be reasonable business arrangements from the Fund’s perspective. The Board determined that, given the totality of the information provided with respect to the Agreements, the Board had received sufficient information to renew the Agreements. The Board considered that shareholders chose to invest or remain invested in the Fund knowing that the Advisor and the Sub-Advisor manage the Fund and knowing the Fund’s unitary fee.
In reviewing the Agreements, the Board considered the nature, extent and quality of the services provided by the Advisor and the Sub-Advisor under the Agreements. With respect to the Advisory Agreement, the Board considered that the Advisor is responsible for the
Other Information (Continued)
FT Vest Gold Strategy Quarterly Buffer ETF (BGLD)June 30, 2024 (Unaudited) overall management and administration of the Trust and the Fund and reviewed all of the services provided by the Advisor to the Fund, including the oversight of the Sub-Advisor, as well as the background and experience of the persons responsible for such services. The Board noted that the Advisor oversees the Sub-Advisor’s day-to-day management of the Fund’s investments, including portfolio risk monitoring and performance review. In reviewing the services provided, the Board noted the compliance program that had been developed by the Advisor and considered that it includes a robust program for monitoring the Advisor’s, the Sub-Advisor’s and the Fund’s compliance with the 1940 Act, as well as the Fund’s compliance with its investment objective, policies and restrictions. The Board also considered a report from the Advisor with respect to its risk management functions related to the operation of the Fund. Finally, as part of the Board’s consideration of the Advisor’s services, the Advisor, in its written materials and at the April 25, 2024 meeting, described to the Board the scope of its ongoing investment in additional personnel and infrastructure to maintain and improve the quality of services provided to the Fund and the other funds in the First Trust Fund Complex. With respect to the Sub-Advisory Agreement, the Board noted that the Fund is an actively-managed ETF and the Sub-Advisor actively manages the Fund’s investments. The Board reviewed the materials provided by the Sub-Advisor and considered the services that the Sub-Advisor provides to the Fund, including the Sub-Advisor’s day-to-day management of the Fund’s investments. In considering the Sub-Advisor’s management of the Fund, the Board noted the background and experience of the Sub-Advisor’s portfolio management team, including the Board’s prior meetings with members of the portfolio management team. In light of the information presented and the considerations made, the Board concluded that the nature, extent and quality of the services provided to the Trust and the Fund by the Advisor and the Sub-Advisor under the Agreements have been and are expected to remain satisfactory and that the Sub-Advisor, under the oversight of the Advisor, has managed the Fund consistent with its investment objective, policies and restrictions.
The Board considered the unitary fee rate schedule payable by the Fund under the Advisory Agreement for the services provided. The Board noted that the sub-advisory fee is paid by the Advisor from the unitary fee. The Board considered that as part of the unitary fee the Advisor is responsible for the Fund’s expenses, including the cost of sub-advisory, transfer agency, custody, fund administration, legal, audit and other services and license fees, if any, but excluding the fee payment under the Advisory Agreement and interest, taxes, acquired fund fees and expenses, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution and service fees pursuant to a Rule 12b-1 plan, if any, and extraordinary expenses, if any. The Board received and reviewed information showing the fee rates and expense ratios of the peer funds in the Expense Group, as well as advisory and unitary fee rates charged by the Advisor and the Sub-Advisor to other fund (including ETFs) and non-fund clients, as applicable. Because the Fund pays a unitary fee, the Board determined that expense ratios were the most relevant comparative data point. Based on the information provided, the Board noted that the total (net) expense ratio for the Fund was above the median total (net) expense ratio of the peer funds in the Expense Group. With respect to the Expense Group, the Board discussed with Broadridge its methodology for assembling peer groups and discussed with the Advisor limitations in creating peer groups for actively-managed ETFs, and different business models that may affect the pricing of services among ETF sponsors. The Board also noted that not all peer funds employ an advisor/sub-advisor management structure. The Board took these limitations and differences into account in considering the peer data. With respect to fees charged to other non-ETF clients, the Board considered differences between the Fund and other non-ETF clients that limited their comparability. In considering the unitary fee rate schedule overall, the Board also considered the Advisor’s statement that it seeks to meet investor needs through innovative and value-added investment solutions and the Advisor’s demonstrated long-term commitment to the Fund and the other funds in the First Trust Fund Complex.
The Board considered performance information for the Fund. The Board noted the process it has established for monitoring the Fund’s performance and portfolio risk on an ongoing basis, which includes quarterly performance reporting from the Advisor and the Sub-Advisor for the Fund. The Board determined that this process continues to be effective for reviewing the Fund’s performance. The Board received and reviewed information comparing the Fund’s performance for the one-year period ended December 31, 2023 to the performance of the funds in the Performance Universe and to that of a benchmark index. The Board noted that the Fund is a target outcome ETF that seeks to provide investors with returns (before fees and expenses) over a defined period of time (typically one quarter of a year) that match the price return of the SPDR Gold Trust (“GLD”), up to a predetermined cap, while providing a buffer (before fees and expenses) against certain losses on the price return of GLD. The Board considered information provided by the Sub-Advisor on the Fund’s performance during its four quarterly target outcome periods for the year ended February 29, 2024 and noted that the Fund delivered on its target outcome objective.
On the basis of all the information provided on the unitary fee and performance of the Fund and the ongoing oversight by the Board, the Board concluded that the unitary fee for the Fund (out of which the Sub-Advisor is compensated) continues to be reasonable and appropriate in light of the nature, extent and quality of the services provided by the Advisor and the Sub-Advisor to the Fund under the Agreements.
Other Information (Continued)
FT Vest Gold Strategy Quarterly Buffer ETF (BGLD)June 30, 2024 (Unaudited) The Board considered information and discussed with the Advisor whether there were any economies of scale in connection with providing advisory services to the Fund at current asset levels and whether the Fund may benefit from any economies of scale. The Board noted that the unitary fee rate schedule for the Fund includes breakpoints pursuant to which the unitary fee rate will be reduced as assets of the Fund meet certain thresholds. The Board considered the Advisor’s statement that it believes that its expenses relating to providing advisory services to the Fund will increase during the next twelve months as the Advisor continues to build infrastructure and add new staff. The Board also noted that under the unitary fee structure, any reduction in expenses associated with the management and operations of the Fund would benefit the Advisor, but that the unitary fee structure provides a level of certainty in expenses for shareholders of the Fund. The Board concluded that the unitary fee rate schedule for the Fund reflects an appropriate level of sharing of any economies of scale that may be realized in the management of the Fund at current asset levels. The Board considered the revenues and allocated costs (including the allocation methodology) of the Advisor in serving as investment advisor to the Fund for the twelve months ended December 31, 2023 and the estimated profitability level for the Fund calculated by the Advisor based on such data, as well as complex-wide and product-line profitability data, for the same period. The Board noted the inherent limitations in the profitability analysis and concluded that, based on the information provided, the Advisor’s profitability level for the Fund was not unreasonable. In addition, the Board considered indirect benefits described by the Advisor that may be realized from its relationship with the Fund. The Board considered that the Advisor had identified as an indirect benefit to the Advisor and FTP their exposure to investors and brokers who, absent their exposure to the Fund, may have had no dealings with the Advisor or FTP. The Board also noted that FTCP has a controlling ownership interest in the Sub-Advisor’s parent company and considered potential indirect benefits to the Advisor from such ownership interest. The Board concluded that the character and amount of potential indirect benefits to the Advisor were not unreasonable.
The Board considered the Sub-Advisor’s statement that it believes that the sub-advisory fee for the Fund is appropriate. The Board noted the Sub-Advisor’s statements that it continues to invest in infrastructure, technology and personnel, and that it anticipates that its expenses relating to providing services to the Fund will remain approximately the same for the next twelve months. The Board noted that the Advisor pays the Sub-Advisor from the unitary fee, that the sub-advisory fee will be reduced consistent with the breakpoints in the unitary fee rate schedule and its understanding that the Fund’s sub-advisory fee was the product of an arm’s length negotiation. The Board did not review the profitability of the Sub-Advisor with respect to the Fund. The Board concluded that the profitability analysis for the Advisor was more relevant. The Board considered the potential indirect benefits to the Sub-Advisor from being associated with the Advisor and the Fund, and noted the Sub-Advisor’s statements that it is the Sub-Advisor’s policy currently not to enter into soft-dollar arrangements for the procurement of research services in connection with client securities transactions and that, as a result, there are no foreseen indirect benefits from its relationship with the Fund. The Board also considered the potential indirect benefits to the Sub-Advisor from FTCP’s controlling ownership interest in the Sub-Advisor’s parent company. The Board concluded that the character and amount of potential indirect benefits to the Sub-Advisor were not unreasonable.
Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, unanimously determined that the terms of the Agreements continue to be fair and reasonable and that the continuation of the Agreements is in the best interests of the Fund. No single factor was determinative in the Board’s analysis.
The Fund is not sponsored, endorsed, sold or promoted by SPDR® Gold Trust and World Gold Trust Services, LLC, (together with their affiliates hereinafter referred to as the “Corporations”). The Corporations have not passed on the legality or suitability of, or the accuracy or adequacy of, descriptions and disclosures relating to the Fund or the FLEX Options. The Corporations make no representations or warranties, express or implied, regarding the advisability of investing in the Fund or the FLEX Options or results to be obtained by the Fund or the FLEX Options, shareholders or any other person or entity from use of the Underlying ETF. The Corporations have no liability in connection with the management, administration, marketing or trading of the Fund or the FLEX Options.
Semi-Annual Consolidated
Financial Statements
and Other Information |
For the Six Months Ended
June 30, 2024 |
First Trust Exchange-Traded Fund
FT Vest Gold Strategy Target Income ETF® (IGLD) |
FT Vest Gold Strategy Target Income ETF® (IGLD)
Semi-Annual Consolidated Financial Statements and Other Information
June 30, 2024
Performance and Risk Disclosure
There is no assurance that FT Vest Gold Strategy Target Income ETF® (the “Fund”) will achieve its investment objective. The 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’s shares may therefore be less than what you paid for them. Accordingly, you can lose money by investing in the Fund.
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.
First Trust Advisors L.P., the Fund’s advisor, may also periodically provide additional information on Fund performance on the Fund’s webpage at www.ftportfolios.com.
This report contains information that may help you evaluate your investment in the Fund. It includes details about the Fund and presents data that provides insight into the Fund’s performance and investment approach.
The material risks of investing in the Fund are spelled out in its prospectus, statement of additional information, and other Fund regulatory filings.
FT Vest Gold Strategy Target Income ETF® (IGLD)Consolidated Portfolio of InvestmentsJune 30, 2024 (Unaudited)
| | | | |
U.S. TREASURY BILLS — 128.5% |
| | | | |
| | | | |
| | |
MONEY MARKET FUNDS — 0.1% |
| Dreyfus Government Cash Management Fund, Institutional Shares - 5.19% (c) | |
| | |
| Total Investments — 128.6% | |
| | |
| | | | | |
|
| Call Options Purchased — 0.2% | |
| | | | | |
| | | | | |
WRITTEN OPTIONS — (29.9)% |
| Call Options Written — (0.8)% | |
| | | | | |
| (Premiums received $805,229) | | | | |
| Put Options Written — (29.1)% | |
| | | | | |
| (Premiums received $36,876,028) | | | | |
| | |
| (Premiums received $37,681,257) | |
| Net Other Assets and Liabilities — 1.1% | |
| | |
| All or a portion of this security is segregated as collateral for the options written. At June 30, 2024, the segregated value of this security amounts to $49,742,106. |
| |
| Rate shown reflects yield as of June 30, 2024. |
See Notes to Consolidated Financial Statements
FT Vest Gold Strategy Target Income ETF® (IGLD)Consolidated Portfolio of Investments (Continued)June 30, 2024 (Unaudited)
Valuation InputsA summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Consolidated Financial Statements):
|
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
|
| | | Level 2
Significant
Observable
Inputs | Level 3
Significant
Unobservable
Inputs |
| | | | |
See Notes to Consolidated Financial Statements
FT Vest Gold Strategy Target Income ETF® (IGLD)Consolidated Statement of Assets and Liabilities
June 30, 2024 (Unaudited)
| |
| |
Options contracts purchased, at value | |
| |
| |
| |
Investment securities sold | |
| |
| |
|
| |
Options contracts written, at value | |
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Accumulated distributable earnings (loss) | |
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NET ASSET VALUE, per share | |
Number of shares outstanding (unlimited number of shares authorized, par value $0.01 per share) | |
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Premiums paid on options contracts purchased | |
Premiums received on options contracts written | |
See Notes to Consolidated Financial Statements
FT Vest Gold Strategy Target Income ETF® (IGLD)Consolidated Statement of Operations
For the Six Months Ended June 30, 2024 (Unaudited)
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NET INVESTMENT INCOME (LOSS) | |
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NET REALIZED AND UNREALIZED GAIN (LOSS): | |
Net realized gain (loss) on: | |
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Purchased options contracts | |
Written options contracts | |
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Net change in unrealized appreciation (depreciation) on: | |
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Purchased options contracts | |
Written options contracts | |
Net change in unrealized appreciation (depreciation) | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | |
See Notes to Consolidated Financial Statements
FT Vest Gold Strategy Target Income ETF® (IGLD)Consolidated Statements of Changes in Net Assets
| Six Months
Ended
6/30/2024 (Unaudited) | |
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Net investment income (loss) | | |
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Net change in unrealized appreciation (depreciation) | | |
Net increase (decrease) in net assets resulting from operations | | |
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DISTRIBUTIONS TO SHAREHOLDERS FROM: | | |
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Total distributions to shareholders | | |
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SHAREHOLDER TRANSACTIONS: | | |
Proceeds from shares sold | | |
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Net increase (decrease) in net assets resulting from shareholder transactions | | |
Total increase (decrease) in net assets | | |
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CHANGES IN SHARES OUTSTANDING: | | |
Shares outstanding, beginning of period | | |
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Shares outstanding, end of period | | |
See Notes to Consolidated Financial Statements
FT Vest Gold Strategy Target Income ETF® (IGLD)Consolidated Financial Highlights
For a share outstanding throughout each period
| Six Months
Ended
6/30/2024
(Unaudited) | | Period
Ended
12/31/2021 (a) |
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Net asset value, beginning of period | | | | |
Income from investment operations: | | | | |
Net investment income (loss) | | | | |
Net realized and unrealized gain (loss) | | | | |
Total from investment operations | | | | |
Distributions paid to shareholders from: | | | | |
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Net asset value, end of period | | | | |
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Ratios to average net assets/supplemental data: | | | | |
Net assets, end of period (in 000’s) | | | | |
Ratio of total expenses to average net assets | | | | |
Ratio of net investment income (loss) to average net assets | | | | |
Portfolio turnover rate (e) | | | | |
| Inception date is March 2, 2021, which is consistent with the commencement of investment operations and is the date the initial creation units were established. |
| Based on average shares outstanding. |
| 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. |
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| 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, derivatives and in-kind transactions. |
See Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
FT Vest Gold Strategy Target Income ETF® (IGLD)June 30, 2024 (Unaudited) 1. Organization
First Trust Exchange-Traded Fund (the “Trust”) is an open-end management investment company organized as a Massachusetts business trust on August 8, 2003, and is registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended (the “1940 Act”).
This report covers the FT Vest Gold Strategy Target Income ETF® (the “Fund”), a non-diversified series of the Trust, which trades under the ticker “IGLD” on Cboe BZX Exchange, Inc. The Fund represents a separate series of shares of beneficial interest in the Trust. Unlike conventional mutual funds, the Fund issues and redeems shares on a continuous basis, at net asset value (“NAV”), only in large blocks of shares known as “Creation Units.”
The Fund is an actively managed exchange-traded fund. The Fund’s investment objective is to seek to deliver participation in the price returns of the SPDR® Gold Trust (the “Underlying ETF”) while providing a consistent level of income. The Fund’s investments principally include short-term U.S. Treasury securities, cash and cash equivalents, and the shares of a wholly-owned subsidiary (the “Subsidiary”) that holds FLexible EXchange® Options (“FLEX Options”) that reference the price performance of the Underlying ETF. In seeking to achieve its objective, the Fund, through the Subsidiary, will generally purchase or sell FLEX Options. In combination, the purchased call and sold put options generally provide exposure to price returns of the Underlying ETF both on the upside and downside. The Subsidiary is wholly-owned by the Fund and is organized under the laws of the Cayman Islands. The Fund may invest up to 25% of its total assets in the Subsidiary. As of June 30, 2024, the Fund invested 21.23% of the Fund’s total assets in the Subsidiary. There can be no assurance that the Fund will achieve its investment objective. The Fund may not be appropriate for all investors.
2. Significant Accounting Policies
The Fund is considered an investment company and follows accounting and reporting guidance under Financial Accounting Standards Board Accounting Standards Codification Topic 946, “Financial Services-Investment Companies.” The consolidated financial statements include the accounts on a consolidated basis of the Subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of the consolidated financial statements. The preparation of the consolidated 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 consolidated financial statements. Actual results could differ from those estimates.
The 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. The Fund’s NAV is calculated 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 shares outstanding.
The 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 readily available market quotations such as 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 Fund’s investment advisor, First Trust Advisors L.P. (“First Trust” or the “Advisor”), in accordance with valuation procedures approved by the Trust’s Board of Trustees, and in accordance with provisions of the 1940 Act and rules thereunder. Investments valued by the Advisor’s Pricing Committee, if any, are footnoted as such in the footnotes to the Consolidated Portfolio of Investments. The Fund’s investments are valued as follows:
Exchange-traded options contracts (other than FLEX Option contracts) are valued at the closing price in the market where such contracts are principally traded. If no closing price is available, exchange-traded options contracts are valued at the mean of their most recent bid and ask price, if both are available. Over-the-counter options contracts are valued as follows, depending on the market in which the instrument trades: (1) the mean of their most recent bid and ask price, if available; or (2) a price based on the equivalent exchange-traded option. FLEX Option contracts are normally valued using a model-based price provided by a third-party pricing vendor. On days when a trade in a FLEX Option contract occurs, the trade price will be used to value such FLEX Option contracts in lieu of the model price.
Notes to Consolidated Financial Statements (Continued)
FT Vest Gold Strategy Target Income ETF® (IGLD)June 30, 2024 (Unaudited) U.S. Treasuries are valued on the basis of valuations provided by a third-party pricing service approved by the Trust’s Board of Trustees.
Shares of open-end funds are valued based on NAV per share.
If the Fund’s investments are not able to be priced by pre-established pricing methods, such investments may be valued by the Trust’s Board of Trustees or its delegate, the Advisor’s Pricing Committee, at fair value. A variety of factors may be considered in determining the fair value of such investments.
Valuing the Fund’s holdings using fair value pricing will result in using prices for those holdings that may differ from current market valuations. The Subsidiary’s holdings will be valued in the same manner as the Fund’s holdings.
The Fund is 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:
• 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.
• 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.
• 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 the Fund’s investments as of June 30, 2024, is included with the Fund’s Consolidated Portfolio of Investments.
B. Investment Transactions and Investment Income
Investment transactions are recorded as of the trade date. Realized gains and losses from investment transactions are recorded on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income, if any, is recorded daily on the accrual basis. Amortization of premiums and accretion of discounts are recorded using the effective interest method.
FLEX Options are customized equity or index option contracts that trade on an exchange, but provide investors with the ability to customize key contract terms like exercise prices, styles and expiration dates. FLEX Options are guaranteed for settlement by the Options Clearing Corporation.
The Fund, through the Subsidiary, purchases and sells call and put FLEX Options based on the performance of the Underlying ETF. The FLEX Options that the Subsidiary holds that reference the Underlying ETF will give the Subsidiary the right to receive or deliver shares of the Underlying ETF on the option expiration date at a strike price, depending on whether the option is a put or call option and whether the Subsidiary purchases or sells the option. The FLEX Options held by the Subsidiary are European style options, which are exercisable at the strike price only on the FLEX Option expiration date.
When the Subsidiary writes (sells) an option, an amount equal to the premium received by the Subsidiary is included in “Options contracts written, at value” on the Consolidated Statement of Assets and Liabilities. Gain or loss on written options is presented separately as “Net realized gain (loss) on written options contracts” on the Consolidated Statement of Operations. When the Subsidiary purchases a call or put option, the premium paid represents the cost of the call or put option, which is included in “Options
Notes to Consolidated Financial Statements (Continued)
FT Vest Gold Strategy Target Income ETF® (IGLD)June 30, 2024 (Unaudited) contracts purchased, at value” on the Consolidated Statement of Assets and Liabilities. Gain or loss on purchased options is included in “Net realized gain (loss) on purchased options contracts” on the Consolidated Statement of Operations.
D. Dividends and Distributions to Shareholders
Dividends from net investment income of the Fund, if any, are declared and paid monthly, or as the Board of Trustees may determine from time to time. Distributions of net realized capital gains earned by the Fund, if any, are distributed at least annually. The Fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
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 consolidated 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 portfolio securities held by the Fund 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 consolidated financial statement and tax purposes, will reverse at some time in the future.
The tax character of distributions paid during the fiscal year ended December 31, 2023 was as follows:
As of December 31, 2023, the components of distributable earnings on a tax basis for the Fund were as follows:
Undistributed ordinary income | |
Accumulated capital and other gain (loss) | |
Net unrealized appreciation (depreciation) | |
The 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 (the “Code”), 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, the Fund may be subject to an excise tax of 4% of the amount by which approximately 98% of the Fund’s taxable income exceeds the distributions from such taxable income for the calendar year.
The Subsidiary is classified as a controlled foreign corporation under Subchapter N of the Code. Therefore, the Fund is required to increase its taxable income by its share of the Subsidiary’s income, whether or not such earnings are distributed by the Subsidiary to the Fund. Net investment losses of the Subsidiary cannot be deducted by the Fund in the current period nor carried forward to offset taxable income in future periods.
The Fund is 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 years ended 2021, 2022, and 2023 remain open to federal and state audit. As of June 30, 2024, management has evaluated the application of these standards to the Fund and has determined that no provision for income tax is required in the Fund’s consolidated financial statements for uncertain tax positions.
The 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. The 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 apply when there has been a 50% change in ownership. At December 31, 2023, for federal income tax purposes, the Fund had $31,595 of non-expiring capital loss carryforwards available, to the extent provided by regulations, to offset future capital gains. 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 the Fund’s shareholders.
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 December 31, 2023, the Fund had no net late year ordinary or capital losses.
Notes to Consolidated Financial Statements (Continued)
FT Vest Gold Strategy Target Income ETF® (IGLD)June 30, 2024 (Unaudited) As of June 30, 2024, the aggregate cost, gross unrealized appreciation, gross unrealized depreciation, and net unrealized appreciation/(depreciation) on investments (including short positions and derivatives, if any) for federal income tax purposes were as follows:
| Gross Unrealized
Appreciation | Gross Unrealized
(Depreciation) | Net Unrealized
Appreciation
(Depreciation) |
| | | |
Expenses, other than the investment advisory fee and other excluded expenses, are paid by the Advisor (see Note 3).
3. Investment Advisory Fee, Affiliated Transactions and Other Fee Arrangements
First Trust, the investment advisor to the Fund, 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 ongoing monitoring of the Fund’s and the Subsidiary’s investment portfolios, managing the Fund’s business affairs and providing certain administrative services necessary for the management of the Fund.
First Trust is responsible for the expenses of the Fund and the Subsidiary including the cost of transfer agency, sub-advisory, custody, fund administration, legal, audit and other services, but excluding fee payments under the Investment Management Agreement, interest, taxes, acquired fund fees and expenses, if any, 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. The annual unitary management fee payable by the Fund to First Trust for these services will be reduced at certain levels of the Fund’s net assets (“breakpoints”) and calculated pursuant to the following schedule:
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Fund net assets up to and including $2.5 billion | |
Fund net assets greater than $2.5 billion up to and including $5 billion | |
Fund net assets greater than $5 billion up to and including $7.5 billion | |
Fund net assets greater than $7.5 billion up to and including $10 billion | |
Fund net assets greater than $10 billion | |
The Subsidiary does not pay First Trust a separate management fee.
Vest Financial LLC (“Vest”), an affiliate of First Trust, serves as the Fund’s sub-advisor and manages the Fund’s portfolio subject to First Trust’s supervision. Pursuant to the Investment Management Agreement, between the Trust, on behalf of the Fund, and the Advisor, and the Investment Sub-Advisory Agreement among the Trust, on behalf of the Fund, the Advisor and Vest, First Trust will supervise Vest and its management of the investment of the Fund’s assets and will pay Vest for its services as the Fund’s sub-advisor a sub-advisory fee equal to 50% of any remaining monthly unitary management fee paid to the Advisor after the average Fund’s expenses accrued during the most recent twelve months are subtracted from the unitary management fee for that month.
The Trust has multiple service agreements with The Bank of New York Mellon (“BNY”). Under the service agreements, BNY performs custodial, fund accounting, certain administrative services, and transfer agency services for the Fund. As custodian, BNY is responsible for custody of the Fund’s assets. As fund accountant and administrator, BNY is responsible for maintaining the books and records of the Fund’s securities and cash. As transfer agent, BNY is responsible for maintaining shareholder records for the Fund. BNY 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 target outcome fund or an index fund.
Additionally, the Chairs of the Audit Committee, Nominating and Governance Committee and Valuation Committee, the Vice Chair of the Audit Committee, the Lead Independent Trustee and the Vice Lead Independent Trustee 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.
Notes to Consolidated Financial Statements (Continued)
FT Vest Gold Strategy Target Income ETF® (IGLD)June 30, 2024 (Unaudited) Independent Trustees are reimbursed for travel and out-of-pocket expenses in connection with all meetings. The Committee Chairs, the Audit Committee Vice Chair, the Lead Independent Trustee and the Vice Lead Independent Trustee rotate periodically in serving in such capacities. The officers and “Interested” Trustee receive no compensation from the Trust for acting in such capacities.
4. Purchases and Sales of Securities
For the six months ended June 30, 2024, the cost of purchases and proceeds from sales of investments, excluding short-term investments, derivatives, and in-kind transactions, were $0 and $0, respectively.
For the six months ended June 30, 2024, the Fund had no in-kind transactions.
5. Derivative Transactions
The following table presents the types of derivatives held by the Subsidiary at June 30, 2024, the primary underlying risk exposure and the location of these instruments as presented on the Consolidated Statement of Assets and Liabilities.
| | | |
| | Consolidated
Statement of Assets and
Liabilities Location | | Consolidated
Statement of Assets and
Liabilities Location | |
| | Options contracts purchased, at value | | Options contracts written, at value | |
The following table presents the amount of net realized gain (loss) and change in net unrealized appreciation (depreciation) recognized for the six months ended June 30, 2024, on derivative instruments, as well as the primary underlying risk exposure associated with the instruments.
Consolidated Statement of Operations Location | |
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Net realized gain (loss) on: | |
Purchased options contracts | |
Written options contracts | |
Net change in unrealized appreciation (depreciation) on: | |
Purchased options contracts | |
Written options contracts | |
During the six months ended June 30, 2024, the premiums for purchased options contracts opened were $64,479 and the premiums for purchased options contracts closed, exercised and expired were $67,830.
During the six months ended June 30, 2024, the premiums for written options contracts opened were $9,028,626 and the premiums for written options contracts closed, exercised and expired were $7,934,330.
The Fund does not have the right to offset financial assets and financial liabilities related to options contracts on the Consolidated Statement of Assets and Liabilities.
6. Creations, Redemptions and Transaction Fees
The Fund generally issues and redeems its shares in primary market transactions through a creation and redemption mechanism and does not sell or redeem individual shares. Instead, financial entities known as “Authorized Participants” have contractual arrangements with the Fund or one of the Fund’s service providers to purchase and redeem Fund shares directly with the Fund in Creation Units. Prior to the start of trading on every business day, the Fund publishes through the National Securities Clearing Corporation the “basket” of securities, cash or other assets that it will accept in exchange for a Creation Unit of the Fund’s shares. An Authorized Participant that wishes to effectuate a creation of the Fund’s shares deposits with the Fund the “basket” of securities, cash or other assets identified by the Fund that day, and then receives the Creation Unit of the Fund’s shares in return for those assets. After purchasing a Creation Unit, the Authorized Participant may continue to hold the Fund’s shares or sell them in the secondary market. The redemption process is the reverse of the purchase process: the Authorized Participant redeems a Creation Unit of the Fund’s shares for a basket of securities, cash or other assets. The combination of the creation and redemption process with secondary market
Notes to Consolidated Financial Statements (Continued)
FT Vest Gold Strategy Target Income ETF® (IGLD)June 30, 2024 (Unaudited) trading in the Fund’s shares and underlying securities provides arbitrage opportunities that are designed to help keep the market price of the Fund’s shares at or close to the NAV per share of the Fund.
The Fund imposes fees in connection with the purchase of Creation Units. These fees may vary based upon various fact-based circumstances, including, but not limited to, the composition of the securities included in the Creation Unit or the countries in which the transactions are settled. The price for each Creation Unit will equal the daily NAV per share of the Fund 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, stamp taxes and part or all of the spread between the expected bid and offer side of the market related to the securities comprising the creation basket.
The Fund also imposes fees in connection with the redemption of Creation Units. These fees may vary based upon various fact-based circumstances, including, but not limited to, the composition of the securities included in the Creation Unit or the countries in which the transactions are settled. The price received for each Creation Unit will equal the daily NAV per share of the Fund times the number of shares in a Creation Unit, minus the fees described above and, if applicable, any 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 the securities comprising the redemption basket. Investors who use the services of a broker or other such intermediary in addition to an Authorized Participant to effect a redemption of a Creation Unit may also be assessed an amount to cover the cost of such services. The redemption fee charged by the Fund will comply with Rule 22c-2 of the 1940 Act which limits redemption fees to no more than 2% of the value of the shares redeemed.
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 Fund is authorized to pay an amount up to 0.25% of its average daily net assets each year to reimburse First Trust Portfolios L.P. (“FTP”), the distributor of the Fund, 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 Fund, and pursuant to a contractual arrangement, no 12b-1 fees will be paid any time before April 30, 2025.
The Trust, on behalf of the Fund, 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.
Management has evaluated the impact of all subsequent events on the Fund through the date the consolidated financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in the consolidated financial statements that have not already been disclosed.
FT Vest Gold Strategy Target Income ETF® (IGLD)June 30, 2024 (Unaudited) Changes in and Disagreements with Accountants (Item 8 of Form N-CSR)
There were no changes in or disagreements with the Fund’s accountants during the six months ended June 30, 2024.
Proxy Disclosures (Item 9 of Form N-CSR)
There were no matters submitted for vote by shareholders of the Fund during the six months ended June 30, 2024.
Remuneration Paid to Directors, Officers, and Others (Item 10 of Form N-CSR)
Independent Trustees and any member of any advisory board of the Fund are compensated through the unitary management fee paid by the Fund to the advisor and not directly by the Fund. The investment advisory fee paid is included in the Consolidated Statement of Operations.
Statement Regarding the Basis for the Board’s Approval of Investment Advisory Contract (Item 11 of Form N-CSR)
The Board of Trustees of First Trust Exchange-Traded Fund (the “Trust”), including the Independent Trustees, unanimously approved the continuation of the Investment Management Agreement (the “Advisory Agreement”) with First Trust Advisors L.P. (the “Advisor”) on behalf of the FT Vest Gold Strategy Target Income ETF (the “Fund”) and the Investment Sub-Advisory Agreement (the “Sub-Advisory Agreement” and together with the Advisory Agreement, the “Agreements”) among the Trust, on behalf of the Fund, the Advisor and Vest Financial LLC (the “Sub-Advisor”). The Board approved the continuation of the Agreements for a one-year period ending June 30, 2025 at a meeting held on June 2–3, 2024. The Board determined that the continuation of the Agreements is in the best interests of the Fund in light of the nature, extent and quality of the services provided and such other matters as the Board considered to be relevant in the exercise of its business judgment.
To reach this determination, the Board considered its duties under the Investment Company Act of 1940, as amended (the “1940 Act”), as well as under the general principles of state law, in reviewing and approving advisory contracts; the requirements of the 1940 Act in such matters; the fiduciary duty of investment advisors with respect to advisory agreements and compensation; the standards used by courts in determining whether investment company boards have fulfilled their duties; and the factors to be considered by the Board in voting on such agreements. At meetings held on April 16, 2024, April 25, 2024 and June 2–3, 2024, the Board, including the Independent Trustees, reviewed materials provided by the Advisor and the Sub-Advisor responding to requests for information from counsel to the Independent Trustees, submitted on behalf of the Independent Trustees, that, among other things, outlined: the services provided by the Advisor and the Sub-Advisor to the Fund (including the relevant personnel responsible for these services and their experience); the unitary fee rate schedule payable by the Fund as compared to fees charged to a peer group of funds (the “Expense Group”) and a broad peer universe of funds (the “Expense Universe”), each assembled by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent source, and as compared to fees charged to other clients of the Advisor, including other exchange-traded funds (“ETFs”) managed by the Advisor; the sub-advisory fee as compared to fees charged to other clients of the Sub-Advisor; the expense ratio of the Fund as compared to expense ratios of the funds in the Fund’s Expense Group and Expense Universe; performance information for the Fund, including comparisons of the Fund’s performance to that of one or more relevant benchmark indexes and to that of a performance group of funds and a broad performance universe of funds (the “Performance Universe”), each assembled by Broadridge; the nature of expenses incurred in providing services to the Fund and the potential for the Advisor and the Sub-Advisor to realize economies of scale, if any; profitability and other financial data for the Advisor; financial data for the Sub-Advisor; any indirect benefits to the Advisor and its affiliates, First Trust Portfolios L.P. (“FTP”) and First Trust Capital Partners, LLC (“FTCP”), and the Sub-Advisor; and information on the Advisor’s and the Sub-Advisor’s compliance programs. The Board reviewed initial materials with the Advisor at the meeting held on April 25, 2024, prior to which the Independent Trustees and their counsel met separately to discuss the information provided by the Advisor and the Sub-Advisor. Following the April 25, 2024 meeting, counsel to the Independent Trustees, on behalf of the Independent Trustees, requested certain clarifications and supplements to the materials provided, and the information provided in response to those requests was considered at an executive session of the Independent Trustees and their counsel held prior to the June 2–3, 2024 meeting, as well as at the June meeting. The Board applied its business judgment to determine whether the arrangements between the Trust and the Advisor and among the Trust, the Advisor and the Sub-Advisor continue to be reasonable business arrangements from the Fund’s perspective. The Board determined that, given the totality of the information provided with respect to the Agreements, the Board had received sufficient information to renew the Agreements. The Board considered that shareholders chose to invest or remain invested in the Fund knowing that the Advisor and the Sub-Advisor manage the Fund and knowing the Fund’s unitary fee.
In reviewing the Agreements, the Board considered the nature, extent and quality of the services provided by the Advisor and the Sub-Advisor under the Agreements. With respect to the Advisory Agreement, the Board considered that the Advisor is responsible for the
Other Information (Continued)
FT Vest Gold Strategy Target Income ETF® (IGLD)June 30, 2024 (Unaudited) overall management and administration of the Trust and the Fund and reviewed all of the services provided by the Advisor to the Fund, including the oversight of the Sub-Advisor, as well as the background and experience of the persons responsible for such services. The Board noted that the Advisor oversees the Sub-Advisor’s day-to-day management of the Fund’s investments, including portfolio risk monitoring and performance review. In reviewing the services provided, the Board noted the compliance program that had been developed by the Advisor and considered that it includes a robust program for monitoring the Advisor’s, the Sub-Advisor’s and the Fund’s compliance with the 1940 Act, as well as the Fund’s compliance with its investment objective, policies and restrictions. The Board also considered a report from the Advisor with respect to its risk management functions related to the operation of the Fund. Finally, as part of the Board’s consideration of the Advisor’s services, the Advisor, in its written materials and at the April 25, 2024 meeting, described to the Board the scope of its ongoing investment in additional personnel and infrastructure to maintain and improve the quality of services provided to the Fund and the other funds in the First Trust Fund Complex. With respect to the Sub-Advisory Agreement, the Board noted that the Fund is an actively-managed ETF and the Sub-Advisor actively manages the Fund’s investments. The Board reviewed the materials provided by the Sub-Advisor and considered the services that the Sub-Advisor provides to the Fund, including the Sub-Advisor’s day-to-day management of the Fund’s investments. In considering the Sub-Advisor’s management of the Fund, the Board noted the background and experience of the Sub-Advisor’s portfolio management team, including the Board’s prior meetings with members of the portfolio management team. In light of the information presented and the considerations made, the Board concluded that the nature, extent and quality of the services provided to the Trust and the Fund by the Advisor and the Sub-Advisor under the Agreements have been and are expected to remain satisfactory and that the Sub-Advisor, under the oversight of the Advisor, has managed the Fund consistent with its investment objective, policies and restrictions.
The Board considered the unitary fee rate schedule payable by the Fund under the Advisory Agreement for the services provided. The Board noted that the sub-advisory fee is paid by the Advisor from the unitary fee. The Board considered that as part of the unitary fee the Advisor is responsible for the Fund’s expenses, including the cost of sub-advisory, transfer agency, custody, fund administration, legal, audit and other services and license fees, if any, but excluding the fee payment under the Advisory Agreement and interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution and service fees pursuant to a Rule 12b-1 plan, if any, and extraordinary expenses, if any. The Board received and reviewed information showing the fee rates and expense ratios of the peer funds in the Expense Group, as well as advisory and unitary fee rates charged by the Advisor and the Sub-Advisor to other fund (including ETFs) and non-fund clients, as applicable. Because the Fund pays a unitary fee, the Board determined that expense ratios were the most relevant comparative data point. Based on the information provided, the Board noted that the total (net) expense ratio for the Fund was above the median total (net) expense ratio of the peer funds in the Expense Group. With respect to the Expense Group, the Board discussed with Broadridge its methodology for assembling peer groups and discussed with the Advisor limitations in creating peer groups for actively-managed ETFs, and different business models that may affect the pricing of services among ETF sponsors. The Board also noted that not all peer funds employ an advisor/sub-advisor management structure. The Board took these limitations and differences into account in considering the peer data. With respect to fees charged to other non-ETF clients, the Board considered differences between the Fund and other non-ETF clients that limited their comparability. In considering the unitary fee rate schedule overall, the Board also considered the Advisor’s statement that it seeks to meet investor needs through innovative and value-added investment solutions and the Advisor’s demonstrated long-term commitment to the Fund and the other funds in the First Trust Fund Complex.
The Board considered performance information for the Fund. The Board noted the process it has established for monitoring the Fund’s performance and portfolio risk on an ongoing basis, which includes quarterly performance reporting from the Advisor and the Sub-Advisor for the Fund. The Board determined that this process continues to be effective for reviewing the Fund’s performance. The Board received and reviewed information comparing the Fund’s performance for the one-year period ended December 31, 2023 to the performance of the funds in the Performance Universe and to that of a benchmark index. Based on the information provided, the Board noted that the Fund underperformed the Performance Universe median and the benchmark index for the one-year period ended December 31, 2023. The Board considered that the Fund follows an options-based strategy that seeks to deliver participation in the price returns of the SPDR Gold Trust while providing a consistent level of income, and took this strategy into account when considering the comparative performance information.
On the basis of all the information provided on the unitary fee and performance of the Fund and the ongoing oversight by the Board, the Board concluded that the unitary fee for the Fund (out of which the Sub-Advisor is compensated) continues to be reasonable and appropriate in light of the nature, extent and quality of the services provided by the Advisor and the Sub-Advisor to the Fund under the Agreements.
The Board considered information and discussed with the Advisor whether there were any economies of scale in connection with providing advisory services to the Fund at current asset levels and whether the Fund may benefit from any economies of scale. The
Other Information (Continued)
FT Vest Gold Strategy Target Income ETF® (IGLD)June 30, 2024 (Unaudited) Board noted that the unitary fee rate schedule for the Fund includes breakpoints pursuant to which the unitary fee rate will be reduced as assets of the Fund meet certain thresholds. The Board considered the Advisor’s statement that it believes that its expenses relating to providing advisory services to the Fund will increase during the next twelve months as the Advisor continues to build infrastructure and add new staff. The Board also noted that under the unitary fee structure, any reduction in expenses associated with the management and operations of the Fund would benefit the Advisor, but that the unitary fee structure provides a level of certainty in expenses for shareholders of the Fund. The Board concluded that the unitary fee rate schedule for the Fund reflects an appropriate level of sharing of any economies of scale that may be realized in the management of the Fund at current asset levels. The Board considered the revenues and allocated costs (including the allocation methodology) of the Advisor in serving as investment advisor to the Fund for the twelve months ended December 31, 2023 and the estimated profitability level for the Fund calculated by the Advisor based on such data, as well as complex-wide and product-line profitability data, for the same period. The Board noted the inherent limitations in the profitability analysis and concluded that, based on the information provided, the Advisor’s profitability level for the Fund was not unreasonable. In addition, the Board considered indirect benefits described by the Advisor that may be realized from its relationship with the Fund. The Board considered that the Advisor had identified as an indirect benefit to the Advisor and FTP their exposure to investors and brokers who, absent their exposure to the Fund, may have had no dealings with the Advisor or FTP. The Board also noted that FTCP has a controlling ownership interest in the Sub-Advisor’s parent company and considered potential indirect benefits to the Advisor from such ownership interest. The Board concluded that the character and amount of potential indirect benefits to the Advisor were not unreasonable.
The Board considered the Sub-Advisor’s statement that it believes that the sub-advisory fee for the Fund is appropriate. The Board noted the Sub-Advisor’s statements that it continues to invest in infrastructure, technology and personnel, and that it anticipates that its expenses relating to providing services to the Fund will remain approximately the same for the next twelve months. The Board noted that the Advisor pays the Sub-Advisor from the unitary fee, that the sub-advisory fee will be reduced consistent with the breakpoints in the unitary fee rate schedule and its understanding that the Fund’s sub-advisory fee was the product of an arm’s length negotiation. The Board did not review the profitability of the Sub-Advisor with respect to the Fund. The Board concluded that the profitability analysis for the Advisor was more relevant. The Board considered the potential indirect benefits to the Sub-Advisor from being associated with the Advisor and the Fund, and noted the Sub-Advisor’s statements that it is the Sub-Advisor’s policy currently not to enter into soft-dollar arrangements for the procurement of research services in connection with client securities transactions and that, as a result, there are no foreseen indirect benefits from its relationship with the Fund. The Board also considered the potential indirect benefits to the Sub-Advisor from FTCP’s controlling ownership interest in the Sub-Advisor’s parent company. The Board concluded that the character and amount of potential indirect benefits to the Sub-Advisor were not unreasonable.
Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, unanimously determined that the terms of the Agreements continue to be fair and reasonable and that the continuation of the Agreements is in the best interests of the Fund. No single factor was determinative in the Board’s analysis.
The Fund is not sponsored, endorsed, sold or promoted by SPDR® Gold Trust and World Gold Trust Services, LLC, (together with their affiliates hereinafter referred to as the “Corporations”). The Corporations have not passed on the legality or suitability of, or the accuracy or adequacy of, descriptions and disclosures relating to the Fund or the FLEX Options. The Corporations make no representations or warranties, express or implied, regarding the advisability of investing in the Fund or the FLEX Options or results to be obtained by the Fund or the FLEX Options, shareholders or any other person or entity from use of the Underlying ETF. The Corporations have no liability in connection with the management, administration, marketing or trading of the Fund or the FLEX Options.
| (b) | The Financial Highlights is included in the Financial Statements and Other Information filed under Item 7(a) of this form. |
Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies.
| (a) | Not applicable to the Registrant. |
Item 9. Proxy Disclosures for Open-End Management Investment Companies.
Not applicable to the Registrant.
Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies
This information is included in the Financial Statements and Other Information filed under Item 7 of this Form N-CSR.
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract.
This information is included in the Financial Statements and Other Information filed under Item 7 of this Form N-CSR.
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to the Registrant.
Item 13. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to the Registrant.
Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable to the Registrant.
Item 15. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
Item 16. Controls and Procedures.
| (a) | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
| (b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
| (a) | Not applicable to the Registrant. |
| (b) | Not applicable to the Registrant. |
Item 18. Recovery of Erroneously Awarded Compensation.
| (a) | Not applicable to the Registrant. |
| (b) | Not applicable to the Registrant. |
Item 19. Exhibits.
| (a)(1) | Not applicable to semi-annual reports on Form N-CSR. |
| (a)(3) | Not applicable to the Registrant. |
| (a)(4) | Not applicable to the Registrant. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| (registrant) | | First Trust Exchange-Traded Fund |
| By (Signature and Title)* | | /s/ James M. Dykas |
| | | James M. Dykas, President and Chief Executive Officer
(principal executive officer) |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By (Signature and Title)* | | /s/ James M. Dykas |
| | | James M. Dykas, President and Chief Executive Officer
(principal executive officer) |
| By (Signature and Title)* | | /s/ Derek D. Maltbie |
| | | Derek D. Maltbie, Treasurer, Chief Financial Officer
and Chief Accounting Officer
(principal financial officer) |
* Print the name and title of each signing officer under his or her signature.
