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 811-21944
| First Trust Exchange-Traded Fund II |
| (Exact name of registrant as specified in charter) |
120 East Liberty Drive, Suite 400
Wheaton, IL 60187 |
| (Address of principal executive offices) |
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: (630) 765-8000
Date of fiscal year end: September 30
Date of reporting period: March 31, 2021
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. Report to Stockholders.
The registrant's semi-annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is as follows:
FIRST TRUST
First Trust Exchange-Traded Fund II
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Book 1
First Trust STOXX(R) European Select Dividend Index Fund (FDD)
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund (FFR)
First Trust Dow Jones Global Select Dividend Index Fund (FGD)
First Trust Global Wind Energy ETF (FAN)
First Trust Global Engineering and Construction ETF (FLM)
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund (GRID)
First Trust Indxx Global Natural Resources Income ETF (FTRI)
First Trust Indxx Global Agriculture ETF (FTAG)
First Trust BICK Index Fund (BICK)
First Trust Indxx NextG ETF (NXTG)
First Trust NASDAQ Global Auto Index Fund (CARZ)
First Trust Cloud Computing ETF (SKYY)
First Trust International Equity Opportunities ETF (FPXI)
First Trust Nasdaq Cybersecurity ETF (CIBR)
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Semi-Annual Report
March 31, 2021
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<PAGE>
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TABLE OF CONTENTS
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FIRST TRUST EXCHANGE-TRADED FUND II
SEMI-ANNUAL REPORT
MARCH 31, 2021
<TABLE>
<CAPTION>
<S> <C>
Shareholder Letter....................................................................... 2
Market Overview.......................................................................... 3
Fund Performance Overview
First Trust STOXX(R) European Select Dividend Index Fund (FDD)..................... 4
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund (FFR)........ 6
First Trust Dow Jones Global Select Dividend Index Fund (FGD)...................... 8
First Trust Global Wind Energy ETF (FAN)........................................... 10
First Trust Global Engineering and Construction ETF (FLM).......................... 12
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund (GRID).... 14
First Trust Indxx Global Natural Resources Income ETF (FTRI)....................... 16
First Trust Indxx Global Agriculture ETF (FTAG).................................... 18
First Trust BICK Index Fund (BICK)................................................. 20
First Trust Indxx NextG ETF (NXTG)................................................. 22
First Trust NASDAQ Global Auto Index Fund (CARZ)................................... 24
First Trust Cloud Computing ETF (SKYY)............................................. 26
First Trust International Equity Opportunities ETF (FPXI).......................... 28
First Trust Nasdaq Cybersecurity ETF (CIBR)........................................ 30
Notes to Fund Performance Overview....................................................... 32
Understanding Your Fund Expenses......................................................... 33
Portfolio of Investments
First Trust STOXX(R) European Select Dividend Index Fund (FDD)..................... 35
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund (FFR)........ 37
First Trust Dow Jones Global Select Dividend Index Fund (FGD)...................... 43
First Trust Global Wind Energy ETF (FAN)........................................... 45
First Trust Global Engineering and Construction ETF (FLM).......................... 48
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund (GRID).... 50
First Trust Indxx Global Natural Resources Income ETF (FTRI)....................... 52
First Trust Indxx Global Agriculture ETF (FTAG).................................... 54
First Trust BICK Index Fund (BICK)................................................. 56
First Trust Indxx NextG ETF (NXTG)................................................. 59
First Trust NASDAQ Global Auto Index Fund (CARZ)................................... 62
First Trust Cloud Computing ETF (SKYY)............................................. 64
First Trust International Equity Opportunities ETF (FPXI).......................... 66
First Trust Nasdaq Cybersecurity ETF (CIBR)........................................ 68
Statements of Assets and Liabilities..................................................... 70
Statements of Operations................................................................. 74
Statements of Changes in Net Assets...................................................... 78
Financial Highlights..................................................................... 86
Notes to Financial Statements............................................................ 93
Additional Information................................................................... 104
</TABLE>
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CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This report contains certain forward-looking statements within the meaning of
the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934,
as amended. Forward-looking statements include statements regarding the goals,
beliefs, plans or current expectations of First Trust Advisors L.P. ("First
Trust" or the "Advisor") and its representatives, taking into account the
information currently available to them. Forward-looking statements include all
statements that do not relate solely to current or historical fact. For example,
forward-looking statements include the use of words such as "anticipate,"
"estimate," "intend," "expect," "believe," "plan," "may," "should," "would" or
other words that convey uncertainty of future events or outcomes.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
any series of First Trust Exchange-Traded Fund II (the "Trust") described in
this report (each such series is referred to as a "Fund" and collectively, as
the "Funds") to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. When
evaluating the information included in this report, you are cautioned not to
place undue reliance on these forward-looking statements, which reflect the
judgment of the Advisor and its representatives only as of the date hereof. We
undertake no obligation to publicly revise or update these forward-looking
statements to reflect events and circumstances that arise after the date hereof.
PERFORMANCE AND RISK DISCLOSURE
There is no assurance that any Fund described in this report will achieve its
investment objective. Each Fund is subject to market risk, which is the
possibility that the market values of securities owned by the Fund will decline
and that the value of the Fund's shares may therefore be less than what you paid
for them. Accordingly, you can lose money by investing in a Fund. See "Risk
Considerations" in the Additional Information section of this report for a
discussion of certain other risks of investing in the Funds.
Performance data quoted represents past performance, which is no guarantee of
future results, and current performance may be lower or higher than the figures
shown. For the most recent month-end performance figures, please visit
www.ftportfolios.com or speak with your financial advisor. Investment returns,
net asset value and share price will fluctuate and Fund shares, when sold, may
be worth more or less than their original cost.
The Advisor may also periodically provide additional information on Fund
performance on each Fund's webpage at www.ftportfolios.com.
HOW TO READ THIS REPORT
This report contains information that may help you evaluate your investment. It
includes details about each Fund and presents data and analysis that provide
insight into each Fund's performance and investment approach.
By reading the market overview by Robert F. Carey, Chief Market Strategist of
the Advisor, you may obtain an understanding of how the market environment
affected the performance of each Fund. The statistical information that follows
may help you understand each Fund's performance compared to that of relevant
market benchmarks.
It is important to keep in mind that the opinions expressed by personnel of the
Advisor are just that: informed opinions. They should not be considered to be
promises or advice. The opinions, like the statistics, cover the period through
the date on the cover of this report. The material risks of investing in each
Fund are spelled out in its prospectus, statement of additional information, and
other Fund regulatory filings.
Page 1
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SHAREHOLDER LETTER
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FIRST TRUST EXCHANGE-TRADED FUND II
SEMI-ANNUAL LETTER FROM THE CHAIRMAN AND CEO
MARCH 31, 2021
Dear Shareholders,
First Trust is pleased to provide you with the semi-annual report for certain
series of the First Trust Exchange-Traded Fund II (the "Funds"), which contains
detailed information about the Funds for the six months ended March 31, 2021.
A year ago my message to shareholders was largely fixated on the growing spread
of the coronavirus ("COVID-19") pandemic and what government leaders at the
federal and state levels were doing, and contemplating, to help mitigate the
potential fallout from shutting down such a huge chunk of the U.S. economy. Six
months ago, I was able to share some specifics, such as fast-tracking the
development of one or more vaccines to treat the virus. I disclosed the plan
from the Federal Reserve (the "Fed") to keep short-term interest rates
artificially low for a multi-year period, if necessary, to bring down the
nation's unemployment rate and help nudge inflation above the Fed's 2.0% target.
That level of guidance and commitment has rarely, if ever, been offered up by
the Fed, in our opinion. At that time, the Fed's aggressive response sent a
message to investors that this challenge, like the 2008-2009 financial crisis,
was a serious one that called for extraordinary measures. While we are still
early on in 2021, it does appear that the Fed's monetary policy and the
trillions of dollars of fiscal stimulus from the federal government are having a
positive influence on the U.S. economy and the equities markets.
The global growth forecast from the International Monetary Fund ("IMF"),
released in the first week of April 2021, sees real gross domestic product
growth rising by 6.0% worldwide in 2021, a strong rebound from its -3.3%
projection for 2020. The IMF is calling for a 6.4% growth rate for the U.S. in
2021, up from its -3.5% estimate for 2020. If achieved, the 6.4% growth rate
would be the highest for a calendar year since 1984, according to data from the
Bureau of Economic Analysis. As has been the case for many years, Emerging
Market and Developing Economies are expected to grow faster than advanced
economies in 2021, albeit not by much. Their 2021 growth rate estimate is 6.7%,
up from its -2.2% estimate for 2020.
For anyone looking for some confirmation that the U.S. economy is back on solid
footing, look no further than the latest releases on the ISM Manufacturing Index
and CEO confidence levels. The ISM Manufacturing Index jumped from a reading of
60.8 in February 2021 to 64.7 in March 2021, the highest mark since 1983,
according to the Institute for Supply Management. A reading above 50 indicates
that manufacturing is expanding and vice versa. The Conference Board reported
that its first quarter survey of 2021, which tracks CEO confidence levels, hit
its highest reading since the first quarter of 2004, when the measure stood at
74. The measure currently stands at 73. A reading above 50 points reflects more
positive than negative responses. Eighty-two percent of those CEOs polled expect
economic conditions to improve over the next six months, up from 63% in the
prior survey.
With respect to the performance of the stock market, the S&P 500(R) Index (the
"Index") posted a total return of 56.35% for the 12-month period ended March 31,
2021, according to Bloomberg. It was up 19.07% for the six-month period ended
March 31, 2021, and up 6.17% in the first quarter of 2021. For comparative
purposes, from 1926 through 2020, the Index posted an average annual total
return of 10.28%, according to Morningstar/Ibbotson Associates. I doubt that
anyone was forecasting such outsized returns over the past year, which is why I
embrace a buy and hold approach to investing and encourage all of you to stay
the course.
Investors funneled record amounts of capital into exchange-traded funds ("ETFs")
and related exchange-traded products ("ETPs"), particularly equity funds, in the
first quarter of 2021. ETFGI, an independent research and consultancy firm,
reported that total assets invested in ETFs/ETPs listed in the U.S. stood at an
all-time high of $5.91 trillion as of March 31, 2021, according to its own
release. In March, net inflows to ETFs/ETPs listed in the U.S. totaled a record
high $98.26 billion, pushing year-to-date net inflows to a record high $252.24
billion. Equity and fixed-income funds have garnered the most capital so far
this year. Equity ETFs/ETPs took in a net $184.53 billion in the first quarter,
up from $28.03 billion in the first quarter of 2020. Fixed-income ETFs/ETPs took
in a net $32.09 billion in the first quarter, up from $10.78 billion a year ago.
Thank you for giving First Trust the opportunity to play a role in your
financial future. We value our relationship with you and will report on the
Funds again in six months.
Sincerely,
/s/ James A. Bowen
James A. Bowen
Chairman of the Board of Trustees
Chief Executive Officer of First Trust Advisors L.P.
Page 2
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MARKET OVERVIEW
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FIRST TRUST EXCHANGE-TRADED FUND II
SEMI-ANNUAL REPORT
MARCH 31, 2021
ROBERT F. CAREY, CFA
SENIOR VICE PRESIDENT AND CHIEF MARKET STRATEGIST
FIRST TRUST ADVISORS L.P.
Mr. Carey is responsible for the overall management of research and analysis of
the First Trust product line. Mr. Carey has more than 30 years of experience as
an Equity and Fixed-Income Analyst and is a recipient of the Chartered Financial
Analyst ("CFA") designation. He is a graduate of the University of Illinois at
Champaign-Urbana with a B.S. in Physics. He is also a member of the Investment
Analysts Society of Chicago and the CFA Institute. Mr. Carey has appeared as a
guest on such programs as Bloomberg TV, CNBC, and WBBM Radio, and has been
quoted by several publications, including The Wall Street Journal, The Wall
Street Reporter, Bloomberg News Service and Registered Rep.
STATE OF THE GLOBAL ECONOMY
On February 17, 2021, data provided by the Institute of International Finance
indicated that the coronavirus ("COVID-19") pandemic had driven global debt
higher by $24 trillion, according to Reuters. Considering that the virus is
still not contained around the world by any stretch, we anticipate the potential
need for additional capital to be raised to help prop up struggling economies.
The $24 trillion capital increase pushed the value of total global debt
outstanding to a record $281 trillion. As a result, worldwide debt-to-gross
domestic product stood above 355% in mid-February 2021. While opinions may vary,
on a country level, the World Bank believes that a ratio above 77% for an
extended period can negatively impact economic growth. For now, the extended
debt levels do not seem to be a major hurdle for investors, but that could
change in the future if not addressed, in our opinion.
The climate of artificially low interest rates and slowly rising bond yields
continues to help fuel demand for equities. While quite a bit of attention is
being garnered by the spike in the yield on the benchmark 10-Year Treasury Note
("T-Note"), the Federal Reserve (the "Fed") is not fazed by it. The yield on the
10-Year T-Note rose by 82 basis points to 1.74% in the first quarter of 2021,
according to Bloomberg. Its all-time closing low was 0.51% on August 4, 2020. At
1.74%, the yield on the 10-Year T-Note is too low to compete with the historical
return on stocks, in our opinion. On March 24, 2021, Fed Chairman Jerome Powell
commented that he is not concerned about the rise in bond yields because he
believes it reflects growing optimism about the economy's prospects, according
to The Wall Street Journal. Powell believes that COVID-19 is still the biggest
risk for the U.S. economy.
Data from Refinitiv indicates that global mergers and acquisitions ("M&A") deal
value (announcements) totaled $1.3 trillion in the first quarter of 2021, up 94%
from the first quarter of 2020, according to Axios. That is an all-time high for
the first quarter of a calendar year and the second-most for any quarter on
record. The U.S. accounted for 50% of that total. Cross-border M&A hit an
all-time first quarter high of $458 billion in 2021. Strong M&A activity
reflects growing confidence in the current global economic recovery.
GLOBAL EQUITIES MARKETS
The S&P 500(R), S&P MidCap 400(R) and S&P SmallCap 600(R) Indices posted total
returns of 19.07%, 41.13% and 55.26%, respectively, over the past six months.
All 11 sectors that comprise the S&P 500(R) Index were up on a total return
basis. The top-performing sector was Energy, up 67.19%, while the worst result
by far came from the Consumer Staples sector, up 7.57%. With respect to foreign
equities, the MSCI World ex USA and the MSCI Emerging Markets Indices posted
total returns of 20.53% (USD) and 22.43% (USD), respectively, according to
Bloomberg, for the same period. Over the same period, the U.S. dollar declined
by 0.70% against a basket of major currencies, as measured by the U.S. Dollar
Index (DXY). The drop in the relative value of the dollar had little influence
on the performance of the two foreign stock indices, in our opinion.
There are other signs that investors have a growing appetite for equities in the
current climate. Data from Renaissance Capital shows that a total of 101 equity
initial public offerings (market caps above $50 million) have been priced in the
U.S. this year (through April 1, 2021), up 288.5% from the same period in 2020,
according to its own release. The 101 companies raised a combined $39.2 billion,
up 463.9% from the same period a year ago.
Over the past 12 months, investors favored sector funds over core equity funds
and passive funds over active funds. Investors liquidated an estimated net
$156.61 billion from U.S. Equity mutual funds and exchange-traded funds ("ETFs")
for the 12-month period ended March 31, 2021, compared to estimated net inflows
totaling $125.70 billion for Sector Equity mutual funds and ETFs, according to
Morningstar. International Equity mutual funds and ETFs endured estimated net
outflows totaling $16.33 billion over the same period. Investors continue to
favor passive over active funds. Passive U.S. Equity funds and ETFs reported
estimated net inflows totaling $43.87 billion in the period, compared to
estimated net outflows totaling $200.48 billion for Active U.S. Equity mutual
funds and ETFs. Passive Sector Equity mutual funds and ETFs reported estimated
net inflows totaling $107.82 billion in the period, compared to estimated net
inflows totaling $17.88 billion for Active Sector Equity mutual funds and ETFs.
Passive International Equity mutual funds and ETFs reported estimated net
inflows totaling $54.64 billion for the same period, compared to estimated net
outflows totaling $70.97 billion for Active International Equity mutual funds
and ETFs.
Page 3
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FUND PERFORMANCE OVERVIEW (UNAUDITED)
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FIRST TRUST STOXX(R) EUROPEAN SELECT DIVIDEND INDEX FUND (FDD)
First Trust STOXX(R) European Select Dividend Index Fund (the "Fund") seeks
investment results that correspond generally to the price and yield (before the
Fund's fees and expenses) of an equity index called the STOXX(R) Europe Select
Dividend 30 Index (the "STOXX Index"). The shares of the Fund are listed and
trade on the NYSE Arca, Inc. under the ticker symbol "FDD." The Fund will
normally invest at least 90% of its net assets (including investment borrowings)
in the common stocks and depositary receipts that comprise the STOXX Index.
The STOXX Index consists of 30 high dividend-yielding securities selected from
the STOXX(R) Europe 600 Index, including secondary lines of those companies
(where there are multiple lines of equity capital in a company), which covers 18
European countries: Austria, Belgium, Czech Republic, Denmark, Finland, France,
Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal,
Spain, Sweden, Switzerland and the United Kingdom. In addition, a company must
have a non-negative five-year dividend-per-share growth rate and a
dividend-to-earnings ratio of 60% or less. The STOXX Index is compiled and
maintained by STOXX Limited.
<TABLE>
<CAPTION>
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PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (8/27/07) Ended Ended (8/27/07)
3/31/21 3/31/21 3/31/21 3/31/21 to 3/31/21 3/31/21 3/31/21 to 3/31/21
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 38.04% 53.43% 7.63% 4.33% -1.04% 44.43% 52.74% -13.21%
Market Price 38.64% 53.18% 7.66% 4.26% -1.04% 44.62% 51.81% -13.19%
INDEX PERFORMANCE
STOXX(R) Europe Select
Dividend 30 Index 38.83% 52.49% 8.13% 4.73% -0.55% 47.82% 58.75% -7.22%
STOXX(R) Europe 600 Index 20.18% 46.69% 8.44% 5.48% 2.83% 49.96% 70.42% 46.10%
MSCI Europe Index 20.33% 44.95% 8.18% 5.08% 2.50% 48.19% 64.14% 39.85%
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</TABLE>
(See Notes to Fund Performance Overview on page 32.)
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The STOXX Index and the trademarks used in the index name are the intellectual
property of STOXX Limited, Zurich, Switzerland ("STOXX"), Deutsche Borse Group
and/or their licensors. The STOXX Index is used under license from STOXX. The
Fund is in no way sponsored, endorsed, sold or promoted by STOXX and/or its
licensors and neither STOXX nor its licensors shall have any liability with
respect thereto.
Page 4
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FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
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FIRST TRUST STOXX(R) EUROPEAN SELECT DIVIDEND INDEX FUND (FDD) (CONTINUED)
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% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Financials 33.58%
Communication Services 18.69
Utilities 12.12
Real Estate 11.90
Consumer Discretionary 7.64
Materials 5.85
Health Care 5.67
Energy 2.71
Industrials 1.84
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Total 100.00%
======
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% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
GlaxoSmithKline PLC 5.67%
Legal & General Group PLC 5.43
SSE PLC 5.25
IG Group Holdings PLC 4.83
Proximus S.A., DP 4.60
Orange S.A. 4.54
NN Group N.V. 4.39
Telecom Italia S.p.A. 3.79
Snam S.p.A. 3.68
Ageas S.A./N.V. 3.40
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Total 45.58%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2010 - MARCH 31, 2021
First Trust STOXX(R) European STOXX(R) Europe Select STOXX(R) Europe MSCI Europe
Select Dividend Index Fund Dividend 30 Index 600 Index Index
----------------------------- ---------------------- --------------- -----------
<S> <C> <C> <C> <C>
9/30/10 $10,000 $10,000 $10,000 $10,000
3/31/11 11,069 11,088 11,139 11,125
9/30/11 9,330 9,408 8,817 8,819
3/31/12 10,035 10,064 10,299 10,286
9/30/12 10,051 10,090 10,378 10,346
3/31/13 10,042 10,096 11,444 11,371
9/30/13 11,387 11,483 12,995 12,853
3/31/14 12,739 12,866 14,379 14,158
9/30/14 12,376 12,519 13,768 13,602
3/31/15 12,164 12,342 13,680 13,459
9/30/15 11,398 11,531 12,657 12,332
3/31/16 11,707 11,908 12,661 12,322
9/30/16 11,840 12,039 12,936 12,639
3/31/17 12,431 12,690 13,821 13,525
9/30/17 14,082 14,377 15,824 15,458
3/31/18 14,434 14,754 15,868 15,486
9/30/18 14,186 14,533 15,778 15,412
3/31/19 13,982 14,348 15,245 14,910
9/30/19 14,520 14,890 15,652 15,296
3/31/20 11,019 11,544 12,944 12,598
9/30/20 12,248 12,680 15,801 15,176
3/31/21 16,907 17,604 18,990 18,261
</TABLE>
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 5
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FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
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FIRST TRUST FTSE EPRA/NAREIT DEVELOPED MARKETS REAL ESTATE INDEX FUND (FFR)
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund (the
"Fund") seeks investment results that correspond generally to the price and
yield (before the Fund's fees and expenses) of an equity index called the FTSE
EPRA/NAREIT Developed Index (the "FTSE Index"). The shares of the Fund are
listed and trade on the NYSE Arca, Inc. under the ticker symbol "FFR." The Fund
will normally invest at least 90% of its net assets (including investment
borrowings) in the common stocks and depositary receipts that comprise the FTSE
Index.
The FTSE Index is compiled and maintained by FTSE International Limited. The
FTSE Index is modified market cap weighted based on free float market
capitalization and includes the securities of listed real estate companies or
real estate investment trusts ("REITs") that are publicly traded on an official
stock exchange located in North America, Europe or Asia and provide an audited
annual report in English.
<TABLE>
<CAPTION>
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PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (8/27/07) Ended Ended (8/27/07)
3/31/21 3/31/21 3/31/21 3/31/21 to 3/31/21 3/31/21 3/31/21 to 3/31/21
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 19.73% 34.77% 4.05% 5.81% 2.84% 21.99% 75.89% 46.24%
Market Price 20.48% 33.94% 4.16% 5.76% 2.83% 22.62% 75.05% 46.18%
INDEX PERFORMANCE
FTSE EPRA/NAREIT
Developed Index 20.42% 35.95% 4.85% 6.64% 3.69% 26.72% 90.15% 63.65%
S&P Global REIT Index 19.55% 36.05% 3.52% 6.23% 3.35% 18.86% 82.93% 56.53%
MSCI World REIT Index 13.99% 31.28% 5.33% 7.24% 3.66% 29.65% 101.19% 63.10%
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</TABLE>
(See Notes to Fund Performance Overview on page 32.)
-----------------------------
The Fund has been developed solely by First Trust. The Fund is not in any way
connected to or sponsored, endorsed, sold or promoted by the London Stock
Exchange Group plc and its group undertakings, including FTSE International
Limited (collectively, the "LSE Group"), European Public Real Estate Association
("EPRA"), or the National Association of Real Estate Investments Trusts
("Nareit") (and together the "Licensor Parties"). FTSE Russell is a trading name
of certain of the LSE Group companies. All rights in the FTSE Index vest in the
Licensor Parties. "FTSE(R)" and "FTSE Russell(R)" are trademarks of the relevant
LSE Group company and are used by any other LSE Group company under license.
"Nareit(R)" is a trademark of Nareit, "EPRA(R)" is a trademark of EPRA and all
are used by the LSE Group under license. The FTSE Index is calculated by or on
behalf of FTSE International Limited or its affiliate, agent or partner. The
Licensor Parties do not accept any liability whatsoever to any person arising
out of (a) the use of, reliance on or any error in the FTSE Index or (b)
investment in or operation of the Fund. The Licensor Parties makes no claim,
prediction, warranty or representation either as to the results to be obtained
from the Fund or the suitability of the FTSE Index for the purpose to which it
is being put by First Trust.
Page 6
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST FTSE EPRA/NAREIT DEVELOPED MARKETS REAL ESTATE INDEX FUND (FFR)
(CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Real Estate 99.79%
Health Care 0.12
Consumer Discretionary 0.09
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Prologis, Inc. 4.74%
Digital Realty Trust, Inc. 2.38
Public Storage 2.26
Simon Property Group, Inc. 2.26
Vonovia SE 2.25
Welltower, Inc. 1.82
Equity Residential 1.60
AvalonBay Communities, Inc. 1.57
Realty Income Corp. 1.44
Alexandria Real Estate Equities, Inc. 1.35
------
Total 21.67%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2010 - MARCH 31, 2021
First Trust FTSE EPRA/NAREIT Developed FTSE EPRA/NAREIT S&P Global MSCI World
Markets Real Estate Index Fund Developed Index REIT Index REIT Index
-------------------------------------- ---------------- ---------- ----------
<S> <C> <C> <C> <C>
9/30/10 $10,000 $10,000 $10,000 $10,000
3/31/11 10,888 10,938 11,247 11,381
9/30/11 9,183 9,312 9,833 10,017
3/31/12 11,154 11,287 11,896 12,075
9/30/12 11,958 12,161 12,665 12,982
3/31/13 13,425 13,686 14,157 14,209
9/30/13 13,156 13,493 13,512 13,523
3/31/14 13,563 13,967 14,317 14,215
9/30/14 13,928 14,399 14,824 14,887
3/31/15 15,617 16,210 16,849 16,788
9/30/15 14,341 14,913 15,434 15,631
3/31/16 15,698 16,415 17,311 17,661
9/30/16 16,484 17,277 18,045 18,367
3/31/17 15,886 16,721 17,370 17,709
9/30/17 16,595 17,540 17,862 18,324
3/31/18 16,446 17,414 17,328 17,978
9/30/18 17,257 18,349 18,371 18,906
3/31/19 18,663 19,925 19,741 20,963
9/30/19 19,533 20,937 21,141 22,755
3/31/20 14,208 15,299 15,126 17,439
9/30/20 15,993 17,273 17,213 20,084
3/31/21 19,148 20,800 20,578 22,894
</TABLE>
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 7
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST DOW JONES GLOBAL SELECT DIVIDEND INDEX FUND (FGD)
First Trust Dow Jones Global Select Dividend Index Fund (the "Fund") seeks
investment results that correspond generally to the price and yield (before the
Fund's fees and expenses) of an equity index called the Dow Jones Global Select
Dividend Index (the "Select Dividend Index"). The shares of the Fund are listed
and trade on the NYSE Arca, Inc. under the ticker symbol "FGD." The Fund will
normally invest at least 90% of its net assets (including investment borrowings)
in the common stocks and depositary receipts that comprise the Select Dividend
Index.
The Select Dividend Index is an indicated annual dividend yield weighted index
of 100 stocks selected from the developed-market portion of the Dow Jones World
Index(SM). Indicated annual dividend yield is a stock's unadjusted indicated
annual dividend (not including any special dividends) divided by its unadjusted
price.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (11/21/07) Ended Ended (11/21/07)
3/31/21 3/31/21 3/31/21 3/31/21 to 3/31/21 3/31/21 3/31/21 to 3/31/21
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 43.11% 65.47% 7.65% 5.43% 3.76% 44.58% 69.65% 63.78%
Market Price 44.04% 66.09% 7.82% 5.39% 3.78% 45.69% 68.99% 64.12%
INDEX PERFORMANCE
Dow Jones Global Select
Dividend Index 43.85% 66.89% 7.94% 5.61% 3.97% 46.50% 72.56% 68.22%
Dow Jones World Developed
Markets Index(SM) 21.00% 56.38% 13.59% 10.12% 7.17% 89.07% 162.24% 152.09%
MSCI World Index 19.57% 54.03% 13.36% 9.88% 6.73% 87.16% 156.58% 138.82%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 32.)
-----------------------------
The Select Dividend Index is a product of S&P Dow Jones Indices LLC or its
affiliates ("SPDJI"), and has been licensed for use by First Trust. Standard &
Poor's(R) and S&P(R) are registered trademarks of Standard & Poor's Financial
Services LLC ("S&P"); Dow Jones(R) is a registered trademark of Dow Jones
Trademark Holdings LLC ("Dow Jones"); and these trademarks have been licensed
for use by SPDJI and sublicensed for certain purposes by First Trust. The Fund
is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their
respective affiliates, and none of such parties make any representation
regarding the advisability of investing in such product(s) nor do they have any
liability for any errors, omissions, or interruptions of the Select Dividend
Index.
Page 8
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST DOW JONES GLOBAL SELECT DIVIDEND INDEX FUND (FGD) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Financials 46.89%
Communication Services 11.23
Utilities 8.89
Materials 8.18
Consumer Staples 6.30
Energy 5.09
Real Estate 5.08
Consumer Discretionary 3.79
Industrials 3.49
Information Technology 1.06
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Labrador Iron Ore Royalty Corp. 1.78%
Fortescue Metals Group Ltd. 1.69
Enagas S.A. 1.68
Meritz Securities Co., Ltd. 1.65
Telefonica S.A. 1.61
British American Tobacco PLC 1.55
Altria Group, Inc. 1.42
Centamin PLC 1.41
Mapfre S.A. 1.41
Industrial Bank of Korea 1.41
------
Total 15.61%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2010 - MARCH 31, 2021
First Trust Dow Jones Global Dow Jones Global Dow Jones World Developed MSCI World
Select Dividend Index Fund Select Dividend Index Markets Index(SM) Index
---------------------------- ----------------------- ------------------------- ----------
<S> <C> <C> <C> <C>
9/30/10 $10,000 $10,000 $10,000 $10,000
3/31/11 11,136 11,151 11,480 11,418
9/30/11 9,843 9,917 9,583 9,566
3/31/12 11,133 11,118 11,517 11,482
9/30/12 11,573 11,578 11,659 11,631
3/31/13 12,172 12,172 12,965 12,843
9/30/13 13,238 13,259 14,159 13,982
3/31/14 14,555 14,597 15,523 15,291
9/30/14 14,371 14,407 15,855 15,688
3/31/15 13,950 13,998 16,461 16,214
9/30/15 12,286 12,269 15,119 14,891
3/31/16 13,067 13,135 15,923 15,655
9/30/16 13,966 13,989 16,926 16,582
3/31/17 14,743 14,842 18,356 17,967
9/30/17 15,942 16,047 20,081 19,595
3/31/18 16,089 16,158 20,997 20,396
9/30/18 16,303 16,421 22,330 21,797
3/31/19 15,441 15,552 21,682 21,228
9/30/19 15,779 15,891 22,595 22,196
3/31/20 11,419 11,531 19,251 19,022
9/30/20 13,195 13,377 24,880 24,504
3/31/21 18,883 19,243 30,105 29,299
</TABLE>
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 9
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN)
First Trust Global Wind Energy ETF (the "Fund") seeks investment results that
correspond generally to the price and yield (before the Fund's fees and
expenses) of an equity index called the ISE Clean Edge Global Wind Energy(TM)
Index (the "Index"). The shares of the Fund are listed and trade on the NYSE
Arca, Inc. under the ticker symbol "FAN." The Fund will normally invest at least
90% of its net assets (including investment borrowings) in the common stocks and
depositary receipts that comprise the Index.
The Index is developed, maintained and sponsored by Nasdaq, Inc. The Index
provides a benchmark for investors interested in tracking public companies
throughout the world that are active in the wind energy industry.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (6/16/08) Ended Ended (6/16/08)
3/31/21 3/31/21 3/31/21 3/31/21 to 3/31/21 3/31/21 3/31/21 to 3/31/21
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 28.76% 86.34% 17.36% 9.10% -0.23% 122.68% 138.92% -2.95%
Market Price 29.38% 87.67% 17.61% 9.11% -0.17% 125.06% 139.09% -2.21%
INDEX PERFORMANCE
ISE Clean Edge Global Wind
Energy(TM) Index 29.59% 87.88% 18.30% 9.99% 0.59% 131.65% 159.15% 7.87%
Russell 3000(R) Index 21.96% 62.53% 16.64% 13.79% 11.12% 115.87% 263.95% 285.09%
MSCI World Index 19.57% 54.03% 13.36% 9.88% 7.35% 87.16% 156.58% 147.56%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 32.)
-----------------------------
Nasdaq(R), Clean Edge(R), and the Index are registered trademarks and service
marks of Nasdaq, Inc. and Clean Edge, Inc., respectively (together with its
affiliates hereinafter referred to as the "Corporations") and are licensed for
use by First Trust. The Fund has not been passed on by the Corporations as to
its legality or suitability. The Fund is not issued, endorsed, sold or promoted
by the Corporations. the corporations make no warranties and bear no liability
with respect to the fund.
Page 10
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Utilities 56.51%
Industrials 40.29
Materials 2.97
Energy 0.23
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Vestas Wind Systems A/S 8.50%
Siemens Gamesa Renewable Energy S.A. 8.08
Northland Power, Inc. 7.94
Orsted AS 7.74
China Longyuan Power Group Corp., Ltd.,
Class H 5.28
Boralex, Inc., Class A 3.23
Nordex SE 2.67
Alliant Energy Corp. 2.29
TPI Composites, Inc. 2.26
Duke Energy Corp. 2.20
------
Total 50.19%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2010 - MARCH 31, 2021
First Trust Global ISE Clean Edge Global Russell 3000(R) MSCI World
Wind Energy ETF Wind Energy(TM) Index Index Index
------------------ --------------------- --------------- ----------
<S> <C> <C> <C> <C>
9/30/10 $10,000 $10,000 $10,000 $10,000
3/31/11 11,459 11,478 11,871 11,418
9/30/11 7,953 8,045 10,055 9,566
3/31/12 7,718 7,796 12,725 11,482
9/30/12 6,669 6,777 13,093 11,631
3/31/13 7,653 7,777 14,579 12,843
9/30/13 10,445 10,677 15,920 13,982
3/31/14 12,165 12,485 17,875 15,291
9/30/14 11,716 12,049 18,747 15,687
3/31/15 11,275 11,654 20,084 16,213
9/30/15 10,852 11,234 18,654 14,890
3/31/16 12,293 12,840 20,016 15,654
9/30/16 14,153 14,806 21,445 16,581
3/31/17 14,055 14,836 23,630 17,966
9/30/17 15,032 15,879 25,454 19,594
3/31/18 15,306 16,143 26,892 20,395
9/30/18 14,593 15,496 29,928 21,796
3/31/19 15,419 16,413 29,249 21,227
9/30/19 15,700 16,805 30,802 22,195
3/31/20 14,692 15,830 26,582 19,021
9/30/20 21,262 22,950 35,423 24,503
3/31/21 27,377 29,741 43,202 29,298
</TABLE>
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 11
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST GLOBAL ENGINEERING AND CONSTRUCTION ETF (FLM)
First Trust Global Engineering and Construction ETF (the "Fund") seeks
investment results that correspond generally to the price and yield (before the
Fund's fees and expenses) of an equity index called the ISE Global Engineering
and Construction(TM) Index (the "Index"). The shares of the Fund are listed and
trade on the NYSE Arca, Inc. under the ticker symbol "FLM." The Fund will
normally invest in at least 90% of its net assets (including investment
borrowings) in the common stocks and depositary receipts that comprise the
Index.
The Index is developed, maintained and sponsored by Nasdaq, Inc. The Index
provides a benchmark for investors interested in tracking public companies
throughout the world that are active in the engineering and construction
industries.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (10/13/08) Ended Ended (10/13/08)
3/31/21 3/31/21 3/31/21 3/31/21 to 3/31/21 3/31/21 3/31/21 to 3/31/21
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 31.79% 57.90% 5.56% 3.12% 6.83% 31.08% 36.03% 127.77%
Market Price 32.43% 59.13% 5.71% 3.13% 6.86% 31.99% 36.12% 128.50%
INDEX PERFORMANCE
ISE Global Engineering and
Construction(TM) Index 32.87% 59.12% 6.66% 4.30% 8.37% 38.07% 52.36% 172.45%
Russell 3000(R) Index 21.96% 62.53% 16.64% 13.79% 14.22% 115.87% 263.95% 424.28%
MSCI World Industrials Index 24.29% 62.94% 12.42% 9.15% 11.24% 79.55% 140.08% 277.16%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 32.)
-----------------------------
Nasdaq(R) and the Index are registered trademarks and service marks of Nasdaq,
Inc. (together with its affiliates hereinafter referred to as the
"Corporations") and are licensed for use by First Trust. The Fund has not been
passed on by the Corporations as to its legality or suitability. The Fund is not
issued, endorsed, sold or promoted by the Corporations. The corporations make no
warranties and bear no liability with respect to the fund.
Page 12
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST GLOBAL ENGINEERING AND CONSTRUCTION ETF (FLM) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Industrials 99.38%
Utilities 0.62
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
MasTec, Inc. 3.94%
Quanta Services, Inc. 3.77
Jacobs Engineering Group, Inc. 3.57
KBR, Inc. 3.45
AECOM 3.35
Vinci S.A. 3.04
EMCOR Group, Inc. 2.89
ACS Actividades de Construccion y
Servicios S.A. 2.89
Bouygues S.A. 2.83
Dycom Industries, Inc. 2.80
------
Total 32.53%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2010 - MARCH 31, 2021
First Trust Global Engineering ISE Global Engineering and Russell 3000(R) MSCI World
and Construction ETF Construction(TM) Index Index Industrials Index
------------------------------ -------------------------- --------------- -----------------
<S> <C> <C> <C> <C>
9/30/10 $10,000 $10,000 $10,000 $10,000
3/31/11 12,383 12,445 11,871 11,918
9/30/11 8,670 8,852 10,055 9,252
3/31/12 10,579 10,742 12,725 11,433
9/30/12 10,224 10,455 13,092 11,188
3/31/13 11,276 11,549 14,578 12,854
9/30/13 12,784 13,209 15,920 14,341
3/31/14 14,005 14,529 17,874 15,636
9/30/14 13,047 13,595 18,747 15,513
3/31/15 12,711 13,445 20,085 16,059
9/30/15 12,109 12,845 18,655 14,432
3/31/16 12,850 13,733 20,017 15,937
9/30/16 13,611 14,573 21,447 17,019
3/31/17 14,606 15,747 23,633 18,576
9/30/17 16,115 17,446 25,457 20,703
3/31/18 16,229 17,535 26,895 21,388
9/30/18 16,385 17,844 29,931 22,229
3/31/19 14,484 15,853 29,252 21,284
9/30/19 13,821 15,182 30,805 22,144
3/31/20 10,668 11,915 26,585 17,560
9/30/20 12,782 14,271 35,426 23,022
3/31/21 16,845 18,962 43,202 28,614
</TABLE>
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 13
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) SMART GRID INFRASTRUCTURE INDEX FUND (GRID)
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund (the
"Fund") seeks investment results that correspond generally to the price and
yield (before the Fund's fees and expenses) of an equity index called the NASDAQ
OMX Clean Edge Smart Grid Infrastructure Index(SM) (the "Index"). The shares of
the Fund are listed and trade on The Nasdaq Stock Market LLC under the ticker
symbol "GRID." The Fund will normally invest at least 90% of its net assets
(including investment borrowings) in the common stocks and depositary receipts
that comprise the Index.
The Index is designed to act as a transparent and liquid benchmark for the grid
and electric energy infrastructure sector. The Index includes companies that are
primarily engaged and involved in electric grid, electric meters and devices,
networks, energy storage and management, and enabling software used by the smart
grid infrastructure sector. Clean Edge, Inc. and Nasdaq, Inc. serve as index
providers to the Index.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (11/16/09) Ended Ended (11/16/09)
3/31/21 3/31/21 3/31/21 3/31/21 to 3/31/21 3/31/21 3/31/21 to 3/31/21
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 37.01% 102.00% 21.31% 10.63% 10.87% 162.77% 174.54% 223.24%
Market Price 37.23% 102.52% 21.31% 10.66% 10.89% 162.75% 175.47% 224.06%
INDEX PERFORMANCE
NASDAQ OMX Clean Edge
Smart Grid Infrastructure
Index(SM) 37.81% 103.72% 22.32% 11.55% 11.80% 173.85% 198.36% 255.38%
Russell 3000(R) Index 21.96% 62.53% 16.64% 13.79% 14.33% 115.87% 263.95% 358.57%
S&P Composite 1500(R)
Industrials Index 30.81% 72.61% 14.28% 12.47% 14.10% 94.90% 223.78% 347.84%
MSCI World Industrials Index 24.29% 62.94% 12.42% 9.15% 10.61% 79.55% 140.08% 214.66%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 32.)
-----------------------------
NASDAQ(R), NASDAQ OMX(R), Clean Edge(R), and the Index are registered trademarks
and service marks of Nasdaq, Inc. and Clean Edge, Inc. respectively (together
with its affiliates hereinafter referred to as the "Corporations") and are
licensed for use by First Trust. The Fund has not been passed on by the
Corporations as to its legality or suitability. The Fund is not issued,
endorsed, sold, or promoted by the Corporations. The Corporations make no
warranties and bear no liability with respect to the Fund.
Page 14
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) SMART GRID INFRASTRUCTURE INDEX FUND (GRID)
(CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Industrials 51.24%
Information Technology 24.74
Utilities 13.22
Consumer Discretionary 10.78
Materials 0.02
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Johnson Controls International PLC 8.41%
Eaton Corp. PLC 8.36
ABB Ltd. 8.24
Schneider Electric SE 8.06
Aptiv PLC 7.24
Terna Rete Elettrica Nazionale S.p.A. 4.24
Quanta Services, Inc. 4.13
Samsung SDI Co., Ltd. 3.82
Prysmian S.p.A. 3.80
SolarEdge Technologies, Inc. 3.79
------
Total 60.09%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2010 - MARCH 31, 2021
First Trust NASDAQ(R) NASDAQ OMX Russell MSCI World
Clean Edge(R) Smart Grid Clean Edge Smart Grid 3000(R) S&P Composite 1500(R) Industrials
Infrastructure Index Fund Infrastructure Index(SM) Index Industrials Index Index
------------------------- ------------------------ ------- ------------------- -----------
<S> <C> <C> <C> <C> <C>
9/30/10 $10,000 $10,000 $10,000 $10,000 $10,000
3/31/11 11,596 11,637 11,871 12,296 11,918
9/30/11 8,037 8,149 10,055 9,550 9,252
3/31/12 9,408 9,517 12,725 12,517 11,433
9/30/12 9,710 9,871 13,092 12,448 11,188
3/31/13 10,829 11,055 14,578 14,554 12,854
9/30/13 11,501 11,805 15,920 16,273 14,341
3/31/14 13,246 13,652 17,875 18,458 15,636
9/30/14 12,213 12,634 18,747 18,757 15,512
3/31/15 12,393 12,865 20,084 19,995 16,058
9/30/15 10,995 11,429 18,654 18,085 14,431
3/31/16 12,115 12,678 20,016 20,425 15,936
9/30/16 13,822 14,486 21,445 21,659 17,018
3/31/17 14,835 15,617 23,630 24,375 18,575
9/30/17 17,516 18,491 25,454 26,637 20,702
3/31/18 17,763 18,770 26,892 27,870 21,387
9/30/18 17,227 18,295 29,928 29,826 22,228
3/31/19 15,851 16,888 29,249 28,651 21,283
9/30/19 18,145 19,477 30,802 30,058 22,143
3/31/20 15,764 17,042 26,582 23,060 17,559
9/30/20 23,242 25,193 35,423 30,430 23,020
3/31/21 31,844 34,718 43,202 39,805 28,612
</TABLE>
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 15
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST INDXX GLOBAL NATURAL RESOURCES INCOME ETF (FTRI)
First Trust Indxx Global Natural Resources Income ETF (the "Fund") seeks
investment results that correspond generally to the price and yield (before the
Fund's fees and expenses) of an equity index called the Indxx Global Natural
Resources Income Index (the "Index"). The shares of the Fund are listed and
traded on The Nasdaq Stock Market LLC under the ticker symbol "FTRI." The Fund
will normally invest at least 90% of its net assets (including investment
borrowings) in the common stocks and depositary receipts that comprise the
Index.
The Index is owned and is developed, maintained and sponsored by Indxx, LLC. The
Index is a free float adjusted market capitalization weighted index designed to
measure the market performance of the 50 highest dividend yielding companies
involved in the upstream (i.e., generally exploration and production) segment of
the natural resources sector.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (3/11/10) Ended Ended (3/11/10)
3/31/21 3/31/21 3/31/21 3/31/21 to 3/31/21 3/31/21 3/31/21 to 3/31/21
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 40.70% 65.89% 10.28% -8.01% -4.06% 63.12% -56.61% -36.79%
Market Price 40.11% 64.93% 10.52% -8.02% -4.02% 64.88% -56.64% -36.47%
INDEX PERFORMANCE
Indxx Global Natural Resources
Income Index* 41.59% 67.20% 11.44% N/A N/A 71.87% N/A N/A
MSCI ACWI Materials Index 25.89% 76.62% 14.45% 3.15% 4.88% 96.36% 36.31% 69.41%
MSCI ACWI Index 19.93% 54.60% 13.21% 9.14% 9.70% 85.98% 139.90% 178.38%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 32.)
* Effective on the close of business December 18, 2015, the Fund's underlying
index changed from the ISE Global Copper(TM) Index to the Indxx Global Natural
Resources Income Index. Therefore, the Fund's performance and total returns
shown for the period prior to December 18, 2015, are not necessarily indicative
of the performance the Fund, based on its current index, would have generated.
Since the Fund's new underlying index had an inception date of June 1, 2015, it
was not in existence for all the periods disclosed.
-----------------------------
Indxx and the Index are trademarks of Indxx, LLC ("Indxx") and have been
licensed for use for certain purposes by First Trust. The Fund is not sponsored,
endorsed, sold or promoted by Indxx, and Indxx makes no representation regarding
the advisability of trading in such product. The Index is determined, composed
and calculated by Indxx without regard to First Trust or the Fund.
Page 16
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST INDXX GLOBAL NATURAL RESOURCES INCOME ETF (FTRI) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Materials 57.95%
Energy 25.55
Consumer Staples 10.58
Utilities 5.92
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Rio Tinto PLC, ADR 9.91%
BHP Group PLC, ADR 9.91
ConocoPhillips 9.12
Anglo American PLC 9.03
International Paper Co. 4.54
Archer-Daniels-Midland Co. 4.54
Canadian Natural Resources Ltd. 4.53
Fortescue Metals Group Ltd. 4.50
Nutrien Ltd. 4.39
MMC Norilsk Nickel PJSC 4.08
------
Total 64.55%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2010 - MARCH 31, 2021
First Trust Indxx Global MSCI ACWI MSCI ACWI
Natural Resources Income ETF Materials Index Index
---------------------------- --------------- ---------
<S> <C> <C> <C>
9/30/10 $10,000 $10,000 $10,000
3/31/11 12,997 11,905 11,354
9/30/11 7,950 8,713 9,399
3/31/12 9,801 10,085 11,270
9/30/12 9,049 9,642 11,371
3/31/13 8,259 9,656 12,457
9/30/13 7,215 9,680 13,387
3/31/14 7,163 10,154 14,522
9/30/14 7,043 9,875 14,902
3/31/15 5,522 9,438 15,309
9/30/15 3,698 7,549 13,910
3/31/16 3,457 8,265 14,644
9/30/16 3,705 9,363 15,572
3/31/17 3,959 10,392 16,846
9/30/17 4,278 11,588 18,477
3/31/18 4,559 12,034 19,334
9/30/18 4,756 12,123 20,283
3/31/19 4,693 11,670 19,851
9/30/19 4,546 11,537 20,564
3/31/20 3,401 9,187 17,618
9/30/20 4,010 12,888 22,711
3/31/21 5,642 16,225 27,237
</TABLE>
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 17
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST INDXX GLOBAL AGRICULTURE ETF (FTAG)
First Trust Indxx Global Agriculture ETF (the "Fund") seeks investment results
that correspond generally to the price and yield (before the Fund's fees and
expenses) of an equity index called the Indxx Global Agriculture Index (the
"Index"). The shares of the Fund are listed and traded on The Nasdaq Stock
Market LLC under the ticker symbol "FTAG." The Fund will normally invest at
least 90% of its net assets (including investment borrowings) in the common
stocks and depositary receipts that comprise the Index.
The Index is owned and is developed, maintained and sponsored by Indxx, LLC. The
Index is a market capitalization weighted index designed to measure the
performance of companies that are directly or indirectly engaged in improving
agricultural yields. The Index is composed of farmland companies and firms
involved in chemicals and fertilizers, seeds, irrigation equipment, and farm
machinery.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (3/11/10) Ended Ended (3/11/10)
3/31/21 3/31/21 3/31/21 3/31/21 to 3/31/21 3/31/21 3/31/21 to 3/31/21
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 39.47% 89.16% 9.76% -14.22% -12.25% 59.31% -78.42% -76.41%
Market Price 40.05% 88.95% 10.09% -14.27% -12.25% 61.69% -78.57% -76.41%
INDEX PERFORMANCE
Indxx Global Agriculture Index* 40.42% 91.61% 10.77% N/A N/A 66.76% N/A N/A
MSCI ACWI Index 19.93% 54.60% 13.21% 9.14% 9.70% 85.98% 139.90% 178.38%
MSCI ACWI Materials Index 25.89% 76.62% 14.45% 3.15% 4.88% 96.36% 36.31% 69.41%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 32.)
* Effective on the close of business December 18, 2015, the Fund's underlying
index changed from the ISE Global Platinum(TM) Index to the Indxx Global
Agriculture Index. Therefore, the Fund's performance and total returns shown for
the period prior to December 18, 2015, are not necessarily indicative of the
performance the Fund, based on its current Index, would have generated. Since
the Fund's new underlying index had an inception date of June 1, 2015, it was
not in existence for all the periods disclosed.
-----------------------------
Indxx and the Index are trademarks of Indxx, LLC ("Indxx") and have been
licensed for use for certain purposes by First Trust. The Fund is not sponsored,
endorsed, sold or promoted by Indxx and Indxx makes no representation regarding
the advisability of trading in such product. The Index is determined, composed
and calculated by Indxx without regard to First Trust or the Fund.
Page 18
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST INDXX GLOBAL AGRICULTURE ETF (FTAG) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Materials 51.68%
Industrials 29.30
Health Care 9.73
Consumer Staples 6.93
Consumer Discretionary 2.36
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Deere & Co. 10.31%
Bayer AG 9.72
BASF SE 9.59
Corteva, Inc. 5.91
Wilmar International Ltd. 4.50
Kubota Corp. 4.48
Nutrien Ltd. 4.28
CNH Industrial N.V. 3.69
Industries Qatar QSC 3.46
Evonik Industries AG 2.87
------
Total 58.81%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2010 - MARCH 31, 2021
First Trust Indxx MSCI ACWI MSCI ACWI
Global Agriculture ETF Index Materials Index
---------------------- --------- ---------------
<S> <C> <C> <C>
9/30/10 $10,000 $10,000 $10,000
3/31/11 11,160 11,354 11,905
9/30/11 6,551 9,399 8,713
3/31/12 6,714 11,270 10,085
9/30/12 4,974 11,371 9,642
3/31/13 4,766 12,457 9,656
9/30/13 4,485 13,387 9,680
3/31/14 4,456 14,522 10,154
9/30/14 4,008 14,902 9,875
3/31/15 3,317 15,309 9,438
9/30/15 1,956 13,910 7,549
3/31/16 1,512 14,644 8,265
9/30/16 1,586 15,572 9,363
3/31/17 1,821 16,846 10,392
9/30/17 2,016 18,477 11,588
3/31/18 1,988 19,334 12,034
9/30/18 1,985 20,283 12,123
3/31/19 1,778 19,851 11,670
9/30/19 1,785 20,564 11,538
3/31/20 1,274 17,617 9,188
9/30/20 1,729 22,710 12,890
3/31/21 2,411 27,236 16,227
</TABLE>
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 19
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST BICK INDEX FUND (BICK)
The First Trust BICK Index Fund (the "Fund") seeks investment results that
correspond generally to the price and yield (before the Fund's fees and
expenses) of an equity index called the ISE BICK(TM) Index (the "Index"). The
shares of the Fund are listed and trade on The Nasdaq Stock Market LLC under the
ticker symbol "BICK." The Fund will normally invest at least 90% of its net
assets (including investment borrowings) in the common stocks and depositary
receipts that comprise the Index.
The Index is developed, maintained and sponsored by Nasdaq, Inc. The Index is
designed to provide a benchmark for investors interested in tracking some of the
largest and most liquid public companies that are domiciled in Brazil, India,
China (including Hong Kong) and South Korea that are accessible for investment
by U.S. investors.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (4/12/10) Ended Ended (4/12/10)
3/31/21 3/31/21 3/31/21 3/31/21 to 3/31/21 3/31/21 3/31/21 to 3/31/21
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 28.86% 82.51% 14.55% 2.63% 3.49% 97.25% 29.66% 45.62%
Market Price 29.59% 84.73% 14.75% 2.71% 3.55% 98.99% 30.63% 46.65%
INDEX PERFORMANCE
ISE BICK(TM) Index 29.85% 83.89% 15.68% 3.59% 4.44% 107.16% 42.34% 61.00%
MSCI ACWI Index 19.93% 54.60% 13.21% 9.14% 9.36% 85.98% 139.90% 166.92%
MSCI Emerging Markets Index 22.43% 58.39% 12.07% 3.65% 4.64% 76.77% 43.15% 64.43%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 32.)
-----------------------------
Nasdaq(R) and the Index are registered trademarks and service marks of Nasdaq,
Inc. (together with its affiliates hereinafter referred to as the
"Corporations") and are licensed for use by First Trust. The Fund has not been
passed on by the Corporations as to its legality or suitability. The Fund is not
issued, endorsed, sold or promoted by the Corporations. the corporations make no
warranties and bear no liability with respect to the fund.
Page 20
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST BICK INDEX FUND (BICK) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Consumer Discretionary 23.62%
Financials 18.77
Information Technology 12.10
Health Care 10.24
Materials 9.66
Communication Services 8.48
Industrials 7.21
Consumer Staples 4.11
Energy 3.71
Utilities 2.10
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Sify Technologies Ltd., ADR 2.05%
Vedanta Ltd., ADR 2.04
Infosys Ltd., ADR 2.00
Wipro Ltd., ADR 1.89
Dr. Reddy's Laboratories Ltd., ADR 1.87
Yatra Online, Inc. 1.84
HDFC Bank Ltd., ADR 1.79
Axis Bank Ltd., GDR 1.78
WNS (Holdings) Ltd., ADR 1.77
ICICI Bank Ltd., ADR 1.76
------
Total 18.79%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2010 - MARCH 31, 2021
First Trust BICK ISE BICK(TM) MSCI ACWI MSCI Emerging
Index Fund Index Index Markets Index
---------------- ------------ --------- -------------
<S> <C> <C> <C> <C>
9/30/10 $10,000 $10,000 $10,000 $10,000
3/31/11 10,781 10,785 11,354 10,953
9/30/11 7,282 7,432 9,399 8,385
3/31/12 8,636 8,713 11,270 9,989
9/30/12 7,994 8,119 11,371 9,805
3/31/13 8,139 8,262 12,457 10,162
9/30/13 8,049 8,248 13,387 9,901
3/31/14 8,455 8,702 14,522 10,039
9/30/14 8,688 8,993 14,902 10,327
3/31/15 8,157 8,505 15,309 10,082
9/30/15 6,590 6,830 13,910 8,335
3/31/16 7,088 7,411 14,644 8,869
9/30/16 8,172 8,540 15,572 9,734
3/31/17 8,865 9,309 16,846 10,396
9/30/17 10,390 10,975 18,477 11,920
3/31/18 11,150 11,758 19,334 12,970
9/30/18 9,683 10,360 20,283 11,823
3/31/19 10,069 10,832 19,851 12,025
9/30/19 9,511 10,255 20,563 11,587
3/31/20 7,661 8,346 17,617 9,901
9/30/20 10,848 11,822 22,712 12,807
3/31/21 13,979 15,351 27,239 15,680
</TABLE>
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 21
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST INDXX NEXTG ETF (NXTG)
The First Trust Indxx NextG ETF (the "Fund") seeks investment results that
correspond generally to the price and yield (before the Fund's fees and
expenses) of an equity index called the Indxx 5G & NextG Thematic Index(SM) (the
"Index"). The shares of the Fund are listed and trade on The Nasdaq Stock Market
LLC under the ticker symbol "NXTG." The Fund will normally invest at least 90%
of its net assets (including investment borrowings) in the common stocks and
depositary receipts that comprise the Index.
The Index is owned and is developed, maintained and sponsored by Indxx, LLC. The
Index is designed to track the performance of companies that have devoted, or
have committed to devote, material resources to the research, development and
application of fifth generation (5G) and next generation digital cellular
technologies as they emerge.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (2/17/11) Ended Ended (2/17/11)
3/31/21 3/31/21 3/31/21 3/31/21 to 3/31/21 3/31/21 3/31/21 to 3/31/21
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 23.55% 57.90% 15.60% 11.14% 10.33% 106.42% 187.67% 170.38%
Market Price 23.84% 58.60% 15.78% 11.17% 10.38% 108.07% 188.38% 171.62%
INDEX PERFORMANCE
Indxx 5G & NextG Thematic
Index(SM) (1) (2) 24.63% 59.60% N/A N/A N/A N/A N/A N/A
MSCI World Index (3) 19.57% 54.03% 13.36% 9.88% 9.60% 87.16% 156.58% 152.70%
MSCI ACWI Information
Technology Index 17.21% 71.72% 26.30% 18.18% 17.41% 221.38% 431.34% 407.26%
MSCI ACWI Index (3) 19.93% 54.60% 13.21% 9.14% 8.97% 85.98% 139.90% 138.44%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 32.)
(1) On May 30, 2019, the Fund's underlying index changed from the NASDAQ CTA
Smartphone Index(SM) to the Indxx 5G & NextG Thematic Index(SM).
Therefore, the Fund's performance and historical returns shown for the
periods prior to this date are not necessarily indicative of the
performance that the Fund, based on its current index, would have
generated.
(2) Performance data is not available for all the periods shown in the table
for the index because performance data does not exist for some of the
entire periods.
(3) On December 31, 2020, the Fund's benchmark changed from the MSCI World
Index to the MSCI ACWI Index, because the Advisor believes that the MSCI
ACWI Index better reflects the investment strategies of the Fund.
-----------------------------
Indxx and the Index are trademarks of Indxx, LLC ("Indxx") and have been
licensed for use for certain purposes by First Trust. The Fund is not sponsored,
endorsed, sold or promoted by Indxx and Indxx makes no representation regarding
the advisability of trading in such product. The Index is determined, composed
and calculated by Indxx without regard to First Trust or the Fund.
Page 22
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST INDXX NEXTG ETF (NXTG) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Information Technology 64.92%
Communication Services 20.68
Real Estate 9.57
Consumer Discretionary 3.44
Industrials 1.39
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Lenovo Group Ltd. 2.49%
LG Electronics, Inc. 1.98
MediaTek, Inc. 1.77
ASE Technology Holding Co., Ltd. 1.73
Hewlett Packard Enterprise Co. 1.70
Intel Corp. 1.67
NXP Semiconductors N.V. 1.67
Skyworks Solutions, Inc. 1.65
Micron Technology, Inc. 1.62
F5 Networks, Inc. 1.60
------
Total 17.88%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
FEBRUARY 17, 2011 - MARCH 31, 2021
First Trust Indxx MSCI World MSCI ACWI Information MSCI ACWI
NextG ETF Index Technology Index Index
--------------------- ----------- --------------------- ---------
<S> <C> <C> <C> <C>
2/17/11 $10,000 $10,000 $10,000 $10,000
3/31/11 9,399 9,849 9,547 9,939
9/30/11 7,503 8,251 8,390 8,228
3/31/12 9,238 9,904 10,774 9,866
9/30/12 7,805 10,032 10,566 9,954
3/31/13 9,021 11,077 10,774 10,905
9/30/13 10,975 12,059 11,756 11,719
3/31/14 12,117 13,188 13,356 12,713
9/30/14 12,748 13,530 14,502 13,046
3/31/15 13,920 13,983 15,485 13,402
9/30/15 12,194 12,842 14,328 12,177
3/31/16 13,098 13,501 15,785 12,820
9/30/16 14,585 14,300 17,605 13,633
3/31/17 16,474 15,494 19,719 14,748
9/30/17 18,041 16,898 22,884 16,176
3/31/18 18,932 17,589 25,486 16,927
9/30/18 18,076 18,797 28,111 17,758
3/31/19 17,816 18,306 27,681 17,380
9/30/19 18,397 19,141 29,887 18,004
3/31/20 17,123 16,406 29,540 15,424
9/30/20 21,885 21,134 43,276 19,883
3/31/21 27,038 25,270 50,724 23,844
</TABLE>
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 23
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST NASDAQ GLOBAL AUTO INDEX FUND (CARZ)
The First Trust NASDAQ Global Auto Index Fund (the "Fund") seeks investment
results that correspond generally to the price and yield (before the Fund's fees
and expenses) of an equity index called the NASDAQ Global Auto Index(SM) (the
"Index"). The shares of the Fund are listed and trade on The Nasdaq Stock Market
LLC under the ticker symbol "CARZ." The Fund will normally invest at least 90%
of its net assets (including investment borrowings) in the common stocks and
depositary receipts that comprise the Index.
The Index is owned and was developed by Nasdaq, Inc. (the "Index Provider"). The
Index is designed to track the performance of the largest and most liquid
companies engaged in the manufacturing of automobiles. To be eligible for
inclusion in the Index, a security must be issued by a company classified as an
"Automobile Manufacturer" by the Industry Classification Benchmark. In addition,
a security must be listed on an Index-eligible global stock exchange, as
determined by the Index Provider, have a minimum float-adjusted worldwide market
capitalization of at least $500 million and a minimum three-month average daily
dollar trading volume of $1 million and a minimum free float of 20%.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
6 Months 1 Year 5 Years Inception 5 Years Inception
Ended Ended Ended (5/9/11) Ended (5/9/11)
3/31/21 3/31/21 3/31/21 to 3/31/21 3/31/21 to 3/31/21
<S> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 47.39% 140.92% 13.87% 8.61% 91.43% 126.35%
Market Price 48.10% 142.02% 14.11% 8.68% 93.47% 127.88%
INDEX PERFORMANCE
NASDAQ Global Auto Index(SM) 48.15% 143.04% 14.90% 9.65% 100.28% 148.70%
MSCI World Index 19.57% 54.03% 13.36% 9.80% 87.16% 152.12%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 32.)
-----------------------------
NASDAQ(R) and the Index are registered trademarks and service marks of Nasdaq,
Inc. (together with its affiliates hereinafter referred to as the
"Corporations") and are licensed for use by First Trust. The Fund has not been
passed on by the Corporations as to its legality or suitability. The Fund is not
issued, endorsed, sold or promoted by the Corporations. The Corporations make no
warranties and bear no liability with respect to the Fund.
Page 24
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST NASDAQ GLOBAL AUTO INDEX FUND (CARZ) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Consumer Discretionary 100.00%
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
General Motors Co. 8.50%
Daimler AG 8.41
Honda Motor Co., Ltd. 8.32
Toyota Motor Corp. 7.99
Tesla, Inc. 7.51
Volkswagen AG (Preference Shares) 5.06
Porsche Automobil Holding SE
(Preference Shares) 4.84
Bayerische Motoren Werke AG 4.54
Suzuki Motor Corp. 3.99
Ford Motor Co. 3.97
------
Total 63.13%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
MAY 9, 2011 - MARCH 31, 2021
First Trust NASDAQ NASDAQ Global MSCI World
Global Auto Index Fund Auto Index(SM) Index
---------------------- -------------- ----------
<S> <C> <C> <C>
5/9/11 $10,000 $10,000 $10,000
9/30/11 7,545 7,717 8,232
3/31/12 9,324 9,459 9,881
9/30/12 8,282 8,439 10,009
3/31/13 10,210 10,402 11,052
9/30/13 13,205 13,581 12,032
3/31/14 13,593 14,039 13,158
9/30/14 13,085 13,556 13,499
3/31/15 14,034 14,601 13,951
9/30/15 11,727 12,208 12,813
3/31/16 11,826 12,418 13,470
9/30/16 11,990 12,550 14,267
3/31/17 13,091 13,851 15,458
9/30/17 14,803 15,719 16,858
3/31/18 15,201 16,109 17,547
9/30/18 13,682 14,656 18,752
3/31/19 12,488 13,426 18,263
9/30/19 12,453 13,460 19,098
3/31/20 9,395 10,233 16,368
9/30/20 15,358 16,786 21,085
3/31/21 22,635 24,870 25,212
</TABLE>
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 25
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST CLOUD COMPUTING ETF (SKYY)
The First Trust Cloud Computing ETF (the "Fund") seeks investment results that
correspond generally to the price and yield (before the Fund's fees and
expenses) of an equity index called the ISE CTA Cloud Computing Index(TM) (the
"Index"). The shares of the Fund are listed and trade on The Nasdaq Stock Market
LLC under the ticker symbol "SKYY." The Fund will normally invest at least 90%
of its net assets (including investment borrowings) in the common stocks and
depositary receipts that comprise the Index.
The Index is owned by Nasdaq, Inc. The Index is designed to provide a benchmark
for investors interested in tracking companies involved in the cloud computing
industry. To be eligible for inclusion in the Index, a security must be issued
by a cloud computing company classified by the Consumer Technology Association
("CTA"). A cloud computing company is a company engaged in one or more of the
following activities: Infrastructure-as-a-Service, Platform-as-a-Service or
Software-as-a-Service. In addition, securities included in the Index must have a
minimum capitalization of $500 million.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
6 Months 1 Year 5 Years Inception 5 Years Inception
Ended Ended Ended (7/5/11) Ended (7/5/11)
3/31/21 3/31/21 3/31/21 to 3/31/21 3/31/21 to 3/31/21
<S> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 22.09% 75.87% 27.06% 17.72% 231.17% 389.82%
Market Price 22.17% 75.83% 27.09% 17.72% 231.50% 389.97%
INDEX PERFORMANCE
ISE CTA Cloud Computing Index(TM) (1) 22.48% 77.00% 27.66% 18.38% 239.01% 416.90%
S&P 500(R) Index 19.07% 56.35% 16.29% 14.15% 112.71% 262.72%
S&P Composite 1500(R) Information Technology Index 15.46% 67.88% 27.33% 20.57% 234.66% 518.25%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 32.)
(1) On June 24, 2019, the Fund's underlying index changed its methodology and
changed its name from "ISE Cloud Computing(TM) Index" to "ISE CTA Cloud
Computing Index(TM)."
-----------------------------
Nasdaq(R) and the Index are registered trademarks and service marks of Nasdaq,
Inc. (together with its affiliates hereinafter referred to as the
"Corporations") and are licensed for use by First Trust. The Fund has not been
passed on by the Corporations as to its legality or suitability. The Fund is not
issued, endorsed, sold or promoted by the Corporations. the corporations make no
warranties and bear no liability with respect to the fund.
Page 26
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST CLOUD COMPUTING ETF (SKYY) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Information Technology 83.82%
Consumer Discretionary 7.48
Communication Services 7.38
Health Care 1.32
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Rackspace Technology, Inc. 4.33%
VMware, Inc., Class A 4.17
Oracle Corp. 4.17
Arista Networks, Inc. 4.13
Alphabet, Inc., Class A 3.91
Microsoft Corp. 3.89
Amazon.com, Inc. 3.83
Alibaba Group Holding Ltd., ADR 3.65
Lumen Technologies, Inc. 3.47
Cisco Systems, Inc. 2.94
------
Total 38.49%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
JULY 5, 2011 - MARCH 31, 2021
First Trust Cloud ISE CTA Cloud S&P 500(R) S&P Composite 1500(R)
Computing ETF Computing Index(TM) Index Information Technology Index
----------------- ------------------- ---------- ----------------------------
<S> <C> <C> <C> <C>
7/5/11 $10,000 $10,000 $10,000 $10,000
9/30/11 7,902 7,909 8,501 8,886
3/31/12 10,604 10,641 10,702 11,739
9/30/12 9,864 9,934 11,068 11,695
3/31/13 10,531 10,640 12,196 11,682
9/30/13 12,214 12,376 13,209 12,718
3/31/14 13,390 13,612 14,861 14,655
9/30/14 13,581 13,852 15,815 16,153
3/31/15 14,551 14,885 16,753 17,253
9/30/15 13,994 14,354 15,718 16,547
3/31/16 14,789 15,247 17,052 18,475
9/30/16 17,114 17,697 18,143 20,324
3/31/17 19,392 19,930 19,979 23,173
9/30/17 21,052 21,701 21,519 26,144
3/31/18 24,370 25,195 22,776 29,394
9/30/18 28,591 29,662 25,375 34,091
3/31/19 29,280 30,490 24,939 33,777
9/30/19 28,753 30,069 26,455 36,949
3/31/20 27,851 29,204 23,199 36,826
9/30/20 40,121 42,204 30,462 53,545
3/31/21 48,982 51,690 36,272 61,825
</TABLE>
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 27
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST INTERNATIONAL EQUITY OPPORTUNITIES ETF (FPXI)
First Trust International Equity Opportunities ETF (formerly First Trust
International IPO ETF) (the "Fund") seeks investment results that correspond
generally to the price and yield (before the Fund's fees and expenses) of an
index called the IPOX(R) International Index (the "Index"). The shares of the
Fund are listed and trade on The Nasdaq Stock Market LLC under the ticker symbol
"FPXI." The Fund will normally invest at least 90% of its net assets (including
investment borrowings) in the common stocks and depositary receipts that
comprise the Index.
The Index is owned and is developed, maintained and sponsored by IPOX(R)
Schuster LLC (the "Index Provider"). The Index is a market-cap weighted
portfolio measuring the performance of the top 50 companies domiciled outside
the United States ranked quarterly by market capitalization in the IPOX(R)
Global Composite Index (the "Base Index") and represents, on average, 25% of the
total market capitalization of the Base Index, a fully market
capitalization-weighted index constructed and managed to provide a broad and
objective view of global aftermarket performance of initial public offerings and
spin-offs in all world countries (both developed and emerging market countries).
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
6 Months 1 Year 5 Years Inception 5 Years Inception
Ended Ended Ended (11/4/14) Ended (11/4/14)
3/31/21 3/31/21 3/31/21 to 3/31/21 3/31/21 to 3/31/21
<S> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 15.75% 78.55% 21.39% 14.17% 163.59% 133.65%
Market Price 15.93% 80.00% 21.43% 14.27% 164.06% 134.96%
INDEX PERFORMANCE
IPOX(R) International Index 16.98% 80.00% 22.43% 15.12% 175.06% 146.30%
MSCI World ex USA Index 20.53% 45.86% 8.92% 5.85% 53.32% 43.91%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 32.)
-----------------------------
IPOX(R) and the Index are registered international trademarks and service marks
of IPOX(R) Schuster LLC ("IPOX") and have been licensed for use by First Trust.
The Fund is not sponsored, endorsed, sold or promoted by IPOX, and IPOX makes no
representation regarding the advisability of trading in such Fund.
Page 28
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST INTERNATIONAL EQUITY OPPORTUNITIES ETF (FPXI) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Consumer Discretionary 28.37%
Information Technology 16.13
Communication Services 15.33
Health Care 10.64
Financials 8.68
Energy 7.57
Industrials 7.39
Consumer Staples 5.89
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Saudi Arabian Oil Co. 7.57%
Adyen N.V. 5.34
SoftBank Corp. 4.91
Sea Ltd., ADR 4.50
Coupang, Inc. 4.45
Country Garden Services Holdings Co., Ltd. 3.93
Prosus N.V. 3.57
Meituan, Class B 3.56
AXA S.A. 3.41
Takeda Pharmaceutical Co., Ltd., ADR 3.03
------
Total 44.27%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
NOVEMBER 4, 2014 - MARCH 31, 2021
First Trust International IPOX(R) International MSCI World
Equity Opportunities ETF Index ex USA Index
------------------------- --------------------- ------------
<S> <C> <C> <C>
11/4/14 $10,000 $10,000 $10,000
3/31/15 9,798 9,813 10,252
9/30/15 8,526 8,522 9,212
3/31/16 8,864 8,954 9,386
9/30/16 9,432 9,523 9,872
3/31/17 9,913 10,072 10,506
9/30/17 11,952 12,204 11,722
3/31/18 12,949 13,217 11,951
9/30/18 12,352 12,713 12,036
3/31/19 12,308 12,716 11,594
9/30/19 12,920 13,403 11,922
3/31/20 13,086 13,684 9,866
9/30/20 20,185 21,054 11,940
3/31/21 23,365 24,630 14,391
</TABLE>
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 29
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST NASDAQ CYBERSECURITY ETF (CIBR)
The First Trust Nasdaq Cybersecurity ETF (the "Fund") seeks investment results
that correspond generally to the price and yield (before the Fund's fees and
expenses) of an equity index called the Nasdaq CTA Cybersecurity Index(SM) (the
"Index"). The shares of the Fund are listed and trade on The Nasdaq Stock Market
LLC under the ticker symbol "CIBR." The Fund will normally invest at least 90%
of its net assets (including investment borrowings) in the common stocks and
depositary receipts that comprise the Index.
The Index is owned by Nasdaq, Inc. (the "Index Provider"). The Index Provider
and the Consumer Technology Association ("CTA") have jointly developed the
eligibility and selection criteria and rules for the Index. The Index includes
securities of companies classified as "cybersecurity" companies by the CTA.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
6 Months 1 Year 5 Years Inception 5 Years Inception
Ended Ended Ended (7/6/15) Ended (7/6/15)
3/31/21 3/31/21 3/31/21 to 3/31/21 3/31/21 to 3/31/21
<S> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 20.03% 62.67% 20.31% 14.43% 152.08% 116.65%
Market Price 20.19% 62.60% 20.37% 14.46% 152.70% 117.05%
INDEX PERFORMANCE
Nasdaq CTA Cybersecurity Index(SM) 20.44% 63.78% 21.18% 15.27% 161.30% 125.91%
S&P 500(R) Index 19.07% 56.35% 16.29% 14.30% 112.71% 115.25%
S&P Composite 1500 Information Technology Index 15.46% 67.88% 27.33% 24.83% 234.66% 256.74%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 32.)
-----------------------------
Nasdaq(R) and the Index are registered trademarks and service marks of Nasdaq,
Inc. (together with its affiliates hereinafter referred to as the
"Corporations") and are licensed for use by First Trust. The Fund has not been
passed on by the Corporations as to its legality or suitability. The Fund is not
issued, endorsed, sold or promoted by the Corporations. the corporations make no
warranties and bear no liability with respect to the fund.
Page 30
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST NASDAQ CYBERSECURITY ETF (CIBR) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Information Technology 87.23%
Industrials 12.77
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Cisco Systems, Inc. 6.96%
Accenture PLC, Class A 6.65
Splunk, Inc. 5.72
Crowdstrike Holdings, Inc., Class A 5.10
Zscaler, Inc. 5.06
F5 Networks, Inc. 3.32
Fortinet, Inc. 3.30
VMware, Inc., Class A 3.29
Leidos Holdings, Inc. 3.29
Juniper Networks, Inc. 3.29
------
Total 45.98%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
JULY 6, 2015 - MARCH 31, 2021
First Trust Nasdaq Nasdaq CTA S&P 500(R) S&P Composite 1500
Cybersecurity ETF Cybersecurity Index(TM) Index Information Technology Index
------------------ ----------------------- ---------- ----------------------------
<S> <C> <C> <C> <C>
7/6/15 $10,000 $10,000 $10,000 $10,000
9/30/15 8,575 8,585 9,328 9,547
3/31/16 8,595 8,645 10,120 10,659
9/30/16 10,018 10,113 10,768 11,726
3/31/17 10,993 11,137 11,858 13,370
9/30/17 11,093 11,276 12,772 15,084
3/31/18 12,713 12,943 13,518 16,959
9/30/18 14,475 14,808 15,060 19,669
3/31/19 14,271 14,642 14,801 19,488
9/30/19 14,074 14,493 15,701 21,318
3/31/20 13,318 13,794 13,767 21,250
9/30/20 18,050 18,758 18,077 30,898
3/31/21 21,665 22,591 21,525 35,674
</TABLE>
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 31
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FUND PERFORMANCE OVERVIEW (UNAUDITED)
--------------------------------------------------------------------------------
Total returns for the periods since inception are calculated from the inception
date of each Fund. "Average Annual Total Returns" represent the average annual
change in value of an investment over the periods indicated. "Cumulative Total
Returns" represent the total change in value of an investment over the periods
indicated. For certain Funds, the total returns would have been lower if certain
fees had not been waived and expenses reimbursed by the Advisor.
Each Fund's per share net asset value ("NAV") is the value of one share of the
Fund and is computed by dividing the value of all assets of the Fund (including
accrued interest and dividends), less all liabilities (including accrued
expenses and dividends declared but unpaid), by the total number of outstanding
shares. The price used to calculate market return ("Market Price") is determined
by using the midpoint of the national best bid and offer price ("NBBO") as of
the time that the Fund's NAV is calculated. Under SEC rules, the NBBO consists
of the highest displayed buy and lowest sell prices among the various exchanges
trading the Fund at the time the Fund's NAV is calculated. Prior to January 1,
2019, the price used was the midpoint between the highest bid and the lowest
offer on the stock exchange on which shares of the Fund were listed for trading
as of the time that the Fund's NAV was calculated. Since shares of each Fund did
not trade in the secondary market until after the Fund's inception, for the
period from inception to the first day of secondary market trading in shares of
the Fund, the NAV of each Fund is used as a proxy for the secondary market
trading price to calculate market returns. NAV and market returns assume that
all distributions have been reinvested in each Fund at NAV and Market Price,
respectively.
An index is a statistical composite that tracks a specified financial market or
sector. Unlike each Fund, the indices do not actually hold a portfolio of
securities and therefore do not incur the expenses incurred by each Fund. These
expenses negatively impact the performance of each Fund. Also, market returns do
not include brokerage commissions that may be payable on secondary market
transactions. If brokerage commissions were included, market returns would be
lower. The total returns presented reflect the reinvestment of dividends on
securities in the indices. The returns presented do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption or
sale of Fund shares. The investment return and principal value of shares of each
Fund will vary with changes in market conditions. Shares of each Fund may be
worth more or less than their original cost when they are redeemed or sold in
the market. Each Fund's past performance is no guarantee of future performance.
Page 32
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
UNDERSTANDING YOUR FUND EXPENSES
MARCH 31, 2021 (UNAUDITED)
As a shareholder of First Trust STOXX(R) European Select Dividend Index Fund,
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund, First
Trust Dow Jones Global Select Dividend Index Fund, First Trust Global Wind
Energy ETF, First Trust Global Engineering and Construction ETF, First Trust
NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund, First Trust Indxx
Global Natural Resources Income ETF, First Trust Indxx Global Agriculture ETF,
First Trust BICK Index Fund, First Trust Indxx NextG ETF, First Trust NASDAQ
Global Auto Index Fund, First Trust Cloud Computing ETF, First Trust
International Equity Opportunities ETF or First Trust Nasdaq Cybersecurity ETF
(each a "Fund" and collectively, the "Funds"), you incur two types of costs: (1)
transaction costs; and (2) ongoing costs, including management fees,
distribution and/or service (12b-1) fees, if any, and other Fund expenses. This
Example is intended to help you understand your ongoing costs (in U.S. dollars)
of investing in the Funds and to compare these costs with the ongoing costs of
investing in other funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held through the six-month period ended March 31, 2021.
ACTUAL EXPENSES
The first line in the following table provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During the Six-Month
Period" to estimate the expenses you paid on your account during this six-month
period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line in the following table provides information about hypothetical
account values and hypothetical expenses based on each Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
each Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Funds and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs such as brokerage
commissions. Therefore, the second line in the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
ANNUALIZED
EXPENSE RATIO EXPENSES PAID
BEGINNING ENDING BASED ON THE DURING THE
ACCOUNT VALUE ACCOUNT VALUE SIX-MONTH SIX-MONTH
OCTOBER 1, 2020 MARCH 31, 2021 PERIOD (a) PERIOD (b)
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIRST TRUST STOXX(R) EUROPEAN SELECT DIVIDEND INDEX FUND (FDD)
Actual $1,000.00 $1,380.40 0.57% $3.38
Hypothetical (5% return before expenses) $1,000.00 $1,022.09 0.57% $2.87
FIRST TRUST FTSE EPRA/NAREIT DEVELOPED MARKETS REAL ESTATE INDEX FUND (FFR)
Actual $1,000.00 $1,197.30 0.60% $3.29
Hypothetical (5% return before expenses) $1,000.00 $1,021.94 0.60% $3.02
FIRST TRUST DOW JONES GLOBAL SELECT DIVIDEND INDEX FUND (FGD)
Actual $1,000.00 $1,431.10 0.56% $3.39
Hypothetical (5% return before expenses) $1,000.00 $1,022.14 0.56% $2.82
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN)
Actual $1,000.00 $1,287.60 0.60% $3.42
Hypothetical (5% return before expenses) $1,000.00 $1,021.94 0.60% $3.02
FIRST TRUST GLOBAL ENGINEERING AND CONSTRUCTION ETF (FLM)
Actual $1,000.00 $1,317.90 0.70% $4.05
Hypothetical (5% return before expenses) $1,000.00 $1,021.44 0.70% $3.53
</TABLE>
Page 33
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
UNDERSTANDING YOUR FUND EXPENSES (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
ANNUALIZED
EXPENSE RATIO EXPENSES PAID
BEGINNING ENDING BASED ON THE DURING THE
ACCOUNT VALUE ACCOUNT VALUE SIX-MONTH SIX-MONTH
OCTOBER 1, 2020 MARCH 31, 2021 PERIOD (a) PERIOD (b)
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) SMART GRID INFRASTRUCTURE INDEX FUND (GRID)
Actual $1,000.00 $1,370.10 0.69% $4.08
Hypothetical (5% return before expenses) $1,000.00 $1,021.49 0.69% $3.48
FIRST TRUST INDXX GLOBAL NATURAL RESOURCES INCOME ETF (FTRI)
Actual $1,000.00 $1,407.00 0.70% $4.20
Hypothetical (5% return before expenses) $1,000.00 $1,021.44 0.70% $3.53
FIRST TRUST INDXX GLOBAL AGRICULTURE ETF (FTAG)
Actual $1,000.00 $1,394.70 0.70% $4.18
Hypothetical (5% return before expenses) $1,000.00 $1,021.44 0.70% $3.53
FIRST TRUST BICK INDEX FUND (BICK)
Actual $1,000.00 $1,288.60 0.64% $3.65
Hypothetical (5% return before expenses) $1,000.00 $1,021.74 0.64% $3.23
FIRST TRUST INDXX NEXTG ETF (NXTG)
Actual $1,000.00 $1,235.50 0.70% $3.90
Hypothetical (5% return before expenses) $1,000.00 $1,021.44 0.70% $3.53
FIRST TRUST NASDAQ GLOBAL AUTO INDEX FUND (CARZ)
Actual $1,000.00 $1,473.90 0.70% $4.32
Hypothetical (5% return before expenses) $1,000.00 $1,021.44 0.70% $3.53
FIRST TRUST CLOUD COMPUTING ETF (SKYY)
Actual $1,000.00 $1,220.90 0.60% $3.32
Hypothetical (5% return before expenses) $1,000.00 $1,021.94 0.60% $3.02
FIRST TRUST INTERNATIONAL EQUITY OPPORTUNITIES ETF (FPXI)
Actual $1,000.00 $1,157.50 0.70% $3.77
Hypothetical (5% return before expenses) $1,000.00 $1,021.44 0.70% $3.53
FIRST TRUST NASDAQ CYBERSECURITY ETF (CIBR)
Actual $1,000.00 $1,200.30 0.60% $3.29
Hypothetical (5% return before expenses) $1,000.00 $1,021.94 0.60% $3.02
</TABLE>
(a) These expense ratios reflect expense caps for certain Funds. See Note 3 in
the Notes to Financial Statements.
(b) Expenses are equal to the annualized expense ratio as indicated in the
table multiplied by the average account value over the period (October 1,
2020 through March 31, 2021), multiplied by 182/365 (to reflect the
six-month period).
Page 34
<PAGE>
FIRST TRUST STOXX(R) EUROPEAN SELECT DIVIDEND INDEX FUND (FDD)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.4%
AUSTRIA -- 2.7%
119,974 OMV AG $ 6,086,423
--------------
BELGIUM -- 7.9%
126,131 Ageas S.A./N.V. 7,626,464
474,839 Proximus S.A., DP 10,335,055
--------------
17,961,519
--------------
FINLAND -- 5.5%
268,620 Fortum OYJ 7,169,668
142,923 Nokian Renkaat OYJ 5,175,686
--------------
12,345,354
--------------
FRANCE -- 10.1%
81,215 Covivio 6,952,605
828,495 Orange S.A. 10,206,443
92,842 Publicis Groupe S.A. 5,665,917
--------------
22,824,965
--------------
GERMANY -- 18.4%
25,910 Allianz SE 6,595,013
427,762 alstria office REIT-AG 6,912,575
83,876 Bayerische Motoren Werke AG
(Preference Shares) 6,673,844
75,418 Deutsche Post AG 4,132,057
158,782 Evonik Industries AG 5,615,922
50,163 Porsche Automobil Holding SE
(Preference Shares) 5,319,079
224,290 TAG Immobilien AG 6,402,048
--------------
41,650,538
--------------
ITALY -- 12.7%
222,252 Assicurazioni Generali S.p.A. 4,446,447
587,993 Poste Italiane S.p.A. (b) (c) 7,474,633
1,492,904 Snam S.p.A. 8,277,474
14,807,096 Telecom Italia S.p.A. 8,515,474
--------------
28,714,028
--------------
LUXEMBOURG -- 2.9%
257,942 Grand City Properties S.A. 6,461,179
--------------
NETHERLANDS -- 4.4%
201,508 NN Group N.V. 9,851,733
--------------
SWEDEN -- 3.2%
537,886 Tele2 AB, Class B 7,255,205
--------------
SWITZERLAND -- 10.6%
127,951 LafargeHolcim Ltd. 7,518,805
11,608 Swiss Life Holding AG 5,706,054
262,621 UBS Group AG 4,066,506
15,514 Zurich Insurance Group AG 6,621,539
--------------
23,912,904
--------------
UNITED KINGDOM -- 21.0%
717,158 GlaxoSmithKline PLC 12,734,184
874,229 IG Group Holdings PLC 10,859,015
3,168,798 Legal & General Group PLC 12,192,557
587,634 SSE PLC 11,787,191
--------------
47,572,947
--------------
TOTAL COMMON STOCKS -- 99.4% 224,636,795
(Cost $190,803,235) --------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
RIGHTS (a) -- 0.0%
ITALY -- 0.0%
953,433 Snam S.p.A., expiring
4/7/21 (d) (e) (f) $ 984
(Cost $0) --------------
TOTAL INVESTMENTS -- 99.4% 224,637,779
(Cost $190,803,235) (g)
NET OTHER ASSETS AND
LIABILITIES -- 0.6% 1,367,686
--------------
NET ASSETS -- 100.0% $ 226,005,465
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(c) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(d) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures adopted by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940, as
amended. At March 31, 2021, securities noted as such are valued at $984 or
0.0% of net assets.
(e) Pursuant to procedures adopted by the Trust's Board of Trustees, this
security has been determined to be illiquid by First Trust Advisors, L.P.,
the Fund's Advisor.
(f) Non-income producing security.
(g) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2021, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $38,537,553 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $4,703,009. The net unrealized appreciation was
$33,834,544.
See Notes to Financial Statements Page 35
<PAGE>
FIRST TRUST STOXX(R) EUROPEAN SELECT DIVIDEND INDEX FUND (FDD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/21 PRICES INPUTS INPUTS
----------------------------------------------------------
Common
Stocks* $ 224,636,795 $ 224,636,795 $ -- $ --
Rights* 984 -- 984 --
----------------------------------------------------------
Total
Investments $ 224,637,779 $ 224,636,795 $ 984 $ --
==========================================================
* See Portfolio of Investments for country breakout.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
Euro 65.0%
British Pound Sterling 21.2
Swiss Franc 10.6
Swedish Krona 3.2
------
Total 100.0%
======
Page 36 See Notes to Financial Statements
<PAGE>
FIRST TRUST FTSE EPRA/NAREIT DEVELOPED MARKETS REAL ESTATE INDEX FUND (FFR)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.2%
AUSTRALIA -- 3.4%
196,196 BGP Holdings
PLC (b) (c) (d) (e) (f) $ 0
9,435 BWP Trust 28,307
9,446 Charter Hall Long Wale REIT 33,865
9,345 Charter Hall Retail REIT 27,256
27,441 Cromwell Property Group 17,195
21,177 Dexus 156,829
37,804 GPT Group (The) 132,085
76,263 Mirvac Group 144,814
18,948 National Storage REIT 28,784
100,635 Scentre Group 215,553
20,781 Shopping Centres Australasia
Property Group 39,618
46,232 Stockland 154,508
72,744 Vicinity Centres 91,443
15,150 Waypoint REIT 28,883
--------------
1,099,140
--------------
AUSTRIA -- 0.2%
1,336 CA Immobilien Anlagen AG 56,559
--------------
BELGIUM -- 1.0%
640 Aedifica S.A. 73,402
100 Ascencio 5,553
417 Befimmo S.A. 16,993
524 Cofinimmo S.A. 76,321
444 Intervest Offices & Warehouses
N.V. 11,012
47 Leasinvest Real Estate S.C.A. 4,123
234 Montea C.V.A. 24,423
194 Retail Estates N.V. 13,286
2,699 Warehouses De Pauw C.V.A. 89,193
390 Xior Student Housing N.V. (g) 20,810
--------------
335,116
--------------
BERMUDA -- 0.4%
22,517 Hongkong Land Holdings Ltd. 110,558
--------------
CANADA -- 2.8%
2,358 Allied Properties Real Estate
Investment Trust 76,255
2,247 Artis Real Estate Investment
Trust 19,382
732 Boardwalk Real Estate
Investment Trust 21,150
3,283 Canadian Apartment Properties
REIT 140,704
4,157 Chartwell Retirement Residences 38,735
4,950 Choice Properties Real Estate
Investment Trust 53,411
3,253 Cominar Real Estate Investment
Trust 24,151
1,786 Crombie Real Estate Investment
Trust 22,483
2,939 Dream Industrial Real Estate
Investment Trust 31,385
770 Dream Office Real Estate
Investment Trust 12,965
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
CANADA (CONTINUED)
4,178 First Capital Real Estate
Investment Trust $ 54,822
1,120 Granite Real Estate Investment
Trust 68,107
5,455 H&R Real Estate Investment
Trust 61,899
2,171 InterRent Real Estate Investment
Trust 25,550
1,870 Killam Apartment Real Estate
Investment Trust 27,543
2,896 NorthWest Healthcare Properties
Real Estate Investment Trust 29,797
6,136 RioCan Real Estate Investment
Trust 95,016
2,521 SmartCentres Real Estate
Investment Trust 53,863
2,411 Summit Industrial Income REIT 27,358
1,031 WPT Industrial Real Estate
Investment Trust 15,568
--------------
900,144
--------------
CAYMAN ISLANDS -- 1.4%
46,095 CK Asset Holdings Ltd. 279,863
32,272 Wharf Real Estate Investment
Co., Ltd. 180,786
--------------
460,649
--------------
FINLAND -- 0.3%
1,489 Citycon OYJ 12,380
3,781 Kojamo OYJ 73,959
--------------
86,339
--------------
FRANCE -- 1.2%
756 Carmila S.A. 11,437
970 Covivio 83,039
1,005 Gecina S.A. 138,364
616 ICADE 45,041
3,563 Klepierre S.A. 83,086
1,190 Mercialys S.A. 13,111
--------------
374,078
--------------
GERMANY -- 4.3%
3,447 alstria office REIT-AG 55,703
991 Deutsche EuroShop AG (e) 20,640
6,722 Deutsche Wohnen SE 313,582
1,369 Hamborner REIT AG 14,473
1,399 LEG Immobilien SE 184,011
2,448 TAG Immobilien AG 69,875
172 TLG Immobilien AG 5,031
10,982 Vonovia SE 717,340
--------------
1,380,655
--------------
GUERNSEY -- 0.2%
4,651 BMO Real Estate Investments
Ltd. 4,783
7,134 Regional REIT Ltd. (g) (h) 7,760
9,608 Schroder Real Estate Investment
Trust Ltd. 5,285
18,765 Sirius Real Estate Ltd. 22,972
See Notes to Financial Statements Page 37
<PAGE>
FIRST TRUST FTSE EPRA/NAREIT DEVELOPED MARKETS REAL ESTATE INDEX FUND (FFR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
GUERNSEY (CONTINUED)
7,889 Standard Life Investment Property
Income Trust Ltd. $ 6,645
--------------
47,445
--------------
HONG KONG -- 3.9%
38,350 Champion REIT 22,495
39,303 Hang Lung Properties Ltd. 102,124
11,646 Hysan Development Co., Ltd. 45,541
40,310 Link REIT 367,110
27,849 New World Development Co.,
Ltd. 144,007
66,960 Sino Land Co., Ltd. 93,195
27,608 Sun Hung Kai Properties Ltd. 418,341
20,399 Swire Properties Ltd. 63,106
--------------
1,255,919
--------------
IRELAND -- 0.1%
12,859 Hibernia REIT PLC 16,648
8,487 Irish Residential Properties REIT
PLC 16,243
--------------
32,891
--------------
ISLE OF MAN -- 0.0%
5,170 RDI REIT PLC 8,667
--------------
ISRAEL -- 0.2%
2,837 Amot Investments Ltd. 15,156
709 Azrieli Group Ltd. 43,710
--------------
58,866
--------------
ITALY -- 0.0%
1,265 Immobiliare Grande Distribuzione
SIIQ S.p.A. 5,259
--------------
JAPAN -- 11.5%
13 Activia Properties, Inc. 57,002
25 Advance Residence Investment
Corp. 78,347
2,323 AEON Mall Co., Ltd. 40,386
30 AEON REIT Investment Corp. 40,370
12 Comforia Residential REIT, Inc. 36,577
39 Daiwa House REIT Investment
Corp. 104,646
5 Daiwa Office Investment Corp. 35,177
38 Daiwa Securities Living
Investments Corp. 37,271
9 Frontier Real Estate Investment
Corp. 38,325
14 Fukuoka REIT Corp. 21,975
19 Global One Real Estate
Investment Corp. 20,695
79 GLP J-REIT 129,711
4 Hoshino Resorts REIT, Inc. 23,048
7,067 Hulic Co., Ltd. 83,291
22 Hulic REIT, Inc. 34,433
23 Ichigo Office REIT Investment
Corp. 19,692
37 Industrial & Infrastructure Fund
Investment Corp. 63,457
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
JAPAN (CONTINUED)
168 Invesco Office J-REIT, Inc. $ 26,446
95 Invincible Investment Corp. 35,821
24 Japan Excellent, Inc. 31,082
87 Japan Hotel REIT Investment
Corp. 48,951
17 Japan Logistics Fund, Inc. 47,902
136 Japan Metropolitan Fund Invest 138,917
17 Japan Prime Realty Investment
Corp. 63,409
25 Japan Real Estate Investment
Corp. 147,437
7 Kenedix Office Investment Corp. 49,754
18 Kenedix Residential Next
Investment Corp. 35,114
10 Kenedix Retail REIT Corp. 24,267
32 LaSalle Logiport REIT 48,495
22,042 Mitsubishi Estate Co., Ltd. 384,702
6 Mitsubishi Estate Logistics REIT
Investment Corp. 23,572
17,953 Mitsui Fudosan Co., Ltd. 407,540
10 Mitsui Fudosan Logistics Park,
Inc. 49,402
31 Mori Hills REIT Investment Corp. 42,920
19 Mori Trust Sogo REIT, Inc. 26,649
9 Nippon Accommodations Fund,
Inc. 52,752
29 Nippon Building Fund, Inc. 170,504
43 Nippon Prologis REIT, Inc. 138,058
8 NIPPON REIT Investment Corp. 30,526
2,220 Nomura Real Estate Holdings, Inc. 53,432
87 Nomura Real Estate Master Fund,
Inc. 130,746
51 Orix JREIT, Inc. 88,620
25 Premier Investment Corp. 35,697
78 Sekisui House REIT, Inc. 64,809
7,679 Sumitomo Realty & Development
Co., Ltd. 270,889
3,850 Tokyo Tatemono Co., Ltd. 58,450
17 Tokyu REIT, Inc. 27,774
57 United Urban Investment Corp. 76,498
--------------
3,695,538
--------------
JERSEY -- 0.0%
1,583 Phoenix Spree Deutschland Ltd. 7,191
--------------
LUXEMBOURG -- 0.9%
1,576 ADLER Group S.A. (e) (g) (h) 43,173
23,271 Aroundtown S.A. 165,650
2,201 Grand City Properties S.A. 55,133
486 Shurgard Self Storage S.A. 22,142
--------------
286,098
--------------
MULTI-NATIONAL -- 0.7%
2,613 Unibail-Rodamco-Westfield (e) 209,413
--------------
NETHERLANDS -- 0.2%
933 Eurocommercial Properties N.V.,
C.V.A (e) 20,570
357 NSI N.V. 14,151
Page 38 See Notes to Financial Statements
<PAGE>
FIRST TRUST FTSE EPRA/NAREIT DEVELOPED MARKETS REAL ESTATE INDEX FUND (FFR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
NETHERLANDS (CONTINUED)
332 Vastned Retail N.V. $ 9,675
782 Wereldhave N.V. (e) 13,361
--------------
57,757
--------------
NEW ZEALAND -- 0.3%
21,088 Goodman Property Trust 33,285
30,439 Kiwi Property Group Ltd. 26,360
20,476 Precinct Properties New Zealand
Ltd. 23,310
--------------
82,955
--------------
NORWAY -- 0.2%
3,234 Entra ASA (g) (h) 71,802
--------------
SINGAPORE -- 3.3%
63,256 Ascendas Real Estate Investment
Trust 143,422
34,476 Ascott Residence Trust 27,423
84,597 CapitaLand Integrated
Commercial Trust 136,467
49,834 CapitaLand Ltd. 139,292
15,267 CDL Hospitality Trusts 14,073
9,120 City Developments Ltd. 54,102
26,157 Fortune Real Estate Investment
Trust 25,067
20,773 Frasers Centrepoint Trust 37,988
50,464 Frasers Logistics & Commercial
Trust (g) 54,395
23,494 Keppel DC REIT 47,156
38,093 Keppel REIT 34,548
27,976 Manulife US Real Estate
Investment Trust (g) 20,422
42,466 Mapletree Commercial Trust 66,925
31,682 Mapletree Industrial Trust 64,532
55,577 Mapletree Logistics Trust 79,738
7,459 Parkway Life Real Estate
Investment Trust 22,623
40,479 Suntec Real Estate Investment
Trust 46,943
9,515 UOL Group Ltd. 55,879
--------------
1,070,995
--------------
SPAIN -- 0.4%
6,300 Inmobiliaria Colonial Socimi S.A. 60,988
1,176 Lar Espana Real Estate Socimi
S.A. 7,033
6,429 Merlin Properties Socimi S.A. 65,743
--------------
133,764
--------------
SWEDEN -- 2.2%
877 Atrium Ljungberg AB, Class B 15,705
5,299 Castellum AB 116,860
488 Catena AB 21,513
1,626 Dios Fastigheter AB 13,368
5,043 Fabege AB 67,993
1,952 Fastighets AB Balder, Class B (e) 96,690
2,080 Hufvudstaden AB, Class A 30,247
12,277 Klovern AB, Class B 21,409
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
SWEDEN (CONTINUED)
3,658 Kungsleden AB $ 38,220
3,402 Nyfosa AB (e) 34,980
1,711 Pandox AB (e) 28,995
3,328 Sagax AB, Class B 71,945
19,278 Samhallsbyggnadsbolaget i
Norden AB 59,996
3,158 Wallenstam AB, Class B 43,139
2,571 Wihlborgs Fastigheter AB 48,780
--------------
709,840
--------------
SWITZERLAND -- 1.1%
272 Allreal Holding AG 54,794
56 Hiag Immobilien Holding AG (e) 6,458
22 Intershop Holding AG 14,525
125 Mobimo Holding AG 38,155
172 Peach Property Group AG (e) 9,045
834 PSP Swiss Property AG 101,653
1,456 Swiss Prime Site AG 134,254
--------------
358,884
--------------
UNITED KINGDOM -- 4.5%
4,503 Aberdeen Standard European
Logistics Income PLC (g) (h) 6,736
50,679 Assura PLC 50,374
3,127 Big Yellow Group PLC 48,067
17,929 British Land (The) Co. PLC 124,772
14,208 Capital & Counties Properties
PLC 33,435
12,062 Civitas Social Housing PLC (g) 17,926
3,025 CLS Holdings PLC 9,550
7,517 Custodian REIT PLC 9,513
1,950 Derwent London PLC 86,778
11,372 Empiric Student Property PLC (e) 12,432
8,826 GCP Student Living PLC 18,860
12,832 Grainger PLC 47,198
4,912 Great Portland Estates PLC 46,034
78,671 Hammerson PLC 37,949
1,955 Helical PLC 11,145
4,566 Impact Healthcare REIT PLC (g) 7,144
13,817 Land Securities Group PLC 131,452
17,045 LondonMetric Property PLC 50,192
11,270 LXI REIT PLC (g) 19,576
5,859 NewRiver REIT PLC (e) 7,576
25,167 Primary Health Properties PLC 51,419
3,967 Safestore Holdings PLC 43,505
23,059 Segro PLC 298,056
5,394 Shaftesbury PLC (e) 47,703
8,868 Target Healthcare REIT PLC 13,864
7,073 Triple Point Social Housing REIT
PLC (g) (h) 9,848
33,087 Tritax Big Box REIT PLC 81,877
9,839 Tritax EuroBox PLC (g) (h) 13,632
6,169 UNITE Group (The) PLC (e) 90,744
2,583 Workspace Group PLC 28,488
--------------
1,455,845
--------------
See Notes to Financial Statements Page 39
<PAGE>
FIRST TRUST FTSE EPRA/NAREIT DEVELOPED MARKETS REAL ESTATE INDEX FUND (FFR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
UNITED STATES -- 54.5%
1,631 Acadia Realty Trust $ 30,940
1,197 Agree Realty Corp. 80,570
41 Alexander's, Inc. 11,369
2,624 Alexandria Real Estate Equities,
Inc. 431,123
968 American Assets Trust, Inc. 31,402
2,647 American Campus Communities,
Inc. 114,271
2,099 American Finance Trust, Inc. 20,612
5,276 American Homes 4 Rent, Class A 175,902
4,593 Americold Realty Trust 176,693
2,863 Apartment Income REIT Corp. 122,422
2,863 Apartment Investment and
Management Co., Class A 17,579
4,053 Apple Hospitality REIT, Inc. 59,052
1,106 Armada Hoffler Properties, Inc. 13,869
2,723 AvalonBay Communities, Inc. 502,421
3,009 Boston Properties, Inc. 304,691
3,258 Brandywine Realty Trust 42,061
5,728 Brixmor Property Group, Inc. 115,877
752 Brookfield Property REIT, Inc.,
Class A 13,498
1,824 Camden Property Trust 200,476
1,837 CareTrust REIT, Inc. 42,774
250 Centerspace 17,000
9,233 Colony Capital, Inc. (e) 59,830
2,202 Columbia Property Trust, Inc. 37,654
428 Community Healthcare Trust, Inc. 19,739
2,171 Corporate Office Properties Trust 57,162
2,862 Cousins Properties, Inc. 101,172
3,736 CubeSmart 141,333
2,324 CyrusOne, Inc. 157,381
3,840 DiamondRock Hospitality Co. (e) 39,552
5,404 Digital Realty Trust, Inc. 761,099
4,560 Diversified Healthcare Trust 21,797
3,217 Douglas Emmett, Inc. 101,014
7,126 Duke Realty Corp. 298,793
1,568 Easterly Government Properties,
Inc. 32,505
753 EastGroup Properties, Inc. 107,890
2,785 Empire State Realty Trust, Inc.,
Class A 30,997
1,431 EPR Properties 66,670
2,257 Equity Commonwealth 62,745
3,363 Equity LifeStyle Properties, Inc. 214,021
7,111 Equity Residential 509,361
1,999 Essential Properties Realty
Trust, Inc. 45,637
1,261 Essex Property Trust, Inc. 342,790
2,482 Extra Space Storage, Inc. 328,989
1,477 Federal Realty Investment Trust 149,842
2,476 First Industrial Realty Trust,
Inc. 113,376
1,413 Four Corners Property Trust, Inc. 38,716
1,997 Franklin Street Properties Corp. 10,884
4,202 Gaming and Leisure Properties,
Inc. 178,291
671 Getty Realty Corp. 19,003
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
UNITED STATES (CONTINUED)
1,733 Global Net Lease, Inc. $ 31,298
2,691 Healthcare Realty Trust, Inc. 81,591
4,203 Healthcare Trust of America,
Inc., Class A 115,919
10,432 Healthpeak Properties, Inc. 331,112
1,989 Highwoods Properties, Inc. 85,408
13,520 Host Hotels & Resorts, Inc. (e) 227,812
2,904 Hudson Pacific Properties, Inc. 78,785
1,959 Independence Realty Trust, Inc. 29,777
1,248 Industrial Logistics Properties
Trust 28,866
451 Innovative Industrial Properties,
Inc. 81,252
10,853 Invitation Homes, Inc. 347,187
2,355 JBG SMITH Properties 74,865
2,322 Kennedy-Wilson Holdings, Inc. 46,928
2,247 Kilroy Realty Corp. 147,471
7,987 Kimco Realty Corp. 149,756
1,597 Kite Realty Group Trust 30,806
5,259 Lexington Realty Trust 58,427
1,428 Life Storage, Inc. 122,737
748 LTC Properties, Inc. 31,207
2,881 Macerich (The) Co. 33,708
1,669 Mack-Cali Realty Corp. 25,836
11,092 Medical Properties Trust, Inc. 236,038
2,203 Mid-America Apartment
Communities, Inc. 318,025
1,825 Monmouth Real Estate
Investment Corp. 32,284
837 National Health Investors, Inc. 60,498
3,346 National Retail Properties, Inc. 147,458
1,204 National Storage Affiliates Trust 48,076
422 NexPoint Residential Trust, Inc. 19,450
920 Office Properties Income Trust 25,318
4,433 Omega Healthcare Investors, Inc. 162,381
3,613 Paramount Group, Inc. 36,600
4,545 Park Hotels & Resorts, Inc. (e) 98,081
2,502 Pebblebrook Hotel Trust 60,774
4,013 Physicians Realty Trust 70,910
2,386 Piedmont Office Realty Trust,
Inc., Class A 41,445
14,260 Prologis, Inc. 1,511,560
386 PS Business Parks, Inc. 59,668
2,918 Public Storage 720,046
1,232 QTS Realty Trust, Inc., Class A 76,433
7,235 Realty Income Corp. 459,422
3,258 Regency Centers Corp. 184,761
2,224 Retail Opportunity Investments
Corp. 35,295
4,123 Retail Properties of America, Inc.,
Class A 43,209
2,536 Rexford Industrial Realty, Inc. 127,814
3,156 RLJ Lodging Trust 48,855
1,551 RPT Realty 17,697
970 Ryman Hospitality Properties,
Inc (e) 75,185
3,950 Sabra Health Care REIT, Inc. 68,572
Page 40 See Notes to Financial Statements
<PAGE>
FIRST TRUST FTSE EPRA/NAREIT DEVELOPED MARKETS REAL ESTATE INDEX FUND (FFR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
UNITED STATES (CONTINUED)
346 Safehold, Inc. $ 24,255
3,152 Service Properties Trust 37,383
6,328 Simon Property Group, Inc. 719,937
2,944 SITE Centers Corp. 39,921
1,359 SL Green Realty Corp. 95,116
2,207 Spirit Realty Capital, Inc. 93,797
3,070 STAG Industrial, Inc. 103,183
4,668 STORE Capital Corp. 156,378
1,988 Summit Hotel Properties, Inc. (e) 20,198
2,046 Sun Communities, Inc. 306,982
4,133 Sunstone Hotel Investors,
Inc. (e) 51,497
1,741 Tanger Factory Outlet Centers,
Inc. 26,341
1,300 Terreno Realty Corp. 75,101
5,665 UDR, Inc. 248,467
247 Universal Health Realty Income
Trust 16,742
2,231 Urban Edge Properties 36,856
7,221 Ventas, Inc. 385,168
4,230 VEREIT, Inc. 163,363
10,340 VICI Properties, Inc. 292,002
3,393 Vornado Realty Trust 154,008
1,627 Washington Real Estate
Investment Trust 35,957
2,345 Weingarten Realty Investors 63,104
8,091 Welltower, Inc. 579,558
3,367 W.P. Carey, Inc. 238,249
2,178 Xenia Hotels & Resorts, Inc. (e) 42,471
--------------
17,525,482
--------------
TOTAL COMMON STOCKS -- 99.2% 31,877,849
(Cost $30,272,529) --------------
INVESTMENT COMPANIES (a) -- 0.1%
GUERNSEY -- 0.1%
10,208 BMO Commercial Property Trust
Ltd. 9,963
10,570 Picton Property Income Ltd. 12,503
14,271 UK Commercial Property REIT
Ltd. 14,185
--------------
TOTAL INVESTMENT COMPANIES
-- 0.1% 36,651
(Cost $47,103) --------------
MONEY MARKET FUNDS -- 0.4%
128,424 Morgan Stanley Institutional
Liquidity Funds - Treasury
Portfolio - Institutional
Class - 0.01% (i) 128,424
(Cost $128,424) --------------
TOTAL INVESTMENTS -- 99.7% 32,042,924
(Cost $30,448,056) (j)
NET OTHER ASSETS AND
LIABILITIES -- 0.3% 99,856
--------------
NET ASSETS -- 100.0% $ 32,142,780
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures adopted by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940, as
amended. At March 31, 2021, securities noted as such are valued at $0 or
0.0% of net assets.
(c) This security's value was determined using significant unobservable inputs
(see Note 2A - Portfolio Valuation in the Notes to Financial Statements).
(d) Pursuant to procedures adopted by the Trust's Board of Trustees, this
security has been determined to be illiquid by First Trust Advisors, L.P.,
the Fund's Advisor.
(e) Non-income producing security.
(f) This is a restricted security which cannot be traded as a result of the
in-specie distribution. It was acquired on August 6, 2009 at a cost of $0
and has a carrying value per share of $0.
(g) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act, as amended (the
"1933 Act").
(h) This security is exempt from registration upon resale under Rule 144A of
the 1933 Act, and may be resold in transactions exempt from registration,
normally to qualified institutional buyers. This security is not
restricted on the foreign exchange where it trades freely without any
additional registration. As such, it does not require the additional
disclosure required of restricted securities.
(i) Rate shown reflects yield as of March 31, 2021.
(j) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2021, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $4,904,451 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $3,309,583. The net unrealized appreciation was
$1,594,868.
See Notes to Financial Statements Page 41
<PAGE>
FIRST TRUST FTSE EPRA/NAREIT DEVELOPED MARKETS REAL ESTATE INDEX FUND (FFR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/21 PRICES INPUTS INPUTS
----------------------------------------------------------
Common
Stocks:
Australia $ 1,099,140 $ 1,099,140 $ -- $ --**
Other
Country
Categories* 30,778,709 30,778,709 -- --
Investment
Companies* 36,651 36,651 -- --
Money Market
Funds 128,424 128,424 -- --
----------------------------------------------------------
Total
Investments $ 32,042,924 $ 32,042,924 $ -- $ --**
==========================================================
* See Portfolio of Investments for Country breakout.
** Investment is valued at $0.
Level 3 Common Stocks are fair valued by the Advisor's Pricing Committee and are
footnoted in the Portfolio of Investments. Level 3 Common Stocks values are
based on unobservable and non-quantitative inputs.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 55.6%
Japanese Yen 11.5
Euro 9.2
Hong Kong Dollar 5.4
British Pound Sterling 4.9
Australian Dollar 3.4
Singapore Dollar 3.2
Canadian Dollar 2.8
Swedish Krona 2.2
Swiss Franc 1.1
New Zealand Dollar 0.3
Norwegian Krone 0.2
Israeli Shekel 0.2
------
Total 100.0%
======
Page 42 See Notes to Financial Statements
<PAGE>
FIRST TRUST DOW JONES GLOBAL SELECT DIVIDEND INDEX FUND (FGD)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.2%
AUSTRALIA -- 2.8%
486,868 Fortescue Metals Group Ltd. $ 7,392,308
126,113 JB Hi-Fi Ltd. 4,959,958
--------------
12,352,266
--------------
BELGIUM -- 1.0%
71,836 Ageas S.A./N.V. 4,343,537
--------------
BERMUDA -- 4.5%
693,453 CK Infrastructure Holdings Ltd. 4,121,059
1,334,500 Kerry Properties Ltd. 4,300,077
85,812 Lazard Ltd., Class A 3,733,680
515,937 VTech Holdings Ltd. 4,645,630
1,301,987 Yue Yuen Industrial Holdings Ltd. 3,249,064
--------------
20,049,510
--------------
CANADA -- 13.2%
57,654 Bank of Nova Scotia (The) 3,606,873
104,178 BCE, Inc. 4,702,807
37,668 Canadian Imperial Bank of
Commerce 3,688,269
173,937 Canadian Utilities Ltd., Class A 4,669,877
155,097 Great-West Lifeco, Inc. 4,127,034
160,816 IGM Financial, Inc. 4,901,132
264,920 Labrador Iron Ore Royalty Corp. 7,806,149
107,500 Laurentian Bank of Canada 3,424,226
153,326 Manulife Financial Corp. 3,297,845
170,465 Power Corp. of Canada 4,480,353
211,716 Shaw Communications, Inc.,
Class B 5,505,593
105,979 TC Energy Corp. 4,858,320
173,376 TELUS Corp. 3,453,172
--------------
58,521,650
--------------
CAYMAN ISLANDS -- 0.8%
467,586 CK Hutchison Holdings Ltd. 3,726,084
--------------
FINLAND -- 1.0%
156,271 Fortum OYJ 4,170,990
--------------
FRANCE -- 1.9%
74,509 Nexity S.A. 3,676,825
104,323 TOTAL SE 4,866,074
--------------
8,542,899
--------------
GERMANY -- 1.6%
14,102 Allianz SE 3,589,459
42,099 BASF SE 3,497,347
--------------
7,086,806
--------------
HONG KONG -- 5.9%
1,131,949 BOC Hong Kong Holdings Ltd. 3,953,180
140,386 Hang Seng Bank Ltd. 2,717,754
911,575 Henderson Land Development
Co., Ltd. 4,092,302
772,935 Hysan Development Co., Ltd. 3,022,501
752,024 New World Development Co.,
Ltd. 3,888,728
9,316,756 PCCW Ltd. 5,249,147
437,649 Swire Pacific Ltd., Class A 3,282,044
--------------
26,205,656
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
ISRAEL -- 1.4%
313,558 Plus500 Ltd. $ 6,051,825
--------------
ITALY -- 5.6%
2,392,770 A2A S.p.A. 4,354,930
734,700 Anima Holding S.p.A. (b) (c) 3,784,085
166,011 Azimut Holding S.p.A. 3,783,641
232,720 Eni S.p.A. 2,863,935
316,467 Poste Italiane S.p.A. (b) (c) 4,022,964
1,980,432 UnipolSai Assicurazioni S.p.A. 5,954,789
--------------
24,764,344
--------------
JAPAN -- 6.3%
178,454 Aozora Bank Ltd. 4,084,014
296,700 Haseko Corp. 4,150,718
120,276 Idemitsu Kosan Co., Ltd. 3,100,183
269,670 Japan Tobacco, Inc. 5,175,423
126,300 MS&AD Insurance Group
Holdings, Inc. 3,706,017
875,300 Resona Holdings, Inc. 3,674,323
103,800 Sumitomo Mitsui Financial
Group, Inc. 3,756,393
--------------
27,647,071
--------------
JERSEY -- 2.2%
4,323,531 Centamin PLC 6,198,867
117,073 Janus Henderson Group PLC 3,646,824
--------------
9,845,691
--------------
LUXEMBOURG -- 0.9%
89,575 APERAM S.A. 4,035,828
--------------
NETHERLANDS -- 2.6%
27,880 LyondellBasell Industries N.V.,
Class A 2,900,914
94,602 NN Group N.V. 4,625,095
203,638 SBM Offshore N.V. 3,730,167
--------------
11,256,176
--------------
NEW ZEALAND -- 0.9%
1,251,953 Spark New Zealand Ltd. 3,917,162
--------------
SINGAPORE -- 0.8%
1,892,036 Singapore Telecommunications
Ltd. 3,431,882
--------------
SOUTH KOREA -- 11.0%
716,163 BNK Financial Group, Inc. 4,296,662
101,703 DB Insurance Co., Ltd. 4,250,543
608,557 DGB Financial Group, Inc. 4,538,300
104,487 Hana Financial Group, Inc. 3,951,441
761,980 Industrial Bank of Korea 6,167,207
66,700 KB Financial Group, Inc. 3,312,163
65,099 KT&G Corp. 4,682,181
1,770,035 Meritz Securities Co., Ltd. 7,209,950
136,521 Samsung Securities Co., Ltd. 4,758,784
619,213 Woori Financial Group, Inc. 5,526,001
--------------
48,693,232
--------------
SPAIN -- 9.7%
180,717 ACS Actividades de Construccion
y Servicios S.A. 5,989,073
See Notes to Financial Statements Page 43
<PAGE>
FIRST TRUST DOW JONES GLOBAL SELECT DIVIDEND INDEX FUND (FGD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
SPAIN (CONTINUED)
281,013 Cia de Distribucion Integral
Logista Holdings S.A. $ 5,569,312
338,392 Enagas S.A. 7,349,360
2,968,055 Mapfre S.A. 6,181,635
203,921 Naturgy Energy Group S.A. 4,998,005
314,087 Red Electrica Corp., S.A. 5,561,800
1,579,032 Telefonica S.A. 7,068,082
--------------
42,717,267
--------------
SWEDEN -- 1.0%
1,023,530 Telia Co., AB 4,433,544
--------------
SWITZERLAND -- 2.9%
32,141 Helvetia Holding AG 3,774,693
52,086 Swiss Re AG 5,122,906
9,463 Zurich Insurance Group AG 4,038,908
--------------
12,936,507
--------------
UNITED KINGDOM -- 7.7%
177,457 British American Tobacco PLC 6,786,408
643,956 Drax Group PLC 3,728,601
1,124,182 Jupiter Fund Management PLC 4,317,756
1,289,724 Legal & General Group PLC 4,962,460
478,471 Phoenix Group Holdings PLC 4,842,955
52,387 Rio Tinto PLC 4,008,270
1,284,945 Standard Life Aberdeen PLC 5,135,387
--------------
33,781,837
--------------
UNITED STATES -- 13.5%
121,991 Altria Group, Inc. 6,241,060
185,327 AT&T, Inc. 5,609,848
42,125 Comerica, Inc. 3,022,047
121,637 First Financial Bancorp 2,919,288
195,654 H&R Block, Inc. 4,265,257
178,282 Huntington Bancshares, Inc. 2,802,593
436,876 Lumen Technologies, Inc. 5,832,295
54,408 Marathon Petroleum Corp. 2,910,284
292,754 Navient Corp. 4,189,310
262,860 Northwest Bancshares, Inc. 3,798,327
42,598 Prudential Financial, Inc. 3,880,678
200,399 Umpqua Holdings Corp. 3,517,002
79,715 Universal Corp. 4,702,388
109,463 Unum Group 3,046,355
118,057 Waddell & Reed Financial, Inc.,
Class A 2,957,328
--------------
59,694,060
--------------
TOTAL INVESTMENTS -- 99.2% 438,205,824
(Cost $397,146,140) (d)
NET OTHER ASSETS AND
LIABILITIES -- 0.8% 3,744,833
--------------
NET ASSETS -- 100.0% $ 441,950,657
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(c) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(d) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2021, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $52,606,886 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $11,547,202. The net unrealized appreciation
was $41,059,684.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
LEVEL 1 SIGNIFICANT SIGNIFICANT
QUOTED OBSERVABLE UNOBSERVABLE
PRICES INPUTS INPUTS
--------------------------------------------
Common Stocks* $ 438,205,824 $ -- $ --
============================================
* See Portfolio of Investments for country breakout.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
Euro 23.7%
United States Dollar 16.0
Canadian Dollar 13.4
South Korean Won 11.1
Hong Kong Dollar 10.6
British Pound Sterling 10.5
Japanese Yen 6.3
Swiss Franc 2.9
Australian Dollar 2.8
Swedish Krona 1.0
New Zealand Dollar 0.9
Singapore Dollar 0.8
------
Total 100.0%
======
Page 44 See Notes to Financial Statements
<PAGE>
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.8%
AUSTRALIA -- 1.7%
966,630 AGL Energy Ltd. $ 7,085,061
--------------
BERMUDA -- 0.5%
27,271,676 Concord New Energy Group Ltd. 1,964,490
--------------
CANADA -- 15.3%
429,393 Boralex, Inc., Class A 13,503,311
509,959 Innergex Renewable Energy, Inc. 8,915,254
915,452 Northland Power, Inc. 33,181,220
519,375 TransAlta Renewables, Inc. 8,501,268
--------------
64,101,053
--------------
CAYMAN ISLANDS -- 0.5%
2,068,723 China High Speed Transmission
Equipment Group Co., Ltd. 2,088,920
--------------
CHINA -- 7.7%
11,317,406 China Datang Corp. Renewable
Power Co., Ltd., Class H 2,154,559
16,251,352 China Longyuan Power Group
Corp., Ltd., Class H 22,075,131
2,553,168 China Suntien Green Energy
Corp., Ltd., Class H 975,407
3,763,806 Xinjiang Goldwind Science &
Technology Co., Ltd.,
Class H (b) 7,068,544
--------------
32,273,641
--------------
DENMARK -- 16.2%
200,260 Orsted A/S (c) (d) 32,344,046
173,115 Vestas Wind Systems A/S 35,533,162
--------------
67,877,208
--------------
FRANCE -- 2.4%
556,007 Engie S.A. (e) 7,892,844
44,711 Neoen S.A. (b) (c) (d) (e) 2,241,501
--------------
10,134,345
--------------
GERMANY -- 7.5%
29,976 Energiekontor AG 2,045,903
347,770 Nordex SE (e) 11,166,421
171,351 PNE AG 1,486,986
214,400 RWE AG 8,402,716
91,910 SGL Carbon SE (e) 651,011
215,019 Siemens Energy AG (e) 7,718,424
--------------
31,471,461
--------------
GREECE -- 0.9%
242,389 Terna Energy S.A. 3,581,557
--------------
ITALY -- 4.9%
856,619 Enel S.p.A. 8,531,734
552,977 Falck Renewables S.p.A. 3,958,961
251,754 Prysmian S.p.A. 8,180,905
--------------
20,671,600
--------------
JAPAN -- 1.9%
1,247,210 Toray Industries, Inc. 8,025,623
--------------
NETHERLANDS -- 0.3%
54,594 SIF Holding N.V. (e) 1,035,886
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
PORTUGAL -- 1.9%
1,415,790 EDP - Energias de Portugal S.A. $ 8,085,675
--------------
SOUTH KOREA -- 1.9%
88,231 CS Wind Corp. 5,909,352
46,662 Dongkuk Structures &
Construction Co., Ltd. 279,539
514,382 Unison Co., Ltd. (e) 1,947,539
--------------
8,136,430
--------------
SPAIN -- 13.7%
40,316 Acciona S.A. 6,756,132
326,974 Endesa S.A. 8,650,492
644,539 Iberdrola S.A. 8,303,051
872,639 Siemens Gamesa Renewable
Energy S.A. 33,770,463
--------------
57,480,138
--------------
SWEDEN -- 2.8%
117,315 Arise AB (e) 667,612
104,588 Eolus Vind AB, Class B (e) 2,450,200
297,741 SKF AB, Class B 8,461,641
--------------
11,579,453
--------------
SWITZERLAND -- 3.9%
282,679 ABB Ltd. 8,541,832
31,904 BKW AG 3,470,064
1,738 Gurit Holding AG 4,413,268
--------------
16,425,164
--------------
UNITED KINGDOM -- 2.1%
440,438 SSE PLC 8,834,626
--------------
UNITED STATES -- 13.7%
176,686 Alliant Energy Corp. 9,569,314
39,190 American Superconductor
Corp. (e) 743,042
67,665 Arcosa, Inc. 4,404,315
61,807 Broadwind, Inc. (e) 407,926
95,291 Duke Energy Corp. 9,198,440
650,393 General Electric Co. 8,539,660
117,486 Hexcel Corp. (e) 6,579,216
110,996 NextEra Energy, Inc. 8,392,408
167,228 TPI Composites, Inc. (e) 9,436,676
--------------
57,270,997
--------------
TOTAL COMMON STOCKS -- 99.8% 418,123,328
(Cost $342,010,156) --------------
MONEY MARKET FUNDS -- 0.1%
243,270 Morgan Stanley Institutional
Liquidity Funds - Treasury
Portfolio - Institutional
Class - 0.01% (f) 243,270
(Cost $243,270) --------------
See Notes to Financial Statements Page 45
<PAGE>
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
PRINCIPAL
VALUE DESCRIPTION VALUE
-------------------------------------------------------------
REPURCHASE AGREEMENTS -- 1.3%
$ 1,798,504 Bank of America Corp.,
0.00% (f), dated 03/31/21, due
04/01/21, with a maturity
value of $1,798,504.
Collateralized by U.S.
Treasury Note, interest rate
of 2.000%, due 11/30/2022. The
value of the collateral
including accrued interest is
$1,834,476. (g) $ 1,798,504
2,597,008 JPMorgan Chase & Co.,
0.01% (f), dated 03/31/21, due
04/01/21, with a maturity
value of $2,597,009.
Collateralized by U.S.
Treasury Securities, interest
rate of 0.000% to 2.500%, due
01/15/2022 to 11/15/2050. The
value of the collateral
including accrued interest is
$2,648,948. (g) 2,597,008
1,013,519 Mizuho Financial Group, Inc.,
0.00% (f), dated 03/31/21, due
04/01/21, with a maturity
value of $1,013,519.
Collateralized by U.S.
Treasury Securities, interest
rate of 0.500% to 2.875%, due
08/15/2021 to 11/15/2029. The
value of the collateral
including accrued interest is
$1,033,790. (g) 1,013,519
--------------
TOTAL REPURCHASE AGREEMENTS
-- 1.3% 5,409,031
(Cost $5,409,031) --------------
TOTAL INVESTMENTS -- 101.2% 423,775,629
(Cost $347,662,457) (h)
NET OTHER ASSETS AND
LIABILITIES -- (1.2)% (5,077,279)
--------------
NET ASSETS -- 100.0% $ 418,698,350
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) All or a portion of this security is on loan (see Note 2E - 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 is $5,151,441 and the
total value of the collateral held by the Fund is $5,409,031.
(c) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(e) Non-income producing security.
(f) Rate shown reflects yield as of March 31, 2021.
(g) This security serves as collateral for securities on loan.
(h) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2021, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $80,028,942 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $3,915,770. The net unrealized appreciation was
$76,113,172.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/21 PRICES INPUTS INPUTS
----------------------------------------------------------
Common
Stocks* $ 418,123,328 $ 418,123,328 $ -- $ --
Money Market
Funds 243,270 243,270 -- --
Repurchase
Agreements 5,409,031 -- 5,409,031 --
----------------------------------------------------------
Total
Investments $ 423,775,629 $ 418,366,598 $ 5,409,031 $ --
==========================================================
* See Portfolio of Investments for country breakout.
Page 46 See Notes to Financial Statements
<PAGE>
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (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) $ 5,151,441
Non-cash Collateral(2) (5,151,441)
--------------
Net Amount $ --
==============
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At March 31, 2021, 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:
REPURCHASE AGREEMENTS
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(3) $ 5,409,031
Non-cash Collateral(4) (5,409,031)
--------------
Net Amount $ --
==============
(3) The amount is included in "Investments, at value" on the Statements of
Assets and Liabilities.
(4) At March 31, 2021, the value of the collateral received from each seller
exceeded the value of the repurchase agreements.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
Euro 31.3%
Danish Krone 16.0
Canadian Dollar 15.1
United States Dollar 14.8
Hong Kong Dollar 8.6
Swiss Franc 3.9
Swedish Krona 2.7
British Pound Sterling 2.1
South Korean Won 1.9
Japanese Yen 1.9
Australian Dollar 1.7
------
Total 100.0%
======
See Notes to Financial Statements Page 47
<PAGE>
FIRST TRUST GLOBAL ENGINEERING AND CONSTRUCTION ETF (FLM)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.4%
AUSTRALIA -- 2.9%
5,678 CIMIC Group Ltd. (b) $ 75,861
37,227 Downer EDI Ltd. 145,055
1,892 Monadelphous Group Ltd. 14,945
--------------
235,861
--------------
CANADA -- 4.6%
1,064 Aecon Group, Inc. 16,451
6,784 SNC-Lavalin Group, Inc. 145,213
5,018 Stantec, Inc. 214,823
--------------
376,487
--------------
CAYMAN ISLANDS -- 1.3%
154,745 China State Construction
International Holdings Ltd. 106,095
--------------
CHINA -- 1.9%
297,427 China Railway Group Ltd.,
Class H 157,243
--------------
FINLAND -- 0.3%
4,569 YIT OYJ 24,294
--------------
FRANCE -- 8.5%
5,805 Bouygues S.A. 232,750
2,223 Eiffage S.A. (b) 222,527
2,441 Vinci S.A. 250,074
--------------
705,351
--------------
GERMANY -- 1.8%
1,658 HOCHTIEF AG 148,353
--------------
IRELAND -- 2.8%
2,700 Kingspan Group PLC 228,924
--------------
ITALY -- 0.1%
5,850 Webuild S.p.A. 12,239
--------------
JAPAN -- 28.8%
2,000 Chiyoda Corp. (b) 8,634
6,000 COMSYS Holdings Corp. 184,782
18,400 JGC Holdings Corp. 225,337
15,200 Kajima Corp. 215,662
5,800 Kandenko Co., Ltd. 50,863
8,300 Kinden Corp. 141,301
2,170 Kumagai Gumi Co., Ltd. 58,892
6,700 Kyowa Exeo Corp. 176,811
8,500 Maeda Corp. 73,389
1,400 Maeda Road Construction Co.,
Ltd. 27,096
3,400 Nippo Corp. 92,734
4,120 Nishimatsu Construction Co.,
Ltd. (c) 104,484
21,700 Obayashi Corp. 198,921
1,300 Okumura Corp. 34,541
16,200 Penta-Ocean Construction Co.,
Ltd. 127,142
2,200 Raito Kogyo Co., Ltd. 37,354
24,600 Shimizu Corp. 199,066
2,600 SHO-BOND Holdings Co., Ltd. 112,007
5,900 Taisei Corp. 227,528
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
JAPAN (CONTINUED)
12,100 Toda Corp. $ 88,626
--------------
2,385,170
--------------
NETHERLANDS -- 2.6%
1,888 Arcadis N.V. (b) 76,961
4,237 Boskalis Westminster (b) 136,044
--------------
213,005
--------------
PHILIPPINES -- 0.6%
9,130 Manila Electric Co. 51,164
--------------
SOUTH KOREA -- 3.6%
19,730 Daewoo Engineering &
Construction Co., Ltd. (b) 115,234
4,824 GS Engineering & Construction
Corp. 183,284
--------------
298,518
--------------
SPAIN -- 3.9%
7,174 ACS Actividades de Construccion
y Servicios S.A. 237,751
34,257 Sacyr S.A. 87,658
--------------
325,409
--------------
SWEDEN -- 5.3%
5,415 NCC AB, Class B 91,392
10,245 Peab AB, Class B (b) 123,877
8,976 Skanska AB, Class B 225,082
--------------
440,351
--------------
UNITED KINGDOM -- 1.7%
33,990 Balfour Beatty PLC (b) 138,327
--------------
UNITED STATES -- 28.7%
4,295 AECOM (b) 275,352
2,482 Dycom Industries, Inc. (b) 230,454
2,121 EMCOR Group, Inc. 237,891
9,808 Fluor Corp. (b) 226,467
3,440 Granite Construction, Inc. 138,460
2,273 Jacobs Engineering Group, Inc. 293,831
7,384 KBR, Inc. 283,472
3,458 MasTec, Inc. (b) 324,014
3,522 Quanta Services, Inc. 309,865
2,967 Tutor Perini Corp. (b) 56,225
--------------
2,376,031
--------------
TOTAL COMMON STOCKS -- 99.4% 8,222,822
(Cost $7,016,102) --------------
MONEY MARKET FUNDS -- 1.2%
101,117 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
0.02% (d) (e) 101,117
(Cost $101,117) --------------
TOTAL INVESTMENTS -- 100.6% 8,323,939
(Cost $7,117,219) (f)
NET OTHER ASSETS AND
LIABILITIES -- (0.6)% (51,096)
--------------
NET ASSETS -- 100.0% $ 8,272,843
==============
Page 48 See Notes to Financial Statements
<PAGE>
FIRST TRUST GLOBAL ENGINEERING AND CONSTRUCTION ETF (FLM)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) Non-income producing security.
(c) All or a portion of this security is on loan (see Note 2E - 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 is $94,035 and the
total value of the collateral held by the Fund is $101,117.
(d) Rate shown reflects yield as of March 31, 2021.
(e) This security serves as collateral for securities on loan.
(f) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2021, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $2,014,634 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $807,914. The net unrealized appreciation was
$1,206,720.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
LEVEL 1 SIGNIFICANT SIGNIFICANT
QUOTED OBSERVABLE UNOBSERVABLE
PRICES INPUTS INPUTS
--------------------------------------------
Common Stocks* $ 8,222,822 $ -- $ --
Money Market
Funds 101,117 -- --
--------------------------------------------
Total Investments $ 8,323,939 $ -- $ --
============================================
* See Portfolio of Investments for country breakout.
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
-------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 94,035
Non-cash Collateral(2) (94,035)
--------------
Net Amount $ --
==============
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At March 31, 2021, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 29.8%
Japanese Yen 28.6
Euro 19.9
Swedish Krona 5.3
Canadian Dollar 4.5
South Korean Won 3.6
Hong Kong Dollar 3.2
Australian Dollar 2.8
British Pound Sterling 1.7
Philippine Peso 0.6
------
Total 100.0%
======
See Notes to Financial Statements Page 49
<PAGE>
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) SMART GRID INFRASTRUCTURE INDEX FUND (GRID)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.7%
BELGIUM -- 3.1%
74,824 Elia Group S.A./N.V. $ 8,239,388
--------------
CANADA -- 0.3%
15,062 Fortis, Inc. 653,561
1,657 Stella-Jones, Inc. 67,219
--------------
720,780
--------------
CAYMAN ISLANDS -- 0.1%
543,534 Wasion Holdings Ltd. 167,798
--------------
CHINA -- 0.2%
26,856 BYD Co., Ltd., Class H 569,655
--------------
FRANCE -- 8.4%
59,723 Engie S.A. (b) 847,803
140,172 Schneider Electric SE 21,410,532
--------------
22,258,335
--------------
GERMANY -- 2.2%
59,662 E. ON SE 694,341
273 PSI Software AG 8,580
24,137 Siemens AG 3,962,778
22,128 SMA Solar Technology AG (b) 1,300,075
--------------
5,965,774
--------------
IRELAND -- 18.6%
160,547 Eaton Corp. PLC 22,200,439
374,648 Johnson Controls International
PLC 22,355,246
181,349 nVent Electric PLC 5,061,451
--------------
49,617,136
--------------
ITALY -- 8.8%
216,524 Enel S.p.A. 2,156,531
310,898 Prysmian S.p.A. 10,102,827
1,492,721 Terna Rete Elettrica Nazionale
S.p.A. 11,269,848
--------------
23,529,206
--------------
JAPAN -- 2.2%
2,335 GS Yuasa Corp. 63,265
31,224 Hitachi Ltd. 1,411,108
47,099 Meidensha Corp. 1,023,863
8,353 NEC Corp. 491,863
8,225 NGK Insulators Ltd. 150,349
61,290 Nissin Electric Co., Ltd. 688,596
49,726 Osaki Electric Co., Ltd. 273,948
79,170 Panasonic Corp. 1,017,823
12,300 Takaoka Toko Co., Ltd. 175,405
13,186 Toshiba Corp. 445,388
--------------
5,741,608
--------------
JERSEY -- 7.2%
139,494 Aptiv PLC (b) 19,236,223
--------------
NETHERLANDS -- 1.3%
23,704 Alfen Beheer BV (b) (c) (d) 1,951,404
7,329 NXP Semiconductors N.V. 1,475,621
2,093 STMicroelectronics N.V. 80,225
--------------
3,507,250
--------------
SOUTH KOREA -- 3.8%
17,421 Samsung SDI Co., Ltd. 10,159,364
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
SPAIN -- 3.3%
501,882 Red Electrica Corp., S.A. $ 8,887,242
--------------
SWITZERLAND -- 8.8%
724,437 ABB Ltd. 21,890,621
24,804 Landis+Gyr Group AG 1,669,084
--------------
23,559,705
--------------
TAIWAN -- 0.1%
15,451 Advantech Co., Ltd. 191,696
--------------
UNITED KINGDOM -- 0.7%
106,511 National Grid PLC 1,268,670
31,275 SSE PLC 627,337
--------------
1,896,007
--------------
UNITED STATES -- 30.6%
38,190 Advanced Energy Industries, Inc. 4,169,202
17,609 AES (The) Corp. 472,097
27,823 American Superconductor
Corp. (b) 527,524
11,189 Analog Devices, Inc. 1,735,190
1,338 Arcosa, Inc. 87,090
614 AZZ, Inc. 30,915
1,168 Belden, Inc. 51,824
116,456 Cisco Systems, Inc. 6,021,940
681 Digi International, Inc. (b) 12,932
19,362 Emerson Electric Co. 1,746,840
1,240 EnerSys 112,592
59,359 Enphase Energy, Inc. (b) 9,625,655
622 ESCO Technologies, Inc. 67,730
1,744 Generac Holdings, Inc. (b) 571,073
260,297 General Electric Co. 3,417,700
22,443 Honeywell International, Inc. 4,871,702
1,612 Hubbell, Inc. 301,267
28,835 International Business Machines
Corp. 3,842,552
37,056 Itron, Inc. (b) 3,285,014
1,508 MasTec, Inc. (b) 141,300
13,770 MYR Group, Inc. (b) 986,896
9,526 NVIDIA Corp. 5,086,217
57,951 Oracle Corp. 4,066,422
124,637 Quanta Services, Inc. 10,965,563
35,033 SolarEdge Technologies, Inc. (b) 10,069,886
1,134 SPX Corp. (b) 66,078
7,736 Tesla, Inc. (b) 5,167,106
6,721 Trimble, Inc. (b) 522,827
636 Valmont Industries, Inc. 151,158
108,729 Veoneer, Inc. (b) (e) 2,661,686
1,341 WESCO International, Inc. (b) 116,037
11,899 Willdan Group, Inc. (b) 488,454
--------------
81,440,469
--------------
TOTAL COMMON STOCKS -- 99.7% 265,687,636
(Cost $229,617,177) --------------
MONEY MARKET FUNDS -- 0.4%
1,008,504 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
0.02% (f) (g) 1,008,504
(Cost $1,008,504) --------------
Page 50 See Notes to Financial Statements
<PAGE>
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) SMART GRID INFRASTRUCTURE INDEX FUND (GRID)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
TOTAL INVESTMENTS -- 100.1% $ 266,696,140
(Cost $230,625,681) (h)
NET OTHER ASSETS AND
LIABILITIES -- (0.1)% (328,126)
--------------
NET ASSETS -- 100.0% $ 266,368,014
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) Non-income producing security.
(c) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(e) All or a portion of this security is on loan (see Note 2E - 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 is $1,013,472 and the
total value of the collateral held by the Fund is $1,008,504.
(f) Rate shown reflects yield as of March 31, 2021.
(g) This security serves as collateral for securities on loan.
(h) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2021, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $36,961,031 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $890,572. The net unrealized appreciation was
$36,070,459.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
LEVEL 1 SIGNIFICANT SIGNIFICANT
QUOTED OBSERVABLE UNOBSERVABLE
PRICES INPUTS INPUTS
--------------------------------------------
Common Stocks* $ 265,687,636 $ -- $ --
Money Market
Funds 1,008,504 -- --
--------------------------------------------
Total Investments $ 266,696,140 $ -- $ --
============================================
* See Portfolio of Investments for country breakout.
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
-------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 1,013,472
Non-cash Collateral(2) (1,008,504)
--------------
Net Amount $ 4,968
==============
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) The Collateral requirements are determined at the beginning of each
business day based on the market value of the loaned securities from the
end of the prior day. On March 31, 2021, there was sufficient collateral
based on the end of day market value from the prior business day; however,
as a result of market movement from March 30 to March 31, the value of the
related securities loaned was above the collateral value received.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 57.3%
Euro 26.6
Swiss Franc 8.8
South Korean Won 3.8
Japanese Yen 2.1
British Pound Sterling 0.7
Hong Kong Dollar 0.3
Canadian Dollar 0.3
New Taiwan Dollar 0.1
------
Total 100.0%
======
See Notes to Financial Statements Page 51
<PAGE>
FIRST TRUST INDXX GLOBAL NATURAL RESOURCES INCOME ETF (FTRI)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.2%
AUSTRALIA -- 4.5%
58,455 Fortescue Metals Group Ltd. $ 887,545
--------------
BERMUDA -- 0.1%
31,496 China Water Affairs Group Ltd. 25,767
--------------
CANADA -- 12.8%
28,888 Canadian Natural Resources Ltd. 893,052
53,201 Cenovus Energy, Inc. 399,632
16,051 Nutrien Ltd. 864,989
1,646 Premium Brands Holdings Corp. 156,833
11,686 Tourmaline Oil Corp. 222,431
--------------
2,536,937
--------------
CAYMAN ISLANDS -- 0.1%
59,473 China Zhongwang Holdings
Ltd. (b) 14,612
--------------
HONG KONG -- 1.0%
118,994 Guangdong Investment Ltd. 193,780
--------------
INDIA -- 0.1%
15,358 Oil India Ltd. 25,795
--------------
IRELAND -- 0.6%
8,315 Glanbia PLC 123,936
--------------
ISRAEL -- 1.0%
22,235 Delek Drilling, L.P. (c) 32,151
29,159 ICL Group Ltd. (d) 169,414
--------------
201,565
--------------
JAPAN -- 1.6%
34,025 Inpex Corp. 232,313
4,426 Itoham Yonekyu Holdings, Inc. 29,140
1,226 Japan Petroleum Exploration Co.,
Ltd. 22,754
1,812 Nippon Light Metal Holdings Co.,
Ltd. 36,216
--------------
320,423
--------------
JERSEY -- 0.3%
47,531 Centamin PLC 68,148
--------------
LUXEMBOURG -- 0.4%
1,993 APERAM S.A. 89,795
--------------
NORWAY -- 3.3%
4,523 Aker BP ASA 128,395
2,218 Salmar ASA 152,999
7,079 Yara International ASA 368,138
--------------
649,532
--------------
RUSSIA -- 7.4%
74,363 Magnitogorsk Iron & Steel Works
PJSC 59,325
2,556 MMC Norilsk Nickel PJSC 804,222
1,936 PhosAgro PJSC 103,624
63,944 Tatneft PJSC 505,649
--------------
1,472,820
--------------
SOUTH AFRICA -- 1.9%
4,303 African Rainbow Minerals Ltd. 81,077
10,219 Exxaro Resources Ltd. 120,371
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
SOUTH AFRICA (CONTINUED)
4,074 Kumba Iron Ore Ltd. $ 167,956
--------------
369,404
--------------
SWEDEN -- 1.1%
6,733 Lundin Energy AB 211,547
--------------
TAIWAN -- 2.9%
482,598 China Steel Corp. 438,064
65,653 TA Chen Stainless Pipe 72,135
29,516 Taiwan Fertilizer Co., Ltd. 58,446
--------------
568,645
--------------
THAILAND -- 1.0%
50,349 PTT Exploration & Production
PCL 183,673
55,250 TTW PCL 20,862
--------------
204,535
--------------
UNITED KINGDOM -- 33.6%
45,427 Anglo American PLC 1,780,143
33,741 BHP Group PLC, ADR 1,952,254
12,211 Ferrexpo PLC 63,061
17,737 Pennon Group PLC 238,411
25,142 Rio Tinto PLC, ADR (d) 1,952,276
10,065 Severn Trent PLC 319,973
28,781 United Utilities Group PLC 367,336
--------------
6,673,454
--------------
UNITED STATES -- 25.5%
15,699 Archer-Daniels-Midland Co. 894,843
8,989 CF Industries Holdings, Inc. 407,921
33,939 ConocoPhillips 1,797,749
2,322 Domtar Corp. 85,798
16,551 International Paper Co. 894,913
10,859 Ovintiv, Inc. 258,661
9,798 Tyson Foods, Inc., Class A 727,991
--------------
5,067,876
--------------
TOTAL COMMON STOCKS -- 99.2% 19,706,116
(Cost $17,636,060) --------------
MONEY MARKET FUNDS -- 9.4%
1,859,156 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
0.02% (e) (f) 1,859,156
(Cost $1,859,156) --------------
TOTAL INVESTMENTS -- 108.6% 21,565,272
(Cost $19,495,216) (g)
Net Other Assets and
Liabilities -- (8.6)% (1,702,382)
--------------
NET ASSETS -- 100.0% $ 19,862,890
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) Non-income producing security.
Page 52 See Notes to Financial Statements
<PAGE>
FIRST TRUST INDXX GLOBAL NATURAL RESOURCES INCOME ETF (FTRI)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
(c) Security is a Master Limited Partnership ("MLP").
(d) All or a portion of this security is on loan (see Note 2E - 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 is $1,816,476 and the
total value of the collateral held by the Fund is $1,859,156.
(e) Rate shown reflects yield as of March 31, 2021.
(f) This security serves as collateral for securities on loan.
(g) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2021, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $2,112,841 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $42,785. The net unrealized appreciation was
$2,070,056.
ADR - American Depositary Receipt
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/21 PRICES INPUTS INPUTS
----------------------------------------------------------
Common Stocks:
Thailand $ 204,535 $ -- $ 204,535 $ --
Other Country
Categories* 19,501,581 19,501,581 -- --
Money Market
Funds 1,859,156 1,859,156 -- --
----------------------------------------------------------
Total
Investments $ 21,565,272 $ 21,360,737 $ 204,535 $ --
==========================================================
* See Portfolio of Investments for country breakout.
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
-------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 1,816,476
Non-cash Collateral(2) (1,816,476)
--------------
Net Amount $ --
==============
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At March 31, 2021, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 55.0%
British Pound Sterling 13.2
Canadian Dollar 7.8
Russian Ruble 6.8
Australian Dollar 4.1
Norwegian Krone 3.0
New Taiwan Dollar 2.6
South African Rand 1.7
Japanese Yen 1.5
Hong Kong Dollar 1.1
Euro 1.0
Swedish Krona 1.0
Thai Baht 0.9
Israeli Shekel 0.2
Indian Rupee 0.1
------
Total 100.0%
======
See Notes to Financial Statements Page 53
<PAGE>
FIRST TRUST INDXX GLOBAL AGRICULTURE ETF (FTAG)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.7%
AUSTRALIA -- 1.0%
14,251 Incitec Pivot Ltd. (b) $ 31,499
2,786 Nufarm Ltd. (b) 11,236
--------------
42,735
--------------
BERMUDA -- 1.9%
1,028 Bunge Ltd. 81,490
--------------
CANADA -- 4.3%
3,343 Nutrien Ltd. 180,092
--------------
CHILE -- 1.3%
1,033 Sociedad Quimica y Minera de
Chile S.A., ADR 54,821
--------------
CHINA -- 0.1%
12,000 China BlueChemical Ltd.,
Class H 2,902
2,000 First Tractor Co., Ltd.,
Class H (b) 862
--------------
3,764
--------------
GERMANY -- 22.5%
4,861 BASF SE 403,825
6,472 Bayer AG 409,542
3,419 Evonik Industries AG 120,926
1,404 K+S AG 13,949
--------------
948,242
--------------
INDIA -- 7.1%
330 Bayer CropScience Ltd. 24,111
3,054 Chambal Fertilizers and
Chemicals Ltd. 9,568
2,149 Coromandel International Ltd. 22,766
990 Escorts Ltd. 17,438
1,409 Godrej Agrovet Ltd. (c) (d) 10,094
9,120 Mahindra & Mahindra Ltd. 99,197
1,114 PI Industries Ltd. 34,406
3,662 Sumitomo Chemical India Ltd. 14,560
1,869 Tata Chemicals Ltd. 19,218
5,604 UPL Ltd. 49,196
--------------
300,554
--------------
JAPAN -- 8.9%
8,300 Kubota Corp. 188,863
1,000 Kumiai Chemical Industry Co.,
Ltd. 9,067
1,500 Mitsui Chemicals, Inc. 47,347
1,100 Nissan Chemical Corp. 58,713
300 Sakata Seed Corp. 11,082
12,100 Sumitomo Chemical Co., Ltd. 62,617
--------------
377,689
--------------
MALAYSIA -- 2.7%
58,701 Petronas Chemicals Group Bhd 113,254
--------------
MEXICO -- 1.0%
15,409 Orbia Advance Corp. SAB de CV 41,087
--------------
NETHERLANDS -- 4.5%
9,934 CNH Industrial N.V. (b) 155,368
1,546 OCI N.V. (b) 33,413
--------------
188,781
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
NORWAY -- 2.4%
1,967 Yara International ASA $ 102,292
--------------
QATAR -- 3.4%
44,392 Industries Qatar QSC 145,668
--------------
RUSSIA -- 1.2%
950 PhosAgro PJSC 50,848
--------------
SINGAPORE -- 4.5%
47,000 Wilmar International Ltd. 189,370
--------------
SWITZERLAND -- 0.9%
75 Bucher Industries AG 38,216
--------------
TAIWAN -- 0.3%
7,191 Taiwan Fertilizer Co., Ltd. 14,239
--------------
TURKEY -- 0.5%
2,451 Gubre Fabrikalari TAS (b) 21,698
--------------
UNITED STATES -- 31.2%
552 AGCO Corp. 79,295
87 Alamo Group, Inc. 13,585
1,570 CF Industries Holdings, Inc. 71,247
249 Compass Minerals International,
Inc. 15,617
5,341 Corteva, Inc. 248,997
1,161 Deere & Co. 434,376
949 FMC Corp. 104,969
80 Lindsay Corp. 13,330
2,782 Mosaic (The) Co. 87,939
263 Raven Industries, Inc. 10,081
409 Scotts Miracle-Gro (The) Co. 100,193
325 SiteOne Landscape Supply,
Inc. (b) 55,490
790 Toro (The) Co. 81,481
--------------
1,316,600
--------------
TOTAL COMMON STOCKS -- 99.7% 4,211,440
(Cost $3,273,709) --------------
RIGHTS (a) -- 0.0%
CHILE -- 0.0%
164 Sociedad Quimica y Minera de
Chile S.A., expiring
4/26/21 (b) (e) 509
(Cost $0) --------------
TOTAL INVESTMENTS -- 99.7% 4,211,949
(Cost $3,273,709) (f)
NET OTHER ASSETS AND
LIABILITIES -- 0.3% 11,730
--------------
NET ASSETS -- 100.0% $ 4,223,679
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) Non-income producing security.
Page 54 See Notes to Financial Statements
<PAGE>
FIRST TRUST INDXX GLOBAL AGRICULTURE ETF (FTAG)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
(c) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(e) Pursuant to procedures adopted by the Trust's Board of Trustees, this
security has been determined to be illiquid by First Trust Advisors, L.P.,
the Fund's Advisor.
(f) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2021, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $1,145,849 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $207,609. The net unrealized appreciation was
$938,240.
ADR - American Depositary Receipt
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
LEVEL 1 SIGNIFICANT SIGNIFICANT
QUOTED OBSERVABLE UNOBSERVABLE
PRICES INPUTS INPUTS
--------------------------------------------
Common Stocks* $ 4,211,440 $ -- $ --
Rights* 509 -- --
--------------------------------------------
Total Investments $ 4,211,949 $ -- $ --
============================================
* See Portfolio of Investments for country breakout.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 38.2%
Euro 23.3
Japanese Yen 9.0
Indian Rupee 7.1
Singapore Dollar 4.5
Canadian Dollar 4.3
Qatar Riyal 3.5
Malaysian Ringgit 2.7
Norwegian Krone 2.4
Russian Ruble 1.2
Australian Dollar 1.0
Mexican Peso 1.0
Swiss Franc 0.9
Turkish Lira 0.5
New Taiwan Dollar 0.3
Hong Kong Dollar 0.1
------
Total 100.0%
======
See Notes to Financial Statements Page 55
<PAGE>
FIRST TRUST BICK INDEX FUND (BICK)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.9%
BRAZIL -- 23.2%
336,255 Ambev S.A., ADR $ 921,339
117,700 Azul S.A. (Preference Shares) (b) 792,522
58,276 B2W Cia Digital (b) 630,112
88,215 B3 S.A. - Brasil Bolsa Balcao 856,815
207,114 Banco Bradesco S.A., ADR 973,436
170,361 Banco do Brasil S.A. 924,044
147,443 Centrais Eletricas Brasileiras
S.A. 892,991
145,379 Cia Siderurgica Nacional S.A. 974,505
184,717 Gerdau S.A. (Preference Shares) 987,800
189,283 Itau Unibanco Holding S.A., ADR 938,844
480,263 Itausa S.A. (Preference Shares) 875,432
185,074 JBS S.A. 989,709
82,390 Localiza Rent a Car S.A. 877,379
130,350 Lojas Renner S.A. 984,460
197,627 Magazine Luiza S.A. 705,027
103,501 Natura & Co. Holding S.A. (b) 883,187
108,128 Petroleo Brasileiro S.A., ADR 916,925
264,012 Rumo S.A. (b) 945,136
65,308 Suzano S.A. (b) 798,387
50,737 Vale S.A., ADR 881,809
402,580 Via Varejo S.A. (b) 861,857
61,225 WEG S.A. 814,608
--------------
19,426,324
--------------
CAYMAN ISLANDS -- 21.7%
3,606 Alibaba Group Holding Ltd.,
ADR (b) 817,588
56,000 ANTA Sports Products Ltd. 913,392
3,025 Baidu, Inc., ADR (b) 658,089
2,680 BeiGene Ltd., ADR (b) 932,854
6,807 Bilibili, Inc., ADR (b) 728,758
8,337 GSX Techedu, Inc., ADR (b) (c) 282,458
9,134 JD.com, Inc., ADR (b) 770,270
19,552 Meituan, Class B (b) (d) (e) 749,978
7,806 NetEase, Inc., ADR 806,048
48,274 New Oriental Education &
Technology Group, Inc.,
ADR (b) 675,836
18,730 NIO, Inc., ADR (b) 730,095
14,768 Pagseguro Digital Ltd.,
Class A (b) 683,758
5,010 Pinduoduo, Inc., ADR (b) 670,739
106,000 Smoore International Holdings
Ltd. (b) (d) (e) 644,936
9,992 StoneCo., Ltd., Class A (b) 611,710
34,310 Sunny Optical Technology Group
Co., Ltd. 782,050
11,058 TAL Education Group, ADR (b) 595,473
10,003 Tencent Holdings Ltd. 784,892
33,338 Tencent Music Entertainment
Group, ADR (b) 683,096
21,735 Trip.com Group Ltd., ADR (b) 861,358
22,976 Vipshop Holdings Ltd., ADR (b) 686,063
69,426 Wuxi Biologics Cayman,
Inc. (b) (d) (e) 869,377
19,426 XP, Inc., Class A (b) 731,777
662,841 Yatra Online, Inc. (b) 1,544,420
--------------
18,215,015
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
CHINA -- 5.1%
33,500 BYD Co., Ltd., Class H $ 710,584
1,068,074 China Construction Bank Corp.,
Class H 898,522
111,500 China Merchants Bank Co., Ltd.,
Class H 851,227
1,314,412 Industrial & Commercial Bank
of China Ltd., Class H 943,443
70,025 Ping An Insurance (Group) Co.
of China Ltd., Class H 833,642
--------------
4,237,418
--------------
INDIA -- 20.4%
31,121 Axis Bank Ltd., GDR (b) (d) 1,487,584
25,532 Dr. Reddy's Laboratories Ltd.,
ADR 1,567,409
19,348 HDFC Bank Ltd., ADR (b) 1,503,146
92,183 ICICI Bank Ltd., ADR (b) 1,477,693
89,437 Infosys Ltd., ADR 1,674,261
26,675 Reliance Industries Ltd., GDR (e) 1,475,127
486,084 Sify Technologies Ltd.,
ADR (b) (c) 1,715,877
29,277 State Bank of India, GDR (b) (d) 1,452,139
69,630 Tata Motors Ltd., ADR (b) 1,447,608
136,103 Vedanta Ltd., ADR 1,710,815
249,782 Wipro Ltd., ADR 1,583,618
--------------
17,095,277
--------------
JERSEY -- 1.8%
20,495 WNS (Holdings) Ltd., ADR (b) 1,484,658
--------------
MAURITIUS -- 1.7%
45,638 MakeMyTrip Ltd. (b) 1,441,248
--------------
SOUTH KOREA -- 26.0%
7,670 Celltrion Healthcare Co.,
Ltd. (f) 921,688
6,268 Celltrion Pharm, Inc. (f) 830,749
3,238 Celltrion, Inc. (f) 928,413
2,545 Green Cross Corp. 810,667
21,384 Hanwha Solutions Corp. (b) 946,621
9,848 HLB, Inc. (f) 341,101
3,179 Hyundai Mobis Co., Ltd. 820,206
4,065 Hyundai Motor Co. 783,009
1,974 Kakao Corp. 868,612
12,133 Kia Motors Corp. 888,735
42,438 Korea Electric Power Corp. 868,071
34,222 Korean Air Lines Co., Ltd. (b) 822,477
1,159 LG Chem Ltd. 824,383
6,576 LG Electronics, Inc. 871,570
2,569 NAVER Corp. 855,766
3,422 POSCO 967,563
1,284 Samsung Biologics Co.,
Ltd. (b) (d) (e) 848,625
7,929 Samsung C&T Corp. 872,242
5,084 Samsung Electro-Mechanics Co.,
Ltd. 842,280
11,677 Samsung Electronics Co., Ltd. 839,857
1,429 Samsung SDI Co., Ltd. 833,347
11,496 Shin Poong Pharmaceutical Co.,
Ltd. 864,422
Page 56 See Notes to Financial Statements
<PAGE>
FIRST TRUST BICK INDEX FUND (BICK)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
SOUTH KOREA (CONTINUED)
29,236 Shinhan Financial Group Co., Ltd. $ 967,429
3,670 SK Holdings Co., Ltd. 914,460
6,808 SK Hynix, Inc. 797,049
3,698 SK Innovation Co., Ltd. (b) 715,584
--------------
21,844,926
--------------
TOTAL COMMON STOCKS -- 99.9% 83,744,866
(Cost $68,110,404) --------------
MONEY MARKET FUNDS -- 0.7%
599,654 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
0.02% (g) (h) 599,654
(Cost $599,654) --------------
TOTAL INVESTMENTS -- 100.6% 84,344,520
(Cost $68,710,058) (i)
NET OTHER ASSETS AND
LIABILITIES -- (0.6)% (474,096)
--------------
NET ASSETS -- 100.0% $ 83,870,424
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) Non-income producing security.
(c) All or a portion of this security is on loan (see Note 2E - Securities
Lending in the Notes to Financial Statements). The remaining contractual
maturity of all of the securities lending transactions is overnight and
continuous. The aggregate value of such securities is $596,802 and the
total value of the collateral held by the Fund is $599,654.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the Securities Act of 1933, as
amended (the "1933 Act").
(e) This security is exempt from registration upon resale under Rule 144A of
the 1933 Act, and may be resold in transactions exempt from registration,
normally to qualified institutional buyers. This security is not
restricted on the foreign exchange where it trades freely without any
additional registration. As such, it does not require the additional
disclosure required of restricted securities.
(f) Non-income producing security which makes payment-in-kind ("PIK")
distributions. For the six months ended March 31, 2021, the Fund received
140, 50 and 9,424 shares of Celltrion Healthcare Co., Ltd., Celltrion,
Inc. and HLB, Inc., respectively. There were no in-kind distributions
received from Celltrion Pharm, Inc.
(g) Rate shown reflects yield as of March 31, 2021.
(h) This security serves as collateral for securities on loan.
(i) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2021, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $20,297,849 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $4,663,387. The net unrealized appreciation was
$15,634,462.
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
LEVEL 1 SIGNIFICANT SIGNIFICANT
QUOTED OBSERVABLE UNOBSERVABLE
PRICES INPUTS INPUTS
--------------------------------------------
Common Stocks* $ 83,744,866 $ -- $ --
Money Market
Funds 599,654 -- --
--------------------------------------------
Total Investments $ 84,344,520 $ -- $ --
============================================
* See Portfolio of Investments for country breakout.
See Notes to Financial Statements Page 57
<PAGE>
FIRST TRUST BICK INDEX FUND (BICK)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (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) $ 596,802
Non-cash Collateral(2) (596,802)
--------------
Net Amount $ --
==============
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At March 31, 2021, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 45.9%
South Korean Won 25.9
Brazilian Real 17.5
Hong Kong Dollar 10.7
------
Total 100.0%
======
Page 58 See Notes to Financial Statements
<PAGE>
FIRST TRUST INDXX NEXTG ETF (NXTG)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.8%
AUSTRALIA -- 0.5%
1,878,374 Telstra Corp., Ltd. $ 4,850,841
--------------
BERMUDA -- 1.5%
301,794 Marvell Technology Group Ltd. 14,781,870
--------------
BRAZIL -- 0.4%
470,048 Telefonica Brasil S.A., ADR 3,699,278
--------------
CANADA -- 1.3%
93,358 BCE, Inc. 4,214,371
89,824 Rogers Communications, Inc.,
Class B 4,142,039
213,445 TELUS Corp. 4,251,236
--------------
12,607,646
--------------
CAYMAN ISLANDS -- 1.2%
142,368 GDS Holdings Ltd., ADR (b) 11,544,621
--------------
CHINA -- 1.7%
85,791,622 China Tower Corp., Ltd.,
Class H (c) (d) 12,690,905
1,752,489 ZTE Corp., Class H 4,449,921
--------------
17,140,826
--------------
FINLAND -- 1.7%
79,082 Elisa OYJ 4,742,713
3,083,314 Nokia OYJ, ADR (b) 12,209,923
--------------
16,952,636
--------------
FRANCE -- 0.4%
342,674 Orange S.A. 4,221,489
--------------
GERMANY -- 2.5%
236,032 Deutsche Telekom AG 4,752,582
367,579 Infineon Technologies AG 15,585,026
1,519,805 Telefonica Deutschland
Holding AG 4,455,704
--------------
24,793,312
--------------
GUERNSEY -- 1.4%
194,765 Amdocs Ltd. 13,662,765
--------------
HONG KONG -- 2.5%
17,246,555 Lenovo Group Ltd. 24,536,203
--------------
INDIA -- 8.0%
625,775 Bharti Airtel Ltd. 4,427,531
1,100,518 HCL Technologies Ltd. 14,790,980
835,480 Infosys Ltd., ADR 15,640,185
342,611 Tata Consultancy Services Ltd. 14,891,404
1,028,659 Tech Mahindra Ltd. 13,949,004
2,434,193 Wipro Ltd., ADR 15,432,784
--------------
79,131,888
--------------
ITALY -- 1.7%
1,088,870 Infrastrutture Wireless Italiane
S.p.A. (c) (d) 12,130,763
8,871,870 Telecom Italia S.p.A. 4,798,361
--------------
16,929,124
--------------
JAPAN -- 10.0%
98,532 Fujitsu Ltd. 14,238,085
152,048 KDDI Corp. 4,662,027
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
JAPAN (CONTINUED)
218,471 Kyocera Corp. $ 13,860,996
899,865 Mitsubishi Electric Corp. 13,706,230
249,359 NEC Corp. 14,683,411
173,566 Nippon Telegraph & Telephone
Corp. 4,454,952
1,333,359 Renesas Electronics Corp. (b) 14,450,493
341,798 SoftBank Corp. 4,440,519
137,676 Sony Corp. 14,417,279
--------------
98,913,992
--------------
MALAYSIA -- 1.1%
12,733,455 DiGi.Com Bhd 11,178,048
--------------
NETHERLANDS -- 3.1%
81,822 NXP Semiconductors N.V. 16,474,041
362,648 STMicroelectronics N.V. 13,830,067
--------------
30,304,108
--------------
NEW ZEALAND -- 0.4%
1,337,737 Spark New Zealand Ltd. 4,185,567
--------------
NORWAY -- 0.4%
245,200 Telenor ASA 4,314,504
--------------
PHILIPPINES -- 0.8%
101,010 Globe Telecom, Inc. 3,912,414
151,217 PLDT, Inc., ADR (e) 3,955,837
--------------
7,868,251
--------------
QATAR -- 0.4%
2,200,774 Ooredoo QPSC 4,272,526
--------------
RUSSIA -- 0.4%
484,921 Mobile TeleSystems PJSC, ADR 4,044,241
--------------
SINGAPORE -- 0.5%
2,451,252 Singapore Telecommunications
Ltd. 4,446,220
--------------
SOUTH AFRICA -- 1.0%
954,152 MTN Group Ltd. 5,614,370
524,320 Vodacom Group Ltd. 4,485,138
--------------
10,099,508
--------------
SOUTH KOREA -- 5.7%
385,755 KT Corp., ADR 4,798,792
147,642 LG Electronics, Inc. 19,568,191
193,208 Samsung Electronics Co., Ltd. 13,896,294
80,486 Samsung SDS Co., Ltd. 13,761,026
19,612 SK Telecom Co., Ltd. 4,765,452
--------------
56,789,755
--------------
SPAIN -- 0.4%
916,369 Telefonica S.A. 4,101,862
--------------
SWEDEN -- 2.3%
321,171 Tele2 AB, Class B 4,332,073
1,046,583 Telefonaktiebolaget LM Ericsson,
Class B 13,847,067
1,031,710 Telia Co., AB 4,468,977
--------------
22,648,117
--------------
SWITZERLAND -- 0.4%
7,974 Swisscom AG 4,277,435
--------------
See Notes to Financial Statements Page 59
<PAGE>
FIRST TRUST INDXX NEXTG ETF (NXTG)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
TAIWAN -- 5.9%
4,533,271 ASE Technology Holding Co.,
Ltd. $ 17,079,404
1,115,999 Chunghwa Telecom Co., Ltd. 4,361,052
515,349 MediaTek, Inc. 17,501,601
1,236,831 Taiwan Mobile Co., Ltd. 4,256,713
124,245 Taiwan Semiconductor
Manufacturing Co., Ltd., ADR 14,695,699
--------------
57,894,469
--------------
TURKEY -- 0.4%
2,205,299 Turkcell Iletisim Hizmetleri AS 3,998,102
--------------
UNITED ARAB EMIRATES -- 0.5%
913,296 Emirates Telecommunications
Group Co. PJSC 5,380,593
--------------
UNITED KINGDOM -- 1.0%
2,382,942 BT Group PLC (b) 5,085,396
2,417,863 Vodafone Group PLC 4,395,933
--------------
9,481,329
--------------
UNITED STATES -- 40.3%
141,280 Advanced Micro Devices, Inc. (b) 11,090,480
59,022 American Tower Corp. 14,109,799
91,661 Analog Devices, Inc. 14,214,788
105,078 Apple, Inc. 12,835,278
46,856 Arista Networks, Inc. (b) 14,145,358
139,835 AT&T, Inc. 4,232,805
31,582 Broadcom, Inc. 14,643,310
280,910 Ciena Corp. (b) 15,371,395
292,190 Cisco Systems, Inc. 15,109,145
109,292 CoreSite Realty Corp. 13,098,646
82,369 Crown Castle International Corp. 14,178,176
193,744 CyrusOne, Inc. 13,120,344
99,875 Digital Realty Trust, Inc. 14,066,395
18,849 Equinix, Inc. 12,809,592
75,550 F5 Networks, Inc. (b) 15,761,241
1,068,474 Hewlett Packard Enterprise Co. 16,817,781
257,657 Intel Corp. 16,490,048
103,632 International Business Machines
Corp. 13,810,000
589,436 Juniper Networks, Inc. 14,930,414
103,800 Keysight Technologies, Inc. (b) 14,884,920
146,592 Lumentum Holdings, Inc. (b) 13,391,179
181,677 Micron Technology, Inc. (b) 16,025,728
24,958 NVIDIA Corp. 13,325,825
81,792 Qorvo, Inc. (b) 14,943,398
83,147 QUALCOMM, Inc. 11,024,461
46,989 SBA Communications Corp. 13,041,797
88,978 Skyworks Solutions, Inc. 16,325,683
32,871 T-Mobile US, Inc. (b) 4,118,408
70,924 Verizon Communications, Inc. 4,124,231
30,255 VMware, Inc., Class A (b) (e) 4,551,865
90,018 Xilinx, Inc. 11,153,230
--------------
397,745,720
--------------
TOTAL COMMON STOCKS -- 99.8% 986,796,846
(Cost $812,041,286) --------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
MONEY MARKET FUNDS -- 0.3%
2,869,968 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
0.02% (f) (g) $ 2,869,968
(Cost $2,869,968) --------------
TOTAL INVESTMENTS -- 100.1% 989,666,814
(Cost $814,911,254) (h)
NET OTHER ASSETS AND
LIABILITIES -- (0.1)% (1,412,887)
--------------
NET ASSETS -- 100.0% $ 988,253,927
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) Non-income producing security.
(c) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(e) All or a portion of this security is on loan (see Note 2E - 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 is $2,812,859 and the
total value of the collateral held by the Fund is $2,869,968.
(f) Rate shown reflects yield as of March 31, 2021.
(g) This security serves as collateral for securities on loan.
(h) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2021, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $184,379,786 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $9,624,226. The net unrealized appreciation was
$174,755,560.
ADR - American Depositary Receipt
Page 60 See Notes to Financial Statements
<PAGE>
FIRST TRUST INDXX NEXTG ETF (NXTG)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
LEVEL 1 SIGNIFICANT SIGNIFICANT
QUOTED OBSERVABLE UNOBSERVABLE
PRICES INPUTS INPUTS
--------------------------------------------
Common Stocks* $ 986,796,846 $ -- $ --
Money Market
Funds 2,869,968 -- --
--------------------------------------------
Total Investments $ 989,666,814 $ -- $ --
============================================
* See Portfolio of Investments for country breakout.
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
-------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 2,812,859
Non-cash Collateral(2) (2,812,859)
--------------
Net Amount $ --
==============
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At March 31, 2021, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 53.7%
Japanese Yen 10.0
Euro 6.9
South Korean Won 5.3
Indian Rupee 4.9
New Taiwan Dollar 4.4
Hong Kong Dollar 4.2
Swedish Krona 2.3
Canadian Dollar 1.3
Malaysian Ringgit 1.1
South African Rand 1.0
British Pound Sterling 1.0
United Arab Emirates Dirham 0.5
Australian Dollar 0.5
Singapore Dollar 0.5
Norwegian Krone 0.4
Swiss Franc 0.4
Qatar Riyal 0.4
New Zealand Dollar 0.4
Turkish Lira 0.4
Philippine Peso 0.4
------
Total 100.0%
======
See Notes to Financial Statements Page 61
<PAGE>
FIRST TRUST NASDAQ GLOBAL AUTO INDEX FUND (CARZ)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.6%
BERMUDA -- 0.8%
643,307 Brilliance China Automotive
Holdings Ltd. (b) $ 604,075
--------------
CAYMAN ISLANDS -- 3.7%
833,635 Geely Automobile Holdings Ltd. 2,121,056
230,003 Yadea Group Holdings Ltd. (c) (d) 510,651
--------------
2,631,707
--------------
CHINA -- 7.2%
375,352 BAIC Motor Corp., Ltd.,
Class H (c) (d) 120,223
106,733 BYD Co., Ltd., Class H 2,263,963
466,981 Dongfeng Motor Group Co., Ltd.,
Class H 433,697
659,256 Great Wall Motor Co., Ltd.,
Class H 1,827,474
600,035 Guangzhou Automobile Group
Co., Ltd., Class H 504,010
--------------
5,149,367
--------------
FRANCE -- 2.6%
44,034 Renault S.A. (e) 1,907,023
--------------
GERMANY -- 22.8%
31,191 Bayerische Motoren Werke AG 3,236,039
67,326 Daimler AG 6,001,254
32,572 Porsche Automobil Holding SE
(Preference Shares) 3,453,802
12,890 Volkswagen AG (Preference
Shares) 3,606,715
--------------
16,297,810
--------------
JAPAN -- 32.0%
198,064 Honda Motor Co., Ltd. 5,937,001
146,160 Isuzu Motors Ltd. 1,569,512
127,697 Mazda Motor Corp. (e) 1,040,259
145,835 Mitsubishi Motors Corp. (e) 414,884
501,809 Nissan Motor Co., Ltd. (e) 2,791,277
130,910 Subaru Corp. 2,605,786
62,711 Suzuki Motor Corp. 2,845,995
73,252 Toyota Motor Corp. 5,700,061
--------------
22,904,775
--------------
MALAYSIA -- 0.1%
143,955 DRB-Hicom Bhd 66,657
49,719 UMW Holdings Bhd 39,089
--------------
105,746
--------------
SINGAPORE -- 0.5%
21,050 Jardine Cycle & Carriage Ltd. 352,241
--------------
SOUTH KOREA -- 7.4%
12,832 Hyundai Motor Co. 2,471,726
38,304 Kia Motors Corp. 2,805,745
--------------
5,277,471
--------------
TAIWAN -- 0.4%
54,172 China Motor Corp. (e) 125,876
106,358 Yulon Motor Co., Ltd. (e) 164,198
--------------
290,074
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
UNITED KINGDOM -- 0.7%
17,358 Aston Martin Lagonda Global
Holdings PLC (c) (d) (e) $ 478,358
--------------
UNITED STATES -- 21.4%
231,367 Ford Motor Co. (e) 2,834,246
105,474 General Motors Co. (e) 6,060,536
26,742 Harley-Davidson, Inc. 1,072,354
8,015 Tesla, Inc. (e) 5,353,459
--------------
15,320,595
--------------
TOTAL INVESTMENTS -- 99.6% 71,319,242
(Cost $61,816,793) (f)
NET OTHER ASSETS AND
LIABILITIES -- 0.4% 266,727
--------------
NET ASSETS -- 100.0% $ 71,585,969
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures adopted by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940, as
amended. At March 31, 2021, securities noted as such are valued at
$604,075 or 0.8% of net assets.
(c) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(e) Non-income producing security.
(f) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2021, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $10,889,492 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $1,387,043. The net unrealized appreciation was
$9,502,449.
Page 62 See Notes to Financial Statements
<PAGE>
FIRST TRUST NASDAQ GLOBAL AUTO INDEX FUND (CARZ)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/21 PRICES INPUTS INPUTS
----------------------------------------------------------
Common Stocks:
Bermuda $ 604,075 $ -- $ 604,075 $ --
Other Country
Categories* 70,715,167 70,715,167 -- --
----------------------------------------------------------
Total
Investments $ 71,319,242 $ 70,715,167 $ 604,075 $ --
==========================================================
* See Portfolio of Investments for country breakout.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
Japanese Yen 32.1%
Euro 25.5
United States Dollar 21.5
Hong Kong Dollar 11.8
South Korean Won 7.4
British Pound Sterling 0.7
Singapore Dollar 0.5
New Taiwan Dollar 0.4
Malaysian Ringgit 0.1
------
Total 100.0%
======
See Notes to Financial Statements Page 63
<PAGE>
FIRST TRUST CLOUD COMPUTING ETF (SKYY)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 100.0%
CANADA -- 2.3%
845,745 Open Text Corp. $ 40,350,494
88,281 Shopify, Inc., Class A (b) 97,682,927
--------------
138,033,421
--------------
CAYMAN ISLANDS -- 6.2%
951,250 Alibaba Group Holding Ltd.,
ADR (b) 215,676,912
3,841,190 Kingsoft Cloud Holdings Ltd.,
ADR (b) 151,035,591
--------------
366,712,503
--------------
GERMANY -- 1.3%
611,185 SAP SE, ADR (c) 75,047,406
--------------
JERSEY -- 0.6%
879,077 Mimecast Ltd. (b) 35,347,686
--------------
NETHERLANDS -- 0.5%
280,488 Elastic N.V. (b) 31,190,266
--------------
UNITED KINGDOM -- 1.7%
475,746 Atlassian Corp. PLC, Class A (b) 100,268,227
--------------
UNITED STATES -- 87.4%
246,012 Adobe, Inc. (b) 116,946,724
1,595,550 Akamai Technologies, Inc. (b) 162,586,545
111,860 Alphabet, Inc., Class A (b) 230,713,487
73,124 Amazon.com, Inc. (b) 226,251,506
580,010 Anaplan, Inc. (b) 31,233,539
229,818 Appfolio, Inc., Class A (b) 32,498,563
438,567 Appian Corp. (b) (c) 58,307,483
808,209 Arista Networks, Inc. (b) 243,990,215
1,088,503 Asana, Inc., Class A (b) 31,109,416
240,187 Avalara, Inc. (b) 32,048,151
303,941 Blackline, Inc. (b) 32,947,204
2,054,217 Box, Inc., Class A (b) 47,164,822
3,360,363 Cisco Systems, Inc. 173,764,371
1,128,759 Citrix Systems, Inc. 158,432,613
4,670,987 Cloudera, Inc. (b) 56,845,912
509,597 Cloudflare, Inc., Class A (b) 35,804,285
108,862 Coupa Software, Inc. (b) 27,703,202
174,512 Crowdstrike Holdings, Inc.,
Class A (b) 31,850,185
395,083 Datadog, Inc., Class A (b) 32,926,217
166,306 DocuSign, Inc. (b) 33,668,650
1,182,956 Domo, Inc., Class B (b) 66,588,593
1,671,984 Dropbox, Inc., Class A (b) 44,575,093
246,001 Everbridge, Inc. (b) 29,810,401
1,536,893 Fastly, Inc., Class A (b) (c) 103,402,161
610,477 Five9, Inc. (b) 95,435,869
7,766,801 Hewlett Packard Enterprise Co. 122,249,448
219,582 HubSpot, Inc. (b) 99,736,340
950,851 International Business
Machines Corp. 126,710,404
96,618 Intuit, Inc. 37,010,491
15,335,588 Lumen Technologies, Inc. 204,730,100
973,274 Microsoft Corp. 229,468,811
150,697 MicroStrategy, Inc., Class A (b) 102,293,124
488,365 MongoDB, Inc. (b) 130,603,452
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
UNITED STATES (CONTINUED)
1,806,464 NetApp, Inc. $ 131,275,739
3,505,956 Oracle Corp. 246,012,933
105,201 Palo Alto Networks, Inc. (b) 33,881,034
100,725 Paycom Software, Inc. (b) 37,274,294
197,160 Paylocity Holding Corp. (b) 35,455,283
4,836,811 Pure Storage, Inc., Class A (b) 104,184,909
309,279 Q2 Holdings, Inc. (b) 30,989,756
387,966 Qualys, Inc. (b) 40,651,077
10,759,716 Rackspace Technology, Inc. (b) 255,866,046
522,330 salesforce.com, Inc. (b) 110,666,057
211,984 ServiceNow, Inc. (b) 106,015,318
544,330 Smartsheet, Inc., Class A (b) 34,793,574
145,238 Snowflake, Inc., Class A (b) 33,300,169
790,747 Splunk, Inc. (b) 107,130,404
554,580 Sprout Social, Inc., Class A (b) 32,032,541
2,024,430 SVMK, Inc. (b) 37,087,558
929,589 Tabula Rasa HealthCare,
Inc. (b) (c) 42,807,573
287,835 Twilio, Inc., Class A (b) 98,082,655
134,572 Veeva Systems, Inc., Class A (b) 35,155,589
1,636,417 VMware, Inc., Class A (b) (c) 246,198,938
153,744 Workday, Inc., Class A (b) 38,194,622
372,663 Workiva, Inc. (b) 32,891,236
257,937 Zendesk, Inc. (b) 34,207,605
100,894 Zoom Video Communications,
Inc., Class A (b) 32,416,233
183,851 Zscaler, Inc. (b) 31,561,701
--------------
5,157,540,221
--------------
TOTAL COMMON STOCKS
-- 100.0% 5,904,139,730
(Cost $4,726,529,327) --------------
MONEY MARKET FUNDS -- 6.5%
384,079,190 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
0.02% (d) (e) 384,079,190
(Cost $384,079,190) --------------
TOTAL INVESTMENTS -- 106.5% 6,288,218,920
(Cost $5,110,608,517) (f)
NET OTHER ASSETS AND
LIABILITIES -- (6.5)% (383,022,828)
--------------
NET ASSETS -- 100.0% $5,905,196,092
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) Non-income producing security.
Page 64 See Notes to Financial Statements
<PAGE>
FIRST TRUST CLOUD COMPUTING ETF (SKYY)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
(c) All or a portion of this security is on loan (see Note 2E - 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 is $381,780,069 and the
total value of the collateral held by the Fund is $384,079,190.
(d) Rate shown reflects yield as of March 31, 2021.
(e) This security serves as collateral for securities on loan.
(f) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2021, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $1,229,241,991 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $51,631,588. The net unrealized appreciation
was $1,177,610,403.
ADR - American Depositary Receipt
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
LEVEL 1 SIGNIFICANT SIGNIFICANT
QUOTED OBSERVABLE UNOBSERVABLE
PRICES INPUTS INPUTS
--------------------------------------------
Common Stocks* $5,904,139,730 $ -- $ --
Money Market
Funds 384,079,190 -- --
--------------------------------------------
Total Investments $6,288,218,920 $ -- $ --
============================================
* See Portfolio of Investments for country breakout.
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
-------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 381,780,069
Non-cash Collateral(2) (381,780,069)
--------------
Net Amount $ --
==============
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At March 31, 2021, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
See Notes to Financial Statements Page 65
<PAGE>
FIRST TRUST INTERNATIONAL EQUITY OPPORTUNITIES ETF (FPXI)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.8%
AUSTRALIA -- 0.6%
611,373 Netwealth Group Ltd. $ 6,259,681
--------------
BERMUDA -- 0.5%
410,795 Liberty Latin America Ltd.,
Class C (b) 5,332,119
--------------
BRAZIL -- 1.5%
4,793,270 Magazine Luiza S.A. 17,099,813
--------------
CANADA -- 0.4%
75,363 Lightspeed POS, Inc. (b) 4,739,347
--------------
CAYMAN ISLANDS -- 29.5%
207,875 Bilibili, Inc., ADR (b) 22,255,097
7,906,858 China Feihe Ltd. (c) (d) 22,375,693
4,354,545 Country Garden Services
Holdings Co., Ltd. 44,138,633
261,663 Farfetch Ltd., Class A (b) 13,873,372
3,127,652 Haidilao International Holding
Ltd. (c) (d) 21,383,145
378,231 Huazhu Group Ltd., ADR (b) 20,764,882
1,715,335 Jiumaojiu International Holdings
Ltd. (b) (c) (d) 6,862,134
3,608,480 JS Global Lifestyle Co.,
Ltd. (c) (d) 9,770,714
1,042,343 Meituan, Class B (b) (c) (d) 39,982,337
242,015 Pinduoduo, Inc., ADR (b) 32,400,968
226,207 Sea Ltd., ADR (b) 50,496,189
318,775 StoneCo., Ltd., Class A (b) 19,515,405
890,826 Tencent Music Entertainment
Group, ADR (b) 18,253,025
67,954 Zai Lab Ltd., ADR (b) 9,067,102
--------------
331,138,696
--------------
CHINA -- 2.0%
2,976,316 China Merchants Bank Co., Ltd.,
Class H 22,722,161
--------------
FRANCE -- 7.6%
1,427,033 AXA S.A. 38,297,762
405,139 Danone S.A. 27,793,829
422,615 La Francaise des Jeux
SAEM (c) (d) 19,214,503
--------------
85,306,094
--------------
GERMANY -- 7.6%
142,070 BioNTech SE, ADR (b) (e) 15,512,623
95,114 Knorr-Bremse AG 11,870,149
750,307 Siemens Energy AG (b) 26,933,375
570,860 Siemens Healthineers AG (c) (d) 30,928,585
--------------
85,244,732
--------------
ISRAEL -- 0.4%
67,601 Inmode Ltd. (b) 4,892,284
--------------
ITALY -- 1.7%
1,111,238 Nexi S.p.A. (b) (c) (d) 19,390,923
--------------
JAPAN -- 11.5%
94,946 Freee KK (b) 8,060,441
131,495 JMDC, Inc. (b) 6,199,177
278,216 Mercari, Inc. (b) 12,613,631
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
JAPAN (CONTINUED)
4,236,917 SoftBank Corp. $ 55,044,526
1,860,257 Takeda Pharmaceutical Co., Ltd.,
ADR (e) 33,968,293
95,733 TDK Corp. 13,254,341
--------------
129,140,409
--------------
MALAYSIA -- 0.7%
8,332,640 MR DIY Group M Bhd (c) (d) 8,279,387
--------------
MEXICO -- 1.4%
7,007,075 Becle SAB de CV 15,982,281
--------------
NETHERLANDS -- 8.9%
26,860 Adyen N.V. (b) (c) (d) 59,958,029
360,254 Prosus N.V. 40,050,285
--------------
100,008,314
--------------
SAUDI ARABIA -- 9.2%
567,914 Dr. Sulaiman Al Habib Medical
Services Group Co. 18,777,521
8,850,572 Saudi Arabian Oil Co. (c) (d) 84,958,694
--------------
103,736,215
--------------
SWEDEN -- 9.0%
749,170 Embracer Group AB (b) 20,604,759
567,407 EQT AB 18,678,702
368,774 Nordnet AB (b) 5,953,791
134,252 Sinch AB (b) (c) (d) 23,611,640
2,459,095 Telefonaktiebolaget LM Ericsson,
ADR 32,435,463
--------------
101,284,355
--------------
SWITZERLAND -- 0.7%
118,396 Dufry AG (b) (e) 8,062,177
--------------
UNITED ARAB EMIRATES -- 0.8%
7,375,477 Abu Dhabi National Oil Co. for
Distribution PJSC 9,015,665
--------------
UNITED KINGDOM -- 0.5%
2,122,310 Virgin Money UK PLC (b) 5,531,283
--------------
UNITED STATES -- 4.5%
1,011,996 Coupang, Inc. (b) (e) 49,942,003
--------------
VIRGIN ISLANDS -- 0.8%
178,243 Capri Holdings Ltd. (b) 9,090,393
--------------
TOTAL COMMON STOCKS -- 99.8% 1,122,198,332
(Cost $1,033,280,512) --------------
MONEY MARKET FUNDS -- 8.2%
92,002,037 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
0.02% (f) (g) 92,002,037
(Cost $92,002,037) --------------
TOTAL INVESTMENTS -- 108.0% 1,214,200,369
(Cost $1,125,282,549) (h)
NET OTHER ASSETS AND
LIABILITIES -- (8.0)% (90,085,276)
--------------
NET ASSETS -- 100.0% $1,124,115,093
==============
Page 66 See Notes to Financial Statements
<PAGE>
FIRST TRUST INTERNATIONAL EQUITY OPPORTUNITIES ETF (FPXI)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) Non-income producing security.
(c) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(e) All or a portion of this security is on loan (see Note 2E - 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 is $91,080,603 and the
total value of the collateral held by the Fund is $92,002,037.
(f) Rate shown reflects yield as of March 31, 2021.
(g) This security serves as collateral for securities on loan.
(h) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2021, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $108,743,912 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $19,826,092. The net unrealized appreciation
was $88,917,820.
ADR - American Depositary Receipt
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
LEVEL 1 SIGNIFICANT SIGNIFICANT
QUOTED OBSERVABLE UNOBSERVABLE
PRICES INPUTS INPUTS
--------------------------------------------
Common Stocks* $1,122,198,332 $ -- $ --
Money Market
Funds 92,002,037 -- --
--------------------------------------------
Total Investments $1,214,200,369 $ -- $ --
============================================
* See Portfolio of Investments for country breakout.
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
-------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 91,080,603
Non-cash Collateral(2) (91,080,603)
--------------
Net Amount $ --
==============
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At March 31, 2021, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 35.4%
Euro 22.6
Hong Kong Dollar 13.8
Saudi Riyal 8.5
Japanese Yen 7.8
Swedish Krona 5.7
Brazilian Real 1.4
Mexican Peso 1.3
United Arab Emirates Dirham 0.7
Malaysian Ringgit 0.7
Swiss Franc 0.7
Australian Dollar 0.5
British Pound Sterling 0.5
Canadian Dollar 0.4
------
Total 100.0%
======
See Notes to Financial Statements Page 67
<PAGE>
FIRST TRUST NASDAQ CYBERSECURITY ETF (CIBR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 100.0%
FRANCE -- 1.4%
486,131 Thales S.A. $ 48,297,841
--------------
INDIA -- 0.5%
912,929 Infosys Ltd., ADR 17,090,031
--------------
IRELAND -- 6.6%
829,892 Accenture PLC, Class A 229,257,665
--------------
ISRAEL -- 6.2%
944,387 Check Point Software
Technologies Ltd. (b) 105,743,012
709,053 CyberArk Software Ltd. (b) 91,708,915
296,610 Radware Ltd. (b) 7,735,589
710,741 Tufin Software Technologies
Ltd. (b) 7,462,781
--------------
212,650,297
--------------
JAPAN -- 1.5%
1,053,573 Trend Micro, Inc. 52,714,332
--------------
JERSEY -- 1.6%
1,343,112 Mimecast Ltd. (b) 54,006,533
--------------
UNITED KINGDOM -- 3.3%
3,609,675 Avast PLC (c) (d) 22,692,030
11,872,549 BAE Systems PLC 82,656,262
239,665 Ultra Electronics Holdings PLC 6,700,589
--------------
112,048,881
--------------
UNITED STATES -- 78.9%
1,604,382 A10 Networks, Inc. (b) 15,418,111
1,101,686 Akamai Technologies, Inc. (b) 112,261,803
1,349,614 Booz Allen Hamilton Holding
Corp. 108,684,415
4,640,514 Cisco Systems, Inc. 239,960,979
1,407,452 Cloudflare, Inc., Class A (b) 98,887,578
963,978 Crowdstrike Holdings, Inc.,
Class A (b) 175,935,625
548,017 F5 Networks, Inc. (b) 114,327,307
5,388,723 FireEye, Inc. (b) 105,457,309
616,583 Fortinet, Inc. (b) 113,710,237
4,472,077 Juniper Networks, Inc. 113,277,710
1,177,048 Leidos Holdings, Inc. 113,326,181
309,498 ManTech International Corp.,
Class A 26,910,851
398,205 Okta, Inc. (b) 87,776,328
390,605 OneSpan, Inc. (b) 9,569,822
290,564 Palo Alto Networks, Inc. (b) 93,579,042
860,987 Proofpoint, Inc. (b) 108,303,555
1,000,199 Qualys, Inc. (b) 104,800,851
1,044,314 Rapid7, Inc. (b) 77,916,268
957,231 Ribbon Communications, Inc. (b) 7,858,866
1,624,626 Sailpoint Technologies Holdings,
Inc. (b) 82,271,061
639,471 Science Applications
International Corp. 53,453,381
1,455,988 Splunk, Inc. (b) 197,257,254
1,928,209 Tenable Holdings, Inc. (b) 69,772,243
1,701,690 Varonis Systems, Inc. (b) 87,364,765
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
UNITED STATES (CONTINUED)
536,577 VeriSign, Inc. (b) $ 106,650,045
753,282 VMware, Inc., Class A (b) 113,331,277
1,071,262 Zix Corp. (b) 8,088,028
1,015,550 Zscaler, Inc. (b) 174,339,468
--------------
2,720,490,360
--------------
TOTAL INVESTMENTS -- 100.0% 3,446,555,940
(Cost $2,872,378,987) (e)
NET OTHER ASSETS AND
LIABILITIES -- 0.0% 1,700,409
--------------
NET ASSETS -- 100.0% $3,448,256,349
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) Non-income producing security.
(c) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(e) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2021, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $612,971,011 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $38,794,058. The net unrealized appreciation
was $574,176,953.
ADR - American Depositary Receipt
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
LEVEL 1 SIGNIFICANT SIGNIFICANT
QUOTED OBSERVABLE UNOBSERVABLE
PRICES INPUTS INPUTS
--------------------------------------------
Common Stocks* $3,446,555,940 $ -- $ --
============================================
* See Portfolio of Investments for country breakout.
Page 68 See Notes to Financial Statements
<PAGE>
FIRST TRUST NASDAQ CYBERSECURITY ETF (CIBR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 93.8%
British Pound Sterling 3.3
Japanese Yen 1.5
Euro 1.4
------
Total 100.0%
======
See Notes to Financial Statements Page 69
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
FIRST TRUST
FIRST TRUST FTSE EPRA/NAREIT
STOXX(R) EUROPEAN DEVELOPED MARKETS
SELECT DIVIDEND REAL ESTATE
INDEX FUND INDEX FUND
(FDD) (FFR)
---------------------- ----------------------
ASSETS:
<S> <C> <C>
Investments, at value ................................................. $ 224,637,779 $ 32,042,924
Cash .................................................................. -- --
Foreign currency, at value ............................................ 8,912,477 --
Receivables:
Reclaims ........................................................... 1,183,585 18,363
Dividends .......................................................... 374,749 144,591
Investment securities sold ......................................... 327,740 2,238
Capital shares sold ................................................ -- --
Securities lending income .......................................... -- --
Prepaid expenses ...................................................... 5,035 4,625
---------------- ----------------
Total Assets ....................................................... 235,441,365 32,212,741
---------------- ----------------
LIABILITIES:
Due to custodian ...................................................... 13,844 --
Due to custodian foreign currency ..................................... -- 1,200
Payables:
Investment securities purchased .................................... 9,113,642 --
Licensing fees ..................................................... 157,760 18,537
Investment advisory fees ........................................... 76,500 10,015
Audit and tax fees ................................................. 19,596 16,221
Shareholder reporting fees ......................................... 14,527 5,835
Trustees' fees ..................................................... 63 52
Foreign capital gains tax .......................................... -- --
Collateral for securities on loan .................................. -- --
Capital shares redeemed ............................................ -- --
Other liabilities ..................................................... 39,968 18,101
---------------- ----------------
Total Liabilities .................................................. 9,435,900 69,961
---------------- ----------------
NET ASSETS ............................................................ $ 226,005,465 $ 32,142,780
================ ================
NET ASSETS CONSIST OF:
Paid-in capital ....................................................... $ 255,021,527 $ 32,727,420
Par value ............................................................. 160,533 6,916
Accumulated distributable earnings (loss) ............................. (29,176,595) (591,556)
---------------- ----------------
NET ASSETS ............................................................ $ 226,005,465 $ 32,142,780
================ ================
NET ASSET VALUE, per share ............................................ $ 14.08 $ 46.48
================ ================
Number of shares outstanding (unlimited number of shares
authorized, par value $0.01 per share) ............................. 16,053,334 691,608
================ ================
Investments, at cost .................................................. $ 190,803,235 $ 30,448,056
================ ================
Foreign currency, at cost (proceeds) .................................. $ 9,007,354 $ (1,221)
================ ================
Securities on loan, at value .......................................... $ -- $ --
================ ================
</TABLE>
Page 70 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST
FIRST TRUST FIRST TRUST GLOBAL NASDAQ(R) CLEAN FIRST TRUST
DOW JONES GLOBAL GLOBAL ENGINEERING EDGE(R) SMART GRID INDXX GLOBAL
SELECT DIVIDEND WIND ENERGY AND CONSTRUCTION INFRASTRUCTURE NATURAL RESOURCES
INDEX FUND ETF ETF INDEX FUND INCOME ETF
(FGD) (FAN) (FLM) (GRID) (FTRI)
--------------------- --------------------- --------------------- --------------------- ---------------------
<S> <C> <C> <C> <C>
$ 438,205,824 $ 423,775,629 $ 8,323,939 $ 266,696,140 $ 21,565,272
-- -- 19,719 132,610 15,042
4,735 156,914 2 7,973,512 1,553
798,763 318,960 630 186,521 595
3,592,402 404,594 53,320 172,863 150,781
3,841,867 -- -- 408,968 --
981,398 4,163,923 -- -- --
-- 19,007 24 257 122
6,144 5,425 4,507 312 --
--------------- --------------- --------------- --------------- ---------------
447,431,133 428,844,452 8,402,141 275,571,183 21,733,365
--------------- --------------- --------------- --------------- ---------------
219,754 -- -- -- --
-- -- -- -- --
4,945,279 4,398,139 -- 7,985,315 --
28,141 111,098 1,948 47,147 --
152,721 102,981 2,379 99,820 11,319
22,455 15,097 15,097 15,097 --
27,129 16,530 4,019 7,188 --
72 3 49 14 --
-- -- -- -- --
-- 5,409,031 101,117 1,008,504 1,859,156
-- -- -- -- --
84,925 93,223 4,689 40,084 --
--------------- --------------- --------------- --------------- ---------------
5,480,476 10,146,102 129,298 9,203,169 1,870,475
--------------- --------------- --------------- --------------- ---------------
$ 441,950,657 $ 418,698,350 $ 8,272,843 $ 266,368,014 $ 19,862,890
=============== =============== =============== =============== ===============
$ 552,940,685 $ 379,121,774 $ 15,405,414 $ 227,458,878 $ 80,150,320
176,500 187,000 1,500 31,000 15,000
(111,166,528) 39,389,576 (7,134,071) 38,878,136 (60,302,430)
--------------- --------------- --------------- --------------- ---------------
$ 441,950,657 $ 418,698,350 $ 8,272,843 $ 266,368,014 $ 19,862,890
=============== =============== =============== =============== ===============
$ 25.04 $ 22.39 $ 55.15 $ 85.93 $ 13.24
=============== =============== =============== =============== ===============
17,650,002 18,700,002 150,002 3,100,002 1,500,002
=============== =============== =============== =============== ===============
$ 397,146,140 $ 347,662,457 $ 7,117,219 $ 230,625,681 $ 19,495,216
=============== =============== =============== =============== ===============
$ 4,728 $ 156,912 $ 2 $ 8,051,955 $ 1,564
=============== =============== =============== =============== ===============
$ -- $ 5,151,441 $ 94,035 $ 1,013,472 $ 1,816,476
=============== =============== =============== =============== ===============
</TABLE>
See Notes to Financial Statements Page 71
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST
INDXX GLOBAL BICK
AGRICULTURE ETF INDEX FUND
(FTAG) (BICK)
---------------------- ----------------------
ASSETS:
<S> <C> <C>
Investments, at value ................................................. $ 4,211,949 $ 84,344,520
Cash .................................................................. 14,828 --
Foreign currency, at value ............................................ -- 12
Receivables:
Reclaims ........................................................... 6,264 --
Dividends .......................................................... 4,473 213,799
Investment securities sold ......................................... -- --
Capital shares sold ................................................ -- --
Securities lending income .......................................... -- 420
Prepaid expenses ...................................................... -- --
---------------- ----------------
Total Assets ....................................................... 4,237,514 84,558,751
---------------- ----------------
LIABILITIES:
Due to custodian ...................................................... -- 41,547
Due to custodian foreign currency ..................................... -- --
Payables:
Investment securities purchased .................................... 8,009 --
Licensing fees ..................................................... -- --
Investment advisory fees ........................................... 2,494 47,126
Audit and tax fees ................................................. -- --
Shareholder reporting fees ......................................... -- --
Trustees' fees ..................................................... -- --
Foreign capital gains tax .......................................... 3,332 --
Collateral for securities on loan .................................. -- 599,654
Capital shares redeemed ............................................ -- --
Other liabilities ..................................................... -- --
---------------- ----------------
Total Liabilities .................................................. 13,835 688,327
---------------- ----------------
NET ASSETS ............................................................ $ 4,223,679 $ 83,870,424
================ ================
NET ASSETS CONSIST OF:
Paid-in capital ....................................................... $ 22,715,392 $ 96,657,238
Par value ............................................................. 1,399 22,500
Accumulated distributable earnings (loss) ............................. (18,493,112) (12,809,314)
---------------- ----------------
NET ASSETS ............................................................ $ 4,223,679 $ 83,870,424
================ ================
NET ASSET VALUE, per share ............................................ $ 30.18 $ 37.28
================ ================
Number of shares outstanding (unlimited number of shares
authorized, par value $0.01 per share) ............................. 139,928 2,250,002
================ ================
Investments, at cost .................................................. $ 3,273,709 $ 68,710,058
================ ================
Foreign currency, at cost (proceeds) .................................. $ -- $ 12
================ ================
Securities on loan, at value .......................................... $ -- $ 596,802
================ ================
</TABLE>
Page 72 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST FIRST TRUST FIRST TRUST
FIRST TRUST NASDAQ GLOBAL CLOUD INTERNATIONAL NASDAQ
INDXX AUTO COMPUTING EQUITY CYBERSECURITY
NEXTG ETF INDEX FUND ETF OPPORTUNITIES ETF ETF
(NXTG) (CARZ) (SKYY) (FPXI) (CIBR)
--------------------- --------------------- --------------------- --------------------- ---------------------
<S> <C> <C> <C> <C>
$ 989,666,814 $ 71,319,242 $ 6,288,218,920 $ 1,214,200,369 $ 3,446,555,940
832,440 28,090 2,558,704 -- 3,297,637
6 25,522 -- 7,062,026 --
43,150 23,277 348,822 50,641 --
2,662,825 231,746 1,182,030 2,772,251 135,009
-- -- -- -- --
3,636,185 -- 14,356,230 9,831,987 --
5,782 -- 47,652 5,875 --
-- -- -- -- --
--------------- --------------- --------------- --------------- ---------------
996,847,202 71,627,877 6,306,712,358 1,233,923,149 3,449,988,586
--------------- --------------- --------------- --------------- ---------------
-- -- -- 856,787 --
-- -- -- -- 52
3,633,243 -- 14,355,042 16,309,766 --
-- -- -- -- --
569,615 41,908 3,082,034 636,711 1,732,185
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
1,520,449 -- -- -- --
2,869,968 -- 384,079,190 92,002,037 --
-- -- -- 2,755 --
-- -- -- -- --
--------------- --------------- --------------- --------------- ---------------
8,593,275 41,908 401,516,266 109,808,056 1,732,237
--------------- --------------- --------------- --------------- ---------------
$ 988,253,927 $ 71,585,969 $ 5,905,196,092 $ 1,124,115,093 $ 3,448,256,349
=============== =============== =============== =============== ===============
$ 778,335,297 $ 61,819,242 $ 4,152,884,105 $ 1,065,722,851 $ 2,844,356,144
136,000 12,500 617,000 171,500 826,500
209,782,630 9,754,227 1,751,694,987 58,220,742 603,073,705
--------------- --------------- --------------- --------------- ---------------
$ 988,253,927 $ 71,585,969 $ 5,905,196,092 $ 1,124,115,093 $ 3,448,256,349
=============== =============== =============== =============== ===============
$ 72.67 $ 57.27 $ 95.71 $ 65.55 $ 41.72
=============== =============== =============== =============== ===============
13,600,002 1,250,002 61,700,002 17,150,002 82,650,002
=============== =============== =============== =============== ===============
$ 814,911,254 $ 61,816,793 $ 5,110,608,517 $ 1,125,282,549 $ 2,872,378,987
=============== =============== =============== =============== ===============
$ 6 $ 25,527 $ -- $ 7,127,636 $ (52)
=============== =============== =============== =============== ===============
$ 2,812,859 $ -- $ 381,780,069 $ 91,080,603 $ --
=============== =============== =============== =============== ===============
</TABLE>
See Notes to Financial Statements Page 73
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
FIRST TRUST
FIRST TRUST FTSE EPRA/NAREIT
STOXX(R) EUROPEAN DEVELOPED MARKETS
SELECT DIVIDEND REAL ESTATE
INDEX FUND INDEX FUND
(FDD) (FFR)
---------------------- ----------------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............................................................. $ 1,953,251 $ 513,923
Securities lending income (net of fees)................................ -- --
Foreign withholding tax................................................ (139,718) (9,923)
---------------- ----------------
Total investment income............................................. 1,813,533 504,000
---------------- ----------------
EXPENSES:
Investment advisory fees............................................... 421,843 61,790
Licensing fees......................................................... 70,216 18,585
Accounting and administration fees..................................... 53,326 10,802
Audit and tax fees..................................................... 16,418 13,669
Shareholder reporting fees............................................. 11,506 7,252
Custodian fees......................................................... 5,899 11,409
Transfer agent fees.................................................... 5,253 769
Listing fees........................................................... 4,121 3,807
Trustees' fees and expenses............................................ 3,075 3,044
Legal fees............................................................. 2,037 686
Registration and filing fees........................................... -- --
Expenses previously waived and expenses reimbursed by the investment
advisor............................................................. -- --
Other expenses......................................................... 3,408 2,489
---------------- ----------------
Total expenses...................................................... 597,102 134,302
Less fees waived and expenses reimbursed by
the investment advisor........................................... -- (41,616)
---------------- ----------------
Net expenses........................................................ 597,102 92,686
---------------- ----------------
NET INVESTMENT INCOME (LOSS)........................................... 1,216,431 411,314
---------------- ----------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments......................................................... 13,710,090 (39,192)
In-kind redemptions................................................. 5,837,782 308,402
Foreign currency transactions....................................... (45,287) 708
Foreign capital gains tax........................................... -- --
---------------- ----------------
Net realized gain (loss)............................................... 19,502,585 269,918
---------------- ----------------
Net change in unrealized appreciation (depreciation) on:
Investments......................................................... 45,188,143 4,756,433
Foreign currency translation........................................ 28,075 (1,589)
Deferred foreign capital gains tax.................................. -- --
---------------- ----------------
Net change in unrealized appreciation (depreciation)................... 45,216,218 4,754,844
---------------- ----------------
NET REALIZED AND UNREALIZED GAIN (LOSS)................................ 64,718,803 5,024,762
---------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS..................................................... $ 65,935,234 $ 5,436,076
================ ================
</TABLE>
(a) Fund is subject to a unitary fee (see Note 3 in the Notes to Financial
Statements).
Page 74 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST
FIRST TRUST FIRST TRUST GLOBAL NASDAQ(R) CLEAN FIRST TRUST
DOW JONES GLOBAL GLOBAL ENGINEERING EDGE(R) SMART GRID INDXX GLOBAL
SELECT DIVIDEND WIND ENERGY AND CONSTRUCTION INFRASTRUCTURE NATURAL RESOURCES
INDEX FUND ETF ETF INDEX FUND INCOME ETF
(FGD) (FAN) (FLM) (GRID) (FTRI)
--------------------- --------------------- --------------------- --------------------- ---------------------
<S> <C> <C> <C> <C>
$ 9,400,985 $ 3,009,337 $ 96,554 $ 1,533,803 $ 356,050
-- 82,518 142 1,303 402
(343,455) (354,596) (10,380) (137,037) (13,039)
--------------- --------------- --------------- --------------- ---------------
9,057,530 2,737,259 86,316 1,398,069 343,413
--------------- --------------- --------------- --------------- ---------------
786,610 734,366 14,696 302,315 34,490 (a)
103,931 183,525 3,671 68,006 --
99,208 92,661 2,914 38,630 --
18,598 11,657 11,774 11,584 --
21,156 23,660 6,507 11,139 --
37,171 47,378 229 5,644 --
9,796 9,173 183 3,774 --
3,807 4,036 4,036 3,011 --
3,108 3,140 3,042 3,067 --
3,662 4,914 570 1,842 --
-- 6,035 -- 2,761 --
-- -- -- 63,759 --
5,423 3,393 1,903 2,234 --
--------------- --------------- --------------- --------------- ---------------
1,092,470 1,123,938 49,525 517,766 34,490
-- (22,389) (23,808) -- --
--------------- --------------- --------------- --------------- ---------------
1,092,470 1,101,549 25,717 517,766 34,490
--------------- --------------- --------------- --------------- ---------------
7,965,060 1,635,710 60,599 880,303 308,923
--------------- --------------- --------------- --------------- ---------------
(3,237,149) (2,078,299) (155,523) (1,865,917) (217,198)
44,785,014 19,958,968 -- 6,333,632 --
(19,976) (27,695) (40) (54,444) (2,225)
-- -- -- -- --
--------------- --------------- --------------- --------------- ---------------
41,527,889 17,852,974 (155,563) 4,413,271 (219,423)
--------------- --------------- --------------- --------------- ---------------
86,455,510 42,375,590 2,095,884 27,752,955 2,273,024
(37,305) (7,755) (333) 34,716 321
-- -- -- -- --
--------------- --------------- --------------- --------------- ---------------
86,418,205 42,367,835 2,095,551 27,787,671 2,273,345
--------------- --------------- --------------- --------------- ---------------
127,946,094 60,220,809 1,939,988 32,200,942 2,053,922
--------------- --------------- --------------- --------------- ---------------
$ 135,911,154 $ 61,856,519 $ 2,000,587 $ 33,081,245 $ 2,362,845
=============== =============== =============== =============== ===============
</TABLE>
See Notes to Financial Statements Page 75
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE SIX MONTHS ENDED MARCH 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
FIRST TRUST
INDXX GLOBAL FIRST TRUST
AGRICULTURE BICK
ETF INDEX FUND
(FTAG) (BICK)
---------------------- ----------------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............................................................. $ 26,614 $ 466,844
Securities lending income (net of fees)................................ -- 5,929
Foreign withholding tax................................................ (2,304) (69,959)
---------------- ----------------
Total investment income............................................. 24,310 402,814
---------------- ----------------
EXPENSES:
Investment advisory fees............................................... 12,820 (a) 252,898 (a)
Licensing fees......................................................... -- --
Accounting and administration fees..................................... -- --
Audit and tax fees..................................................... -- --
Shareholder reporting fees............................................. -- --
Custodian fees......................................................... -- --
Transfer agent fees.................................................... -- --
Listing fees........................................................... -- --
Trustees' fees and expenses............................................ -- --
Legal fees............................................................. -- --
Registration and filing fees........................................... -- --
Expenses previously waived and expenses reimbursed by the investment
advisor............................................................. -- --
Other expenses......................................................... -- --
---------------- ----------------
Total expenses ..................................................... 12,820 252,898
Less fees waived and expenses reimbursed by
the investment advisor........................................... -- --
---------------- ----------------
Net expenses........................................................ 12,820 252,898
---------------- ----------------
NET INVESTMENT INCOME (LOSS)........................................... 11,490 149,916
---------------- ----------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments......................................................... 66,663 3,150,311
In-kind redemptions................................................. -- 369,260
Foreign currency transactions....................................... (170) 20,375
Foreign capital gains tax........................................... (211) --
---------------- ----------------
Net realized gain (loss)............................................... 66,282 3,539,946
---------------- ----------------
Net change in unrealized appreciation (depreciation) on:
Investments......................................................... 1,120,623 13,677,641
Foreign currency translation........................................ (99) (5,815)
Deferred foreign capital gains tax.................................. 746 --
---------------- ----------------
Net change in unrealized appreciation (depreciation)................... 1,121,270 13,671,826
---------------- ----------------
NET REALIZED AND UNREALIZED GAIN (LOSS)................................ 1,187,552 17,211,772
---------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS..................................................... $ 1,199,042 $ 17,361,688
================ ================
</TABLE>
(a) Fund is subject to a unitary fee (see Note 3 in the Notes to Financial
Statements).
Page 76 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST FIRST TRUST FIRST TRUST
FIRST TRUST NASDAQ GLOBAL CLOUD INTERNATIONAL NASDAQ
INDXX AUTO COMPUTING EQUITY CYBERSECURITY
NEXTG ETF INDEX FUND ETF OPPORTUNITIES ETF ETF
(NXTG) (CARZ) (SKYY) (FPXI) (CIBR)
--------------------- --------------------- --------------------- --------------------- ---------------------
<S> <C> <C> <C> <C>
$ 7,886,513 $ 507,798 $ 21,998,830 $ 3,848,436 $ 10,030,679
43,313 370 489,549 67,172 --
(639,624) (61,535) (47,442) (309,138) (220,197)
--------------- --------------- --------------- --------------- ---------------
7,290,202 446,633 22,440,937 3,606,470 9,810,482
--------------- --------------- --------------- --------------- ---------------
2,816,552 (a) 182,372 (a) 17,577,502 (a) 2,554,135 (a) 8,815,427 (a)
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
--------------- --------------- --------------- --------------- ---------------
2,816,552 182,372 17,577,502 2,554,135 8,815,427
-- -- -- -- --
--------------- --------------- --------------- --------------- ---------------
2,816,552 182,372 17,577,502 2,554,135 8,815,427
--------------- --------------- --------------- --------------- ---------------
4,473,650 264,261 4,863,435 1,052,335 995,055
--------------- --------------- --------------- --------------- ---------------
(2,903,350) (243,743) (17,327,282) (26,787,179) (1,444,853)
40,457,064 4,978,855 737,144,352 5,135,507 129,141,320
(147,440) (10,493) -- (174,423) (95,847)
(350,114) -- -- -- --
--------------- --------------- --------------- --------------- ---------------
37,056,160 4,724,619 719,817,070 (21,826,095) 127,600,620
--------------- --------------- --------------- --------------- ---------------
114,415,111 11,354,132 375,022,751 52,442,387 286,142,644
(21,556) (3,163) -- 24,344 (6,141)
(1,520,449) -- -- -- --
--------------- --------------- --------------- --------------- ---------------
112,873,106 11,350,969 375,022,751 52,466,731 286,136,503
--------------- --------------- --------------- --------------- ---------------
149,929,266 16,075,588 1,094,839,821 30,640,636 413,737,123
--------------- --------------- --------------- --------------- ---------------
$ 154,402,916 $ 16,339,849 $ 1,099,703,256 $ 31,692,971 $ 414,732,178
=============== =============== =============== =============== ===============
</TABLE>
See Notes to Financial Statements Page 77
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FIRST TRUST
STOXX(R) EUROPEAN
SELECT DIVIDEND
INDEX FUND
(FDD)
---------------------------------------
SIX MONTHS ENDED
3/31/2021 YEAR ENDED
(UNAUDITED) 9/30/2020
------------------ ------------------
OPERATIONS:
<S> <C> <C>
Net investment income (loss)........................................................ $ 1,216,431 $ 9,746,591
Net realized gain (loss)............................................................ 19,502,585 (68,012,847)
Net increase from payment by the advisor............................................ -- --
Net change in unrealized appreciation (depreciation)................................ 45,216,218 2,157,675
---------------- ----------------
Net increase (decrease) in net assets resulting
from operations.................................................................. 65,935,234 (56,108,581)
---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations............................................................... (1,506,189) (9,499,846)
---------------- ----------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold........................................................... 10,413,535 22,397,192
Cost of shares redeemed............................................................. (29,064,382) (70,479,677)
---------------- ----------------
Net increase (decrease) in net assets resulting
from shareholder transactions.................................................... (18,650,847) (48,082,485)
---------------- ----------------
Total increase (decrease) in net assets............................................. 45,778,198 (113,690,912)
NET ASSETS:
Beginning of period................................................................. 180,227,267 293,918,179
---------------- ----------------
End of period....................................................................... $ 226,005,465 $ 180,227,267
================ ================
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period............................................. 17,553,334 23,053,334
Shares sold......................................................................... 800,000 1,600,000
Shares redeemed..................................................................... (2,300,000) (7,100,000)
---------------- ----------------
Shares outstanding, end of period................................................... 16,053,334 17,553,334
================ ================
</TABLE>
Page 78 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST
FTSE EPRA/NAREIT DOW JONES FIRST TRUST
DEVELOPED MARKETS REAL ESTATE GLOBAL SELECT DIVIDEND GLOBAL WIND ENERGY
INDEX FUND INDEX FUND ETF
(FFR) (FGD) (FAN)
---------------------------------------- --------------------------------------- ---------------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED SIX MONTHS ENDED
3/31/2021 YEAR ENDED 3/31/2021 YEAR ENDED 3/31/2021 YEAR ENDED
(UNAUDITED) 9/30/2020 (UNAUDITED) 9/30/2020 (UNAUDITED) 9/30/2020
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C>
$ 411,314 $ 1,158,864 $ 7,965,060 $ 29,030,096 $ 1,635,710 $ 2,006,911
269,918 (289,037) 41,527,889 (118,795,433) 17,852,974 (2,424,628)
-- -- -- -- -- --
4,754,844 (11,697,826) 86,418,205 (17,797,799) 42,367,835 32,827,377
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
5,436,076 (10,827,999) 135,911,154 (107,563,136) 61,856,519 32,409,660
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
-- (2,248,427) (7,929,776) (29,511,768) (1,410,310) (2,010,555)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
-- 2,470,109 134,940,728 59,303,361 197,916,007 102,329,499
(5,963,839) (13,159,351) (165,460,110) (110,271,559) (44,738,676) (3,155,559)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(5,963,839) (10,689,242) (30,519,382) (50,968,198) 153,177,331 99,173,940
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(527,763) (23,765,668) 97,461,996 (188,043,102) 213,623,540 129,573,045
32,670,543 56,436,211 344,488,661 532,531,763 205,074,810 75,501,765
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
$ 32,142,780 $ 32,670,543 $ 441,950,657 $ 344,488,661 $ 418,698,350 $ 205,074,810
================ ================ ================ ================ ================ ================
841,608 1,141,608 19,300,002 23,250,002 11,750,002 5,750,002
-- 50,000 5,350,000 2,450,000 9,000,000 6,250,000
(150,000) (350,000) (7,000,000) (6,400,000) (2,050,000) (250,000)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
691,608 841,608 17,650,002 19,300,002 18,700,002 11,750,002
================ ================ ================ ================ ================ ================
</TABLE>
See Notes to Financial Statements Page 79
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
FIRST TRUST
GLOBAL ENGINEERING
AND CONSTRUCTION
ETF
(FLM)
---------------------------------------
SIX MONTHS ENDED
3/31/2021 YEAR ENDED
(UNAUDITED) 9/30/2020
------------------ ------------------
OPERATIONS:
<S> <C> <C>
Net investment income (loss)........................................................ $ 60,599 $ 203,777
Net realized gain (loss)............................................................ (155,563) (366,607)
Net increase from payment by the advisor............................................ -- --
Net change in unrealized appreciation (depreciation)................................ 2,095,551 (239,121)
---------------- ----------------
Net increase (decrease) in net assets resulting
from operations.................................................................. 2,000,587 (401,951)
---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations............................................................... (37,606) (207,908)
---------------- ----------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold........................................................... -- --
Cost of shares redeemed............................................................. -- (2,489,438)
---------------- ----------------
Net increase (decrease) in net assets resulting
from shareholder transactions.................................................... -- (2,489,438)
---------------- ----------------
Total increase (decrease) in net assets............................................. 1,962,981 (3,099,297)
NET ASSETS:
Beginning of period................................................................. 6,309,862 9,409,159
---------------- ----------------
End of period....................................................................... $ 8,272,843 $ 6,309,862
================ ================
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period............................................. 150,002 200,002
Shares sold......................................................................... -- --
Shares redeemed..................................................................... -- (50,000)
---------------- ----------------
Shares outstanding, end of period................................................... 150,002 150,002
================ ================
</TABLE>
Page 80 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST
NASDAQ(R) CLEAN EDGE(R) INDXX GLOBAL FIRST TRUST
SMART GRID INFRASTRUCTURE NATURAL RESOURCES INDXX GLOBAL
INDEX FUND INCOME ETF AGRICULTURE ETF
(GRID) (FTRI) (FTAG)
---------------------------------------- --------------------------------------- ---------------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED SIX MONTHS ENDED
3/31/2021 YEAR ENDED 3/31/2021 YEAR ENDED 3/31/2021 YEAR ENDED
(UNAUDITED) 9/30/2020 (UNAUDITED) 9/30/2020 (UNAUDITED) 9/30/2020
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C>
$ 880,303 $ 468,582 $ 308,923 $ 314,979 $ 11,490 $ 62,970
4,413,271 1,516,049 (219,423) (1,111,105) 66,282 (311,190)
-- -- -- -- -- --
27,787,671 7,530,176 2,273,345 20,445 1,121,270 142,251
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
33,081,245 9,514,807 2,362,845 (775,681) 1,199,042 (105,969)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(388,610) (369,941) (267,376) (343,681) (15,364) (54,334)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
194,139,307 22,728,389 12,027,104 -- -- --
(17,042,911) (2,526,309) -- (592,651) -- --
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
177,096,396 20,202,080 12,027,104 (592,651) -- --
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
209,789,031 29,346,946 14,122,573 (1,712,013) 1,183,678 (160,303)
56,578,983 27,232,037 5,740,317 7,452,330 3,040,001 3,200,304
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
$ 266,368,014 $ 56,578,983 $ 19,862,890 $ 5,740,317 $ 4,223,679 $ 3,040,001
================ ================ ================ ================ ================ ================
900,002 550,002 600,002 650,002 139,928 139,928
2,400,000 400,000 900,000 -- -- --
(200,000) (50,000) -- (50,000) -- --
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
3,100,002 900,002 1,500,002 600,002 139,928 139,928
================ ================ ================ ================ ================ ================
</TABLE>
See Notes to Financial Statements Page 81
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
FIRST TRUST
BICK
INDEX FUND
(BICK)
---------------------------------------
SIX MONTHS ENDED
3/31/2021 YEAR ENDED
(UNAUDITED) 9/30/2020
------------------ ------------------
OPERATIONS:
<S> <C> <C>
Net investment income (loss)........................................................ $ 149,916 $ 558,660
Net realized gain (loss)............................................................ 3,539,946 (4,705,431)
Net increase from payment by the advisor............................................ -- --
Net change in unrealized appreciation (depreciation)................................ 13,671,826 4,781,924
---------------- ----------------
Net increase (decrease) in net assets resulting
from operations.................................................................. 17,361,688 635,153
---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations............................................................... (262,126) (775,621)
---------------- ----------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold........................................................... 8,833,353 7,430,446
Cost of shares redeemed............................................................. (2,999,826) (62,855,887)
---------------- ----------------
Net increase (decrease) in net assets resulting
from shareholder transactions.................................................... 5,833,527 (55,425,441)
---------------- ----------------
Total increase (decrease) in net assets............................................. 22,933,089 (55,565,909)
NET ASSETS:
Beginning of period................................................................. 60,937,335 116,503,244
---------------- ----------------
End of period....................................................................... $ 83,870,424 $ 60,937,335
================ ================
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period............................................. 2,100,002 4,550,002
Shares sold......................................................................... 250,000 250,000
Shares redeemed..................................................................... (100,000) (2,700,000)
---------------- ----------------
Shares outstanding, end of period................................................... 2,250,002 2,100,002
================ ================
</TABLE>
Page 82 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FIRST TRUST
FIRST TRUST NASDAQ FIRST TRUST
INDXX GLOBAL AUTO CLOUD COMPUTING
NEXTG ETF INDEX FUND ETF
(NXTG) (CARZ) (SKYY)
---------------------------------------- --------------------------------------- ---------------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED SIX MONTHS ENDED
3/31/2021 YEAR ENDED 3/31/2021 YEAR ENDED 3/31/2021 YEAR ENDED
(UNAUDITED) 9/30/2020 (UNAUDITED) 9/30/2020 (UNAUDITED) 9/30/2020
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C>
$ 4,473,650 $ 5,543,997 $ 264,261 $ 204,420 $ 4,863,435 $ 7,732,715
37,056,160 11,563,540 4,724,619 3,036,237 719,817,070 381,228,554
-- -- -- -- -- --
112,873,106 52,847,743 11,350,969 1,129,834 375,022,751 797,519,832
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
154,402,916 69,955,280 16,339,849 4,370,491 1,099,703,256 1,186,481,101
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(3,166,625) (5,116,621) (204,355) (256,391) (6,415,330) (8,515,791)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
338,152,019 384,483,696 42,159,206 11,510,144 1,393,979,431 2,872,076,000
(91,669,590) (54,802,400) (15,955,132) (4,001,084) (1,545,895,843) (1,254,414,356)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
246,482,429 329,681,296 26,204,074 7,509,060 (151,916,412) 1,617,661,644
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
397,718,720 394,519,955 42,339,568 11,623,160 941,371,514 2,795,626,954
590,535,207 196,015,252 29,246,401 17,623,241 4,963,824,578 2,168,197,624
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
$ 988,253,927 $ 590,535,207 $ 71,585,969 $ 29,246,401 $ 5,905,196,092 $ 4,963,824,578
================ ================ ================ ================ ================ ================
10,000,002 3,900,002 750,002 550,002 63,250,002 38,450,002
4,950,000 7,100,000 800,000 300,000 14,500,000 43,350,000
(1,350,000) (1,000,000) (300,000) (100,000) (16,050,000) (18,550,000)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
13,600,002 10,000,002 1,250,002 750,002 61,700,002 63,250,002
================ ================ ================ ================ ================ ================
</TABLE>
See Notes to Financial Statements Page 83
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
FIRST TRUST
INTERNATIONAL
EQUITY
OPPORTUNITIES ETF
(FPXI)
---------------------------------------
SIX MONTHS ENDED
3/31/2021 YEAR ENDED
(UNAUDITED) 9/30/2020
------------------ ------------------
OPERATIONS:
<S> <C> <C>
Net investment income (loss)........................................................ $ 1,052,335 $ 398,607
Net realized gain (loss)............................................................ (21,826,095) 7,966,839
Net increase from payment by the advisor............................................ -- 806
Net change in unrealized appreciation (depreciation)................................ 52,466,731 33,900,257
---------------- ----------------
Net increase (decrease) in net assets resulting
from operations.................................................................. 31,692,971 42,266,509
---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations............................................................... (126,000) (374,400)
---------------- ----------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold........................................................... 758,273,654 354,994,527
Cost of shares redeemed............................................................. (22,528,963) (71,013,884)
---------------- ----------------
Net increase (decrease) in net assets resulting
from shareholder transactions.................................................... 735,744,691 283,980,643
---------------- ----------------
Total increase (decrease) in net assets............................................. 767,311,662 325,872,752
NET ASSETS:
Beginning of period................................................................. 356,803,431 30,930,679
---------------- ----------------
End of period....................................................................... $ 1,124,115,093 $ 356,803,431
================ ================
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period............................................. 6,300,002 850,002
Shares sold......................................................................... 11,200,000 6,850,000
Shares redeemed..................................................................... (350,000) (1,400,000)
---------------- ----------------
Shares outstanding, end of period................................................... 17,150,002 6,300,002
================ ================
</TABLE>
Page 84 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FIRST TRUST
NASDAQ
CYBERSECURITY ETF
(CIBR)
----------------------------------------
SIX MONTHS ENDED
3/31/2021 YEAR ENDED
(UNAUDITED) 9/30/2020
------------------ ------------------
<S> <C>
$ 995,055 $ 23,199,240
127,600,620 105,970,783
-- --
286,136,503 233,902,808
---------------- ----------------
414,732,178 363,072,831
---------------- ----------------
(1,871,100) (23,668,226)
---------------- ----------------
1,103,603,248 1,421,549,328
(247,196,349) (561,615,357)
---------------- ----------------
856,406,899 859,933,971
---------------- ----------------
1,269,267,977 1,199,338,576
2,178,988,372 979,649,796
---------------- ----------------
$ 3,448,256,349 $ 2,178,988,372
================ ================
62,650,002 35,450,002
25,650,000 44,800,000
(5,650,000) (17,600,000)
---------------- ----------------
82,650,002 62,650,002
================ ================
</TABLE>
See Notes to Financial Statements Page 85
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST STOXX(R) EUROPEAN SELECT DIVIDEND INDEX FUND (FDD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2021 ------------------------------------------------------------------------
(UNAUDITED) 2020 2019 2018 2017 2016
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.27 $ 12.75 $ 13.12 $ 13.61 $ 11.82 $ 11.92
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.07 0.52 0.66 0.59 0.42 0.55
Net realized and unrealized gain (loss) 3.83 (2.50) (0.37) (0.49) 1.79 (0.10)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 3.90 (1.98) 0.29 0.10 2.21 0.45
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.09) (0.50) (0.66) (0.59) (0.42) (0.55)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 14.08 $ 10.27 $ 12.75 $ 13.12 $ 13.61 $ 11.82
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 38.04% (15.64)% 2.35% 0.74% 18.93% 3.88%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 226,005 $ 180,227 $ 293,918 $ 454,824 $ 529,527 $ 165,490
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.57% (b) 0.57% 0.58% 0.57% 0.60% 0.60%
Ratio of net expenses to average net
assets 0.57% (b) 0.57% 0.58% 0.57% 0.60% 0.60%
Ratio of net investment income (loss) to
average net assets 1.15% (b) 3.84% 4.84% 4.25% 3.96% 4.63%
Portfolio turnover rate (c) 48% 98% 24% 35% 21% 34%
</TABLE>
FIRST TRUST FTSE EPRA/NAREIT DEVELOPED MARKETS REAL ESTATE INDEX FUND (FFR)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2021 ------------------------------------------------------------------------
(UNAUDITED) 2020 2019 2018 2017 2016
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 38.82 $ 49.44 $ 45.07 $ 44.96 $ 46.18 $ 41.00
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.41 0.62 1.25 1.48 0.89 0.90
Net realized and unrealized gain (loss) 7.25 (9.27) 4.55 0.31 (0.65) 5.20
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 7.66 (8.65) 5.80 1.79 0.24 6.10
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income -- (1.97) (1.43) (1.68) (1.46) (0.92)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 46.48 $ 38.82 $ 49.44 $ 45.07 $ 44.96 $ 46.18
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 19.73% (18.12)% 13.19% 3.99% 0.67% 14.95%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 32,143 $ 32,671 $ 56,436 $ 45,074 $ 51,700 $ 71,576
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.87% (b) 0.85% 0.89% 0.85% 0.70% 0.72%
Ratio of net expenses to average net
assets 0.60% (b) 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net investment income (loss) to
average net assets 2.66% (b) 2.52% 2.61% 3.48% 2.40% 2.53%
Portfolio turnover rate (c) 2% 7% 7% 9% 6% 6%
</TABLE>
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year. The total returns would have been lower if certain
fees had not been waived and expenses reimbursed by the investment
advisor.
(b) Annualized.
(c) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
Page 86 See Notes to Financial Statements
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST DOW JONES GLOBAL SELECT DIVIDEND INDEX FUND (FGD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2021 ------------------------------------------------------------------------
(UNAUDITED) 2020 2019 2018 2017 2016
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 17.85 $ 22.90 $ 25.16 $ 25.73 $ 23.49 $ 21.62
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.47 1.30 1.39 1.15 1.03 1.07
Net realized and unrealized gain (loss) 7.18 (5.04) (2.24) (0.58) 2.23 1.82
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 7.65 (3.74) (0.85) 0.57 3.26 2.89
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.46) (1.31) (1.41) (1.14) (1.02) (1.02)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 25.04 $ 17.85 $ 22.90 $ 25.16 $ 25.73 $ 23.49
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 43.11% (16.33)% (3.21)% 2.26% 14.14% 13.68%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 441,951 $ 344,489 $ 532,532 $ 484,280 $ 470,887 $ 344,068
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.56% (b) 0.57% 0.59% 0.58% 0.58% 0.58%
Ratio of net expenses to average net
assets 0.56% (b) 0.57% 0.59% 0.58% 0.58% 0.58%
Ratio of net investment income (loss) to
average net assets 4.05% (b) 6.16% 6.20% 4.48% 4.43% 4.63%
Portfolio turnover rate (c) 39% 67% 31% 31% 35% 43%
</TABLE>
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2021 ------------------------------------------------------------------------
(UNAUDITED) 2020 2019 2018 2017 2016
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 17.45 $ 13.13 $ 12.50 $ 13.13 $ 13.30 $ 10.38
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.09 0.26 0.30 0.28 0.41 0.20
Net realized and unrealized gain (loss) 4.93 4.33 0.64 (0.66) 0.32 2.93
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 5.02 4.59 0.94 (0.38) 0.73 3.13
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.08) (0.27) (0.31) (0.25) (0.90) (0.21)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 22.39 $ 17.45 $ 13.13 $ 12.50 $ 13.13 $ 13.30
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 28.76% 35.42% 7.58% (2.92)% 6.21% 30.42%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 418,698 $ 205,075 $ 75,502 $ 79,362 $ 100,467 $ 87,096
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.61% (b) 0.66% 0.71% 0.68% 0.71% 0.74%
Ratio of net expenses to average net
assets 0.60% (b) 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net investment income (loss) to
average net assets 0.89% (b) 1.86% 2.32% 2.21% 2.88% 1.80%
Portfolio turnover rate (c) 24% 42% 30% 22% 78% 26%
</TABLE>
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year. The total returns would have been lower if certain
fees had not been waived and expenses reimbursed by the investment
advisor.
(b) Annualized.
(c) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
See Notes to Financial Statements Page 87
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST GLOBAL ENGINEERING AND CONSTRUCTION ETF (FLM)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2021 ------------------------------------------------------------------------
(UNAUDITED) 2020 2019 2018 2017 2016
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 42.07 $ 47.05 $ 56.78 $ 56.89 $ 48.63 $ 44.17
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.40 1.28 0.87 0.79 0.62 0.96
Net realized and unrealized gain (loss) 12.93 (4.93) (9.71) 0.16 8.27 4.46
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 13.33 (3.65) (8.84) 0.95 8.89 5.42
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.25) (1.33) (0.89) (1.06) (0.63) (0.96)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 55.15 $ 42.07 $ 47.05 $ 56.78 $ 56.89 $ 48.63
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 31.79% (7.52)% (15.64)% 1.67% 18.39% 12.40%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 8,273 $ 6,310 $ 9,409 $ 14,194 $ 17,066 $ 14,588
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 1.35% (b) 1.43% 1.21% 0.88% 0.92% 1.03%
Ratio of net expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income (loss) to
average net assets 1.65% (b) 2.68% 1.64% 1.45% 1.20% 2.01%
Portfolio turnover rate (c) 9% 20% 14% 16% 20% 28%
</TABLE>
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) SMART GRID INFRASTRUCTURE INDEX FUND (GRID)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2021 ------------------------------------------------------------------------
(UNAUDITED) 2020 2019 2018 2017 2016
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 62.87 $ 49.51 $ 47.62 $ 49.00 $ 39.19 $ 31.52
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.26 0.58 0.67 0.52 0.57 0.42
Net realized and unrealized gain (loss) 23.00 13.27 1.84 (1.32) 9.82 7.65
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 23.26 13.85 2.51 (0.80) 10.39 8.07
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.20) (0.49) (0.62) (0.58) (0.58) (0.40)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 85.93 $ 62.87 $ 49.51 $ 47.62 $ 49.00 $ 39.19
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 37.01% 28.10% 5.32% (1.66)% 26.73% 25.77%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 266,368 $ 56,579 $ 27,232 $ 33,333 $ 26,951 $ 13,715
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.69% (b) 0.75% 0.82% 0.74% 0.84% 1.07%
Ratio of net expenses to average net
assets 0.69% (b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income (loss) to
average net assets 1.16% (b) 1.30% 1.40% 1.10% 1.44% 1.27%
Portfolio turnover rate (c) 19% 53% 31% 60% 32% 37%
</TABLE>
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year. The total returns would have been lower if certain
fees had not been waived and expenses reimbursed by the investment
advisor.
(b) Annualized.
(c) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
Page 88 See Notes to Financial Statements
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST INDXX GLOBAL NATURAL RESOURCES INCOME ETF (FTRI)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2021 ------------------------------------------------------------------------
(UNAUDITED) 2020 2019 2018 2017 2016
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.57 $ 11.47 $ 12.73 $ 11.88 $ 10.66 $ 10.99
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.22 0.53 0.72 0.48 0.41 0.33
Net realized and unrealized gain (loss) 3.66 (1.86) (1.28) 0.83 1.22 (0.32)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 3.88 (1.33) (0.56) 1.31 1.63 0.01
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.21) (0.57) (0.70) (0.46) (0.41) (0.34)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 13.24 $ 9.57 $ 11.47 $ 12.73 $ 11.88 $ 10.66
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 40.70% (11.80)% (4.42)% 11.12% 15.47% 0.20%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 19,863 $ 5,740 $ 7,452 $ 8,908 $ 8,913 $ 10,663
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income (loss) to
average net assets 6.27% (b) 4.94% 5.95% 3.74% 3.39% 3.00%
Portfolio turnover rate (c) 10% 66% 84% 50% 61% 179% (d)
</TABLE>
FIRST TRUST INDXX GLOBAL AGRICULTURE ETF (FTAG)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2021 ------------------------------------------------------------------------
(UNAUDITED) 2020 2019 2018 2017 2016
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 21.73 $ 22.87 $ 26.21 $ 26.96 $ 21.55 $ 26.90
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.08 0.45 0.51 0.44 0.39 0.20
Net realized and unrealized gain (loss) 8.48 (1.20) (3.17) (0.83) 5.41 (5.46)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 8.56 (0.75) (2.66) (0.39) 5.80 (5.26)
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.11) (0.39) (0.64) (0.36) (0.39) (0.09)
Return on Capital -- -- (0.04) -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total distributions (0.11) (0.39) (0.68) (0.36) (0.39) (0.09)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 30.18 $ 21.73 $ 22.87 $ 26.21 $ 26.96 $ 21.55
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 39.47% (3.19)% (10.16)% (1.46)% 27.09% (18.92)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 4,224 $ 3,040 $ 3,200 $ 4,979 $ 7,816 $ 4,093
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.72% (e)
Ratio of net expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.72% (e)
Ratio of net investment income (loss) to
average net assets 0.63% (b) 2.16% 1.93% 1.56% 1.80% 1.74%
Portfolio turnover rate (c) 8% 17% 20% 30% 38% 137% (d)
</TABLE>
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(b) Annualized.
(c) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
(d) The variation in the portfolio turnover rate is due to the change in the
Fund's underlying index effective on the close of business December 18,
2015, which resulted in a complete rebalance of the Fund's portfolio.
(e) Includes foreign capital gains tax. If this tax expense was not included,
the expense ratio would have been 0.70%.
See Notes to Financial Statements Page 89
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST BICK INDEX FUND (BICK)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2021 ------------------------------------------------------------------------
(UNAUDITED) 2020 2019 2018 2017 2016
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 29.02 $ 25.61 $ 26.48 $ 28.77 $ 22.94 $ 18.76
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.08 0.08 0.33 0.40 0.33 0.28
Net realized and unrealized gain (loss) 8.30 3.53 (0.80) (2.34) 5.85 4.19
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 8.38 3.61 (0.47) (1.94) 6.18 4.47
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.12) (0.20) (0.40) (0.35) (0.35) (0.29)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 37.28 $ 29.02 $ 25.61 $ 26.48 $ 28.77 $ 22.94
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 28.86% 14.07% (1.76)% (6.82)% 27.14% 23.99%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 83,870 $ 60,937 $ 116,503 $ 190,648 $ 202,863 $ 8,029
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.64% (b) 0.64% 0.64% 0.64% 0.64% 0.64%
Ratio of net expenses to average net
assets 0.64% (b) 0.64% 0.64% 0.64% 0.64% 0.64%
Ratio of net investment income (loss) to
average net assets 0.38% (b) 0.60% 1.25% 1.33% 2.15% 1.37%
Portfolio turnover rate (c) 50% 58% 66% 65% 86% 59%
</TABLE>
FIRST TRUST INDXX NEXTG ETF (NXTG)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2021 ------------------------------------------------------------------------
(UNAUDITED) 2020 2019 2018 2017 2016
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 59.05 $ 50.26 $ 49.63 $ 50.52 $ 41.29 $ 34.93
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.35 0.69 0.37 0.72 0.44 0.47
Net realized and unrealized gain (loss) 13.54 8.79 0.50 (0.60) 9.29 6.34
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 13.89 9.48 0.87 0.12 9.73 6.81
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.27) (0.69) (0.24) (1.01) (0.50) (0.45)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 72.67 $ 59.05 $ 50.26 $ 49.63 $ 50.52 $ 41.29
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 23.55% 18.97% 1.78% 0.20% 23.68% 19.60%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 988,254 $ 590,535 $ 196,015 $ 17,370 $ 17,683 $ 10,324
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income (loss) to
average net assets 1.11% (b) 1.52% 1.73% 1.34% 1.04% 1.14%
Portfolio turnover rate (c) 11% 30% 59% 80% 18% 28%
</TABLE>
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(b) Annualized.
(c) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
Page 90 See Notes to Financial Statements
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST NASDAQ GLOBAL AUTO INDEX FUND (CARZ)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2021 ------------------------------------------------------------------------
(UNAUDITED) 2020 2019 2018 2017 2016
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 39.00 $ 32.04 $ 36.33 $ 40.25 $ 33.39 $ 33.46
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.22 0.34 1.02 0.98 0.87 0.80
Net realized and unrealized gain (loss) 18.23 7.07 (4.28) (3.98) 6.87 (0.09)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 18.45 7.41 (3.26) (3.00) 7.74 0.71
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.18) (0.45) (1.03) (0.92) (0.88) (0.78)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 57.27 $ 39.00 $ 32.04 $ 36.33 $ 40.25 $ 33.39
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 47.39% 23.33% (8.97)% (7.57)% 23.46% 2.24%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 71,586 $ 29,246 $ 17,623 $ 18,167 $ 18,112 $ 21,705
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income (loss) to
average net assets 1.01% (b) 1.09% 3.19% 2.44% 2.20% 2.16%
Portfolio turnover rate (c) 17% 36% 24% 16% 17% 17%
</TABLE>
FIRST TRUST CLOUD COMPUTING ETF (SKYY)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2021 ------------------------------------------------------------------------
(UNAUDITED) 2020 2019 2018 2017 2016
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 78.48 $ 56.39 $ 56.71 $ 41.88 $ 34.17 $ 28.08
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.07 0.16 0.59 0.14 0.13 0.15
Net realized and unrealized gain (loss) 17.26 22.10 (0.31) 14.84 7.72 6.09
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 17.33 22.26 0.28 14.98 7.85 6.24
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.10) (0.17) (0.60) (0.15) (0.14) (0.15)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 95.71 $ 78.48 $ 56.39 $ 56.71 $ 41.88 $ 34.17
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 22.09% 39.54% 0.57% 35.80% 23.00% 22.30%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $5,905,196 $4,963,825 $2,168,198 $2,067,140 $1,088,930 $ 587,642
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.60% (b) 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net expenses to average net
assets 0.60% (b) 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net investment income (loss) to
average net assets 0.17% (b) 0.24% 1.02% 0.28% 0.34% 0.49%
Portfolio turnover rate (c) 16% 35% 85% 7% 14% 23%
</TABLE>
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(b) Annualized.
(c) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
See Notes to Financial Statements Page 91
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST INTERNATIONAL EQUITY OPPORTUNITIES ETF (FPXI)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2021 ------------------------------------------------------------------------
(UNAUDITED) 2020 2019 2018 2017 2016
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 56.64 $ 36.39 $ 35.10 $ 34.51 $ 27.47 $ 25.24
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.05 0.11 0.30 0.49 0.22 0.51
Net realized and unrealized gain (loss) 8.87 20.32 (a) 1.29 0.66 7.07 2.14
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 8.92 20.43 1.59 1.15 7.29 2.65
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.01) (0.18) (0.30) (0.56) (0.25) (0.42)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 65.55 $ 56.64 $ 36.39 $ 35.10 $ 34.51 $ 27.47
========== ========== ========== ========== ========== ==========
TOTAL RETURN (b) 15.75% 56.24% (a) 4.60% 3.35% 26.71% 10.62%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $1,124,115 $ 356,803 $ 30,931 $ 26,322 $ 22,429 $ 2,748
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.70% (c) 0.70% 0.70% 0.70% 0.70% 0.71% (d)
Ratio of net expenses to average net
assets 0.70% (c) 0.70% 0.70% 0.70% 0.70% 0.71% (d)
Ratio of net investment income (loss) to
average net assets 0.29% (c) 0.38% 0.86% 1.42% 1.62% 2.25%
Portfolio turnover rate (e) 62% 114% 98% 83% 58% 75%
</TABLE>
FIRST TRUST NASDAQ CYBERSECURITY ETF (CIBR)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2021 ------------------------------------------------------------------------
(UNAUDITED) 2020 2019 2018 2017 2016
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 34.78 $ 27.63 $ 28.49 $ 21.85 $ 19.77 $ 17.15
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.02 0.50 0.06 0.02 0.03 0.23
Net realized and unrealized gain (loss) 6.95 7.16 (0.86) 6.64 2.09 2.62
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 6.97 7.66 (0.80) 6.66 2.12 2.85
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.03) (0.51) (0.06) (0.02) (0.04) (0.23)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 41.72 $ 34.78 $ 27.63 $ 28.49 $ 21.85 $ 19.77
========== ========== ========== ========== ========== ==========
TOTAL RETURN (b) 20.03% 28.72% (2.78)% 30.49% 10.73% 16.83%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $3,448,256 $2,178,988 $ 979,650 $ 847,673 $ 313,575 $ 102,815
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.60% (c) 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net expenses to average net
assets 0.60% (c) 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net investment income (loss) to
average net assets 0.07% (c) 1.54% 0.20% 0.04% 0.13% 1.37%
Portfolio turnover rate (e) 16% 46% 58% 56% 67% 49%
</TABLE>
(a) The Fund received a payment from the advisor in the amount of $806, which
represents less than $0.01 per share. Since the advisor reimbursed the
Fund, there was no effect on the Fund's total return.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Includes excise tax. If this excise tax expense was not included, the
expense ratio would have been 0.70%.
(e) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
Page 92 See Notes to Financial Statements
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
1. ORGANIZATION
First Trust Exchange-Traded Fund II (the "Trust") is an open-end management
investment company organized as a Massachusetts business trust on July 6, 2006,
and is registered with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended (the "1940 Act").
The Trust currently consists of sixteen exchange-traded funds. This report
covers the fourteen funds (each a "Fund" and collectively, the "Funds") listed
below:
First Trust STOXX(R) European Select Dividend Index Fund - (NYSE Arca, Inc.
("NYSE Arca") ticker "FDD")
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund -
(NYSE Arca ticker "FFR")
First Trust Dow Jones Global Select Dividend Index Fund -
(NYSE Arca ticker "FGD")
First Trust Global Wind Energy ETF - (NYSE Arca ticker "FAN")
First Trust Global Engineering and Construction ETF - (NYSE Arca ticker
"FLM")
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund -
(The Nasdaq Stock Market LLC ("Nasdaq") ticker "GRID")
First Trust Indxx Global Natural Resources Income ETF - (Nasdaq ticker
"FTRI")
First Trust Indxx Global Agriculture ETF - (Nasdaq ticker "FTAG")
First Trust BICK Index Fund - (Nasdaq ticker "BICK")
First Trust Indxx NextG ETF - (Nasdaq ticker "NXTG")
First Trust NASDAQ Global Auto Index Fund - (Nasdaq ticker "CARZ")
First Trust Cloud Computing ETF - (Nasdaq ticker "SKYY")
First Trust International Equity Opportunities ETF - (Nasdaq ticker "FPXI")
First Trust Nasdaq Cybersecurity ETF - (Nasdaq ticker "CIBR")
Each Fund represents a separate series of shares of beneficial interest in the
Trust. 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:
<TABLE>
<CAPTION>
FUND INDEX
<S> <C>
First Trust STOXX(R) European Select Dividend Index Fund STOXX(R) Europe Select Dividend 30 Index
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund FTSE EPRA/NAREIT Developed Index
First Trust Dow Jones Global Select Dividend Index Fund Dow Jones Global Select Dividend Index
First Trust Global Wind Energy ETF ISE Clean Edge Global Wind Energy(TM) Index
First Trust Global Engineering and Construction ETF ISE Global Engineering and Construction(TM) Index
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund NASDAQ OMX Clean Edge Smart Grid
Infrastructure Index(SM)
First Trust Indxx Global Natural Resources Income ETF Indxx Global Natural Resources Income Index
First Trust Indxx Global Agriculture ETF Indxx Global Agriculture Index
First Trust BICK Index Fund ISE BICK(TM) Index
First Trust Indxx NextG ETF Indxx 5G & NextG Thematic Index(SM)
First Trust NASDAQ Global Auto Index Fund NASDAQ Global Auto Index(SM)
First Trust Cloud Computing ETF ISE CTA Cloud Computing Index(TM)
First Trust International Equity Opportunities ETF IPOX(R) International Index
First Trust Nasdaq Cybersecurity ETF Nasdaq CTA Cybersecurity Index(SM)
</TABLE>
2. SIGNIFICANT ACCOUNTING POLICIES
The Funds are each considered an investment company and follow accounting and
reporting guidance under Financial Accounting Standards Board Accounting
Standards Codification Topic 946, "Financial Services-Investment Companies." The
following is a summary of significant accounting policies consistently followed
by the Funds in the preparation of the financial statements. The preparation of
the financial statements in accordance with accounting principles generally
accepted in the United States of America ("U.S. GAAP") requires management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
Page 93
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
A. PORTFOLIO VALUATION
Each Fund's NAV is determined daily as of the close of regular trading on the
New York Stock Exchange ("NYSE"), normally 4:00 p.m. Eastern time, on each day
the NYSE is open for trading. If the NYSE closes early on a valuation day, the
NAV is determined as of that time. Foreign securities are priced using data
reflecting the earlier closing of the principal markets for those securities.
Each Fund's NAV is calculated by dividing the value of all assets of each Fund
(including accrued interest and dividends), less all liabilities (including
accrued expenses and dividends declared but unpaid), by the total number of
shares outstanding.
Each Fund's investments are valued daily at market value or, in the absence of
market value with respect to any portfolio securities, at fair value. Market
value prices represent last sale or official closing prices from a national or
foreign exchange (i.e., a regulated market) and are primarily obtained from
third-party pricing services. Fair value prices represent any prices not
considered market value prices and are either obtained from a third-party
pricing service or are determined by the Pricing Committee of the Funds'
investment advisor, First Trust Advisors L.P. ("First Trust" or the "Advisor"),
in accordance with valuation procedures adopted by the Trust's Board of
Trustees, and in accordance with provisions of the 1940 Act. Investments valued
by the Advisor's Pricing Committee, if any, are footnoted as such in the
footnotes to the Portfolio of Investments. Each Fund's investments are valued as
follows:
Common stocks and other equity securities listed on any national or
foreign exchange (excluding Nasdaq and the London Stock Exchange
Alternative Investment Market ("AIM")) are valued at the last sale price
on the exchange on which they are principally traded or, for Nasdaq and
AIM securities, the official closing price. Securities traded on more than
one securities exchange are valued at the last sale price or official
closing price, as applicable, at the close of the securities exchange
representing the principal market for such securities.
Securities trading on foreign exchanges or over-the-counter markets that
close prior to the NYSE close may be valued using a systematic fair
valuation model provided by a third-party pricing service. If these
foreign securities meet certain criteria in relation to the valuation
model, their valuation is systematically adjusted to reflect the impact of
movement in the U.S. market after the close of the foreign markets.
Shares of open-end funds are valued at fair value which is based on NAV
per share.
Securities traded in an over-the-counter market are fair valued at the
mean of their most recent bid and asked price, if available, and otherwise
at their closing bid price.
Overnight repurchase agreements are valued at amortized cost when it
represents the best estimate of fair value.
Certain securities may not be able to be priced by pre-established pricing
methods. Such securities may be valued by the Trust's Board of Trustees or its
delegate, the Advisor's Pricing Committee, at fair value. These securities
generally include, but are not limited to, restricted securities (securities
which may not be publicly sold without registration under the Securities Act of
1933, as amended) for which a third-party pricing service is unable to provide a
market price; securities whose trading has been formally suspended; a security
whose market or fair value price is not available from a pre-established pricing
source; a security with respect to which an event has occurred that is likely to
materially affect the value of the security after the market has closed but
before the calculation of a Fund's NAV or make it difficult or impossible to
obtain a reliable market quotation; and a security whose price, as provided by
the third-party pricing service, does not reflect the security's fair value. As
a general principle, the current fair value of a security would appear to be the
amount which the owner might reasonably expect to receive for the security upon
its current sale. When fair value prices are used, generally they will differ
from market quotations or official closing prices on the applicable exchanges. A
variety of factors may be considered in determining the fair value of such
securities, including, but not limited to, the following:
1) the type of security;
2) the size of the holding;
3) the initial cost of the security;
4) transactions in comparable securities;
5) price quotes from dealers and/or third-party pricing services;
6) relationships among various securities;
7) information obtained by contacting the issuer, analysts, or the
appropriate stock exchange;
8) an analysis of the issuer's financial statements; and
9) the existence of merger proposals or tender offers that might affect
the value of the security.
If the securities in question are foreign securities, the following additional
information may be considered:
1) the value of similar foreign securities traded on other foreign
markets;
2) ADR trading of similar securities;
3) closed-end fund or exchange-traded fund trading of similar
securities;
4) foreign currency exchange activity;
Page 94
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
5) the trading prices of financial products that are tied to baskets of
foreign securities;
6) factors relating to the event that precipitated the pricing problem;
7) whether the event is likely to recur; and
8) whether the effects of the event are isolated or whether they affect
entire markets, countries or regions.
In addition, differences between the prices used to calculate a Fund's NAV and
the prices used by such Fund's corresponding index could result in a difference
between a Fund's performance and the performance of its underlying index.
Because foreign markets may be open on different days than the days during which
investors may transact in the shares of a Fund, the value of the Fund's
securities may change on the days when investors are not able to transact in the
shares of the Fund. The value of securities denominated in foreign currencies is
converted into U.S. dollars using exchange rates determined daily as of the
close of regular trading on the NYSE. Any use of a different rate from the rates
used by a relevant index may adversely affect the Fund's ability to track the
index.
The Funds are subject to fair value accounting standards that define fair value,
establish the framework for measuring fair value and provide a three-level
hierarchy for fair valuation based upon the inputs to the valuation as of the
measurement date. The three levels of the fair value hierarchy are as follows:
o Level 1 - Level 1 inputs are quoted prices in active markets for
identical investments. An active market is a market in which
transactions for the investment occur with sufficient frequency and
volume to provide pricing information on an ongoing basis.
o Level 2 - Level 2 inputs are observable inputs, either directly or
indirectly, and include the following:
o Quoted prices for similar investments in active markets.
o Quoted prices for identical or similar investments in markets
that are non-active. A non-active market is a market where
there are few transactions for the investment, the prices are
not current, or price quotations vary substantially either
over time or among market makers, or in which little
information is released publicly.
o Inputs other than quoted prices that are observable for the
investment (for example, interest rates and yield curves
observable at commonly quoted intervals, volatilities,
prepayment speeds, loss severities, credit risks, and default
rates).
o Inputs that are derived principally from or corroborated by
observable market data by correlation or other means.
o Level 3 - Level 3 inputs are unobservable inputs. Unobservable
inputs may reflect the reporting entity's own assumptions about the
assumptions that market participants would use in pricing the
investment.
The inputs or methodologies used for valuing investments are not necessarily an
indication of the risk associated with investing in those investments. A summary
of the inputs used to value each Fund's investments as of March 31, 2021, is
included with each Fund's Portfolio of Investments.
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded as of the trade date. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
Dividend income is recorded on the ex-dividend date. Interest income, if any, is
recorded on the accrual basis.
Withholding taxes and tax reclaims on foreign dividends have been provided for
in accordance with each Fund's understanding of the applicable country's tax
rules and rates.
Distributions received from a Fund's investments in real estate investment
trusts ("REITs") may be comprised of return of capital, capital gains and
income. The actual character of the amounts received during the year is not
known until after the REITs' fiscal year end. A Fund records the character of
distributions received from the REITs during the year based on estimates
available. The characterization of distributions received by a Fund may be
subsequently revised based on information received from the REITs after their
tax reporting periods conclude.
C. OFFSETTING ON THE STATEMENTS OF ASSETS AND LIABILITIES
Offsetting assets and liabilities 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.
Page 95
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
D. FOREIGN CURRENCY
The books and records of the Funds are maintained in U.S. dollars. Foreign
currencies, investments and other assets and liabilities are translated into
U.S. dollars at the exchange rates prevailing at the end of the period.
Purchases and sales of investments and items of income and expense are
translated on the respective dates of such transactions. Unrealized gains and
losses on assets and liabilities, other than investments in securities, which
result from changes in foreign currency exchange rates have been included in
"Net change in unrealized appreciation (depreciation) on foreign currency
translation" on the Statements of Operations. Unrealized gains and losses on
investments in securities which result from changes in foreign exchange rates
are included with fluctuations arising from changes in market price and are
shown in "Net change in unrealized appreciation (depreciation) on investments"
on the Statements of Operations. Net realized foreign currency gains and losses
include the effect of changes in exchange rates between trade date and
settlement date on investment security transactions, foreign currency
transactions and interest and dividends received and are included in "Net
realized gain (loss) on foreign currency transactions" on the Statements of
Operations. The portion of foreign currency gains and losses related to
fluctuations in exchange rates between the initial purchase settlement date and
subsequent sale trade date is included in "Net realized gain (loss) on
investments" on the Statements of Operations.
E. SECURITIES LENDING
The Funds may lend securities representing up to 33 1/3% of the value of their
total assets to broker-dealers, banks and other institutions to generate
additional income. When a Fund loans its portfolio securities, it will receive,
at the inception of each loan, collateral equal to at least 102% (for domestic
securities) or 105% (for international securities) of the market value of the
loaned securities. The collateral amount is valued at the beginning of each
business day and is compared to the market value of the loaned securities from
the prior business day to determine if additional collateral is required. If
additional collateral is required, a request is sent to the borrower. Securities
lending involves the risk that the Fund may lose money because the borrower of
the Fund's loaned securities fails to return the securities in a timely manner
or at all. The Fund could also lose money in the event of (i) a decline in the
value of the collateral provided for the loaned securities, (ii) a decline in
the value of any investments made with cash collateral or (iii) an increase in
the value of the loaned securities if the borrower does not increase the
collateral accordingly and the borrower fails to return the securities. These
events could also trigger adverse tax consequences for the Funds.
Under the Funds' Securities Lending Agency Agreement, the securities lending
agent will generally bear the risk that a borrower may default on its obligation
to return loaned securities. Brown Brothers Harriman & Co. ("BBH") acts as each
Fund's securities lending agent and is responsible for executing the lending of
the portfolio securities to creditworthy borrowers with the exception of FAN.
The Bank of New York Mellon ("BNYM") acts as FAN'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 March 31, 2021, only FAN, FLM, GRID, FTRI, BICK, NXTG,
SKYY, and FPXI had securities in the securities lending program. During the six
months ended March 31, 2021, FAN, FLM, GRID, FTRI, BICK, NXTG, CARZ, SKYY, and
FPXI participated in the securities lending program.
In the event of a default by a borrower with respect to any loan, BBH or BNYM
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 BNYM to exercise these remedies, a Fund sustains losses as a result of a
borrower's default, BBH or BNYM 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 BNYM.
F. REPURCHASE AGREEMENTS
Repurchase agreements involve the purchase of securities subject to the seller's
agreement to repurchase the securities at a mutually agreed upon date and price,
under the terms of a Master Repurchase Agreement ("MRA"). During the term of a
repurchase agreement, the value of the underlying securities held as collateral
on behalf of a Fund, including accrued interest, is required to exceed the value
of the repurchase agreement, including accrued interest. The underlying
securities for all repurchase agreements are held at the Funds' custodian or
designated sub-custodians under tri-party repurchase agreements.
MRAs govern transactions between a Fund and select counterparties. The MRAs
contain provisions for, among other things, initiation, income payments, events
of default, and maintenance of collateral for repurchase agreements.
Page 96
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
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 BNYM on behalf of the Funds participating in the securities
lending program. In the event the counterparty defaults on the repurchase
agreement, the U.S. Treasury securities can either be maintained as part of a
Fund's portfolio or sold for cash. A Fund could suffer a loss to the extent that
the proceeds from the sale of the underlying collateral held by the Fund is less
than the repurchase price and the Fund's costs associated with the delay and
enforcement of the MRA.
While the Funds may invest in repurchase agreements, any repurchase agreements
held by the Funds during the six months ended March 31, 2021, were received as
collateral for lending securities.
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income of each Fund, if any, are declared and paid
quarterly, or as the Board of Trustees may determine from time to time.
Distributions of net realized gains earned by each Fund, if any, are distributed
at least annually.
Distributions from net investment income and realized capital gains are
determined in accordance with federal income tax regulations, which may differ
from U.S. GAAP. Certain capital accounts in the financial statements are
periodically adjusted for permanent differences in order to reflect their tax
character. These permanent differences are primarily due to the varying
treatment of income and gain/loss on significantly modified portfolio securities
held by the Funds and have no impact on net assets or NAV per share. Temporary
differences, which arise from recognizing certain items of income, expense and
gain/loss in different periods for financial statement and tax purposes, will
reverse at some time in the future.
The tax character of distributions paid by each Fund during the fiscal year
ended September 30, 2020 was as follows:
<TABLE>
<CAPTION>
Distributions Distributions Distributions
paid from paid from paid from
Ordinary Capital Return of
Income Gains Capital
----------------- -------------- --------------
<S> <C> <C> <C>
First Trust STOXX(R) European Select Dividend Index Fund $ 9,499,846 $ -- $ --
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund 2,248,427 -- --
First Trust Dow Jones Global Select Dividend Index Fund 29,511,768 -- --
First Trust Global Wind Energy ETF 2,010,555 -- --
First Trust Global Engineering and Construction ETF 207,908 -- --
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund 369,941 -- --
First Trust Indxx Global Natural Resources Income ETF 343,681 -- --
First Trust Indxx Global Agriculture ETF 54,334 -- --
First Trust BICK Index Fund 775,621 -- --
First Trust Indxx NextG ETF 5,116,621 -- --
First Trust NASDAQ Global Auto Index Fund 256,391 -- --
First Trust Cloud Computing ETF 8,515,791 -- --
First Trust International Equity Opportunities ETF 374,400 -- --
First Trust Nasdaq Cybersecurity ETF 23,668,226 -- --
</TABLE>
As of September 30, 2020, the components of distributable earnings on a tax
basis for each Fund were as follows:
<TABLE>
<CAPTION>
Accumulated Net
Undistributed Capital and Unrealized
Ordinary Other Appreciation
Income Gain (Loss) (Depreciation)
----------------- -------------- --------------
<S> <C> <C> <C>
First Trust STOXX(R) European Select Dividend Index Fund $ 380,186 $ (81,101,625) $ (12,884,201)
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund (251,577) (1,691,617) (4,084,438)
First Trust Dow Jones Global Select Dividend Index Fund 1,576,766 (186,630,804) (54,093,868)
First Trust Global Wind Energy ETF 429,387 (52,994,765) 31,508,745
First Trust Global Engineering and Construction ETF 32,482 (8,168,805) (960,729)
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund 123,852 (539,435) 6,601,084
First Trust Indxx Global Natural Resources Income ETF 16,695 (62,199,679) (214,915)
First Trust Indxx Global Agriculture ETF 8,460 (19,483,636) (201,614)
First Trust BICK Index Fund (64,502) (29,890,192) 45,818
First Trust Indxx NextG ETF 747,042 (224,785) 58,024,082
First Trust NASDAQ Global Auto Index Fund 23,284 (3,770,920) (2,633,631)
First Trust Cloud Computing ETF -- (97,889,957) 756,297,018
First Trust International Equity Opportunities ETF 112,434 (7,618,211) 34,159,548
First Trust Nasdaq Cybersecurity ETF (28,233) (45,776,590) 236,017,450
</TABLE>
Page 97
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--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
H. INCOME AND OTHER TAXES
Each Fund intends to continue to qualify as a regulated investment company by
complying with the requirements under Subchapter M of the Internal Revenue Code
of 1986, as amended, which includes distributing substantially all of its net
investment income and net realized gains to shareholders. Accordingly, no
provision has been made for federal and state income taxes. However, due to the
timing and amount of distributions, each Fund may be subject to an excise tax of
4% of the amount by which approximately 98% of each Fund's taxable income
exceeds the distributions from such taxable income for the calendar year.
Certain countries assess a capital gains tax on securities sold in their local
markets. This tax is accrued as the securities in these foreign markets
appreciate in value and is paid at the time of sale to the extent a capital gain
is realized. Taxes accrued on securities in an unrealized appreciation position
are included in "Net change in unrealized appreciation (depreciation) on
deferred foreign capital gains tax" on the Statements of Operations. The capital
gains tax paid on securities sold, if any, is included in "Net realized gain
(loss) on foreign capital gains tax" on the Statements of Operations.
India's Finance Bill, 2018 ("Finance Bill, 2018") was enacted into law on March
29, 2018 and amongst other provisions, it introduced a long-term capital gains
tax beginning April 1, 2018. Long-term capital gains on the sale of listed
shares in excess of INR 0.1 million are taxed at the rate of 10% (plus
applicable surcharge and cess (which is a type of tax)) subject to satisfaction
of certain conditions. Long-term capital gains accruing as of January 31, 2018
are considered exempt due to a grandfather clause in the provision. The
aforesaid exemption from long-term capital gains tax is available with respect
to shares acquired between October 1, 2004 and March 31, 2018 only if on such
acquisitions Securities Transaction Tax ("STT") was chargeable. Certain
exceptions in this regard, such as acquisition of shares in a public offer,
bonus, rights issued, etc. for which the condition of chargeability of STT on
acquisition is not applicable, have been notified.
In the case of the sale of listed shares held by a Fund for one year or less,
the income is classified as short-term capital gains and is taxable at 15% (plus
applicable surcharge and cess) provided the shares are sold on the stock
exchange and subjected to STT. For above purposes, the applicable rate of
surcharge is 2% or 5% (depending on the level of income of the Fund). The
Finance Bill, 2018 increases the cess imposed on the sum of tax and surcharge
from 3% to 4%. The cess 4% rate is applied to the capital gains tax, resulting
in a higher effective rate of capital gains tax.
Where the sale of shares is outside the stock exchange and not subject to STT,
the long-term capital gains are taxed at 10% (plus applicable surcharge and
cess) and short-term capital gains are taxed at 30% (plus applicable surcharge
and cess). The Finance Bill, 2018, approves the carry forward of long-term
capital losses to be offset against long-term capital gains. Short-term losses
can be netted against both short-term gains and long-term gains.
Until March 31, 2020, dividends received by the Fund from Indian companies were
exempt from tax in India because Indian companies were required to pay dividend
distribution tax. The Indian Finance Act, 2020 has amended the dividend taxation
framework effective April 1, 2020 and accordingly dividends would now be taxable
in the hands of the shareholders at 20%, plus applicable surcharge and cess.
Subsequent to the Indian Finance Act, 2020, "The Taxation and Other Laws
(Relaxation and Amendment of Certain Provisions) Bill, 2020" (the "Bill") was
enacted into law and is effective retroactively to April 1, 2020. The Bill caps
the maximum surcharge at 15% of the tax on dividend income earned by the Fund.
The highest effective tax rate proposed for non-corporate entities on dividends
will be 23.92%. Note the Fund will not obtain relief under the US-India tax
treaty as the treaty rate of 25% is higher than the domestic rate. Any excess
taxes withheld can be offset against capital gains tax liability during the year
or claimed as a refund in the annual tax return.
Please note that the above description is based on current provisions of Indian
law, and any change or modification made by subsequent legislation, regulation,
or administrative or judicial decision could increase the Indian tax liability
of a Fund and thus reduce the return to a Fund's shareholders. There can be no
assurance that the Indian tax authorities and/or regulators will not take a
position contrary to the views expressed herein. If the Indian tax authorities
and/or regulators take a position contrary to the views expressed herein,
adverse unpredictable consequences may follow.
The Funds are subject to accounting standards that establish a minimum threshold
for recognizing, and a system for measuring, the benefits of a tax position
taken or expected to be taken in a tax return. Taxable years ended 2017, 2018,
2019, and 2020 remain open to federal and state audit. As of March 31, 2021,
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 September 30, 2020, for
federal income tax purposes, each applicable Fund had a capital loss
carryforward available that is shown in the table below, 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.
Page 98
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--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
Non-Expiring Capital
Loss Carryforwards
---------------------
<S> <C>
First Trust STOXX(R) European Select Dividend Index Fund $ 81,101,625
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund* 1,691,617
First Trust Dow Jones Global Select Dividend Index Fund 186,630,804
First Trust Global Wind Energy ETF 52,994,765
First Trust Global Engineering and Construction ETF 8,168,805
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund 539,435
First Trust Indxx Global Natural Resources Income ETF 62,199,679
First Trust Indxx Global Agriculture ETF 19,483,636
First Trust BICK Index Fund 29,890,192
First Trust Indxx NextG ETF 224,785
First Trust NASDAQ Global Auto Index Fund 3,770,920
First Trust Cloud Computing ETF 97,889,957
First Trust International Equity Opportunities ETF 7,618,211
First Trust Nasdaq Cybersecurity ETF 45,776,590
</TABLE>
* $75,097 of First Trust FTSE EPRA/NAREIT Developed Markets Real
Estate 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 $38,346 per year.
During the taxable year ended September 30, 2020, the following Funds utilized
non-expiring capital loss carryforwards in the following amounts:
<TABLE>
<CAPTION>
Capital Loss
Carryforward Utilized
---------------------
<S> <C>
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund $ 858,833
First Trust Indxx NextG ETF 1,521,443
First Trust NASDAQ Global Auto Index Fund 146,570
</TABLE>
Certain losses realized during the current fiscal year may be deferred and
treated as occurring on the first day of the following fiscal year for federal
income tax purposes. For the fiscal year ended September 30, 2020, the following
Funds incurred and elected to defer late year ordinary or capital losses as
follows:
<TABLE>
<CAPTION>
Qualified Late Year Losses
------------------------------------------
Ordinary Losses Capital Losses
--------------- --------------
<S> <C> <C>
First Trust FTSE EPRA/NAREIT Developed Markets Real
Estate Index Fund $ 251,577 $ --
First Trust BICK Index Fund 64,502 --
First Trust Nasdaq Cybersecurity ETF 28,233 --
</TABLE>
I. EXPENSES
Expenses that are directly related to one of the Funds are charged directly to
the respective Fund, except for First Trust Indxx Global Natural Resources
Income ETF, First Trust Indxx Global Agriculture ETF, First Trust BICK Index
Fund, First Trust Indxx NextG ETF, First Trust NASDAQ Global Auto Index Fund,
First Trust Cloud Computing ETF, First Trust International Equity Opportunities
ETF, and First Trust Nasdaq Cybersecurity ETF (the "Unitary Fee Funds"), for
which expenses other than excluded expenses (discussed in Note 3) are paid by
the Advisor. General expenses of the Trust are allocated to all the Funds based
upon the net assets of each Fund.
Page 99
<PAGE>
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
First Trust has entered into licensing agreements with each of the following
"Licensors" for the respective Funds:
<TABLE>
<CAPTION>
FUND LICENSOR
<S> <C>
First Trust STOXX(R) European Select Dividend Index Fund STOXX Limited
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund FTSE International Limited
First Trust Dow Jones Global Select Dividend Index Fund S&P Dow Jones Indices LLC
First Trust Global Wind Energy ETF Nasdaq, Inc.
First Trust Global Engineering and Construction ETF Nasdaq, Inc.
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund Nasdaq, Inc.
First Trust Indxx Global Natural Resources Income ETF Indxx, LLC
First Trust Indxx Global Agriculture ETF Indxx, LLC
First Trust BICK Index Fund Nasdaq, Inc.
First Trust Indxx NextG ETF Indxx, LLC
First Trust NASDAQ Global Auto Index Fund Nasdaq, Inc.
First Trust Cloud Computing ETF Nasdaq, Inc.
First Trust International Equity Opportunities ETF IPOX(R) Schuster LLC
First Trust Nasdaq Cybersecurity ETF Nasdaq, Inc.
</TABLE>
The respective license agreements allow for the use of each Fund's respective
index and of certain trademarks and trade names of the respective Licensors. The
Funds are sub-licensees to the applicable license agreements. The Funds, except
for the Unitary Fee Funds, are required to pay licensing fees, which are shown
on the Statements of Operations. The licensing fees for the Unitary Fee Funds
are paid by First Trust from the unitary investment advisory fees it receives
from each of these Funds.
3. INVESTMENT ADVISORY FEE, AFFILIATED TRANSACTIONS AND OTHER FEE ARRANGEMENTS
First Trust, the investment advisor to the Funds, is a limited partnership with
one limited partner, Grace Partners of DuPage L.P., and one general partner, The
Charger Corporation. The Charger Corporation is an Illinois corporation
controlled by James A. Bowen, Chief Executive Officer of First Trust. First
Trust is responsible for the selection and ongoing monitoring of the securities
in each Fund's portfolio, managing the Funds' business affairs and providing
certain administrative services necessary for the management of the Funds.
For the following Unitary Fee Funds, First Trust is paid an annual unitary
management fee at the specified rate of such Fund's average daily net assets and
is responsible for the expenses of such Fund including the cost of transfer
agency, custody, fund administration, legal, audit and other services, and
excluding fee payments under the Investment Management Agreement, distribution
and service fees payable pursuant to a Rule 12b-1 plan, if any, brokerage
expense, acquired fund fees and expenses, taxes, interest, and extraordinary
expenses.
% of Daily
Net Assets
------------
First Trust Indxx Global Natural Resources Income ETF 0.70%
First Trust Indxx Global Agriculture ETF 0.70%
First Trust BICK Index Fund 0.64%
First Trust Indxx NextG ETF 0.70%
First Trust NASDAQ Global Auto Index Fund 0.70%
First Trust Cloud Computing ETF 0.60%
First Trust International Equity Opportunities ETF 0.70%
First Trust Nasdaq Cybersecurity ETF 0.60%
For the First Trust STOXX(R) European Select Dividend Index Fund, First Trust
FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund, First Trust Dow Jones
Global Select Dividend Index Fund, First Trust Global Wind Energy ETF, First
Trust Global Engineering and Construction ETF, and First Trust NASDAQ(R) Clean
Edge(R) Smart Grid Infrastructure Index Fund (such Funds, the "Expense Cap
Funds"), First Trust is paid an annual management fee of 0.40% of such Fund's
average daily net assets.
For the Expense Cap Funds, the Trust and First Trust have entered into an
Expense Reimbursement, Fee Waiver and Recovery Agreement ("Recovery Agreement")
in which First Trust has agreed to waive fees and/or reimburse Fund expenses to
the extent that the operating expenses of each such Fund (excluding interest
expense, brokerage commissions and other trading expenses, acquired fund fees
and expenses, taxes and extraordinary expenses) exceed the following amount as a
percentage of average daily net assets per year (the "Expense Cap") at least
through January 31, 2022.
Page 100
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
Expense Cap
-------------
<S> <C>
First Trust STOXX(R) European Select Dividend Index Fund 0.60%
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund 0.60%
First Trust Dow Jones Global Select Dividend Index Fund 0.60%
First Trust Global Wind Energy ETF 0.60%
First Trust Global Engineering and Construction ETF 0.70%
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund 0.70%
</TABLE>
Expenses reimbursed and fees waived by First Trust under the Recovery Agreement
are subject to recovery by First Trust for up to three years from the date the
fee or expense was incurred, but no reimbursement payment will be made by a Fund
if it results in the Fund exceeding (i) the applicable expense limitation in
place for the most recent fiscal year for which such expense limitation was in
place, (ii) the applicable expense limitation in place at the time the fees were
waived, or (iii) the current expense limitation. These amounts would be included
in "Expenses previously waived or reimbursed" on the Statements of Operations.
The advisory fee waivers and expense reimbursements for the six months ended
March 31, 2021 and the fees waived or expenses borne by First Trust subject to
recovery from the applicable Fund for the periods indicated were as follows:
<TABLE>
<CAPTION>
Fees Waived or Expenses Borne by First Trust
Subject to Recovery
---------------------------------------------------------
Advisory Expense Six Months Year Year Six Months
Fee Reim- Ended Ended Ended Ended
Waivers bursements 9/30/2018 9/30/2019 9/30/2020 3/31/2021 Total
---------- ---------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
First Trust FTSE EPRA/NAREIT
Developed Markets Real Estate
Index Fund $ 41,616 $ -- $ 66,837 $ 140,904 $ 114,648 $ 41,616 $ 364,005
First Trust Global Wind Energy ETF 22,389 -- 40,340 83,187 69,675 22,389 215,591
First Trust Global Engineering and
Construction ETF 14,696 9,112 20,005 57,523 55,317 23,808 156,653
</TABLE>
During the six months ended March 31, 2021, First Trust recovered fees that were
previously waived from First Trust NASDAQ(R) Clean Edge(R) Smart Grid
Infrastructure Index Fund of $63,759. As of March 31, 2021, the Fund did not
have any remaining fees previously waived or expenses reimbursed that were
subject to recovery.
For the fiscal year ended September 30, 2020, the First Trust International
Equity Opportunities ETF received a payment from the Advisor of $806 in
connection with a trade error.
The Trust has multiple service agreements with BNYM. Under the service
agreements, BNYM performs custodial, fund accounting, certain administrative
services, and transfer agency services for each Fund. As custodian, BNYM is
responsible for custody of each Fund's assets. As fund accountant and
administrator, BNYM is responsible for maintaining the books and records of each
Fund's securities and cash. As transfer agent, BNYM is responsible for
maintaining shareholder records for each Fund. BNYM is a subsidiary of The Bank
of New York Mellon Corporation, a financial holding company.
Each Trustee who is not an officer or employee of First Trust, any sub-advisor
or any of their affiliates ("Independent Trustees") is paid a fixed annual
retainer that is allocated equally among each fund in the First Trust Fund
Complex. Each Independent Trustee is also paid an annual per fund fee that
varies based on whether the fund is a closed-end or other actively managed fund,
a defined-outcome fund or is an index fund.
Additionally, the Lead Independent Trustee and the Chairmen of the Audit
Committee, Nominating and Governance Committee and Valuation Committee are paid
annual fees to serve in such capacities, with such compensation allocated pro
rata among each fund in the First Trust Fund Complex based on net assets.
Independent Trustees are reimbursed for travel and out-of-pocket expenses in
connection with all meetings. The Lead Independent Trustee and Committee
Chairmen rotate every three years. The officers and "Interested" Trustee receive
no compensation from the Trust for acting in such capacities.
Page 101
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--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
4. PURCHASES AND SALES OF SECURITIES
For the six months ended March 31, 2021, the cost of purchases and proceeds from
sales of investments for each Fund, excluding short-term investments and in-kind
transactions, were as follows:
<TABLE>
<CAPTION>
Purchases Sales
---------------- --------------
<S> <C> <C>
First Trust STOXX(R) European Select Dividend Index Fund $ 98,925,468 $ 99,111,938
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund 1,128,106 664,925
First Trust Dow Jones Global Select Dividend Index Fund 167,981,593 147,486,557
First Trust Global Wind Energy ETF 104,937,535 83,508,954
First Trust Global Engineering and Construction ETF 659,073 669,104
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund 30,428,497 28,547,419
First Trust Indxx Global Natural Resources Income ETF 1,447,454 1,046,276
First Trust Indxx Global Agriculture ETF 301,244 304,492
First Trust BICK Index Fund 41,295,177 37,883,575
First Trust Indxx NextG ETF 152,982,602 85,140,287
First Trust NASDAQ Global Auto Index Fund 17,127,470 8,865,993
First Trust Cloud Computing ETF 916,764,755 886,513,997
First Trust International Equity Opportunities ETF 717,362,431 444,211,030
First Trust Nasdaq Cybersecurity ETF 456,583,576 458,386,026
</TABLE>
For the six months ended March 31, 2021, the cost of in-kind purchases and
proceeds from in-kind sales for each Fund were as follows:
<TABLE>
<CAPTION>
Purchases Sales
---------------- --------------
<S> <C> <C>
First Trust STOXX(R) European Select Dividend Index Fund $ 10,331,493 $ 28,735,957
First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund -- 5,940,805
First Trust Dow Jones Global Select Dividend Index Fund 109,974,058 161,803,772
First Trust Global Wind Energy ETF 176,446,864 43,514,643
First Trust Global Engineering and Construction ETF -- --
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund 192,194,760 16,905,610
First Trust Indxx Global Natural Resources Income ETF 11,544,203 --
First Trust Indxx Global Agriculture ETF -- --
First Trust BICK Index Fund 4,087,398 1,745,476
First Trust Indxx NextG ETF 269,780,815 90,463,940
First Trust NASDAQ Global Auto Index Fund 32,428,751 14,453,207
First Trust Cloud Computing ETF 1,388,980,997 1,568,147,964
First Trust International Equity Opportunities ETF 484,193,947 21,210,581
First Trust Nasdaq Cybersecurity ETF 1,097,374,930 240,697,238
</TABLE>
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
large blocks of shares known as "Creation Units." Prior to the start of trading
on every business day, a Fund publishes through the National Securities Clearing
Corporation ("NSCC") 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.
Page 102
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
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.
6. DISTRIBUTION PLAN
The Board of Trustees adopted a Distribution and Service Plan pursuant to Rule
12b-1 under the 1940 Act. In accordance with the Rule 12b-1 plan, the Funds are
authorized to pay an amount up to 0.25% of their average daily net assets each
year to reimburse First Trust Portfolios L.P. ("FTP"), the distributor of the
Funds, for amounts expended to finance activities primarily intended to result
in the sale of Creation Units or the provision of investor services. FTP may
also use this amount to compensate securities dealers or other persons that are
Authorized Participants for providing distribution assistance, including
broker-dealer and shareholder support and educational and promotional services.
No 12b-1 fees are currently paid by the Funds, and pursuant to a contractual
arrangement, no 12b-1 fees will be paid any time before January 31, 2022.
7. INDEMNIFICATION
The Trust, on behalf of the Funds, has a variety of indemnification obligations
under contracts with its service providers. The Trust's maximum exposure under
these arrangements is unknown. However, the Trust has not had prior claims or
losses pursuant to these contracts and expects the risk of loss to be remote.
8. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Funds
through the date the financial statements were issued, and has determined that
there were the following subsequent events:
On May 14, 2021, First Trust announced that FFR will seek investment results
that correspond generally to the price and yield (before the Fund's fees and
expenses) of an index called the Alerian Disruptive Technology Real Estate Index
(the "New FFR Index"). The New FFR Index will be composed of securities issued
by companies that own and lease real estate that support wired communication,
wireless communication, data infrastructure, warehouses and fulfillment centers.
The New FFR Index includes operating companies and real estate investment trusts
that are engaged in communications activities including the development and
ownership of broadcast and mobile network towers, satellites, fiber-optic and
other forms of data-transmitting cable, warehouses and fulfillment centers.
Additionally, the Fund's name is expected to change to First Trust Alerian
Disruptive Technology Real Estate ETF and its new ticker symbol is expected to
be DTRE. The Fund's shares will continue to be listed for trading on the NYSE
Arca and S-Network Global Indexes Inc. will serve as the Fund's index provider.
These changes will be implemented as soon as practicable after the Fund's
shareholders approve certain matters by proxy related to these changes,
including the approval of a new investment advisory agreement between the Fund
and First Trust, and a change in the Fund's diversification status under the
1940 Act.
On May 14, 2021, First Trust announced that FLM will seek investment results
that correspond generally to the price and yield (before the Fund's fees and
expenses) of an equity index called the Alerian US NextGen Infrastructure Index
(the "New FLM Index"). The New FLM Index will be composed of securities issued
by U.S. companies that build, operate and own infrastructure assets. The New FLM
Index includes companies domiciled and incorporated in the United States that
are engaged in the construction, development, operation and maintenance of
infrastructure. Additionally, the Fund's name is expected to change to First
Trust Alerian US NextGen Infrastructure ETF and its new ticker symbol is
expected to be RBLD. The Fund's shares will continue to be listed for trading on
the NYSE Arca and S-Network Global Indexes Inc. will serve as the Fund's index
provider. These changes will be implemented as soon as practicable after the
Fund's shareholders approve certain matters by proxy related to these changes,
including the approval of a new investment advisory agreement between the Fund
and First Trust.
On or around July 27, 2021, CARZ will seek investment results that correspond
generally to the price and yield (before the Fund's fees and expenses) of an
index called the S-Network Electric & Future Vehicle Ecosystem Index (the "New
CARZ Index"). The New CARZ Index will be composed of approximately 100
securities issued by companies that are materially engaged in the development
and sales of electric and autonomous vehicle technologies. Included in the New
CARZ Index are companies engaged in the manufacture of electric and autonomous
vehicle manufacturing as well as the production of products, technologies and
materials that enable the development of electric and autonomous vehicles.
Additionally, on or around July 27, 2021, the Fund's name is expected to change
to First Trust S-Network Electric & Future Vehicle Ecosystem ETF. The Fund's
shares will continue to be listed for trading on Nasdaq and S-Network Global
Indexes Inc. will serve as the Fund's index provider.
Page 103
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ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies and information on how each Fund voted proxies relating to
its portfolio securities during the most recent 12-month period ended June 30 is
available (1) without charge, upon request, by calling (800) 988-5891; (2) on
each Fund's website at www.ftportfolios.com; and (3) on the Securities and
Exchange Commission's ("SEC") website at www.sec.gov.
PORTFOLIO HOLDINGS
Each Fund files portfolio holdings information for each month in a fiscal
quarter within 60 days after the end of the relevant fiscal quarter on Form
N-PORT. Portfolio holdings information for the third month of each fiscal
quarter will be publicly available on the SEC's website at www.sec.gov. Each
Fund's complete schedule of portfolio holdings for the second and fourth
quarters of each fiscal year is included in the semi-annual and annual reports
to shareholders, respectively, and is filed with the SEC on Form N-CSR. The
semi-annual and annual report for each Fund is available to investors within 60
days after the period to which it relates. Each Fund's Forms N-PORT and Forms
N-CSR are available on the SEC's website listed above.
RISK CONSIDERATIONS
RISKS ARE INHERENT IN ALL INVESTING. CERTAIN GENERAL RISKS THAT MAY BE
APPLICABLE TO A FUND ARE IDENTIFIED BELOW, BUT NOT ALL OF THE MATERIAL RISKS
RELEVANT TO EACH FUND ARE INCLUDED IN THIS REPORT AND NOT ALL OF THE RISKS BELOW
APPLY TO EACH FUND. THE MATERIAL RISKS OF INVESTING IN EACH FUND ARE SPELLED OUT
IN ITS PROSPECTUS, STATEMENT OF ADDITIONAL INFORMATION AND OTHER REGULATORY
FILINGS. BEFORE INVESTING, YOU SHOULD CONSIDER EACH FUND'S INVESTMENT OBJECTIVE,
RISKS, CHARGES AND EXPENSES, AND READ EACH FUND'S PROSPECTUS AND STATEMENT OF
ADDITIONAL INFORMATION CAREFULLY. YOU CAN DOWNLOAD EACH FUND'S PROSPECTUS AT
WWW.FTPORTFOLIOS.COM OR CONTACT FIRST TRUST PORTFOLIOS L.P. AT (800) 621-1675 TO
REQUEST A PROSPECTUS, WHICH CONTAINS THIS AND OTHER INFORMATION ABOUT EACH FUND.
CONCENTRATION RISK. To the extent that a fund is able to invest a large
percentage of its assets in a single asset class or the securities of issuers
within the same country, state, region, industry or sector, an adverse economic,
business or political development may affect the value of the fund's investments
more than if the fund were more broadly diversified. A fund that tracks an index
will be concentrated to the extent the fund's corresponding index is
concentrated. A concentration makes a fund more susceptible to any single
occurrence and may subject the fund to greater market risk than a fund that is
not concentrated.
CREDIT RISK. Credit risk is the risk that an issuer of a security will be unable
or unwilling to make dividend, interest and/or principal payments when due and
the related risk that the value of a security may decline because of concerns
about the issuer's ability to make such payments.
CYBER SECURITY RISK. The funds are susceptible to potential operational risks
through breaches in cyber security. A breach in cyber security refers to both
intentional and unintentional events that may cause a fund to lose proprietary
information, suffer data corruption or lose operational capacity. Such events
could cause a fund to incur regulatory penalties, reputational damage,
additional compliance costs associated with corrective measures and/or financial
loss. In addition, cyber security breaches of a fund's third-party service
providers, such as its administrator, transfer agent, custodian, or sub-advisor,
as applicable, or issuers in which the fund invests, can also subject a fund to
many of the same risks associated with direct cyber security breaches.
DERIVATIVES RISK. To the extent a fund uses derivative instruments such as
futures contracts, options contracts and swaps, the fund may experience losses
because of adverse movements in the price or value of the underlying asset,
index or rate, which may be magnified by certain features of the derivative.
These risks are heightened when a fund's portfolio managers use derivatives to
enhance the fund's return or as a substitute for a position or security, rather
than solely to hedge (or offset) the risk of a position or security held by the
fund.
EQUITY SECURITIES RISK. To the extent a fund invests in equity securities, the
value of the fund's shares will fluctuate with changes in the value of the
equity securities. Equity securities prices fluctuate for several reasons,
including changes in investors' perceptions of the financial condition of an
issuer or the general condition of the relevant stock market, such as market
volatility, or when political or economic events affecting the issuers occur. In
addition, common stock prices may be particularly sensitive to rising interest
rates, as the cost of capital rises and borrowing costs increase. Equity
securities may decline significantly in price over short or extended periods of
time, and such declines may occur in the equity market as a whole, or they may
occur in only a particular country, company, industry or sector of the market.
ETF RISK. The shares of an ETF trade like common stock and represent an interest
in a portfolio of securities. The risks of owning an ETF generally reflect the
risks of owning the underlying securities, although lack of liquidity in an ETF
could result in it being more volatile and ETFs have management fees that
increase their costs. Shares of an ETF trade on an exchange at market prices
rather than net asset value, which may cause the shares to trade at a price
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
greater than net asset value (premium) or less than net asset value (discount).
In times of market stress, decisions by market makers to reduce or step away
from their role of providing a market for an ETF's shares, or decisions by an
ETF's authorized participants that they are unable or unwilling to proceed with
creation and/or redemption orders of an ETF's shares, could result in shares of
the ETF trading at a discount to net asset value and in greater than normal
intraday bid-ask spreads.
FIXED INCOME SECURITIES RISK. To the extent a fund invests in fixed income
securities, the fund will be subject to credit risk, income risk, interest rate
risk, liquidity risk and prepayment risk. Income risk is the risk that income
from a fund's fixed income investments could decline during periods of falling
interest rates. Interest rate risk is the risk that the value of a fund's fixed
income securities will decline because of rising interest rates. Liquidity risk
is the risk that a security cannot be purchased or sold at the time desired, or
cannot be purchased or sold without adversely affecting the price. Prepayment
risk is the risk that the securities will be redeemed or prepaid by the issuer,
resulting in lower interest payments received by the fund. In addition to these
risks, high yield securities, or "junk" bonds, are subject to greater market
fluctuations and risk of loss than securities with higher ratings, and the
market for high yield securities is generally smaller and less liquid than that
for investment grade securities.
INDEX CONSTITUENT RISK. Certain funds may be a constituent of one or more
indices. As a result, such a fund may be included in one or more index-tracking
exchange-traded funds or mutual funds. Being a component security of such a
vehicle could greatly affect the trading activity involving a fund, the size of
the fund and the market volatility of the fund. Inclusion in an index could
significantly increase demand for the fund and removal from an index could
result in outsized selling activity in a relatively short period of time. As a
result, a fund's net asset value could be negatively impacted and the fund's
market price may be significantly below its net asset value during certain
periods.
INDEX PROVIDER RISK. To the extent a fund seeks to track an index, it is subject
to Index Provider Risk. There is no assurance that the Index Provider will
compile the Index accurately, or that the Index will be determined, maintained,
constructed, reconstituted, rebalanced, composed, calculated or disseminated
accurately. To correct any such error, the Index Provider may carry out an
unscheduled rebalance or other modification of the Index constituents or
weightings, which may increase the fund's costs. The Index Provider does not
provide any representation or warranty in relation to the quality, accuracy or
completeness of data in the Index, and it does not guarantee that the Index will
be calculated in accordance with its stated methodology. Losses or costs
associated with any Index Provider errors generally will be borne by the fund
and its shareholders.
INVESTMENT COMPANIES RISK. To the extent a fund invests in the securities of
other investment vehicles, the fund will incur additional fees and expenses that
would not be present in a direct investment in those investment vehicles.
Furthermore, the fund's investment performance and risks are directly related to
the investment performance and risks of the investment vehicles in which the
fund invests.
LIBOR RISK. To the extent a fund invests in floating or variable rate
obligations that use the London Interbank Offered Rate ("LIBOR") as a reference
interest rate, it is subject to LIBOR Risk. The United Kingdom's Financial
Conduct Authority, which regulates LIBOR, will cease making LIBOR available as a
reference rate over a phase-out period that will begin immediately after
December 31, 2021. The unavailability or replacement of LIBOR may affect the
value, liquidity or return on certain fund investments and may result in costs
incurred in connection with closing out positions and entering into new trades.
Any potential effects of the transition away from LIBOR on the fund or on
certain instruments in which the fund invests can be difficult to ascertain, and
they may vary depending on a variety of factors, and they could result in losses
to the fund.
MANAGEMENT RISK. To the extent that a fund is actively managed, it is subject to
management risk. In managing an actively-managed fund's investment portfolio,
the fund's portfolio managers will apply investment techniques and risk analyses
that may not have the desired result. There can be no guarantee that a fund will
meet its investment objective.
MARKET RISK. Securities held by a fund, as well as shares of a fund itself, are
subject to market fluctuations caused by factors such as general economic
conditions, political events, regulatory or market developments, changes in
interest rates and perceived trends in securities prices. Shares of a fund could
decline in value or underperform other investments as a result of the risk of
loss associated with these market fluctuations. In addition, local, regional or
global events such as war, acts of terrorism, spread of infectious diseases or
other public health issues, recessions, or other events could have a significant
negative impact on a fund and its investments. Such events may affect certain
geographic regions, countries, sectors and industries more significantly than
others. The outbreak of the respiratory disease designated as COVID-19 in
December 2019 has caused significant volatility and declines in global financial
markets, which have caused losses for investors. The COVID-19 pandemic may last
for an extended period of time and will continue to impact the economy for the
foreseeable future.
NON-U.S. SECURITIES RISK. To the extent a fund invests in non-U.S. securities,
it is subject to additional risks not associated with securities of domestic
issuers. Non-U.S. securities are subject to higher volatility than securities of
domestic issuers due to: possible adverse political, social or economic
developments; restrictions on foreign investment or exchange of securities; lack
of liquidity; currency exchange rates; excessive taxation; government seizure of
assets; different legal or accounting standards; and less government supervision
and regulation of exchanges in foreign countries. Investments in non-U.S.
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
securities may involve higher costs than investments in U.S. securities,
including higher transaction and custody costs, as well as additional taxes
imposed by non-U.S. governments. These risks may be heightened for securities of
companies located, or with significant operations, in emerging market countries.
OPERATIONAL RISK. Each fund is subject to risks arising from various operational
factors, including, but not limited to, human error, processing and
communication errors, errors of a fund's service providers, counterparties or
other third-parties, failed or inadequate processes and technology or systems
failures. Although the funds and the Advisor seek to reduce these operational
risks through controls and procedures, there is no way to completely protect
against such risks.
PASSIVE INVESTMENT RISK. To the extent a fund seeks to track an index, the fund
will invest in the securities included in, or representative of, the index
regardless of their investment merit. A fund generally will not attempt to take
defensive positions in declining markets.
NOT FDIC INSURED NOT BANK GUARANTEED MAY LOSE VALUE
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FIRST TRUST
First Trust Exchange-Traded Fund II
INVESTMENT ADVISOR
First Trust Advisors L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
ADMINISTRATOR, CUSTODIAN,
FUND ACCOUNTANT &
TRANSFER AGENT
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
111 S. Wacker Drive
Chicago, IL 60606
LEGAL COUNSEL
Chapman and Cutler LLP
111 W. Monroe Street
Chicago, IL 60603
<PAGE>
[BLANK BACK COVER]
<PAGE>
FIRST TRUST
First Trust Exchange-Traded Fund II
--------------------------------------------------------------------------------
Book 2
First Trust IPOX(R) Europe Equity Opportunities ETF (FPXE)
First Trust Dow Jones International Internet ETF (FDNI)
----------------------
Semi-Annual Report
March 31, 2021
----------------------
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TABLE OF CONTENTS
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FIRST TRUST EXCHANGE-TRADED FUND II
SEMI-ANNUAL REPORT
MARCH 31, 2021
<TABLE>
<CAPTION>
<S> <C>
Shareholder Letter ...................................................................... 2
Market Overview ......................................................................... 3
Fund Performance Overview
First Trust IPOX(R) Europe Equity Opportunities ETF (FPXE) ........................ 4
First Trust Dow Jones International Internet ETF (FDNI) ........................... 6
Notes to Fund Performance Overview ...................................................... 8
Understanding Your Fund Expenses ........................................................ 9
Portfolio of Investments
First Trust IPOX(R) Europe Equity Opportunities ETF (FPXE) ........................ 10
First Trust Dow Jones International Internet ETF (FDNI) ........................... 13
Statements of Assets and Liabilities .................................................... 15
Statements of Operations ................................................................ 16
Statements of Changes in Net Assets ..................................................... 17
Financial Highlights .................................................................... 18
Notes to Financial Statements ........................................................... 19
Additional Information .................................................................. 26
</TABLE>
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CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This report contains certain forward-looking statements within the meaning of
the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934,
as amended. Forward-looking statements include statements regarding the goals,
beliefs, plans or current expectations of First Trust Advisors L.P. ("First
Trust" or the "Advisor") and its representatives, taking into account the
information currently available to them. Forward-looking statements include all
statements that do not relate solely to current or historical fact. For example,
forward-looking statements include the use of words such as "anticipate,"
"estimate," "intend," "expect," "believe," "plan," "may," "should," "would" or
other words that convey uncertainty of future events or outcomes.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
any series of First Trust Exchange-Traded Fund II (the "Trust") described in
this report (each such series is referred to as a "Fund" and collectively, as
the "Funds") to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. When
evaluating the information included in this report, you are cautioned not to
place undue reliance on these forward-looking statements, which reflect the
judgment of the Advisor and its representatives only as of the date hereof. We
undertake no obligation to publicly revise or update these forward-looking
statements to reflect events and circumstances that arise after the date hereof.
PERFORMANCE AND RISK DISCLOSURE
There is no assurance that any Fund described in this report will achieve its
investment objective. Each Fund is subject to market risk, which is the
possibility that the market values of securities owned by the Fund will decline
and that the value of the Fund's shares may therefore be less than what you paid
for them. Accordingly, you can lose money by investing in a Fund. See "Risk
Considerations" in the Additional Information section of this report for a
discussion of certain other risks of investing in the Funds.
Performance data quoted represents past performance, which is no guarantee of
future results, and current performance may be lower or higher than the figures
shown. For the most recent month-end performance figures, please visit
www.ftportfolios.com or speak with your financial advisor. Investment returns,
net asset value and share price will fluctuate and Fund shares, when sold, may
be worth more or less than their original cost.
The Advisor may also periodically provide additional information on Fund
performance on each Fund's webpage at www.ftportfolios.com.
HOW TO READ THIS REPORT
This report contains information that may help you evaluate your investment. It
includes details about each Fund and presents data and analysis that provide
insight into each Fund's performance and investment approach.
By reading the market overview by Robert F. Carey, Chief Market Strategist of
the Advisor, you may obtain an understanding of how the market environment
affected the performance of each Fund. The statistical information that follows
may help you understand each Fund's performance compared to that of relevant
market benchmarks.
It is important to keep in mind that the opinions expressed by personnel of the
Advisor are just that: informed opinions. They should not be considered to be
promises or advice. The opinions, like the statistics, cover the period through
the date on the cover of this report. The material risks of investing in each
Fund are spelled out in its prospectus, statement of additional information, and
other Fund regulatory filings.
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SHAREHOLDER LETTER
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FIRST TRUST EXCHANGE-TRADED FUND II
SEMI-ANNUAL LETTER FROM THE CHAIRMAN AND CEO
MARCH 31, 2021
Dear Shareholders,
First Trust is pleased to provide you with the semi-annual report for certain
series of the First Trust Exchange-Traded Fund II (the "Funds"), which contains
detailed information about the Funds for the six months ended March 31, 2021.
A year ago my message to shareholders was largely fixated on the growing spread
of the coronavirus ("COVID-19") pandemic and what government leaders at the
federal and state levels were doing, and contemplating, to help mitigate the
potential fallout from shutting down such a huge chunk of the U.S. economy. Six
months ago, I was able to share some specifics, such as fast-tracking the
development of one or more vaccines to treat the virus. I disclosed the plan
from the Federal Reserve (the "Fed") to keep short-term interest rates
artificially low for a multi-year period, if necessary, to bring down the
nation's unemployment rate and help nudge inflation above the Fed's 2.0% target.
That level of guidance and commitment has rarely, if ever, been offered up by
the Fed, in our opinion. At that time, the Fed's aggressive response sent a
message to investors that this challenge, like the 2008-2009 financial crisis,
was a serious one that called for extraordinary measures. While we are still
early on in 2021, it does appear that the Fed's monetary policy and the
trillions of dollars of fiscal stimulus from the federal government are having a
positive influence on the U.S. economy and the equities markets.
The global growth forecast from the International Monetary Fund ("IMF"),
released in the first week of April 2021, sees real gross domestic product
growth rising by 6.0% worldwide in 2021, a strong rebound from its -3.3%
projection for 2020. The IMF is calling for a 6.4% growth rate for the U.S. in
2021, up from its -3.5% estimate for 2020. If achieved, the 6.4% growth rate
would be the highest for a calendar year since 1984, according to data from the
Bureau of Economic Analysis. As has been the case for many years, Emerging
Market and Developing Economies are expected to grow faster than advanced
economies in 2021, albeit not by much. Their 2021 growth rate estimate is 6.7%,
up from its -2.2% estimate for 2020.
For anyone looking for some confirmation that the U.S. economy is back on solid
footing, look no further than the latest releases on the ISM Manufacturing Index
and CEO confidence levels. The ISM Manufacturing Index jumped from a reading of
60.8 in February 2021 to 64.7 in March 2021, the highest mark since 1983,
according to the Institute for Supply Management. A reading above 50 indicates
that manufacturing is expanding and vice versa. The Conference Board reported
that its first quarter survey of 2021, which tracks CEO confidence levels, hit
its highest reading since the first quarter of 2004, when the measure stood at
74. The measure currently stands at 73. A reading above 50 points reflects more
positive than negative responses. Eighty-two percent of those CEOs polled expect
economic conditions to improve over the next six months, up from 63% in the
prior survey.
With respect to the performance of the stock market, the S&P 500(R) Index (the
"Index") posted a total return of 56.35% for the 12-month period ended March 31,
2021, according to Bloomberg. It was up 19.07% for the six-month period ended
March 31, 2021, and up 6.17% in the first quarter of 2021. For comparative
purposes, from 1926 through 2020, the Index posted an average annual total
return of 10.28%, according to Morningstar/Ibbotson Associates. I doubt that
anyone was forecasting such outsized returns over the past year, which is why I
embrace a buy and hold approach to investing and encourage all of you to stay
the course.
Investors funneled record amounts of capital into exchange-traded funds ("ETFs")
and related exchange-traded products ("ETPs"), particularly equity funds, in the
first quarter of 2021. ETFGI, an independent research and consultancy firm,
reported that total assets invested in ETFs/ETPs listed in the U.S. stood at an
all-time high of $5.91 trillion as of March 31, 2021, according to its own
release. In March, net inflows to ETFs/ETPs listed in the U.S. totaled a record
high $98.26 billion, pushing year-to-date net inflows to a record high $252.24
billion. Equity and fixed-income funds have garnered the most capital so far
this year. Equity ETFs/ETPs took in a net $184.53 billion in the first quarter,
up from $28.03 billion in the first quarter of 2020. Fixed-income ETFs/ETPs took
in a net $32.09 billion in the first quarter, up from $10.78 billion a year ago.
Thank you for giving First Trust the opportunity to play a role in your
financial future. We value our relationship with you and will report on the
Funds again in six months.
Sincerely,
/s/ James A. Bowen
James A. Bowen
Chairman of the Board of Trustees
Chief Executive Officer of First Trust Advisors L.P.
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MARKET OVERVIEW
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FIRST TRUST EXCHANGE-TRADED FUND II
SEMI-ANNUAL REPORT
MARCH 31, 2021
ROBERT F. CAREY, CFA
SENIOR VICE PRESIDENT AND CHIEF MARKET STRATEGIST
FIRST TRUST ADVISORS L.P.
Mr. Carey is responsible for the overall management of research and analysis of
the First Trust product line. Mr. Carey has more than 30 years of experience as
an Equity and Fixed-Income Analyst and is a recipient of the Chartered Financial
Analyst ("CFA") designation. He is a graduate of the University of Illinois at
Champaign-Urbana with a B.S. in Physics. He is also a member of the Investment
Analysts Society of Chicago and the CFA Institute. Mr. Carey has appeared as a
guest on such programs as Bloomberg TV, CNBC, and WBBM Radio, and has been
quoted by several publications, including The Wall Street Journal, The Wall
Street Reporter, Bloomberg News Service and Registered Rep.
STATE OF THE GLOBAL ECONOMY
On February 17, 2021, data provided by the Institute of International Finance
indicated that the coronavirus ("COVID-19") pandemic had driven global debt
higher by $24 trillion, according to Reuters. Considering that the virus is
still not contained around the world by any stretch, we anticipate the potential
need for additional capital to be raised to help prop up struggling economies.
The $24 trillion capital increase pushed the value of total global debt
outstanding to a record $281 trillion. As a result, worldwide debt-to-gross
domestic product stood above 355% in mid-February 2021. While opinions may vary,
on a country level, the World Bank believes that a ratio above 77% for an
extended period can negatively impact economic growth. For now, the extended
debt levels do not seem to be a major hurdle for investors, but that could
change in the future if not addressed, in our opinion.
The climate of artificially low interest rates and slowly rising bond yields
continues to help fuel demand for equities. While quite a bit of attention is
being garnered by the spike in the yield on the benchmark 10-Year Treasury Note
("T-Note"), the Federal Reserve (the "Fed") is not fazed by it. The yield on the
10-Year T-Note rose by 82 basis points to 1.74% in the first quarter of 2021,
according to Bloomberg. Its all-time closing low was 0.51% on August 4, 2020. At
1.74%, the yield on the 10-Year T-Note is too low to compete with the historical
return on stocks, in our opinion. On March 24, 2021, Fed Chairman Jerome Powell
commented that he is not concerned about the rise in bond yields because he
believes it reflects growing optimism about the economy's prospects, according
to The Wall Street Journal. Powell believes that COVID-19 is still the biggest
risk for the U.S. economy.
Data from Refinitiv indicates that global mergers and acquisitions ("M&A") deal
value (announcements) totaled $1.3 trillion in the first quarter of 2021, up 94%
from the first quarter of 2020, according to Axios. That is an all-time high for
the first quarter of a calendar year and the second-most for any quarter on
record. The U.S. accounted for 50% of that total. Cross-border M&A hit an
all-time first quarter high of $458 billion in 2021. Strong M&A activity
reflects growing confidence in the current global economic recovery.
GLOBAL EQUITIES MARKETS
The S&P 500(R), S&P MidCap 400(R) and S&P SmallCap 600(R) Indices posted total
returns of 19.07%, 41.13% and 55.26%, respectively, over the past six months.
All 11 sectors that comprise the S&P 500(R) Index were up on a total return
basis. The top-performing sector was Energy, up 67.19%, while the worst result
by far came from the Consumer Staples sector, up 7.57%. With respect to foreign
equities, the MSCI World ex USA and the MSCI Emerging Markets Indices posted
total returns of 20.53% (USD) and 22.43% (USD), respectively, according to
Bloomberg, for the same period. Over the same period, the U.S. dollar declined
by 0.70% against a basket of major currencies, as measured by the U.S. Dollar
Index (DXY). The drop in the relative value of the dollar had little influence
on the performance of the two foreign stock indices, in our opinion.
There are other signs that investors have a growing appetite for equities in the
current climate. Data from Renaissance Capital shows that a total of 101 equity
initial public offerings (market caps above $50 million) have been priced in the
U.S. this year (through April 1, 2021), up 288.5% from the same period in 2020,
according to its own release. The 101 companies raised a combined $39.2 billion,
up 463.9% from the same period a year ago.
Over the past 12 months, investors favored sector funds over core equity funds
and passive funds over active funds. Investors liquidated an estimated net
$156.61 billion from U.S. Equity mutual funds and exchange-traded funds ("ETFs")
for the 12-month period ended March 31, 2021, compared to estimated net inflows
totaling $125.70 billion for Sector Equity mutual funds and ETFs, according to
Morningstar. International Equity mutual funds and ETFs endured estimated net
outflows totaling $16.33 billion over the same period. Investors continue to
favor passive over active funds. Passive U.S. Equity funds and ETFs reported
estimated net inflows totaling $43.87 billion in the period, compared to
estimated net outflows totaling $200.48 billion for Active U.S. Equity mutual
funds and ETFs. Passive Sector Equity mutual funds and ETFs reported estimated
net inflows totaling $107.82 billion in the period, compared to estimated net
inflows totaling $17.88 billion for Active Sector Equity mutual funds and ETFs.
Passive International Equity mutual funds and ETFs reported estimated net
inflows totaling $54.64 billion for the same period, compared to estimated net
outflows totaling $70.97 billion for Active International Equity mutual funds
and ETFs.
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FUND PERFORMANCE OVERVIEW (UNAUDITED)
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FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE)
The First Trust IPOX(R) Europe Equity Opportunities ETF (the "Fund") seeks
investment results that correspond generally to the price and yield (before the
Fund's fees and expenses) of an equity index called the IPOX(R)-100 Europe Index
(the "Index"). The shares of the Fund are listed and trade on The Nasdaq Stock
Market LLC under the ticker symbol "FPXE." The Fund will normally invest at
least 90% of its net assets (including investment borrowings) in the common
stocks and depositary receipts that comprise the Index. The Index is owned,
developed, maintained and sponsored by IPOX(R) Schuster LLC. The Index seeks to
measure the performance of the equity securities of the 100 largest and
typically most liquid initial public offerings ("IPOs") (including spin-offs and
equity carve-outs) of companies that are economically tied to Europe.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
6 Months Ended 1 Year Ended Inception (10/4/18) Inception (10/4/18)
3/31/21 3/31/21 to 3/31/21 to 3/31/21
<S> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 13.49% 53.92% 16.93% 47.55%
Market Price 13.10% 53.52% 17.07% 47.80%
INDEX PERFORMANCE
IPOX(R)-100 Europe Index 13.97% 55.28% 18.38% 52.17%
MSCI Europe Index 20.33% 44.95% 7.77% 20.46%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 8.)
-----------------------------
IPOX(R) and the Index are registered international trademarks of IPOX(R)
Schuster LLC ("IPOX") and have been licensed for use by First Trust. The Fund is
not sponsored, endorsed, sold or promoted by IPOX, and IPOX makes no
representation regarding the advisability of trading in such Fund.
Page 4
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Consumer Discretionary 29.61%
Information Technology 23.01
Industrials 16.85
Health Care 11.47
Financials 10.91
Consumer Staples 3.63
Communication Services 2.38
Utilities 1.03
Materials 0.63
Real Estate 0.28
Energy 0.20
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Prosus N.V. 7.97%
Siemens Healthineers AG 5.70
Adyen N.V. 4.99
DSV PANALPINA A/S 3.31
Telefonaktiebolaget LM Ericsson, ADR 3.23
AXA S.A. 3.17
Evolution Gaming Group AB 3.06
Danone S.A. 2.88
Dassault Systemes SE 2.77
NXP Semiconductors N.V. 2.73
------
Total 39.81%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
OCTOBER 4, 2018 - MARCH 31, 2021
First Trust IPOX(R) Europe IPOX(R)-100 MSCI Europe
Equity Opportunities ETF Europe Index Index
-------------------------- ------------ -----------
<S> <C> <C> <C>
10/4/18 $10,000 $10,000 $10,000
3/31/19 9,715 9,769 9,836
9/30/19 10,132 10,255 10,091
3/31/20 9,587 9,800 8,311
9/30/20 13,003 13,352 10,011
3/31/21 14,757 15,217 12,046
</TABLE>
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 5
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST DOW JONES INTERNATIONAL INTERNET ETF (FDNI)
The First Trust Dow Jones International Internet ETF (the "Fund") seeks
investment results that correspond generally to the price and yield (before the
Fund's fees and expenses) of an equity index called the Dow Jones International
Internet Index (the "Index"). The shares of the Fund are listed and trade on The
Nasdaq Stock Market LLC under the ticker symbol "FDNI." The Fund will normally
invest at least 90% of its net assets (including investment borrowings) in the
common stocks and depositary receipts that comprise the Index. The Index is
developed, maintained and sponsored by S&P Dow Jones Indices LLC and is designed
to measure the performance of securities of non-US issuers whose primary
business focus is Internet-related.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
6 Months Ended 1 Year Ended Inception (11/5/18) Inception (11/5/18)
3/31/21 3/31/21 to 3/31/21 to 3/31/21
<S> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 14.80% 98.69% 42.95% 135.74%
Market Price 15.37% 98.17% 43.32% 137.22%
INDEX PERFORMANCE
Dow Jones International Internet Index 15.67% 100.20% 44.12% 140.42%
MSCI ACWI ex-USA Information
Technology Index 29.03% 82.27% 33.62% 100.51%
MSCI ACWI ex-USA Index 21.10% 49.41% 12.26% 31.99%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 8.)
-----------------------------
The Index is a product of S&P Dow Jones Indices LLC or its affiliates ("SPDJI")
and has been licensed for use by First Trust. Standard & Poor's(R) and S&P(R)
are registered trademarks of Standard & Poor's Financial Services LLC ("S&P");
Dow Jones(R) is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow
Jones"); and these trademarks have been licensed for use by SPDJI and
sublicensed for certain purposes by First Trust. The Fund is not sponsored,
endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective
affiliates and none of such parties make any representation regarding the
advisability of investing in such product nor do they have any liability for any
errors, omissions, or interruptions of the Index.
Page 6
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST DOW JONES INTERNATIONAL INTERNET ETF (FDNI) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Consumer Discretionary 45.24%
Communication Services 34.21
Information Technology 18.19
Health Care 2.36
------
Total 100.00%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Alibaba Group Holding Ltd., ADR 10.11%
Meituan, Class B 9.81
Tencent Holdings Ltd. 9.67
Shopify, Inc., Class A 8.05
Naspers Ltd., Class N 6.77
JD.com, Inc., ADR 4.65
Sea Ltd., ADR 4.62
Adyen N.V. 4.40
Baidu, Inc., ADR 3.85
NAVER Corp. 3.13
------
Total 65.06%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
NOVEMBER 5, 2018 - MARCH 31, 2021
First Trust Dow Jones Dow Jones International MSCI ACWI ex-USA MSCI ACWI
International Internet ETF Internet Index Information Technology Index ex-USA Index
-------------------------- ----------------------- ----------------------------- ------------
<S> <C> <C> <C> <C>
11/5/18 $10,000 $10,000 $10,000 $10,000
3/31/19 11,275 11,318 10,863 10,463
9/30/19 10,907 10,977 11,546 10,581
3/31/20 11,865 12,008 11,000 8,834
9/30/20 20,535 20,785 15,539 10,899
3/31/21 23,574 24,042 20,050 13,199
</TABLE>
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 7
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FUND PERFORMANCE OVERVIEW (UNAUDITED)
--------------------------------------------------------------------------------
Total returns for the periods since inception are calculated from the inception
date of each Fund. "Average Annual Total Returns" represent the average annual
change in value of an investment over the periods indicated. "Cumulative Total
Returns" represent the total change in value of an investment over the periods
indicated.
Each Fund's per share net asset value ("NAV") is the value of one share of the
Fund and is computed by dividing the value of all assets of the Fund (including
accrued interest and dividends), less all liabilities (including accrued
expenses and dividends declared but unpaid), by the total number of outstanding
shares. The price used to calculate market return ("Market Price") is determined
by using the midpoint of the national best bid and offer price ("NBBO") as of
the time that the Fund's NAV is calculated. Under SEC rules, the NBBO consists
of the highest displayed buy and lowest sell prices among the various exchanges
trading the Fund at the time the Fund's NAV is calculated. Prior to January 1,
2019, the price used was the midpoint between the highest bid and the lowest
offer on the stock exchange on which shares of the Fund were listed for trading
as of the time that the Fund's NAV was calculated. Since shares of each Fund did
not trade in the secondary market until after the Fund's inception, for the
period from inception to the first day of secondary market trading in shares of
the Fund, the NAV of each Fund is used as a proxy for the secondary market
trading price to calculate market returns. NAV and market returns assume that
all distributions have been reinvested in each Fund at NAV and Market Price,
respectively.
An index is a statistical composite that tracks a specified financial market or
sector. Unlike each Fund, the indices do not actually hold a portfolio of
securities and therefore do not incur the expenses incurred by each Fund. These
expenses negatively impact the performance of each Fund. Also, market returns do
not include brokerage commissions that may be payable on secondary market
transactions. If brokerage commissions were included, market returns would be
lower. The total returns presented reflect the reinvestment of dividends on
securities in the indices. The returns presented do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption or
sale of Fund shares. The investment return and principal value of shares of each
Fund will vary with changes in market conditions. Shares of each Fund may be
worth more or less than their original cost when they are redeemed or sold in
the market. Each Fund's past performance is no guarantee of future performance.
Page 8
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
UNDERSTANDING YOUR FUND EXPENSES
MARCH 31, 2021 (UNAUDITED)
As a shareholder of First Trust IPOX(R) Europe Equity Opportunities ETF or First
Trust Dow Jones International Internet ETF (each a "Fund" and collectively, the
"Funds"), you incur two types of costs: (1) transaction costs; and (2) ongoing
costs, including management fees, distribution and/or service (12b-1) fees, if
any, and other Fund expenses. This Example is intended to help you understand
your ongoing costs (in U.S. dollars) of investing in the Funds and to compare
these costs with the ongoing costs of investing in other funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held through the six-month period ended March 31, 2021.
ACTUAL EXPENSES
The first line in the following table provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During the Six-Month
Period" to estimate the expenses you paid on your account during this six-month
period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line in the following table provides information about hypothetical
account values and hypothetical expenses based on each Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
each Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Funds and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs such as brokerage
commissions. Therefore, the second line in the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
ANNUALIZED
EXPENSE RATIO EXPENSES PAID
BEGINNING ENDING BASED ON THE DURING THE
ACCOUNT VALUE ACCOUNT VALUE SIX-MONTH SIX-MONTH
OCTOBER 1, 2020 MARCH 31, 2021 PERIOD PERIOD (a)
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE)
Actual $1,000.00 $1,134.90 0.70% $3.73
Hypothetical (5% return before expenses) $1,000.00 $1,021.44 0.70% $3.53
FIRST TRUST DOW JONES INTERNATIONAL INTERNET ETF (FDNI)
Actual $1,000.00 $1,148.00 0.65% $3.48
Hypothetical (5% return before expenses) $1,000.00 $1,021.69 0.65% $3.28
</TABLE>
(a) Expenses are equal to the annualized expense ratio as indicated in the
table multiplied by the average account value over the period (October 1,
2020 through March 31, 2021), multiplied by 182/365 (to reflect the
six-month period).
Page 9
<PAGE>
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.9%
AUSTRIA -- 0.4%
488 BAWAG Group AG (b) (c) $ 25,203
--------------
BERMUDA -- 0.1%
172 GAN Ltd. (d) 3,130
--------------
CAYMAN ISLANDS -- 1.8%
1,942 Farfetch Ltd., Class A (d) 102,965
--------------
CYPRUS -- 1.4%
1,368 HeadHunter Group PLC, ADR 46,402
570 Ozon Holdings PLC, ADR (d) 31,960
--------------
78,362
--------------
DENMARK -- 5.3%
184 Ascendis Pharma A/S, ADR (d) 23,714
257 Better Collective A/S (d) 6,297
944 DSV PANALPINA A/S 185,206
411 Netcompany Group A/S (b) (c) 39,135
2,189 Scandinavian Tobacco Group
A/S (b) (c) 41,998
--------------
296,350
--------------
FINLAND -- 0.7%
1,402 Terveystalo OYJ (b) (c) 19,467
806 Tokmanni Group Corp. 18,904
--------------
38,371
--------------
FRANCE -- 10.8%
6,619 AXA S.A. 177,636
2,349 Danone S.A. 161,149
726 Dassault Systemes SE 155,292
2,091 La Francaise des Jeux
SAEM (b) (c) 95,069
248 Maisons du Monde S.A. (b) (c) (d) 5,491
133 Talend S.A., ADR (d) 8,464
--------------
603,101
--------------
GERMANY -- 18.1%
988 BioNTech SE, ADR (d) (e) 107,880
1,091 Delivery Hero SE (b) (c) (d) 141,376
547 DWS Group GmbH & Co.
KGaA (b) (c) 23,654
952 HelloFresh SE (d) 71,004
491 Jumia Technologies AG, ADR (d) 17,411
662 Knorr-Bremse AG 82,617
3,977 Siemens Energy AG (d) 142,760
5,884 Siemens Healthineers AG (b) (c) 318,789
550 TeamViewer AG (b) (c) (d) 23,497
1,711 Traton SE 46,149
1,002 Uniper SE 36,286
--------------
1,011,423
--------------
IRELAND -- 1.5%
515 Adient PLC (d) 22,763
2,301 nVent Electric PLC 64,221
--------------
86,984
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
ISRAEL -- 2.9%
172 Fiverr International Ltd. (d) $ 37,355
209 Inmode Ltd. (d) 15,125
370 Kornit Digital Ltd. (d) 36,675
252 Nano-X Imaging Ltd. (d) 10,445
228 Wix.com Ltd. (d) 63,662
--------------
163,262
--------------
ITALY -- 2.8%
3,322 Italgas S.p.A. 21,563
6,873 Nexi S.p.A. (b) (c) (d) 119,932
2,737 Pirelli & C S.p.A. (b) (c) (d) 16,055
--------------
157,550
--------------
JERSEY -- 3.2%
739 Aptiv PLC (d) 101,908
1,127 Wizz Air Holdings PLC (b) (c) (d) 74,919
--------------
176,827
--------------
LUXEMBOURG -- 1.4%
2,926 Global Fashion Group S.A. (d) 38,397
192 Globant S.A. (d) 39,861
--------------
78,258
--------------
NETHERLANDS -- 19.0%
125 Adyen N.V. (b) (c) (d) 279,030
211 Argenx SE, ADR (d) 58,107
306 CureVac N.V. (d) (e) 27,987
468 IMCD N.V. 65,036
236 MYT Netherlands Parent BV,
ADR (d) 6,670
758 NXP Semiconductors N.V. 152,616
4,010 Prosus N.V. 445,801
147 Shop Apotheke Europe
N.V. (b) (c) (d) 32,064
--------------
1,067,311
--------------
NORWAY -- 1.2%
6,382 Elkem ASA (b) (c) 27,757
1,372 Europris ASA (b) (c) 8,213
1,222 Kahoot! ASA (f) 13,687
1,112 Pexip Holding ASA (d) 12,441
787 Volue AS (d) 4,784
--------------
66,882
--------------
SPAIN -- 0.1%
6,492 Unicaja Banco S.A. (b) (c) (d) 6,528
--------------
SWEDEN -- 17.0%
434 AcadeMedia AB (b) (c) 4,070
389 Ambea AB (b) (c) (d) 3,229
1,673 Bravida Holding AB (b) (c) 23,045
433 CELLINK AB, Class B (d) 18,617
547 Cibus Nordic Real Estate AB 10,272
2,027 Embracer Group AB (d) 55,749
3,290 EQT AB 108,305
1,162 Evolution Gaming Group
AB (b) (c) 171,104
427 Instalco AB (c) 15,621
746 Lifco AB, Class B 69,360
Page 10 See Notes to Financial Statements
<PAGE>
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
SWEDEN (CONTINUED)
1,238 Medicover AB, Class B (d) $ 26,508
430 MIPS AB (c) 30,773
2,737 Nordnet AB publ (d) 44,188
2,189 Resurs Holding AB (b) (c) (d) 11,971
578 Sinch AB (b) (c) (d) 101,656
1,889 Tele2 AB, Class B 25,480
13,688 Telefonaktiebolaget LM Ericsson,
ADR 180,545
1,145 Thule Group AB (b) (c) (d) 49,715
--------------
950,208
--------------
SWITZERLAND -- 3.3%
659 Dufry AG (d) 44,875
2,170 Softwareone Holding AG 56,021
274 Stadler Rail AG 13,057
246 VAT Group AG (b) (c) 68,921
--------------
182,874
--------------
UNITED KINGDOM -- 6.7%
620 Abcam PLC, ADR (d) 11,916
25,714 Airtel Africa PLC (b) (c) 28,112
1,123 AJ Bell PLC 6,495
2,509 Biffa PLC (b) (c) (d) 9,201
7,514 Cineworld Group PLC (d) 9,994
3,406 Civitas Social Housing PLC (c) 5,062
451 Endava PLC, ADR (d) 38,195
969 Energean PLC (d) 11,352
1,532 Finablr PLC (b) (d) (g) (h) (i) 0
1,879 Forterra PLC (b) (c) (d) 7,434
5,689 Just Group PLC (d) 7,929
14,231 M&G PLC 40,690
937 Moonpig Group PLC (d) 5,485
41,495 Natwest Group PLC 112,265
2,258 Network International Holdings
PLC (b) (c) (d) 12,875
7,576 Ninety One PLC 24,941
4,843 Quilter PLC (b) (c) 10,673
3,947 Trainline PLC (b) (c) (d) 24,976
3,938 Virgin Money UK PLC (d) 10,263
--------------
377,858
--------------
UNITED STATES -- 0.7%
1,528 Veoneer, Inc. (d) 37,405
--------------
VIRGIN ISLANDS -- 1.5%
1,240 Capri Holdings Ltd. (d) 63,240
2,326 Fix Price Group Ltd., GDR (c) (d) 22,702
--------------
85,942
--------------
TOTAL COMMON STOCKS -- 99.9% 5,596,794
(Cost $5,149,465) --------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
MONEY MARKET FUNDS -- 1.8%
103,580 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
0.02% (j) (k) $ 103,580
(Cost $103,580) --------------
TOTAL INVESTMENTS -- 101.7% 5,700,374
(Cost $5,253,045) (l)
NET OTHER ASSETS AND
LIABILITIES -- (1.7)% (97,884)
--------------
NET ASSETS -- 100.0% $ 5,602,490
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amend(the "1933 Act") and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. This security is not restricted on the foreign exchange where it
trades freely without any additional registration. As such, it does not
require the additional disclosure required of restricted securities.
(c) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(d) Non-income producing security.
(e) All or a portion of this security is on loan (see Note 2E - 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 is $104,443 and the
total value of the collateral held by the Fund is $103,580.
(f) Non-income producing security which makes payment-in-kind ("PIK")
distributions. There were no in-kind distributions received for the six
months ended March 31, 2021.
(g) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures adopted by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940, as
amended. At March 31, 2021, securities noted as such are valued at $0 or
0.0% of net assets.
(h) Pursuant to procedures adopted by the Trust's Board of Trustees, this
security has been determined to be illiquid by First Trust Advisors, L.P.,
the Fund's advisor.
(i) This security's value was determined using significant unobservable inputs
(see Note 2A - Portfolio Valuation in the Notes to Financial Statements).
(j) Rate shown reflects yield as of March 31, 2021.
(k) This security serves as collateral for securities on loan.
See Notes to Financial Statements Page 11
<PAGE>
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
(l) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2021, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $504,519 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $57,190. The net unrealized appreciation was
$447,329.
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2021 PRICES INPUTS INPUTS
------------------------------------------------------
Common Stocks:
United Kingdom $ 377,858 $ 377,858 $ -- $ --**
Other Country
Categories* 5,218,936 5,218,936 -- --
Money Market
Funds 103,580 103,580 -- --
------------------------------------------------------
Total Investments $ 5,700,374 $ 5,700,374 $ -- $ --**
======================================================
* See Portfolio of Investments for country breakout.
** Investment is valued at $0.
Level 3 Common Stocks are fair valued by the Advisor's Pricing Committee and are
footnoted in the Portfolio of Investments. Level 3 Common Stocks values are
based on unobservable and non-quantitative inputs.
---------------------------------
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) $ 104,443
Non-cash Collateral(2) (103,580)
--------------
Net Amount $ 863
==============
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) The collateral requirements are determined at the beginning of each
business day based on the market value of the loaned securities from the
end of the prior day. On March 31, 2021, the last business day of the
period, there was sufficient collateral based on the end of day market
value from the prior business day; however, as a result of market movement
from March 30 to March 31, the value of the related securities loaned was
above the collateral value received. See Note 2E - Securities Lending in
the Notes to Financial Statements.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
Euro 45.0%
United States Dollar 25.2
Swedish Krona 13.6
British Pound Sterling 7.1
Danish Krone 4.7
Swiss Franc 3.2
Norwegian Krone 1.2
------
Total 100.0%
======
Page 12 See Notes to Financial Statements
<PAGE>
FIRST TRUST DOW JONES INTERNATIONAL INTERNET ETF (FDNI)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2021 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.2%
AUSTRALIA -- 1.2%
18,551 Afterpay Ltd. (b) $ 1,430,176
--------------
CANADA -- 8.0%
8,914 Shopify, Inc., Class A (b) 9,841,291
--------------
CAYMAN ISLANDS -- 53.0%
54,495 Alibaba Group Holding Ltd.,
ADR (b) 12,355,651
21,632 Baidu, Inc., ADR (b) 4,706,042
12,326 Bilibili, Inc., ADR (b) 1,319,622
16,797 Farfetch Ltd., Class A (b) 890,577
8,954 GSX Techedu, Inc., ADR (b) 303,361
67,404 JD.com, Inc., ADR (b) 5,684,179
312,628 Meituan, Class B (b) (c) (d) 11,991,828
31,799 NetEase, Inc., ADR 3,283,565
14,207 Pagseguro Digital Ltd.,
Class A (b) 657,784
27,733 Pinduoduo, Inc., ADR (b) 3,712,894
45,520 Ping An Healthcare and
Technology Co.,
Ltd. (b) (c) (d) 570,896
25,283 Sea Ltd., ADR (b) 5,643,924
150,543 Tencent Holdings Ltd. 11,812,458
36,232 Trip.com Group Ltd., ADR (b) 1,435,874
30,674 Vipshop Holdings Ltd., ADR (b) 915,926
--------------
65,284,581
--------------
GERMANY -- 3.3%
12,426 Delivery Hero SE (b) (c) (d) 1,610,208
8,385 Scout24 AG (c) (d) 636,203
12,603 TeamViewer AG (b) (c) (d) 538,420
13,163 Zalando SE (b) (c) (d) 1,291,093
--------------
4,075,924
--------------
ISLE OF MAN -- 0.8%
46,432 Entain PLC (b) 971,694
--------------
ISRAEL -- 1.0%
4,414 Wix.com Ltd. (b) 1,232,477
--------------
JAPAN -- 4.3%
33,872 M3, Inc. 2,316,052
35,982 Nexon Co., Ltd. 1,166,632
64,873 Rakuten, Inc. 772,793
210,476 Z Holdings Corp. 1,046,630
--------------
5,302,107
--------------
LUXEMBOURG -- 2.0%
9,357 Spotify Technology S.A. (b) 2,507,208
--------------
NETHERLANDS -- 8.7%
2,408 Adyen N.V. (b) (c) (d) 5,375,240
33,513 Prosus N.V. 3,725,719
25,269 Yandex N.V., Class A (b) 1,618,732
--------------
10,719,691
--------------
NEW ZEALAND -- 0.8%
9,546 Xero Ltd. (b) 917,426
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
SOUTH AFRICA -- 6.7%
34,553 Naspers Ltd., Class N $ 8,267,695
--------------
SOUTH KOREA -- 5.6%
4,784 Kakao Corp. 2,105,087
11,470 NAVER Corp. 3,820,800
1,271 NCSoft Corp. 980,413
--------------
6,906,300
--------------
UNITED KINGDOM -- 3.8%
10,554 Atlassian Corp. PLC, Class A (b) 2,224,361
76,882 Auto Trader Group PLC (b) (c) (d) 587,609
48,122 Ocado Group PLC (b) 1,350,046
70,327 Rightmove PLC (b) 564,462
--------------
4,726,478
--------------
TOTAL INVESTMENTS -- 99.2% 122,183,048
(Cost $114,558,538) (e)
NET OTHER ASSETS AND
LIABILITIES -- 0.8% 984,269
--------------
NET ASSETS -- 100.0% $ 123,167,317
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) Non-income producing security.
(c) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(e) Aggregate cost for financial reporting purposes approximates the aggregate
cost for federal income tax purposes. As of March 31, 2021, the aggregate
gross unrealized appreciation for all investments in which there was an
excess of value over tax cost was $10,314,628 and the aggregate gross
unrealized depreciation for all investments in which there was an excess
of tax cost over value was $2,690,118. The net unrealized appreciation was
$7,624,510.
ADR - American Depositary Receipt
See Notes to Financial Statements Page 13
<PAGE>
FIRST TRUST DOW JONES INTERNATIONAL INTERNET ETF (FDNI)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2021 (UNAUDITED)
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
LEVEL 1 SIGNIFICANT SIGNIFICANT
QUOTED OBSERVABLE UNOBSERVABLE
PRICES INPUTS INPUTS
----------------------------------------
Common Stocks* $122,183,048 $ -- $ --
========================================
* See Portfolio of Investments for country breakout.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 39.7%
Hong Kong Dollar 19.9
Euro 10.8
Canadian Dollar 8.1
South African Rand 6.8
South Korean Won 5.7
Japanese Yen 4.3
British Pound Sterling 2.8
Australian Dollar 1.9
------
Total 100.0%
======
Page 14 See Notes to Financial Statements
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST
IPOX(R) EUROPE DOW JONES
EQUITY INTERNATIONAL
OPPORTUNITIES ETF INTERNET ETF
(FPXE) (FDNI)
---------------------- ----------------------
ASSETS:
<S> <C> <C>
Investments, at value ................................................. $ 5,700,374 $ 122,183,048
Receivables:
Investment securities sold ......................................... 215,369 1,034,715
Dividends .......................................................... 5,114 21,632
Reclaims ........................................................... 3,831 --
Securities lending income .......................................... 61 --
---------------- ----------------
Total Assets ....................................................... 5,924,749 123,239,395
---------------- ----------------
LIABILITIES:
Due to custodian ...................................................... 126,411 1,903
Due to custodian foreign currency ..................................... 59,611 --
Payables:
Collateral for securities on loan .................................. 103,580 --
Investment securities purchased .................................... 29,214 --
Investment advisory fees ........................................... 3,443 70,175
---------------- ----------------
Total Liabilities .................................................. 322,259 72,078
---------------- ----------------
NET ASSETS ............................................................ $ 5,602,490 $ 123,167,317
================ ================
NET ASSETS CONSIST OF:
Paid-in capital ....................................................... $ 5,201,690 $ 112,569,972
Par value ............................................................. 2,000 27,500
Accumulated distributable earnings (loss) ............................. 398,800 10,569,845
---------------- ----------------
NET ASSETS ............................................................ $ 5,602,490 $ 123,167,317
================ ================
NET ASSET VALUE, per share ............................................ $ 28.01 $ 44.79
================ ================
Number of shares outstanding (unlimited number of shares
authorized, par value $0.01 per share) ............................. 200,002 2,750,002
================ ================
Investments, at cost .................................................. $ 5,253,045 $ 114,558,538
================ ================
Foreign currency, at cost (proceeds) .................................. $ (59,601) $ --
================ ================
Securities on loan, at value .......................................... $ 104,443 $ --
================ ================
</TABLE>
See Notes to Financial Statements Page 15
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST
IPOX(R) EUROPE DOW JONES
EQUITY INTERNATIONAL
OPPORTUNITIES ETF INTERNET ETF
(FPXE) (FDNI)
---------------------- ----------------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............................................................. $ 13,672 $ 49,771
Securities lending income (net of fees)................................ 1,562 --
Foreign withholding tax................................................ (1,633) (4,909)
---------------- ----------------
Total investment income............................................. 13,601 44,862
---------------- ----------------
EXPENSES:
Investment advisory fees............................................... 12,825 309,218
---------------- ----------------
Total expenses...................................................... 12,825 309,218
---------------- ----------------
NET INVESTMENT INCOME (LOSS)........................................... 776 (264,356)
---------------- ----------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments......................................................... (89,820) (1,090,339)
In-kind redemptions................................................. 287,410 4,901,736
Foreign currency transactions....................................... (305) (14,603)
---------------- ----------------
Net realized gain (loss)............................................... 197,285 3,796,794
---------------- ----------------
Net change in unrealized appreciation (depreciation) on:
Investments......................................................... (98,074) 817,918
Foreign currency translations....................................... (111) (277)
---------------- ----------------
Net change in unrealized appreciation (depreciation)................... (98,185) 817,641
NET REALIZED AND UNREALIZED GAIN (LOSS)................................ 99,100 4,614,435
---------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS..................................................... $ 99,876 $ 4,350,079
================ ================
</TABLE>
Page 16 See Notes to Financial Statements
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST
IPOX(R) EUROPE EQUITY DOW JONES INTERNATIONAL
OPPORTUNITIES ETF INTERNET ETF
(FPXE) (FDNI)
------------------------------------ ------------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
3/31/2021 YEAR ENDED 3/31/2021 YEAR ENDED
(UNAUDITED) 9/30/2020 (UNAUDITED) 9/30/2020
----------------- ----------------- ----------------- -----------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income (loss)........................... $ 776 $ 14,604 $ (264,356) $ (68,610)
Net realized gain (loss)............................... 197,285 81,940 3,796,794 506,589
Net change in unrealized appreciation (depreciation)... (98,185) 373,968 817,641 6,929,710
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets resulting
from operations..................................... 99,876 470,512 4,350,079 7,367,689
--------------- --------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations.................................. (23,321) (23,081) (145,080) (61,741)
--------------- --------------- --------------- ---------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold.............................. 4,462,634 1,085,057 79,766,527 39,002,716
Cost of shares redeemed................................ (1,424,855) (1,010,545) (9,654,241) (1,662,339)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets resulting
from shareholder transactions....................... 3,037,779 74,512 70,112,286 37,340,377
--------------- --------------- --------------- ---------------
Total increase (decrease) in net assets................ 3,114,334 521,943 74,317,285 44,646,325
NET ASSETS:
Beginning of period.................................... 2,488,156 1,966,213 48,850,032 4,203,707
--------------- --------------- --------------- ---------------
End of period.......................................... $ 5,602,490 $ 2,488,156 $ 123,167,317 $ 48,850,032
=============== =============== =============== ===============
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period................ 100,002 100,002 1,250,002 200,002
Shares sold............................................ 150,000 50,000 1,700,000 1,100,000
Shares redeemed........................................ (50,000) (50,000) (200,000) (50,000)
--------------- --------------- --------------- ---------------
Shares outstanding, end of period...................... 200,002 100,002 2,750,002 1,250,002
=============== =============== =============== ===============
</TABLE>
See Notes to Financial Statements Page 17
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
3/31/2021 YEAR ENDED PERIOD ENDED
(UNAUDITED) 9/30/2020 9/30/2019 (a)
---------------- --------------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 24.88 $ 19.66 $ 19.70
---------- ----------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.01 (b) 0.22 0.33
Net realized and unrealized gain (loss) 3.35 5.30 (0.06)
---------- ----------- ----------
Total from investment operations 3.36 5.52 0.27
---------- ----------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.23) (0.30) (0.31)
---------- ----------- ----------
Net asset value, end of period $ 28.01 $ 24.88 $ 19.66
========== =========== ==========
TOTAL RETURN (c) 13.49% 28.33% 1.32%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 5,602 $ 2,488 $ 1,966
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.70% (d) 0.70% 0.70% (d)
Ratio of net investment income (loss) to
average net assets 0.04% (d) 0.74% 1.77% (d)
Portfolio turnover rate (e) 61% 63% 67%
</TABLE>
FIRST TRUST DOW JONES INTERNATIONAL INTERNET ETF (FDNI)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
3/31/2021 YEAR ENDED PERIOD ENDED
(UNAUDITED) 9/30/2020 9/30/2019 (a)
---------------- --------------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 39.08 $ 21.02 $ 19.69
---------- ----------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.13) (b) (0.03) 0.75
Net realized and unrealized gain (loss) 5.91 18.40 1.04
---------- ----------- ----------
Total from investment operations 5.78 18.37 1.79
---------- ----------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.07) (0.31) (0.46)
---------- ----------- ----------
Net asset value, end of period $ 44.79 $ 39.08 $ 21.02
========== =========== ==========
TOTAL RETURN (c) 14.80% 88.27% 9.07%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 123,167 $ 48,850 $ 4,204
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.65% (d) 0.65% 0.65% (d)
Ratio of net investment income (loss) to
average net assets (0.56)% (d) (0.50)% 4.42% (d)
Portfolio turnover rate (e) 10% 23% 61%
</TABLE>
(a) Inception dates for FPXE and FDNI are October 4, 2018 and November 5,
2018, respectively, which are consistent with the respective Fund's
commencement of investment operations and are the dates the initial
creation units were established.
(b) Based on average shares outstanding.
(c) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(d) Annualized.
(e) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
Page 18 See Notes to Financial Statements
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
1. ORGANIZATION
First Trust Exchange-Traded Fund II (the "Trust") is an open-end management
investment company organized as a Massachusetts business trust on July 6, 2006,
and is registered with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended (the "1940 Act").
The Trust currently consists of sixteen exchange-traded funds. This report
covers the two funds (each a "Fund" and collectively, the "Funds") listed below.
The shares of each Fund are listed and traded on The Nasdaq Stock Market LLC
("Nasdaq").
First Trust IPOX(R) Europe Equity Opportunities ETF - (ticker "FPXE")
First Trust Dow Jones International Internet ETF - (ticker "FDNI")
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:
<TABLE>
<CAPTION>
FUND INDEX
<S> <C>
First Trust IPOX(R) Europe Equity Opportunities ETF IPOX(R)-100 Europe Index
First Trust Dow Jones International Internet ETF Dow Jones International Internet Index
</TABLE>
2. SIGNIFICANT ACCOUNTING POLICIES
The Funds are each considered an investment company and follow accounting and
reporting guidance under Financial Accounting Standards Board Accounting
Standards Codification Topic 946, "Financial Services-Investment Companies." The
following is a summary of significant accounting policies consistently followed
by the Funds in the preparation of the financial statements. The preparation of
the financial statements in accordance with accounting principles generally
accepted in the United States of America ("U.S. GAAP") requires management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
A. PORTFOLIO VALUATION
Each Fund's NAV is determined daily as of the close of regular trading on the
New York Stock Exchange ("NYSE"), normally 4:00 p.m. Eastern time, on each day
the NYSE is open for trading. If the NYSE closes early on a valuation day, the
NAV is determined as of that time. Foreign securities are priced using data
reflecting the earlier closing of the principal markets for those securities.
Each Fund's NAV is calculated by dividing the value of all assets of each Fund
(including accrued interest and dividends), less all liabilities (including
accrued expenses and dividends declared but unpaid), by the total number of
shares outstanding.
Each Fund's investments are valued daily at market value or, in the absence of
market value with respect to any portfolio securities, at fair value. Market
value prices represent last sale or official closing prices from a national or
foreign exchange (i.e., a regulated market) and are primarily obtained from
third-party pricing services. Fair value prices represent any prices not
considered market value prices and are either obtained from a third-party
pricing service or are determined by the Pricing Committee of the Funds'
investment advisor, First Trust Advisors L.P. ("First Trust" or the "Advisor"),
in accordance with valuation procedures adopted by the Trust's Board of
Trustees, and in accordance with provisions of the 1940 Act. Investments valued
by the Advisor's Pricing Committee, if any, are footnoted as such in the
footnotes to the Portfolio of Investments. Each Fund's investments are valued as
follows:
Common stocks and other equity securities listed on any national or
foreign exchange (excluding Nasdaq and the London Stock Exchange
Alternative Investment Market ("AIM")) are valued at the last sale price
on the exchange on which they are principally traded or, for Nasdaq and
AIM securities, the official closing price. Securities traded on more than
one securities exchange are valued at the last sale price or official
closing price, as applicable, at the close of the securities exchange
representing the principal market for such securities.
Securities trading on foreign exchanges or over-the-counter markets that
close prior to the NYSE close may be valued using a systematic fair
valuation model provided by a third-party pricing service. If these
foreign securities meet certain criteria in relation to the valuation
model, their valuation is systematically adjusted to reflect the impact of
movement in the U.S. market after the close of the foreign markets.
Shares of open-end funds are valued at fair value which is based on NAV
per share.
Securities traded in an over-the-counter market are fair valued at the
mean of their most recent bid and asked price, if available, and otherwise
at their closing bid price.
Page 19
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
Certain securities may not be able to be priced by pre-established pricing
methods. Such securities may be valued by the Trust's Board of Trustees or its
delegate, the Advisor's Pricing Committee, at fair value. These securities
generally include, but are not limited to, restricted securities (securities
which may not be publicly sold without registration under the Securities Act of
1933, as amended) for which a third-party pricing service is unable to provide a
market price; securities whose trading has been formally suspended; a security
whose market or fair value price is not available from a pre-established pricing
source; a security with respect to which an event has occurred that is likely to
materially affect the value of the security after the market has closed but
before the calculation of a Fund's NAV or make it difficult or impossible to
obtain a reliable market quotation; and a security whose price, as provided by
the third-party pricing service, does not reflect the security's fair value. As
a general principle, the current fair value of a security would appear to be the
amount which the owner might reasonably expect to receive for the security upon
its current sale. When fair value prices are used, generally they will differ
from market quotations or official closing prices on the applicable exchanges. A
variety of factors may be considered in determining the fair value of such
securities, including, but not limited to, the following:
1) the type of security;
2) the size of the holding;
3) the initial cost of the security;
4) transactions in comparable securities;
5) price quotes from dealers and/or third-party pricing services;
6) relationships among various securities;
7) information obtained by contacting the issuer, analysts, or the
appropriate stock exchange;
8) an analysis of the issuer's financial statements; and
9) the existence of merger proposals or tender offers that might affect
the value of the security.
If the securities in question are foreign securities, the following additional
information may be considered:
1) the value of similar foreign securities traded on other foreign
markets;
2) ADR trading of similar securities;
3) closed-end fund or exchange-traded fund trading of similar
securities;
4) foreign currency exchange activity;
5) the trading prices of financial products that are tied to baskets of
foreign securities;
6) factors relating to the event that precipitated the pricing problem;
7) whether the event is likely to recur; and
8) whether the effects of the event are isolated or whether they affect
entire markets, countries or regions.
In addition, differences between the prices used to calculate a Fund's NAV and
the prices used by such Fund's corresponding index could result in a difference
between a Fund's performance and the performance of its underlying index.
Because foreign markets may be open on different days than the days during which
investors may transact in the shares of a Fund, the value of the Fund's
securities may change on the days when investors are not able to transact in the
shares of the Fund. The value of securities denominated in foreign currencies is
converted into U.S. dollars using exchange rates determined daily as of the
close of regular trading on the NYSE. Any use of a different rate from the rates
used by a relevant index may adversely affect the Fund's ability to track the
index.
The Funds are subject to fair value accounting standards that define fair value,
establish the framework for measuring fair value and provide a three-level
hierarchy for fair valuation based upon the inputs to the valuation as of the
measurement date. The three levels of the fair value hierarchy are as follows:
o Level 1 - Level 1 inputs are quoted prices in active markets for
identical investments. An active market is a market in which
transactions for the investment occur with sufficient frequency and
volume to provide pricing information on an ongoing basis.
o Level 2 - Level 2 inputs are observable inputs, either directly or
indirectly, and include the following:
o Quoted prices for similar investments in active markets.
o Quoted prices for identical or similar investments in markets
that are non-active. A non-active market is a market where
there are few transactions for the investment, the prices are
not current, or price quotations vary substantially either
over time or among market makers, or in which little
information is released publicly.
o Inputs other than quoted prices that are observable for the
investment (for example, interest rates and yield curves
observable at commonly quoted intervals, volatilities,
prepayment speeds, loss severities, credit risks, and default
rates).
o Inputs that are derived principally from or corroborated by
observable market data by correlation or other means.
o Level 3 - Level 3 inputs are unobservable inputs. Unobservable
inputs may reflect the reporting entity's own assumptions about the
assumptions that market participants would use in pricing the
investment.
The inputs or methodologies used for valuing investments are not necessarily an
indication of the risk associated with investing in those investments. A summary
of the inputs used to value each Fund's investments as of March 31, 2021, is
included with each Fund's Portfolio of Investments.
Page 20
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (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.
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.
D. FOREIGN CURRENCY
The books and records of the Funds are maintained in U.S. dollars. Foreign
currencies, investments and other assets and liabilities are translated into
U.S. dollars at the exchange rates prevailing at the end of the period.
Purchases and sales of investments and items of income and expense are
translated on the respective dates of such transactions. Unrealized gains and
losses on assets and liabilities, other than investments in securities, which
result from changes in foreign currency exchange rates have been included in
"Net change in unrealized appreciation (depreciation) on foreign currency
translation" on the Statements of Operations. Unrealized gains and losses on
investments in securities which result from changes in foreign exchange rates
are included with fluctuations arising from changes in market price and are
shown in "Net change in unrealized appreciation (depreciation) on investments"
on the Statements of Operations. Net realized foreign currency gains and losses
include the effect of changes in exchange rates between trade date and
settlement date on investment security transactions, foreign currency
transactions and interest and dividends received and are included in "Net
realized gain (loss) on foreign currency transactions" on the Statements of
Operations. The portion of foreign currency gains and losses related to
fluctuations in exchange rates between the initial purchase settlement date and
subsequent sale trade date is included in "Net realized gain (loss) on
investments" on the Statements of Operations.
E. SECURITIES LENDING
The Funds may lend securities representing up to 33 1/3% of the value of their
total assets to broker-dealers, banks and other institutions to generate
additional income. When a Fund loans its portfolio securities, it will receive,
at the inception of each loan, collateral equal to at least 102% (for domestic
securities) or 105% (for international securities) of the market value of the
loaned securities. The collateral amount is valued at the beginning of each
business day and is compared to the market value of the loaned securities from
the prior business day to determine if additional collateral is required. If
additional collateral is required, a request is sent to the borrower. Securities
lending involves the risk that the Fund may lose money because the borrower of
the Fund's loaned securities fails to return the securities in a timely manner
or at all. The Fund could also lose money in the event of (i) a decline in the
value of the collateral provided for the loaned securities, (ii) a decline in
the value of any investments made with cash collateral or (iii) an increase in
the value of the loaned securities if the borrower does not increase the
collateral accordingly and the borrower fails to return the securities. These
events could also trigger adverse tax consequences for the Funds.
Under the Funds' Securities Lending Agency Agreement, the securities lending
agent will generally bear the risk that a borrower may default on its obligation
to return loaned securities. Brown Brothers Harriman & Co. ("BBH") acts as each
Funds' securities lending agent and is responsible for executing the lending of
the portfolio securities to creditworthy borrower. The Funds, however, will be
responsible for the risks associated with the investment of cash collateral. A
Fund may lose money on its investment of cash collateral, which may affect its
ability to repay the collateral to the borrower without the use of other Fund
assets. Each Fund that engages in securities lending receives compensation (net
of any rebate and securities lending agent fees) for lending its securities.
Compensation can be in the form of fees received from the securities lending
agent or dividends or interest earned from the investment of cash collateral.
The fees received from the securities lending agent are accrued daily. The
dividend and interest earned on the securities loaned is accounted for in the
same manner as other dividend and interest income. At March 31, 2021, only FPXE
had securities in the securities lending program.
In the event of a default by a borrower with respect to any loan, BBH will
exercise any and all remedies provided under the applicable borrower agreement
to make the Funds whole. These remedies include purchasing replacement
securities by applying the collateral held from the defaulting broker against
the purchase cost of the replacement securities. If, despite such efforts by BBH
Page 21
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
to exercise these remedies, a Fund sustains losses as a result of a borrower's
default, BBH will indemnify the Fund by purchasing replacement securities at its
own expense, or paying the Fund an amount equal to the market value of the
replacement securities, subject to certain limitations which are set forth in
detail in the Securities Lending Agency Agreement between the Trust on behalf of
the Funds and BBH.
F. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income of each Fund, if any, are declared and paid
quarterly, or as the Board of Trustees may determine from time to time.
Distributions of net realized gains earned by each Fund, if any, are distributed
at least annually.
Distributions from net investment income and realized capital gains are
determined in accordance with federal income tax regulations, which may differ
from U.S. GAAP. Certain capital accounts in the financial statements are
periodically adjusted for permanent differences in order to reflect their tax
character. These permanent differences are primarily due to the varying
treatment of income and gain/loss on significantly modified portfolio securities
held by the Funds and have no impact on net assets or NAV per share. Temporary
differences, which arise from recognizing certain items of income, expense and
gain/loss in different periods for financial statement and tax purposes, will
reverse at some time in the future.
The tax character of distributions paid by each Fund during the fiscal year
ended September 30, 2020 was as follows:
<TABLE>
<CAPTION>
Distributions Distributions Distributions
paid from paid from paid from
Ordinary Capital Return of
Income Gains Capital
------------- ------------- -------------
<S> <C> <C> <C>
First Trust IPOX(R) Europe Equity Opportunities ETF $ 23,081 $ -- $ --
First Trust Dow Jones International Internet ETF 61,741 -- --
</TABLE>
As of September 30, 2020, the components of distributable earnings on a tax
basis for each Fund were as follows:
<TABLE>
<CAPTION>
Accumulated Net
Undistributed Capital and Unrealized
Ordinary Other Appreciation
Income Gain (Loss) (Depreciation)
------------- ------------- -------------
<S> <C> <C> <C>
First Trust IPOX(R) Europe Equity Opportunities ETF $ 21,077 $ (226,006) $ 527,174
First Trust Dow Jones International Internet ETF (34,327) (49,667) 6,448,840
</TABLE>
G. INCOME TAXES
Each Fund intends to continue to qualify as a regulated investment company by
complying with the requirements under Subchapter M of the Internal Revenue Code
of 1986, as amended, which includes distributing substantially all of its net
investment income and net realized gains to shareholders. Accordingly, no
provision has been made for federal and state income taxes. However, due to the
timing and amount of distributions, each Fund may be subject to an excise tax of
4% of the amount by which approximately 98% of each Fund's taxable income
exceeds the distributions from such taxable income for the calendar year.
The Funds are subject to accounting standards that establish a minimum threshold
for recognizing, and a system for measuring, the benefits of a tax position
taken or expected to be taken in a tax return. Taxable years ended 2019 and 2020
remain open to federal and state audit. As of March 31, 2021, 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 September 30, 2020, for
federal income tax purposes, each applicable Fund had a capital loss
carryforward available that is shown in the table below, 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.
<TABLE>
<CAPTION>
Non-Expiring
Capital Loss
Carryforward
----------------
<S> <C>
First Trust IPOX(R) Europe Equity Opportunities ETF $ 226,006
First Trust Dow Jones International Internet ETF 49,667
</TABLE>
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
During the taxable year ended September 30, 2020, the following Fund utilized
non-expiring capital loss carryforwards in the following amount:
<TABLE>
<CAPTION>
Capital Loss
Carryforwards
Utilized
----------------
<S> <C>
First Trust Dow Jones International Internet ETF $ 32,509
</TABLE>
Certain losses realized during the current fiscal year may be deferred and
treated as occurring on the first day of the following fiscal year for federal
income tax purposes. For the fiscal year ended September 30, 2020, the following
Fund incurred and elected to defer late year ordinary or capital losses as
follows:
<TABLE>
<CAPTION>
Qualified Late Year Losses
----------------------------------------------
Ordinary Losses Capital Losses
------------------- ----------------
<S> <C> <C>
First Trust Dow Jones International Internet ETF $ 34,327 $ --
</TABLE>
H. EXPENSES
Expenses, other than the investment advisory fee and other excluded expenses,
are paid by the Advisor (see Note 3). First Trust has entered into licensing
agreements with each of the following "Licensors" for the respective Funds:
<TABLE>
<CAPTION>
FUND LICENSOR
<S> <C>
First Trust IPOX(R) Europe Equity Opportunities ETF IPOX(R) Schuster LLC
First Trust Dow Jones International Internet ETF S&P Dow Jones Indices LLC
</TABLE>
The respective license agreements allow for the use of each Fund's respective
index and of certain trademarks and trade names of the respective Licensors. The
Funds are sub-licensees to the applicable license agreements. The Funds'
licensing fees are paid by First Trust from the unitary investment advisory fees
it receives from each of the Funds.
3. INVESTMENT ADVISORY FEE, AFFILIATED TRANSACTIONS AND OTHER FEE ARRANGEMENTS
First Trust, the investment advisor to the Funds, is a limited partnership with
one limited partner, Grace Partners of DuPage L.P., and one general partner, The
Charger Corporation. The Charger Corporation is an Illinois corporation
controlled by James A. Bowen, Chief Executive Officer of First Trust. First
Trust is responsible for the selection and ongoing monitoring of the securities
in each Fund's portfolio, managing the Funds' business affairs and providing
certain administrative services necessary for the management of the Funds.
Pursuant to the Investment Management Agreement between the Trust and the
Advisor, First Trust manages the investment of the Funds' assets and is
responsible for the expenses of each Fund including the cost of transfer agency,
custody, fund administration, legal, audit and other services and license fees
(if any), but excluding fee payments under the Investment Management Agreement,
interest, taxes, acquired fund fees and expenses, brokerage commissions and
other expenses connected with the execution of portfolio transactions,
distribution and service fees payable pursuant to a Rule 12b-1 plan, if any, and
extraordinary expenses, which are paid by each respective Fund. FPXE and FDNI
have each agreed to pay First Trust an annual unitary management fee equal to
0.70% and 0.65% of its average daily net assets, respectively.
The Trust has multiple service agreements with The Bank of New York Mellon
("BNYM"). Under the service agreements, BNYM performs custodial, fund
accounting, certain administrative services, and transfer agency services for
each Fund. As custodian, BNYM is responsible for custody of each Fund's assets.
As fund accountant and administrator, BNYM is responsible for maintaining the
books and records of each Fund's securities and cash. As transfer agent, BNYM is
responsible for maintaining shareholder records for each Fund. BNYM is a
subsidiary of The Bank of New York Mellon Corporation, a financial holding
company.
Each Trustee who is not an officer or employee of First Trust, any sub-advisor
or any of their affiliates ("Independent Trustees") is paid a fixed annual
retainer that is allocated equally among each fund in the First Trust Fund
Complex. Each Independent Trustee is also paid an annual per fund fee that
varies based on whether the fund is a closed-end or other actively managed fund,
a defined-outcome fund or is an index fund.
Additionally, the Lead Independent Trustee and the Chairmen of the Audit
Committee, Nominating and Governance Committee and Valuation Committee are paid
annual fees to serve in such capacities, with such compensation allocated pro
rata among each fund in the First Trust Fund Complex based on net assets.
Independent Trustees are reimbursed for travel and out-of-pocket expenses in
connection with all meetings. The Lead Independent Trustee and Committee
Chairmen rotate every three years. The officers and "Interested" Trustee receive
no compensation from the Trust for acting in such capacities.
Page 23
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--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
4. PURCHASES AND SALES OF SECURITIES
For the six months ended March 31, 2021, the cost of purchases and proceeds from
sales of investments for each Fund, excluding short-term investments and in-kind
transactions, were as follows:
<TABLE>
<CAPTION>
Purchases Sales
---------------- --------------
<S> <C> <C>
First Trust IPOX(R) Europe Equity Opportunities ETF $ 2,267,582 $ 2,290,095
First Trust Dow Jones International Internet ETF 26,580,298 9,737,164
</TABLE>
For the six months ended March 31, 2021, the cost of in-kind purchases and
proceeds from in-kind sales for each Fund were as follows:
<TABLE>
<CAPTION>
Purchases Sales
---------------- --------------
<S> <C> <C>
First Trust IPOX(R) Europe Equity Opportunities ETF $ 4,455,787 $ 1,418,587
First Trust Dow Jones International Internet ETF 61,424,873 9,003,154
</TABLE>
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
large blocks of shares known as "Creation Units." Prior to the start of trading
on every business day, a Fund publishes through the National Securities Clearing
Corporation ("NSCC") 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.
6. DISTRIBUTION PLAN
The Board of Trustees adopted a Distribution and Service Plan pursuant to Rule
12b-1 under the 1940 Act. In accordance with the Rule 12b-1 plan, the Funds are
authorized to pay an amount up to 0.25% of their average daily net assets each
year to reimburse First Trust Portfolios L.P. ("FTP"), the distributor of the
Funds, for amounts expended to finance activities primarily intended to result
in the sale of Creation Units or the provision of investor services. FTP may
also use this amount to compensate securities dealers or other persons that are
Authorized Participants for providing distribution assistance, including
broker-dealer and shareholder support and educational and promotional services.
No 12b-1 fees are currently paid by the Funds, and pursuant to a contractual
arrangement, no 12b-1 fees will be paid any time before January 31, 2022.
Page 24
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
7. INDEMNIFICATION
The Trust, on behalf of the Funds, has a variety of indemnification obligations
under contracts with its service providers. The Trust's maximum exposure under
these arrangements is unknown. However, the Trust has not had prior claims or
losses pursuant to these contracts and expects the risk of loss to be remote.
8. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Funds
through the date the financial statements were issued, and has determined that
there were no subsequent events requiring recognition or disclosure in the
financial statements that have not already been disclosed.
Page 25
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ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies and information on how each Fund voted proxies relating to
its portfolio securities during the most recent 12-month period ended June 30 is
available (1) without charge, upon request, by calling (800) 988-5891; (2) on
each Fund's website at www.ftportfolios.com; and (3) on the Securities and
Exchange Commission's ("SEC") website at www.sec.gov.
PORTFOLIO HOLDINGS
Each Fund files portfolio holdings information for each month in a fiscal
quarter within 60 days after the end of the relevant fiscal quarter on Form
N-PORT. Portfolio holdings information for the third month of each fiscal
quarter will be publicly available on the SEC's website at www.sec.gov. Each
Fund's complete schedule of portfolio holdings for the second and fourth
quarters of each fiscal year is included in the semi-annual and annual reports
to shareholders, respectively, and is filed with the SEC on Form N-CSR. The
semi-annual and annual report for each Fund is available to investors within 60
days after the period to which it relates. Each Fund's Forms N-PORT and Forms
N-CSR are available on the SEC's website listed above.
RISK CONSIDERATIONS
RISKS ARE INHERENT IN ALL INVESTING. CERTAIN GENERAL RISKS THAT MAY BE
APPLICABLE TO A FUND ARE IDENTIFIED BELOW, BUT NOT ALL OF THE MATERIAL RISKS
RELEVANT TO EACH FUND ARE INCLUDED IN THIS REPORT AND NOT ALL OF THE RISKS BELOW
APPLY TO EACH FUND. THE MATERIAL RISKS OF INVESTING IN EACH FUND ARE SPELLED OUT
IN ITS PROSPECTUS, STATEMENT OF ADDITIONAL INFORMATION AND OTHER REGULATORY
FILINGS. BEFORE INVESTING, YOU SHOULD CONSIDER EACH FUND'S INVESTMENT OBJECTIVE,
RISKS, CHARGES AND EXPENSES, AND READ EACH FUND'S PROSPECTUS AND STATEMENT OF
ADDITIONAL INFORMATION CAREFULLY. YOU CAN DOWNLOAD EACH FUND'S PROSPECTUS AT
WWW.FTPORTFOLIOS.COM OR CONTACT FIRST TRUST PORTFOLIOS L.P. AT (800) 621-1675 TO
REQUEST A PROSPECTUS, WHICH CONTAINS THIS AND OTHER INFORMATION ABOUT EACH FUND.
CONCENTRATION RISK. To the extent that a fund is able to invest a large
percentage of its assets in a single asset class or the securities of issuers
within the same country, state, region, industry or sector, an adverse economic,
business or political development may affect the value of the fund's investments
more than if the fund were more broadly diversified. A fund that tracks an index
will be concentrated to the extent the fund's corresponding index is
concentrated. A concentration makes a fund more susceptible to any single
occurrence and may subject the fund to greater market risk than a fund that is
not concentrated.
CREDIT RISK. Credit risk is the risk that an issuer of a security will be unable
or unwilling to make dividend, interest and/or principal payments when due and
the related risk that the value of a security may decline because of concerns
about the issuer's ability to make such payments.
CYBER SECURITY RISK. The funds are susceptible to potential operational risks
through breaches in cyber security. A breach in cyber security refers to both
intentional and unintentional events that may cause a fund to lose proprietary
information, suffer data corruption or lose operational capacity. Such events
could cause a fund to incur regulatory penalties, reputational damage,
additional compliance costs associated with corrective measures and/or financial
loss. In addition, cyber security breaches of a fund's third-party service
providers, such as its administrator, transfer agent, custodian, or sub-advisor,
as applicable, or issuers in which the fund invests, can also subject a fund to
many of the same risks associated with direct cyber security breaches.
DERIVATIVES RISK. To the extent a fund uses derivative instruments such as
futures contracts, options contracts and swaps, the fund may experience losses
because of adverse movements in the price or value of the underlying asset,
index or rate, which may be magnified by certain features of the derivative.
These risks are heightened when a fund's portfolio managers use derivatives to
enhance the fund's return or as a substitute for a position or security, rather
than solely to hedge (or offset) the risk of a position or security held by the
fund.
EQUITY SECURITIES RISK. To the extent a fund invests in equity securities, the
value of the fund's shares will fluctuate with changes in the value of the
equity securities. Equity securities prices fluctuate for several reasons,
including changes in investors' perceptions of the financial condition of an
issuer or the general condition of the relevant stock market, such as market
volatility, or when political or economic events affecting the issuers occur. In
addition, common stock prices may be particularly sensitive to rising interest
rates, as the cost of capital rises and borrowing costs increase. Equity
securities may decline significantly in price over short or extended periods of
time, and such declines may occur in the equity market as a whole, or they may
occur in only a particular country, company, industry or sector of the market.
ETF RISK. The shares of an ETF trade like common stock and represent an interest
in a portfolio of securities. The risks of owning an ETF generally reflect the
risks of owning the underlying securities, although lack of liquidity in an ETF
could result in it being more volatile and ETFs have management fees that
increase their costs. Shares of an ETF trade on an exchange at market prices
rather than net asset value, which may cause the shares to trade at a price
greater than net asset value (premium) or less than net asset value (discount).
In times of market stress, decisions by market makers to reduce or step away
Page 26
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ADDITIONAL INFORMATION (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
from their role of providing a market for an ETF's shares, or decisions by an
ETF's authorized participants that they are unable or unwilling to proceed with
creation and/or redemption orders of an ETF's shares, could result in shares of
the ETF trading at a discount to net asset value and in greater than normal
intraday bid-ask spreads.
FIXED INCOME SECURITIES RISK. To the extent a fund invests in fixed income
securities, the fund will be subject to credit risk, income risk, interest rate
risk, liquidity risk and prepayment risk. Income risk is the risk that income
from a fund's fixed income investments could decline during periods of falling
interest rates. Interest rate risk is the risk that the value of a fund's fixed
income securities will decline because of rising interest rates. Liquidity risk
is the risk that a security cannot be purchased or sold at the time desired, or
cannot be purchased or sold without adversely affecting the price. Prepayment
risk is the risk that the securities will be redeemed or prepaid by the issuer,
resulting in lower interest payments received by the fund. In addition to these
risks, high yield securities, or "junk" bonds, are subject to greater market
fluctuations and risk of loss than securities with higher ratings, and the
market for high yield securities is generally smaller and less liquid than that
for investment grade securities.
INDEX CONSTITUENT RISK. Certain funds may be a constituent of one or more
indices. As a result, such a fund may be included in one or more index-tracking
exchange-traded funds or mutual funds. Being a component security of such a
vehicle could greatly affect the trading activity involving a fund, the size of
the fund and the market volatility of the fund. Inclusion in an index could
significantly increase demand for the fund and removal from an index could
result in outsized selling activity in a relatively short period of time. As a
result, a fund's net asset value could be negatively impacted and the fund's
market price may be significantly below its net asset value during certain
periods.
INDEX PROVIDER RISK. To the extent a fund seeks to track an index, it is subject
to Index Provider Risk. There is no assurance that the Index Provider will
compile the Index accurately, or that the Index will be determined, maintained,
constructed, reconstituted, rebalanced, composed, calculated or disseminated
accurately. To correct any such error, the Index Provider may carry out an
unscheduled rebalance or other modification of the Index constituents or
weightings, which may increase the fund's costs. The Index Provider does not
provide any representation or warranty in relation to the quality, accuracy or
completeness of data in the Index, and it does not guarantee that the Index will
be calculated in accordance with its stated methodology. Losses or costs
associated with any Index Provider errors generally will be borne by the fund
and its shareholders.
INVESTMENT COMPANIES RISK. To the extent a fund invests in the securities of
other investment vehicles, the fund will incur additional fees and expenses that
would not be present in a direct investment in those investment vehicles.
Furthermore, the fund's investment performance and risks are directly related to
the investment performance and risks of the investment vehicles in which the
fund invests.
LIBOR RISK. To the extent a fund invests in floating or variable rate
obligations that use the London Interbank Offered Rate ("LIBOR") as a reference
interest rate, it is subject to LIBOR Risk. The United Kingdom's Financial
Conduct Authority, which regulates LIBOR, will cease making LIBOR available as a
reference rate over a phase-out period that will begin immediately after
December 31, 2021. The unavailability or replacement of LIBOR may affect the
value, liquidity or return on certain fund investments and may result in costs
incurred in connection with closing out positions and entering into new trades.
Any potential effects of the transition away from LIBOR on the fund or on
certain instruments in which the fund invests can be difficult to ascertain, and
they may vary depending on a variety of factors, and they could result in losses
to the fund.
MANAGEMENT RISK. To the extent that a fund is actively managed, it is subject to
management risk. In managing an actively-managed fund's investment portfolio,
the fund's portfolio managers will apply investment techniques and risk analyses
that may not have the desired result. There can be no guarantee that a fund will
meet its investment objective.
MARKET RISK. Securities held by a fund, as well as shares of a fund itself, are
subject to market fluctuations caused by factors such as general economic
conditions, political events, regulatory or market developments, changes in
interest rates and perceived trends in securities prices. Shares of a fund could
decline in value or underperform other investments as a result of the risk of
loss associated with these market fluctuations. In addition, local, regional or
global events such as war, acts of terrorism, spread of infectious diseases or
other public health issues, recessions, or other events could have a significant
negative impact on a fund and its investments. Such events may affect certain
geographic regions, countries, sectors and industries more significantly than
others. The outbreak of the respiratory disease designated as COVID-19 in
December 2019 has caused significant volatility and declines in global financial
markets, which have caused losses for investors. The COVID-19 pandemic may last
for an extended period of time and will continue to impact the economy for the
foreseeable future.
NON-U.S. SECURITIES RISK. To the extent a fund invests in non-U.S. securities,
it is subject to additional risks not associated with securities of domestic
issuers. Non-U.S. securities are subject to higher volatility than securities of
domestic issuers due to: possible adverse political, social or economic
developments; restrictions on foreign investment or exchange of securities; lack
of liquidity; currency exchange rates; excessive taxation; government seizure of
assets; different legal or accounting standards; and less government supervision
and regulation of exchanges in foreign countries. Investments in non-U.S.
Page 27
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ADDITIONAL INFORMATION (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2021 (UNAUDITED)
securities may involve higher costs than investments in U.S. securities,
including higher transaction and custody costs, as well as additional taxes
imposed by non-U.S. governments. These risks may be heightened for securities of
companies located, or with significant operations, in emerging market countries.
OPERATIONAL RISK. Each fund is subject to risks arising from various operational
factors, including, but not limited to, human error, processing and
communication errors, errors of a fund's service providers, counterparties or
other third-parties, failed or inadequate processes and technology or systems
failures. Although the funds and the Advisor seek to reduce these operational
risks through controls and procedures, there is no way to completely protect
against such risks.
PASSIVE INVESTMENT RISK. To the extent a fund seeks to track an index, the fund
will invest in the securities included in, or representative of, the index
regardless of their investment merit. A fund generally will not attempt to take
defensive positions in declining markets.
NOT FDIC INSURED NOT BANK GUARANTEED MAY LOSE VALUE
Page 28
<PAGE>
FIRST TRUST
First Trust Exchange-Traded Fund II
INVESTMENT ADVISOR
First Trust Advisors L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
ADMINISTRATOR, CUSTODIAN,
FUND ACCOUNTANT &
TRANSFER AGENT
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
111 S. Wacker Drive
Chicago, IL 60606
LEGAL COUNSEL
Chapman and Cutler LLP
111 W. Monroe Street
Chicago, IL 60603
<PAGE>
[BLANK BACK COVER]
<PAGE>
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
| (a) | | Schedules of Investments in securities of unaffiliated issuers as of the close of the reporting period are included as part of the report to shareholders filed under Item 1 of this form. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. 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 11. 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 have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. |
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Item 13. Exhibits.
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 II |
| 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/ Donald P. Swade |
| | | Donald P. Swade, Treasurer, Chief Financial Officer
and Chief Accounting Officer
(principal financial officer) |
