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 811-23147
First Trust Exchange-Traded Fund VIII
(Exact name of registrant as specified in charter)
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
(Address of principal executive offices) (Zip code)
W. Scott Jardine, Esq.
First Trust Portfolios L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
(Name and address of agent for service)
Registrant’s telephone number, including area code: (630) 765-8000
Date of fiscal year end: August 31
Date of reporting period: August 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 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 VIII
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First Trust CEF Income Opportunity ETF (FCEF)
First Trust Municipal CEF Income Opportunity ETF (MCEF)
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Annual Report
For the Year Ended
August 31, 2021
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TABLE OF CONTENTS
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FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021
Shareholder Letter........................................................... 1
Fund Performance Overview
First Trust CEF Income Opportunity ETF (FCEF)............................. 2
First Trust Municipal CEF Income Opportunity ETF (MCEF)................... 4
Notes to Fund Performance Overview........................................... 6
Portfolio Commentary......................................................... 7
Understanding Your Fund Expenses............................................. 9
Portfolio of Investments
First Trust CEF Income Opportunity ETF (FCEF)............................. 10
First Trust Municipal CEF Income Opportunity ETF (MCEF)................... 12
Statements of Assets and Liabilities......................................... 14
Statements of Operations..................................................... 15
Statements of Changes in Net Assets.......................................... 16
Financial Highlights......................................................... 17
Notes to Financial Statements................................................ 18
Report of Independent Registered Public Accounting Firm...................... 24
Additional Information....................................................... 25
Board of Trustees and Officers............................................... 31
Privacy Policy............................................................... 33
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 VIII (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(s). 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 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 portfolio commentary from the portfolio management team of the
Funds, you may obtain an understanding of how the market environment affected
each Fund's performance. 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 VIII
ANNUAL LETTER FROM THE CHAIRMAN AND CEO
AUGUST 31, 2021
Dear Shareholders:
First Trust is pleased to provide you with the annual report for the First Trust
CEF Income Opportunity ETF ("FCEF") and the First Trust Municipal CEF Income
Opportunity ETF ("MCEF" and together with FCEF, the "Funds"), each a series of
the First Trust Exchange-Traded Fund VIII, which contains detailed information
about the Funds for the twelve months ended August 31, 2021.
The coronavirus ("COVID-19") pandemic has proven to be as stubborn as
advertised. We were warned by the scientific community early on that we would
have to coexist with this virus from here on out, and that appears to be the
case some 19 months after its onset. While the three main vaccines have proven
to be effective at keeping those people who have gotten all the required shots
out of the hospital, the U.S., unfortunately, had only achieved a 54% fully
vaccinated rate as of September 9, 2021, according to the Centers for Disease
Control and Prevention. If you add in the people ages 18 and older who have
received just one of the two-dose vaccines, it jumps to 75.3%. The U.S. and
global economies continue to underperform due to the pandemic. The U.S. alone
had a record high 10.9 million job openings at the end of July 2021, according
to the latest Job Openings and Labor Turnover Survey from the Department of
Labor. It appears that many people do not seem to want to work right now. An
estimated 7.5 million unemployment recipients in the U.S. were scheduled to lose
their benefits on September 6, 2021. Perhaps that will be enough to incentivize
people to go back to work.
The Federal Reserve (the "Fed") continues to play a major role in the U.S.
economy. It has kept short-term interest rates artificially low for the better
part of the past 13 years. The Federal Funds target rate (upper bound), while
held at 0.25% for roughly nine of those 13 years, reached as high as 2.50% in
the same 13-year period, but only for a few months and that was just prior to
the COVID-19 pandemic, according to data from the Fed. For comparative purposes,
the target rate averaged 2.56% for the 30-year period ended September 21, 2021.
It currently stands at 0.25%. In addition to keeping rates low, the Fed has been
buying assets, specifically Treasuries and mortgage-backed securities. It has
been buying a combined $120 billion of these securities every month. This has
helped keep bond yields artificially low as well. As of February 26, 2020, the
value of the assets on the Fed's balance sheet totaled $4.16 trillion, according
to its own data. As of September 15, 2021, the assets were valued at $8.45
trillion. Keep in mind, the balance sheet stood at $1 trillion on September 17,
2008. That was during the 2007-2008 Financial Crisis. Due to the reopening of
the U.S. economy and a bigger-than-expected rise in inflation this year, the Fed
has signaled that it could begin to taper its bond buying program by the end of
2021. With respect to the Federal Funds rate, the Fed continues to say it
intends to leave short-term rates where they are until 2023. In other words, the
Fed is poised to maintain its accommodative stance towards monetary policy. They
are not looking to get tight - just less loose. We will monitor this scenario
closely in the months ahead to see if the Fed's actions impact the direction of
interest rates and bond yields.
Overall, I am pleased to report that the securities markets have performed well
in this tumultuous climate. It appears, in our opinion, that the extremely low
interest rates offered on savings vehicles has motivated many investors to
assume more risk to potentially generate higher returns. The S&P 500(R) Index
(the "Index") posted a total return of 31.17% for the 12-month period ended
August 31, 2021, according to Bloomberg. For comparative purposes, from 1926
through 2020 (95 years), the Index returned an average of 10.28% per year on a
total return basis, according to Morningstar/Ibbotson Associates. Should
interest rates and bond yields eventually trend higher, investors should be
prepared for a bit of turbulence as stocks and bonds may be subjected to some
potential short-term profit taking, in my opinion. Having said that, I encourage
investors to stay the course. I remain optimistic due in large part to the
trillions of dollars in government stimulus money already circulating in the
economy as well as the potential for trillions of additional dollars from
President Joe Biden's infrastructure and "human infrastructure" bills still
weaving their way through Congress. It's hard to bet against growth in the
current climate.
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 1
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FUND PERFORMANCE OVERVIEW (UNAUDITED)
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FIRST TRUST CEF INCOME OPPORTUNITY ETF (FCEF)
The First Trust CEF Income Opportunity ETF (the "Fund") seeks to provide current
income with a secondary emphasis on total return. Under normal market
conditions, the Fund seeks to achieve its investment objectives by investing at
least 80% of its net assets (including investment borrowings) in a portfolio of
closed-end investment companies that are listed and traded in the United States
on registered exchanges. The Fund is classified as "diversified" under the
Investment Company Act of 1940, as amended. The shares of the Fund are listed
and traded on The Nasdaq Stock Market LLC under the ticker symbol "FCEF."
<TABLE>
<CAPTION>
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PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
1 Year Ended Inception (9/27/16) Inception (9/27/16)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 34.19% 10.90% 66.39%
Market Price 33.83% 10.83% 65.93%
INDEX PERFORMANCE
Russell 3000(R) Index 33.04% 18.32% 129.05%
Blended Benchmark (1) 30.00% 9.92% 59.36%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 6.)
-----------------------------
(1) A blended benchmark (the "Blended Benchmark") comprised 60% of the First
Trust Equity Closed-End Fund Total Return Index, a cap-weighted index
(based on NAV) designed to provide a broad representation of the equity
based closed-end fund universe, and 40% of the First Trust Taxable Fixed
Income Closed-End Fund Total Return Index, a cap-weighted index (based on
NAV) designed to provide a broad representation of the taxable fixed
income closed-end fund universe, has been selected as a secondary
benchmark to provide a more direct correlation to the Fund's underlying
portfolio. The indexes do not charge management fees or brokerage
expenses, and no such fees or expenses were deducted from the performance
shown. Indexes are unmanaged and an investor cannot invest directly in an
index. The Blended Index returns are calculated by using the monthly
return of the two indices during each period shown above. At the beginning
of each month the two indices are rebalanced to a 60-40 ratio to account
for divergence from that ratio that occurred during the course of each
month. The monthly returns are then compounded for each period shown
above, giving the performance for the Blended Index for each period shown
above.
Page 2
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FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
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FIRST TRUST CEF INCOME OPPORTUNITY ETF (FCEF) (CONTINUED)
----------------------------------------------------------
% OF TOTAL
LONG-TERM
TOP TEN HOLDINGS INVESTMENTS
----------------------------------------------------------
Eaton Vance Tax-Advantaged Global Dividend
Income Fund 4.8%
BlackRock Science & Technology Trust 4.7
Cohen & Steers REIT and Preferred and
Income Fund, Inc. 4.1
Eaton Vance Tax-Advantaged Dividend Income
Fund 3.9
Eaton Vance Tax-Advantaged Global Dividend
Opportunities Fund 3.8
Tekla Healthcare Investors 3.7
Tekla Healthcare Opportunities Fund 3.5
Ares Dynamic Credit Allocation Fund, Inc. 3.4
Gabelli Dividend & Income Trust (The) 3.3
BlackRock Science & Technology Trust II 3.3
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Total 38.5%
========
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% OF TOTAL
LONG-TERM
WORLD REGIONS INVESTMENTS
----------------------------------------------------------
North America 78.8%
Europe 11.8
Asia 9.4
--------
Total 100.0%
========
----------------------------------------------------------
% OF TOTAL
LONG-TERM
MARKET CAPITALIZATION INVESTMENTS
----------------------------------------------------------
Mega 28.7%
Large 35.3
Mid 25.8
Small 6.6
Micro 3.6
--------
Total 100.0%
========
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% OF TOTAL
LONG-TERM
CREDIT QUALITY (2) INVESTMENTS
----------------------------------------------------------
AAA 5.9%
AA 0.5
A 1.3
BBB 19.0
BB 27.6
B 26.6
CCC-D 8.9
NR 10.2
--------
Total 100.0%
========
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 27, 2016 - AUGUST 31, 2021
First Trust CEF Income Russell 3000(R) Blended
Opportunity ETF Index Benchmark
<S> <C> <C> <C>
9/28/16 $10,000 $10,000 $10,000
2/28/17 10,698 11,058 10,693
8/31/17 11,348 11,637 11,267
2/28/18 11,572 12,853 11,410
8/31/18 12,267 13,993 12,041
2/28/19 12,044 13,502 11,833
8/31/19 12,658 14,177 12,452
2/29/20 12,451 14,434 12,117
8/31/20 12,401 17,216 12,258
2/28/21 14,636 19,532 14,085
8/31/21 16,638 22,903 15,935
</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.
(2) The ratings are by Standard & Poor's except where otherwise indicated. A
credit rating is an assessment provided by a nationally recognized statistical
rating organization (NRSRO) of the creditworthiness of an issuer with respect to
debt obligations except for those debt obligations that are only privately
rated. Ratings are measured on a scale that generally ranges from AAA (highest)
to D (lowest). Investment grade is defined as those issuers that have a
long-term credit rating of BBB- or higher. "NR" indicates no rating. The credit
ratings shown relate to the creditworthiness of the issuers of the underlying
securities in the Fund, and not to the Fund or its shares. Credit ratings are
subject to change.
Page 3
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FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
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FIRST TRUST MUNICIPAL CEF INCOME OPPORTUNITY ETF (MCEF)
The First Trust Municipal CEF Income Opportunity ETF (the "Fund") seeks to
provide current income. Under normal market conditions, the Fund seeks to
achieve its investment objective by investing at least 80% of its net assets
(including investment borrowings) in a portfolio of closed-end investment
companies that are listed and traded in the United States on registered
exchanges which invest primarily in municipal debt securities, some or all of
which pay interest that is exempt from regular federal income taxes. The Fund
may also invest in exchange-traded funds. The Fund is classified as
"diversified" under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on The Nasdaq Stock Market LLC under the
ticker symbol "MCEF."
<TABLE>
<CAPTION>
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PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
1 Year Ended Inception (9/27/16) Inception (9/27/16)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 16.37% 5.10% 27.75%
Market Price 16.44% 5.09% 27.67%
INDEX PERFORMANCE
Bloomberg Municipal Bond Index 3.40% 3.44% 18.11%
First Trust Municipal Closed-End Fund Total Return
Index (1) 17.36% 5.85% 32.31%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 6.)
-----------------------------
(1) The First Trust Municipal Closed-End Fund Total Return Index, a
cap-weighted index (based on NAV) designed to provide a broad
representation of the taxable fixed income closed-end fund universe, has
been selected as a secondary benchmark to provide a more direct
correlation to the Fund's underlying portfolio. The index does not charge
management fees or brokerage expenses, and no such fees or expenses were
deducted from the performance shown. Indexes are unmanaged and an investor
cannot invest directly in an index.
Page 4
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FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
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FIRST TRUST MUNICIPAL CEF INCOME OPPORTUNITY ETF (MCEF) (CONTINUED)
----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS INVESTMENTS
----------------------------------------------------------
Nuveen AMT-Free Municipal Credit Income
Fund 5.1%
Nuveen AMT-Free Quality Municipal Income
Fund 5.1
Nuveen Quality Municipal Income Fund 4.6
BlackRock MuniYield Quality Fund, Inc. 4.1
BlackRock MuniYield Quality Fund III, Inc. 4.0
Invesco Quality Municipal Income Trust 4.0
BlackRock Muni Intermediate Duration
Fund, Inc. 3.9
BlackRock MuniHoldings Fund, Inc. 3.8
Nuveen Municipal Credit Opportunities Fund 3.6
Nuveen Municipal Credit Income Fund 3.5
--------
Total 41.7%
========
----------------------------------------------------------
% OF TOTAL
TOP STATE EXPOSURE INVESTMENTS
----------------------------------------------------------
Illinois 11.6%
California 9.0
New York 8.7
Texas 7.8
Florida 6.7
--------
Total 43.8%
========
----------------------------------------------------------
% OF TOTAL
CREDIT QUALITY (2) INVESTMENTS
----------------------------------------------------------
AAA 6.8%
AA 26.4
A 24.5
BBB 18.0
BB 6.7
B 1.9
CCC-D 1.2
NR 14.5
--------
Total 100.0%
========
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 27, 2016 - AUGUST 31, 2021
First Trust Municipal CEF Bloomberg Barclays First Trust Municipal
Income Opportunity ETF Municipal Bond Index Closed-End Fund Index
<S> <C> <C> <C>
9/28/16 $10,000 $10,000 $10,000
2/28/17 9,433 9,758 9,359
8/31/17 9,919 10,128 9,978
2/28/18 9,415 10,003 9,399
8/31/18 9,613 10,178 9,693
2/28/19 9,889 10,416 10,017
8/31/19 10,858 11,066 11,182
2/29/20 11,086 11,402 11,415
8/31/20 10,977 11,424 11,273
2/28/21 11,636 11,522 11,971
8/31/21 12,775 11,813 13,231
</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.
-----------------------------
(2) The ratings are by Standard & Poor's except where otherwise indicated. A
credit rating is an assessment provided by a nationally recognized
statistical rating organization (NRSRO) of the creditworthiness of an
issuer with respect to debt obligations except for those debt obligations
that are only privately rated. Ratings are measured on a scale that
generally ranges from AAA (highest) to D (lowest). Investment grade is
defined as those issuers that have a long-term credit rating of BBB- or
higher. "NR" indicates no rating. The credit ratings shown relate to the
creditworthiness of the issuers of the underlying securities in the Fund,
and not to the Fund or its shares. Credit ratings are subject to change.
Page 5
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NOTES TO FUND PERFORMANCE OVERVIEW (UNAUDITED)
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Total returns for the period 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 its 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 6
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PORTFOLIO COMMENTARY
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FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
INVESTMENT ADVISOR
First Trust Advisors L.P. ("First Trust" or the "Advisor") is the investment
advisor to the First Trust CEF Income Opportunity ETF ("FCEF") and the First
Trust Municipal CEF Income Opportunity ETF ("MCEF" and together with FCEF, the
"Funds"), each a series of the First Trust Exchange-Traded Fund VIII, and is
responsible for the selection and ongoing monitoring of the securities in the
Funds' portfolios and certain other services necessary for the management of the
portfolios.
PORTFOLIO MANAGEMENT
Ken Fincher, Senior Vice President of First Trust, and Jordan Ramsland, Vice
President of First Trust, are the Funds' portfolio managers and have
responsibility for the day-to-day management of each Fund's investment
portfolio. Mr. Fincher has nearly 30 years of experience in financial markets.
His current responsibilities include management of two First Trust
exchange-traded funds and separately managed accounts that invest primarily in
closed-end funds. He has also helped develop new product structures in the
closed-end fund space. Mr. Fincher has been named Outstanding Individual
Contributor to the Closed-End Fund Sector in 2007, 2006, 2005 and 2004 by
financial analysts and his peers in the closed-end fund community and served on
the Closed-End Fund committee of the Investment Company Institute. Mr. Fincher
received a B.A. in financial administration from Michigan State University and
an M.B.A. from Loyola University Graduate School of Business. Mr. Ramsland
joined First Trust in 2013, and his current responsibilities include research
and management of strategies that invest primarily in closed-end funds. He is
responsible for updating and maintaining First Trust's proprietary closed-end
fund models as part of the investment process for the First Trust closed-end
funds, exchange-traded funds and separately managed accounts. Mr. Ramsland
graduated from Palm Beach Atlantic University in 2011 with a B.S. in Finance.
COMMENTARY
FCEF
MARKET RECAP
Equity and taxable fixed income closed-end funds ("CEFs") enjoyed strong returns
during the Fund's fiscal year ended August 31, 2021. This was dually led by
underlying net asset value ("NAV") appreciation and share prices rising faster
than NAVs. As the economy began to heal after the coronavirus ("COVID-19")
induced sell-off, many investors looked to CEFs as a source for income and
capital appreciation.
Discounts to NAV narrowed over the fiscal year ended August 31, 2021. Discounts
in the equity space on average narrowed to -5.23% (versus -11.62% on August 31,
2020). In Taxable Fixed Income CEFs, these have traded up to an average 1.18%
premium to NAV (versus a -5.71% discount on August 31, 2020) during the fiscal
year. The average discount of the underlying funds in which the Fund invests
narrowed during the fiscal year from -9.24% to -3.94%.
PERFORMANCE ANALYSIS
On a NAV basis through the fiscal year ended August 31, 2021, the Fund provided
a total return of 34.19%. The Fund's Blended Benchmark (the "Blended Benchmark")
consists of 60% of the First Trust Equity Closed-End Fund Total Return Index and
40% of the First Trust Taxable Fixed Income Closed-End Fund Total Return Index
and provided a total return of 30.00% over the same period. The Fund's NAV total
return outperformed the Blended Benchmark's total return by 4.19% for the fiscal
year ended August 31, 2021. The Fund's share price return of 33.83% outperformed
the Blended Benchmark's total return by 3.83% for the same period.
The primary factor resulting in outperformance relative to the Blended Benchmark
was security selection within the equity and Taxable Fixed Income CEFs market.
Additionally, overweighting equity CEFs, and underweighting Taxable Fixed Income
funds relative to the Blended Benchmark was also additive to relative
performance, as equity-based funds outperformed during the Fund's fiscal year
ended August 31, 2021.
MARKET AND FUND OUTLOOK
As most equity funds posted strong returns during the Fund's fiscal year ended
August 31, 2021, we have seen a number of funds raise distributions now that
embedded gains increased amidst the economic recovery.
The cost of short-term financing (leverage) looks to be low for the near-term,
with many investors closely watching the Federal Reserve's (the "Fed") actions
regarding its bond tapering plan as a potential precursor to the Fed's action on
the short end of the curve. As short-term interest rates remain near zero,
investors in CEFs continue to benefit from the spread earned by borrowing short
and investing long. When the Fed ultimately hints at raising short-term rates,
we would expect Taxable Fixed Income investors to migrate toward shorter
duration securities.
Page 7
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
As we mentioned last year, COVID-19-induced weakness in share prices emboldened
some activist shareholders to step up the pressure on fund sponsors to attempt
to narrow discounts. We have seen in the past, and expect to continue to see,
corporate actions as funds look to fend off these shareholders by enacting
mergers, tender offers, and secondary market buybacks. In some instances, this
can be a positive for funds, but more often, the fund is left with a smaller
asset base, higher fixed costs per share and wider bid/ask spreads which can
make trading in and out more inefficient.
The CEF initial public offering calendar has been very strong with a new deal
coming to market each month in 2021. The cumulative assets raised year-to-date
have surpassed all full calendar years since 2013. We believe the new CEF
structure, in which the fund sponsor pays the sales charges, creates a wider
investment audience. New issues have typically been coming to market with a
twelve-to-fifteen-year term with the potential to become perpetual in nature.
We continue to focus on buying funds based on fundamentals, while seeking to
identify opportunities that can provide investors with the potential for an
attractive total return, whether it be on the equity or fixed income side of the
ledger. As in any market, there will be winners and losers, so it is important
to stay active in that portion of your portfolio that invests in CEFs.
MCEF
MARKET RECAP
Through the fiscal year ended August 31, 2021, municipal CEFs have returned
17.36%, as measured by the Fund's CEF benchmark, the First Trust Municipal
Closed-End Fund Total Return Index. Performance during the fiscal year steadily
pushed higher as global economies began to reopen. Discounts continued to
tighten throughout the fiscal year, and the average fund now trades at a slight
premium to NAV amidst strong investor demand. The average discount in the
national municipal space narrowed from a discount of -5.17% to a 1.40% premium
over the past year, according to Morningstar.
Some drivers that we believe will help the municipal space moving forward are
the continued low cost of borrowing (leverage), the potential for personal and
corporate tax increases, infrastructure spending, and the view by retail
investors that municipals continue to offer a safe haven. Additionally, there
has been a continued effort by CEF sponsors to merge smaller municipal funds to
form funds with a larger asset base to create greater economies of scale and
increase liquidity, which we see as a positive for shareholders.
PERFORMANCE ANALYSIS
On a NAV basis through the fiscal year ended August 31, 2021, the Fund provided
a total return of 16.37%, and returned 16.44% on a share price basis. The Fund's
secondary benchmark, the First Trust Municipal Closed-End Total Return Fund
Index provided a total return of 17.36% over the same period. The Fund's NAV and
share price total return trailed the secondary benchmark's total return by 0.99%
and 0.92%, respectively, during the same period. The underperformance was
primarily due to exposure to shorter duration term CEFs and exchange-traded
funds which generally trailed longer duration municipal CEFs. In comparison to
the Bloomberg Municipal Bond Index, which returned 3.40% during the fiscal year,
municipal CEFs greatly outperformed.
Throughout the fiscal year ended August 31, 2021, the Fund continued to roll out
of its defensive positioning as several shorter duration funds matured, with
most proceeds being deployed in longer duration leveraged municipal CEFs.
Increased earnings in the Fund allowed for two increases in the monthly
distribution rate during the Fund's fiscal year ended August 31, 2021. Overall,
this amounted to a 13.6% increase in the monthly distribution paid during the
fiscal year.
MARKET AND FUND OUTLOOK
CEFs investing in municipal bonds benefited from the underlying bonds being seen
as a "safe haven" as financial markets pushed through their COVID-19-induced
recovery. Additionally, unprecedented fiscal and monetary stimulus provided a
backstop to municipalities and allowed defaults to stay low thus far during the
economic rebound. Widespread vaccine availability in the United States also
aided in the "return to normalcy" as the economy continued to heal, though the
Delta variant has put a damper on the speed of the recovery. Moving forward, the
municipal space will be faced with challenges as existing higher coupon bonds
are called away and replaced with lower yielding bonds in the low current
interest rate environment. We anticipate that a majority of the returns over the
next twelve months will come from the income paid out by the funds. Overall, we
remain cautiously optimistic as the world continues to heal from its physical
and economic wounds.
We believe that active management in the CEF space matters.
Page 8
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
UNDERSTANDING YOUR FUND EXPENSES
AUGUST 31, 2021 (UNAUDITED)
As a shareholder of First Trust CEF Income Opportunity ETF or First Trust
Municipal CEF Income Opportunity 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 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 August 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 Fund 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
MARCH 1, 2021 AUGUST 31, 2021 PERIOD (a) PERIOD (a) (b)
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIRST TRUST CEF INCOME OPPORTUNITY ETF (FCEF)
Actual $1,000.00 $1,137.10 0.85% $4.58
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FIRST TRUST MUNICIPAL CEF INCOME OPPORTUNITY ETF (MCEF)
Actual $1,000.00 $1,097.90 0.75% $3.97
Hypothetical (5% return before expenses) $1,000.00 $1,021.42 0.75% $3.82
</TABLE>
(a) Annualized expense ratio and expenses paid during the six-month period do
not include fees and expenses of the underlying funds in which each Fund
invests.
(b) Expenses are equal to the annualized expense ratio as indicated in the
table multiplied by the average account value over the period (March 1,
2021 through August 31, 2021), multiplied by 184/365 (to reflect the
six-month period).
Page 9
<PAGE>
FIRST TRUST CEF INCOME OPPORTUNITY ETF (FCEF)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
CLOSED-END FUNDS -- 99.0%
CAPITAL MARKETS -- 99.0%
23,699 Adams Natural Resources Fund,
Inc. $ 352,167
41,175 Advent Convertible and Income
Fund 784,796
9,391 Angel Oak Dynamic Financial
Strategies Income Term Trust 194,675
21,352 Apollo Tactical Income Fund, Inc. 339,070
79,601 Ares Dynamic Credit Allocation
Fund, Inc. 1,296,700
23,653 Barings Global Short Duration
High Yield Fund 405,176
23,537 BlackRock Corporate High Yield
Fund, Inc. 296,566
24,382 BlackRock Health Sciences
Trust II 700,739
26,549 BlackRock Multi-Sector Income
Trust 495,139
32,517 BlackRock Science & Technology
Trust 1,784,208
30,781 BlackRock Science & Technology
Trust II 1,264,483
49,743 Blackstone Strategic Credit Fund 689,438
15,940 Central Securities Corp. 683,985
25,878 Cohen & Steers Infrastructure
Fund, Inc. 753,050
57,522 Cohen & Steers REIT and
Preferred and Income Fund, Inc. 1,580,129
62,501 DoubleLine Income Solutions
Fund 1,118,768
11,227 Eaton Vance Enhanced Equity
Income Fund 217,579
44,127 Eaton Vance Short Duration
Diversified Income Fund 601,892
52,464 Eaton Vance Tax-Advantaged
Dividend Income Fund 1,497,323
81,842 Eaton Vance Tax-Advantaged
Global Dividend Income Fund 1,820,985
45,067 Eaton Vance Tax-Advantaged
Global Dividend Opportunities
Fund 1,448,453
47,017 Gabelli Dividend & Income
Trust (The) 1,270,399
18,421 General American Investors Co.,
Inc. 829,129
2,495 John Hancock Financial
Opportunities Fund 109,705
44,946 John Hancock Tax-Advantaged
Dividend Income Fund 1,100,728
13,343 Lazard Global Total Return and
Income Fund, Inc. 290,877
36,481 Macquarie Global Infrastructure
Total Return Fund, Inc. 864,600
4,374 Morgan Stanley China A Share
Fund, Inc. 90,104
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
CAPITAL MARKETS (CONTINUED)
159,547 Nuveen Credit Strategies Income
Fund $ 1,037,056
86,076 Nuveen Preferred & Income
Opportunities Fund 863,342
29,353 Nuveen Real Asset Income and
Growth Fund 473,170
41,057 Nuveen Tax-Advantaged
Dividend Growth Fund 680,725
77,055 PGIM Global High Yield Fund,
Inc. 1,210,534
48,715 PIMCO Dynamic Credit and
Mortgage Income Fund 1,094,139
17,314 PIMCO Dynamic Income
Opportunities Fund 375,021
33,858 Principal Real Estate Income
Fund 528,523
17,155 Royce Micro-Cap Trust, Inc. 205,174
41,247 Royce Value Trust, Inc. 781,218
21,558 Source Capital, Inc. 1,004,271
53,276 Tekla Healthcare Investors 1,425,133
54,777 Tekla Healthcare Opportunities
Fund 1,355,183
20,309 Tekla Life Sciences Investors 443,752
23,070 Templeton Emerging Markets
Fund 412,722
29,415 Tri-Continental Corp. 1,027,466
24,503 Virtus AllianzGI Artificial
Intelligence & Technology
Opportunities Fund 685,349
26,163 Virtus AllianzGI Convertible &
Income 2024 Target Term Fund 270,264
11,958 Virtus AllianzGI Equity &
Convertible Income Fund 368,187
49,381 Western Asset Emerging Markets
Debt Fund, Inc. 686,890
54,490 Western Asset High Income
Opportunity Fund, Inc. 286,073
14,332 Western Asset Inflation-Linked
Opportunities & Income Fund 190,902
-------------
TOTAL CLOSED-END FUNDS
-- 99.0% 38,285,957
(Cost $33,653,987) -------------
MONEY MARKET FUNDS -- 0.9%
339,896 Morgan Stanley Institutional Liquidity
Funds - Treasury Portfolio -
Institutional Class
0.01% (a) 339,896
(Cost $339,896) -------------
TOTAL INVESTMENTS -- 99.9% 38,625,853
(Cost $33,993,883) (b)
NET OTHER ASSETS AND
LIABILITIES -- 0.1% 49,516
-------------
NET ASSETS -- 100.0% $ 38,675,369
=============
Page 10 See Notes to Financial Statements
<PAGE>
FIRST TRUST CEF INCOME OPPORTUNITY ETF (FCEF)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $34,003,914. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$5,219,818 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$597,879. The net unrealized appreciation was $4,621,939.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 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
---------------------------------------------
Closed-End Funds* $ 38,285,957 $ -- $ --
Money Market Funds 339,896 -- --
---------------------------------------------
Total Investments $ 38,625,853 $ -- $ --
=============================================
* See Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 11
<PAGE>
FIRST TRUST MUNICIPAL CEF INCOME OPPORTUNITY ETF (MCEF)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
CLOSED-END FUNDS -- 96.4%
CAPITAL MARKETS -- 96.4%
33,713 BlackRock Long-Term Municipal
Advantage Trust $ 487,827
45,573 BlackRock Muni Intermediate
Duration Fund, Inc. 716,408
20,382 BlackRock Municipal 2030 Target
Term Trust 536,047
29,599 BlackRock Municipal Income
Trust 462,336
34,865 BlackRock Municipal Income
Trust II 561,327
40,220 BlackRock MuniHoldings Fund,
Inc. 690,980
26,890 BlackRock MuniHoldings
Investment Quality Fund 400,123
22,588 BlackRock MuniHoldings Quality
Fund II, Inc. 327,074
44,015 BlackRock MuniYield Quality
Fund, Inc. 739,012
35,735 BlackRock MuniYield Quality
Fund II, Inc. 522,803
48,910 BlackRock MuniYield Quality
Fund III, Inc. 733,650
12,733 DTF Tax-Free Income, Inc. 190,231
18,650 Eaton Vance Municipal Bond
Fund 257,743
10,424 Eaton Vance Municipal Income
2028 Term Trust 241,889
29,175 Eaton Vance Municipal Income
Trust 417,494
42,613 Invesco Municipal Trust 600,417
16,355 Invesco Pennsylvania Value
Municipal Income Trust 221,610
53,365 Invesco Quality Municipal
Income Trust 727,365
42,025 Invesco Trust for Investment
Grade Municipals 599,277
13,597 Invesco Value Municipal Income
Trust 231,829
11,358 MainStay MacKay DefinedTerm
Municipal Opportunities Fund 257,259
13,466 Neuberger Berman Municipal
Fund, Inc. 226,633
51,310 Nuveen AMT-Free Municipal
Credit Income Fund 933,329
58,023 Nuveen AMT-Free Quality
Municipal Income Fund 921,405
32,622 Nuveen Dynamic Municipal
Opportunities Fund 539,894
20,575 Nuveen Enhanced Municipal
Value Fund 349,775
11,984 Nuveen Intermediate Duration
Municipal Term Fund 177,363
12,479 Nuveen Intermediate Duration
Quality Municipal Term Fund 186,686
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
CAPITAL MARKETS (CONTINUED)
36,107 Nuveen Municipal Credit Income
Fund $ 627,901
41,839 Nuveen Municipal Credit
Opportunities Fund 655,617
37,607 Nuveen Municipal High Income
Opportunity Fund 577,267
50,560 Nuveen Municipal Value Fund,
Inc. 595,091
51,472 Nuveen Quality Municipal
Income Fund 837,449
40,238 Western Asset Intermediate Muni
Fund, Inc. 391,113
15,880 Western Asset Municipal High
Income Fund, Inc. 129,581
36,687 Western Asset Municipal Partners
Fund, Inc. 600,933
-------------
TOTAL CLOSED-END FUNDS
-- 96.4% 17,672,738
(Cost $16,772,537) -------------
EXCHANGE-TRADED FUNDS -- 2.7%
CAPITAL MARKETS -- 2.7%
7,732 VanEck Vectors High-Yield Muni
ETF 491,059
(Cost $494,644) -------------
TOTAL INVESTMENTS -- 99.1% 18,163,797
(Cost $17,267,181) (a)
NET OTHER ASSETS AND
LIABILITIES -- 0.9% 164,050
-------------
NET ASSETS -- 100.0% $ 18,327,847
=============
(a) Aggregate cost for federal income tax purposes is $17,269,380. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$928,424 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$34,007. The net unrealized appreciation was $894,417.
Page 12 See Notes to Financial Statements
<PAGE>
FIRST TRUST MUNICIPAL CEF INCOME OPPORTUNITY ETF (MCEF)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 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
---------------------------------------------
Closed-End Funds* $ 17,672,738 $ -- $ --
Exchange-Traded Funds* 491,059 -- --
---------------------------------------------
Total Investments $ 18,163,797 $ -- $ --
=============================================
* See Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 13
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 2021
<TABLE>
<CAPTION>
FIRST TRUST
FIRST TRUST MUNICIPAL CEF
CEF INCOME INCOME
OPPORTUNITY ETF OPPORTUNITY ETF
(FCEF) (MCEF)
--------------- ---------------
<S> <C> <C>
ASSETS:
Investments, at value.................................................. $ 38,625,853 $ 18,163,797
Cash................................................................... -- 167,546
Dividends receivables.................................................. 76,642 48,934
--------------- ---------------
Total Assets........................................................ 38,702,495 18,380,277
--------------- ---------------
LIABILITIES:
Payables:
Investment securities purchased..................................... -- 41,273
Investment advisory fees............................................ 27,126 11,157
--------------- ---------------
Total Liabilities................................................... 27,126 52,430
--------------- ---------------
NET ASSETS............................................................. $ 38,675,369 $ 18,327,847
=============== ===============
NET ASSETS CONSIST OF:
Paid-in capital........................................................ $ 34,038,380 $ 17,360,448
Par value.............................................................. 15,050 8,500
Accumulated distributable earnings (loss).............................. 4,621,939 958,899
--------------- ---------------
NET ASSETS............................................................. $ 38,675,369 $ 18,327,847
=============== ===============
NET ASSET VALUE, per share............................................. $ 25.70 $ 21.56
=============== ===============
Number of shares outstanding (unlimited number of shares
authorized, par value $0.01 per share).............................. 1,505,000 850,002
=============== ===============
Investments, at cost................................................... $ 33,993,883 $ 17,267,181
=============== ===============
</TABLE>
Page 14 See Notes to Financial Statements
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 2021
<TABLE>
<CAPTION>
FIRST TRUST
FIRST TRUST MUNICIPAL CEF
CEF INCOME INCOME
OPPORTUNITY ETF OPPORTUNITY ETF
(FCEF) (MCEF)
--------------- ---------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............................................................. $ 1,241,614 $ 471,862
--------------- ---------------
Total investment income............................................. 1,241,614 471,862
--------------- ---------------
EXPENSES:
Investment advisory fees............................................... 289,694 81,895
--------------- ---------------
Total expenses...................................................... 289,694 81,895
--------------- ---------------
NET INVESTMENT INCOME (LOSS)........................................... 951,920 389,967
--------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments......................................................... 743,787 107,619
In-kind redemptions................................................. 1,101,644 464
Distribution of capital gains from investment companies............. 147,586 7,204
--------------- ---------------
Net realized gain (loss)............................................... 1,993,017 115,287
Net change in unrealized appreciation (depreciation) on investments.... 7,167,845 1,141,529
--------------- ---------------
NET REALIZED AND UNREALIZED GAIN (LOSS)................................ 9,160,862 1,256,816
--------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS..................................................... $ 10,112,782 $ 1,646,783
=============== ===============
</TABLE>
See Notes to Financial Statements Page 15
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST
CEF INCOME MUNICIPAL CEF INCOME
OPPORTUNITY ETF OPPORTUNITY ETF
(FCEF) (MCEF)
-------------------------------- --------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
8/31/2021 8/31/2020 8/31/2021 8/31/2020
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)............................. $ 951,920 $ 1,441,253 $ 389,967 $ 321,427
Net realized gain (loss)................................. 1,993,017 1,374,432 115,287 11,822
Net change in unrealized appreciation (depreciation)..... 7,167,845 (2,466,746) 1,141,529 (559,211)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets resulting
from operations....................................... 10,112,782 348,939 1,646,783 (225,962)
--------------- --------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations.................................... (1,686,588) (2,002,675) (395,501) (289,376)
--------------- --------------- --------------- ---------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold................................ 6,988,057 14,808,321 8,430,208 3,994,750
Cost of shares redeemed.................................. (10,040,378) (16,937,688) -- (5,618,446)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets resulting
from shareholder transactions......................... (3,052,321) (2,129,367) 8,430,208 (1,623,696)
--------------- --------------- --------------- ---------------
Total increase (decrease) in net assets.................. 5,373,873 (3,783,103) 9,681,490 (2,139,034)
NET ASSETS:
Beginning of period...................................... 33,301,496 37,084,599 8,646,357 10,785,391
--------------- --------------- --------------- ---------------
End of period............................................ $ 38,675,369 $ 33,301,496 $ 18,327,847 $ 8,646,357
=============== =============== =============== ===============
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period.................. 1,655,000 1,705,000 450,002 550,002
Shares sold.............................................. 300,000 750,000 400,000 200,000
Shares redeemed.......................................... (450,000) (800,000) -- (300,000)
--------------- --------------- --------------- ---------------
Shares outstanding, end of period........................ 1,505,000 1,655,000 850,002 450,002
=============== =============== =============== ===============
</TABLE>
Page 16 See Notes to Financial Statements
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST CEF INCOME OPPORTUNITY ETF (FCEF)
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, PERIOD
---------------------------------------------- ENDED
2021 2020 2019 2018 8/31/2017 (a)
---------- ---------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................. $ 20.12 $ 21.75 $ 22.26 $ 21.66 $ 20.05
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss).......................... 0.65 0.82 0.82 0.78 1.02
Net realized and unrealized gain (loss)............... 6.07 (1.29) (0.18) 0.93 1.61
-------- -------- -------- -------- --------
Total from investment operations...................... 6.72 (0.47) 0.64 1.71 2.63
-------- -------- -------- -------- --------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income................................. (0.84) (1.10) (0.96) (1.01) (0.79)
Net realized gain..................................... (0.30) (0.06) (0.19) (0.10) (0.12)
Return of capital..................................... -- -- -- -- (0.11)
-------- -------- -------- -------- --------
Total distributions................................... (1.14) (1.16) (1.15) (1.11) (1.02)
-------- -------- -------- -------- --------
Net asset value, end of period........................ $ 25.70 $ 20.12 $ 21.75 $ 22.26 $ 21.66
======== ======== ======== ======== ========
TOTAL RETURN (b)...................................... 34.19% (2.04)% 3.18% 8.09% 13.49%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's).................. $ 38,675 $ 33,301 $ 37,085 $ 45,754 $ 31,517
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets (c)..... 0.85% 0.85% 0.85% 0.85% 0.85% (d)
Ratio of net investment income (loss) to average net
assets............................................. 2.79% 4.01% 3.92% 3.14% 5.99% (d)
Portfolio turnover rate (e)........................... 8% 6% 13% 15% 23%
</TABLE>
FIRST TRUST MUNICIPAL CEF INCOME OPPORTUNITY ETF (MCEF)
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, PERIOD
---------------------------------------------- ENDED
2021 2020 2019 2018 8/31/2017 (a)
---------- ---------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................. $ 19.21 $ 19.61 $ 17.94 $ 19.20 $ 20.05
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss).......................... 0.70 0.68 0.62 0.64 0.61
Net realized and unrealized gain (loss)............... 2.39 (0.48) 1.65 (1.24) (0.80)
-------- -------- -------- -------- --------
Total from investment operations...................... 3.09 0.20 2.27 (0.60) (0.19)
-------- -------- -------- -------- --------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income................................. (0.74) (0.60) (0.60) (0.64) (0.61)
Net realized gain..................................... (0.00)(f) -- -- -- --
Return of capital..................................... -- -- -- (0.02) (0.05)
-------- -------- -------- -------- --------
Total distributions................................... (0.74) (0.60) (0.60) (0.66) (0.66)
-------- -------- -------- -------- --------
Net asset value, end of period........................ $ 21.56 $ 19.21 $ 19.61 $ 17.94 $ 19.20
======== ======== ======== ======== ========
TOTAL RETURN (b)...................................... 16.37% 1.10% 12.96% (3.09)% (0.81)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's).................. $ 18,328 $ 8,646 $ 10,785 $ 13,454 $ 13,441
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets (c)..... 0.75% 0.75% 0.75% 0.75% 0.75% (d)
Ratio of net investment income (loss) to average net
assets............................................. 3.57% 3.49% 3.49% 3.54% 3.59% (d)
Portfolio turnover rate (e)........................... 17% 7% 20% 11% 18%
</TABLE>
(a) Inception date is September 27, 2016, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) The Fund indirectly bears its proportionate share of fees and expenses
incurred by the underlying funds in which the Fund invests. This ratio
does not include these indirect fees and expenses.
(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.
(f) Amount is less than $0.01.
See Notes to Financial Statements Page 17
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NOTES TO FINANCIAL STATEMENTS
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
1. ORGANIZATION
First Trust Exchange-Traded Fund VIII (the "Trust") is an open-end management
investment company organized as a Massachusetts business trust on February 22,
2016, 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 forty-nine funds that are offering shares. 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 CEF Income Opportunity ETF - (ticker "FCEF")
First Trust Municipal CEF Income Opportunity ETF - (ticker "MCEF")
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."
Each Fund is an actively managed exchange-traded fund and principally invests in
a portfolio of closed-end investment companies that are listed and traded in the
United States on registered exchanges ("Closed-End Funds"). FCEF's primary
investment objective is to provide current income with a secondary emphasis on
total return. MCEF's investment objective is to provide current income. Each
Fund seeks to achieve its investment objective(s) by investing, under normal
market conditions, at least 80% of its net assets (including investment
borrowings) in Closed-End Funds. MCEF invests in Closed-End Funds ("Municipal
Closed-End Funds") which invest primarily in municipal debt securities, some or
all of which pay interest that is exempt from regular federal income taxes
("Municipal Securities"). The Funds may also invest in exchange-traded funds.
Closed-End Funds issue shares of common stock that are traded on a securities
exchange. Because the shares of Closed-End Funds cannot be redeemed upon demand
to the issuer like the shares of an open-end investment company, investors seek
to buy and sell shares of Closed-End Funds in the secondary market.
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. Each Fund's NAV is calculated by dividing the
value of all assets of each Fund (including accrued interest and dividends),
less all liabilities (including accrued expenses and dividends declared but
unpaid), by the total number of shares outstanding.
Each Fund's investments are valued daily at market value or, in the absence of
market value with respect to any portfolio securities, at fair value. Market
value prices represent last sale or official closing prices from a national or
foreign exchange (i.e., a regulated market) and are primarily obtained from
third-party pricing services. Fair value prices represent any prices not
considered market value prices and are either obtained from a third-party
pricing service or are determined by the Pricing Committee of the Funds'
investment advisor, First Trust Advisors L.P. ("First Trust" or the "Advisor"),
in accordance with valuation procedures adopted by the Trust's Board of
Trustees, and in accordance with provisions of the 1940 Act. Investments valued
by the Advisor's Pricing Committee, if any, are footnoted as such in the
footnotes to the Portfolio of Investments. Each Fund's investments are valued as
follows:
Common stocks and other equity securities listed on any national or
foreign exchange (excluding Nasdaq and the London Stock Exchange
Alternative Investment Market ("AIM")) are valued at the last sale price
on the exchange on which they are principally traded or, for Nasdaq and
AIM securities, the official closing price. Securities traded on more than
one securities exchange are valued at the last sale price or official
closing price, as applicable, at the close of the securities exchange
representing the principal market for such securities.
Shares of open-end funds are valued at fair value which is based on NAV
per share.
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
Page 18
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
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.
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
investments.
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 August 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.
C. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income of each Fund, if any, are declared and paid
monthly, 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 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.
Page 19
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--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
The tax character of distributions paid by each Fund during the fiscal year
ended August 31, 2021 was as follows:
<TABLE>
<CAPTION>
Distributions Distributions Distributions Distributions
paid from paid from paid from paid from
Ordinary Capital Tax-Exempt Return of
Income Gains Income Capital
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
First Trust CEF Income Opportunity ETF $ 1,243,133 $ 443,455 $ -- $ --
First Trust Municipal CEF Income Opportunity ETF 9,130 -- 386,371 --
</TABLE>
The tax character of distributions paid by each Fund during the fiscal year
ended August 31, 2020 was as follows:
follows:
<TABLE>
<CAPTION>
Distributions Distributions Distributions Distributions
paid from paid from paid from paid from
Ordinary Capital Tax-Exempt Return of
Income Gains Income Capital
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
First Trust CEF Income Opportunity ETF $ 1,906,929 $ 95,746 $ -- $ --
First Trust Municipal CEF Income Opportunity ETF 2,603 -- 286,773 --
</TABLE>
As of August 31, 2021, 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 CEF Income Opportunity ETF $ -- $ -- $ 4,621,939
First Trust Municipal CEF Income Opportunity ETF 35,215 29,267 894,417
</TABLE>
D. 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.
In addition, the First Trust Municipal CEF Income Opportunity ETF intends to
invest in such Municipal Closed-End Funds to allow it to qualify to pass through
"exempt dividends" as defined in the Internal Revenue Code.
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 2018, 2019,
2020 and 2021 remain open to federal and state audit. As of August 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 August 31, 2021, the
Funds had no capital loss carryforwards for federal income tax purposes.
During the taxable year ended August 31, 2021, the following Fund utilized
non-expiring capital loss carryforwards in the following amount:
Capital Loss
Carryforward
Utilized
-------------
First Trust Municipal CEF Income Opportunity ETF $ 83,418
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 August 31, 2021, the Funds had no
net late year ordinary or capital losses.
Page 20
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
In order to present paid-in capital and accumulated distributable earnings
(loss) (which consists of accumulated net investment income (loss), accumulated
net realized gain (loss) on investments and net unrealized appreciation
(depreciation) on investments) on the Statements of Assets and Liabilities that
more closely represent their tax character, certain adjustments have been made
to paid-in capital, accumulated net investment income (loss) and accumulated net
realized gain (loss) on investments. These adjustments are primarily due to the
difference between book and tax treatments of income and gains on various
investment securities held by the Funds and in-kind transactions. The results of
operations and net assets were not affected by these adjustments. For the fiscal
year ended August 31, 2021, the adjustments for each Fund were as follows:
<TABLE>
<CAPTION>
Accumulated
Accumulated Net Realized
Net Investment Gain (Loss) Paid-in
Income (Loss) on Investments Capital
-------------- -------------- --------------
<S> <C> <C> <C>
First Trust CEF Income Opportunity ETF $ 291,213 $ (1,136,352) $ 845,139
First Trust Municipal CEF Income Opportunity ETF 1,257 (2,542) 1,285
</TABLE>
E. EXPENSES
Expenses, other than the investment advisory fee and other excluded expenses,
are paid by the Advisor (see Note 3).
3. INVESTMENT ADVISORY FEE, AFFILIATED TRANSACTIONS AND OTHER FEE ARRANGEMENTS
First Trust, the investment advisor to the 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, pro rata share of fees and expenses attributable to investments
in other investment companies ("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.
FCEF and MCEF have each agreed to pay First Trust an annual unitary management
fee equal to 0.85% and 0.75% of its average daily net assets, respectively. In
addition, each Fund incurs acquired fund fees and expenses. The total of the
unitary management fee and acquired fund fees and expenses represents each
Fund's total annual operating expenses.
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 21
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
4. PURCHASES AND SALES OF SECURITIES
For the fiscal year ended August 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 CEF Income Opportunity ETF $ 3,471,703 $ 2,692,272
First Trust Municipal CEF Income Opportunity ETF 2,023,365 1,872,529
</TABLE>
For the fiscal year ended August 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 CEF Income Opportunity ETF $ 6,921,867 $ 9,831,404
First Trust Municipal CEF Income Opportunity ETF 8,300,595 --
</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 December 31, 2022.
Page 22
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
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 September 20, 2021, FT Cboe Vest International Equity Buffer ETF - September
and FT Cboe Vest Nasdaq-100(R) Buffer ETF - September, each an additional series
of the Trust, began trading under the symbols "YSEP" and "QSPT," respectively,
on Cboe BZX Exchange, Inc.
On September 21, 2021, First Trust SkyBridge Crypto Industry and Digital Economy
ETF, an additional series of the Trust, began trading under the symbol "CRPT" on
NYSE Arca, Inc.
On October 14, 2021, First Trust Multi-Manager Small Cap Opportunities ETF, an
additional series of the Trust, began trading under the symbol "MMSC" on NYSE
Arca, Inc.
On October 21, 2021, First Trust Municipal CEF Income Opportunity ETF announced
that the Board of Trustees of the Trust approved certain changes to the Fund's
principal investment strategies, which will be submitted to shareholders of the
Fund for approval. The proposed changes will convert the Fund from its current
fund-of-funds investment strategy to one that seeks to provide the same
investment objective of current income by investing directly in municipal debt
securities. The Fund would still have the ability to invest up to 10% of its net
assets in closed end investment companies that invest primarily in municipal
debt securities. A special shareholder meeting of the Fund to vote on the
changes described above is expected to be held in the fourth quarter of 2021.
Upon approval of such strategy changes, the Fund will be renamed "First Trust
Flexible Municipal High Income ETF" and the Fund's ticker symbol will be changed
to "MFLX." In connection with the implementation of the proposed strategy
changes, the following persons will serve as additional members of the Fund's
portfolio management team and will manage the Fund's non-closed-end fund
investments:
o Tom Futrell, CFA, Senior Vice President, Senior Portfolio Manager of First
Trust; and
o Johnathan N. Wilhelm, Senior Vice President, Senior Portfolio Manager of
First Trust.
Page 23
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF FIRST TRUST EXCHANGE-TRADED FUND
VIII:
OPINION ON THE FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS
We have audited the accompanying statements of assets and liabilities of First
Trust CEF Income Opportunity ETF and First Trust Municipal CEF Income
Opportunity ETF (the "Funds"), each a series of the First Trust Exchange-Traded
Fund VIII, including the portfolios of investments, as of August 31, 2021, the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, the
financial highlights for each of the years ended August 31, 2021, 2020, 2019,
and 2018, and the period from September 27, 2016 (commencement of operations)
through August 31, 2017, and the related notes. In our opinion, the financial
statements and financial highlights present fairly, in all material respects,
the financial position of the Funds as of August 31, 2021, and the results of
their operations for the year then ended, the changes in their net assets for
each of the two years in the period then ended, and the financial highlights for
the years ended August 31, 2021, 2020, 2019, and 2018, and for the period from
September 27, 2016 (commencement of operations) through August 31, 2017, in
conformity with accounting principles generally accepted in the United States of
America.
BASIS FOR OPINION
These financial statements and financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an opinion on the Funds'
financial statements and financial highlights based on our audits. We are a
public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to
the Funds in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement, whether due to error or fraud. The Funds are not
required to have, nor were we engaged to perform, an audit of their internal
control over financial reporting. As part of our audits we are required to
obtain an understanding of internal control over financial reporting but not for
the purpose of expressing an opinion on the effectiveness of the Funds' internal
control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material
misstatement of the financial statements and financial highlights, whether due
to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the financial statements and financial highlights. Our audits
also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of August 31, 2021, by correspondence with
the custodian and brokers; when replies were not received from brokers, we
performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
Chicago, Illinois
October 22, 2021
We have served as the auditor of one or more First Trust investment companies
since 2001.
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ADDITIONAL INFORMATION
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 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.
FEDERAL TAX INFORMATION
For the taxable year ended August 31, 2021, the following percentages of income
dividend paid by the Funds qualify for the dividends received deduction
available to corporations:
<TABLE>
<CAPTION>
Dividends Received Deduction
----------------------------
<S> <C>
First Trust CEF Income Opportunity ETF *
First Trust Municipal CEF Income Opportunity ETF *
</TABLE>
* The actual percentage of income dividends that qualify for the dividend
received deduction will be available to corporate shareholders shortly after the
calendar year end.
For the taxable year ended August 31, 2021, the following percentages of income
dividend paid by the Funds are hereby designated as qualified dividend income:
<TABLE>
<CAPTION>
Qualified Dividend Income
----------------------------
<S> <C>
First Trust CEF Income Opportunity ETF **
First Trust Municipal CEF Income Opportunity ETF **
</TABLE>
** The actual qualified dividend income distributions will be reported to
shareholders on Form 1099-DIV which will be sent to shareholders shortly after
the calendar year end.
For the taxable year ended August 31, 2021, the following distribution
information is being provided as required by the Internal Revenue Code or to
meet a specific state's requirement. The First Trust Municipal CEF Income
Opportunity ETF designates the following amounts or, if subsequently determined
to be different, the maximum amount allowable for its fiscal year ended August
31, 2021:
<TABLE>
<CAPTION>
Federal and State Income Tax Percentages
------------------------------------- ---------------
<S> <C>
Tax-Exempt Interest Dividends 98.34%
Alternative Minimum Tax (AMT) 14.18%
</TABLE>
For the fiscal year ended August 31, 2021, the amount of long-term capital gain
distributions designated by First Trust CEF Income Opportunity ETF was $443,455,
which is taxable at the applicable capital gain tax rates for federal income tax
purposes.
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
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 significant
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
more broadly diversified.
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.
DEFINED OUTCOME FUNDS RISK. To the extent a fund's investment strategy is
designed to deliver returns tied to the price performance of an underlying ETF,
an investor may not realize the returns the fund seeks to achieve if that
investor does not hold shares for the entire target outcome period. In the event
an investor purchases shares after the first day of the target outcome period or
sells shares prior to the end of the target outcome period, the buffer that the
fund seeks to provide against a decline in the value of the underlying ETF may
not be available, the enhanced returns that the fund seeks to provide (if any)
may not be available and the investor may not participate in a gain in the value
of the underlying ETF up to the cap for the investor's investment period.
Additionally, the fund will not participate in gains of the underlying ETF above
the cap and a shareholder may lose their entire investment. If the fund seeks
enhanced returns, there are certain time periods when the value of the fund may
fall faster than the value of the underlying ETF, and it is very unlikely that,
on any given day during which the underlying ETF share price increases in value,
the fund's share price will increase at the same rate as the enhanced returns
sought by the fund, which is designed for an entire target outcome period.
Trading flexible exchange options involves risks different from, or possibly
greater than, the risks associated with investing directly in securities, such
as less liquidity and correlation and valuation risks. A fund may experience
substantial downside from specific flexible exchange option positions and
certain positions may expire worthless.
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
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 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 OR MODEL CONSTITUENT RISK. Certain funds may be a constituent of one or
more indices or ETF models. 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 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. In addition, index rebalances may potentially result in increased
trading activity in a fund's shares.
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. While the development of
vaccines has slowed the spread of the virus and allowed for the resumption of
"reasonably" normal business activity in the United States, many countries
continue to impose lockdown measures in an attempt to slow the spread.
Additionally, there is no guarantee that vaccines will be effective against
emerging variants of the disease.
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;
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
capital controls; lack of liquidity; currency exchange rates; excessive
taxation; government seizure of assets; the imposition of sanctions by foreign
governments; different legal or accounting standards; and less government
supervision and regulation of exchanges in foreign countries. Investments in
non-U.S. securities may involve higher costs than investments in U.S.
securities, including higher transaction and custody costs, as well as
additional taxes imposed by non-U.S. governments. These risks may be heightened
for securities of companies located, or with significant operations, in emerging
market countries.
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. Each fund relies on third-parties for a range of services, including
custody. Any delay or failure relating to engaging or maintaining such service
providers may affect a fund's ability to meet its investment objective. Although
the funds and the funds' investment 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
ADVISORY AGREEMENT
BOARD CONSIDERATIONS REGARDING CONTINUATION OF INVESTMENT MANAGEMENT AGREEMENT
The Board of Trustees of First Trust Exchange-Traded Fund VIII (the "Trust"),
including the Independent Trustees, unanimously approved the continuation of the
Investment Management Agreement (the "Agreement") with First Trust Advisors L.P.
(the "Advisor") on behalf of the following two series of the Trust (each a
"Fund" and collectively, the "Funds"):
First Trust CEF Income Opportunity ETF (FCEF)
First Trust Municipal CEF Income Opportunity ETF (MCEF)
The Board approved the continuation of the Agreement for each Fund for a
one-year period ending June 30, 2022 at a meeting held on June 6-7, 2021. The
Board determined for each Fund that the continuation of the Agreement is in the
best interests of the Fund in light of the nature, extent and quality of the
services provided and such other matters as the Board considered to be relevant
in the exercise of its business judgment.
To reach this determination for each Fund, the Board considered its duties under
the Investment Company Act of 1940, as amended (the "1940 Act"), as well as
under the general principles of state law, in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; the fiduciary duty
of investment advisors with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Board in voting
on such agreements. At meetings held on April 26, 2021 and June 6-7, 2021, the
Board, including the Independent Trustees, reviewed materials provided by the
Advisor responding to requests for information from counsel to the Independent
Trustees, submitted on behalf of the Independent Trustees, that, among other
things, outlined: the services provided by the Advisor to each Fund (including
the relevant personnel responsible for these services and their experience); the
unitary fee rate payable by each Fund as compared to fees charged to a peer
group of funds (the "Expense Group") and a broad peer universe of funds (the
"Expense Universe"), each assembled by Broadridge Financial Solutions, Inc.
("Broadridge"), an independent source, and as compared to fees charged to other
clients of the Advisor, including other exchange-traded funds ("ETFs") managed
by the Advisor; the expense ratio of each Fund as compared to expense ratios of
the funds in the Fund's Expense Group and Expense Universe; performance
information for each Fund, including comparisons of each Fund's performance to
that of one or more relevant benchmark indexes and to that of a performance
group of funds and a broad performance universe of funds (the "Performance
Universe"), each assembled by Broadridge; the nature of expenses incurred in
providing services to each Fund and the potential for the Advisor to realize
economies of scale, if any; profitability and other financial data for the
Advisor; any fall-out benefits to the Advisor and its affiliate, First Trust
Portfolios L.P. ("FTP"); and information on the Advisor's compliance program.
The Board reviewed initial materials with the Advisor at the meeting held on
April 26, 2021, prior to which the Independent Trustees and their counsel met
separately to discuss the information provided by the Advisor. Following the
April meeting, counsel to the Independent Trustees, on behalf of the Independent
Trustees, requested certain clarifications and supplements to the materials
provided, and the information provided in response to those requests was
considered at an executive session of the Independent Trustees and their counsel
held prior to the June 6-7, 2021 meeting, as well as at the June meeting. The
Board applied its business judgment to determine whether the arrangement between
the Trust and the Advisor continues to be a reasonable business arrangement from
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
each Fund's perspective. The Board determined that, given the totality of the
information provided with respect to the Agreement, the Board had received
sufficient information to renew the Agreement. The Board considered that
shareholders chose to invest or remain invested in a Fund knowing that the
Advisor manages the Fund and knowing the Fund's unitary fee.
In reviewing the Agreement for each Fund, the Board considered the nature,
extent and quality of the services provided by the Advisor under the Agreement.
The Board considered that the Advisor is responsible for the overall management
and administration of the Trust and each Fund and reviewed all of the services
provided by the Advisor to the Funds, as well as the background and experience
of the persons responsible for such services. The Board noted that each Fund is
an actively-managed ETF and noted that the Advisor's CEF Management Team is
responsible for the day-to-day management of the Funds' investments. The Board
considered the background and experience of the members of the CEF Management
Team, including the Board's prior meetings with members of the Team. The Board
considered the Advisor's statement that it applies the same oversight model
internally with its CEF Management Team as it uses for overseeing external
sub-advisors, including portfolio risk monitoring and performance review. In
reviewing the services provided, the Board noted the compliance program that had
been developed by the Advisor and considered that it includes a robust program
for monitoring the Advisor's and each Fund's compliance with the 1940 Act, as
well as each Fund's compliance with its investment objective, policies and
restrictions. The Board also considered a report from the Advisor with respect
to its risk management functions related to the operation of the Funds. Finally,
as part of the Board's consideration of the Advisor's services, the Advisor, in
its written materials and at the April 26, 2021 meeting, described to the Board
the scope of its ongoing investment in additional personnel and infrastructure
to maintain and improve the quality of services provided to the Funds and the
other funds in the First Trust Fund Complex. In light of the information
presented and the considerations made, the Board concluded that the nature,
extent and quality of the services provided to the Trust and each Fund by the
Advisor under the Agreement have been and are expected to remain satisfactory
and that the Advisor has managed each Fund consistent with its investment
objective, policies and restrictions.
The Board considered the unitary fee rate payable by each Fund under the
Agreement for the services provided. The Board considered that as part of the
unitary fee the Advisor is responsible for each Fund's expenses, including the
cost of transfer agency, custody, fund administration, legal, audit and other
services and license fees, if any, but excluding the fee payment under the
Agreement and interest, taxes, acquired fund fees and expenses, brokerage
commissions and other expenses connected with the execution of portfolio
transactions, distribution and service fees pursuant to a Rule 12b-1 plan, if
any, and extraordinary expenses, if any. The Board noted that, because each Fund
invests in underlying funds, the Fund incurs acquired fund fees and expenses,
which are not payable out of the unitary fee, and that such acquired fund fees
and expenses will change over time as assets are reallocated among the
underlying funds. The Board considered that, to the extent any of the underlying
funds are other funds in the First Trust Fund Complex, the Advisor has agreed to
offset the unitary fee paid by each Fund related to the Fund's assets invested
in the affiliated underlying funds. The Board received and reviewed information
showing the advisory or unitary fee rates and expense ratios of the peer funds
in the Expense Groups, as well as advisory and unitary fee rates charged by the
Advisor to other fund (including ETFs) and non-fund clients, as applicable.
Because each Fund pays a unitary fee, the Board determined that expense ratios
were the most relevant comparative data point. Based on the information
provided, the Board noted that the unitary fee rate for FCEF was above the
median total (net) expense ratio (excluding acquired fund fees and expenses) of
the peer funds in its Expense Group and that the unitary fee rate for MCEF was
below the median total (net) expense ratio (excluding acquired fund fees and
expenses) of the peer funds in its Expense Group. The Board also noted that each
Fund's total (net) expense ratio (including acquired fund fees and expenses) was
above the median total (net) expense ratio (including acquired fund fees and
expenses) of the peer funds in the respective Expense Group. With respect to the
Expense Groups, the Board, at the April 26, 2021 meeting, discussed with the
Advisor limitations in creating peer groups for actively-managed ETFs, including
that the Expense Group for each Fund contained both actively-managed ETFs and
open-end mutual funds, and different business models that may affect the pricing
of services among ETF sponsors. The Board took these limitations and differences
into account in considering the peer data. With respect to fees charged to other
non-ETF clients, the Board considered differences between the Funds and other
non-ETF clients that limited their comparability. In considering the unitary fee
rates overall, the Board also considered the Advisor's statement that it seeks
to meet investor needs through innovative and value-added investment solutions
and the Advisor's demonstrated long-term commitment to each Fund and the other
funds in the First Trust Fund Complex.
The Board considered performance information for each Fund. The Board noted the
process it has established for monitoring each Fund's performance and portfolio
risk on an ongoing basis, which includes quarterly performance reporting from
the Advisor for the Funds. The Board determined that this process continues to
be effective for reviewing each Fund's performance. The Board received and
reviewed information comparing each Fund's performance for periods ended
December 31, 2020 to the performance of the funds in its Performance Universe
and, for FCEF, to that of a blended benchmark index and, for MCEF, to that of a
benchmark index. Based on the information provided, the Board noted that FCEF
underperformed its Performance Universe median for the one-year period ended
December 31, 2020, but outperformed its Performance Universe median for the
three-year period ended December 31, 2020 and outperformed its blended benchmark
index for the one- and three-year periods ended December 31, 2020. The Board
also noted that MCEF outperformed its Performance Universe median and benchmark
index for the one- and three-year periods ended December 31, 2020.
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FIRST TRUST EXCHANGE-TRADED FUND VIII
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On the basis of all the information provided on the unitary fee and performance
of each Fund and the ongoing oversight by the Board, the Board concluded that
the unitary fee for each Fund continues to be reasonable and appropriate in
light of the nature, extent and quality of the services provided by the Advisor
to each Fund under the Agreement.
The Board considered information and discussed with the Advisor whether there
were any economies of scale in connection with providing advisory services to
the Funds and noted the Advisor's statement that it believes its expenses will
likely increase during the next twelve months as the Advisor continues to hire
personnel and build infrastructure, including technology, to improve the
services to the Funds. The Board noted that any reduction in fixed costs
associated with the management of the Funds would benefit the Advisor, but that
the unitary fee structure provides a level of certainty in expenses for the
Funds. The Board considered the revenues and allocated costs (including the
allocation methodology) of the Advisor in serving as investment advisor to each
Fund for the twelve months ended December 31, 2020 and the estimated
profitability level for each Fund calculated by the Advisor based on such data,
as well as complex-wide and product-line profitability data, for the same
period. The Board noted the inherent limitations in the profitability analysis
and concluded that, based on the information provided, the Advisor's
profitability level for each Fund was not unreasonable. In addition, the Board
considered fall-out benefits described by the Advisor that may be realized from
its relationship with the Funds. The Board considered that the Advisor had
identified as a fall-out benefit to the Advisor and FTP their exposure to
investors and brokers who, absent their exposure to the Funds, may have had no
dealings with the Advisor or FTP, and noted that the Advisor does not utilize
soft dollars in connection with the Funds. The Board concluded that the
character and amount of potential fall-out benefits to the Advisor were not
unreasonable.
Based on all of the information considered and the conclusions reached, the
Board, including the Independent Trustees, unanimously determined that the terms
of the Agreement continue to be fair and reasonable and that the continuation of
the Agreement is in the best interests of each Fund. No single factor was
determinative in the Board's analysis.
LIQUIDITY RISK MANAGEMENT PROGRAM
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as
amended (the "1940 Act"), the Funds and each other fund in the First Trust Fund
Complex, other than the closed-end funds, have adopted and implemented a
liquidity risk management program (the "Program") reasonably designed to assess
and manage the funds' liquidity risk, i.e., the risk that a fund could not meet
requests to redeem shares issued by the fund without significant dilution of
remaining investors' interests in the fund. The Board of Trustees of the First
Trust Funds has appointed First Trust Advisors, L.P. (the "Advisor") as the
person designated to administer the Program, and in this capacity the Advisor
performs its duties primarily through the activities and efforts of the First
Trust Liquidity Committee (the "Liquidity Committee").
Pursuant to the Program, the Liquidity Committee classifies the liquidity of
each fund's portfolio investments into one of the four liquidity categories
specified by Rule 22e-4: highly liquid investments, moderately liquid
investments, less liquid investments and illiquid investments. The Liquidity
Committee determines certain of the inputs for this classification process,
including reasonably anticipated trade sizes and significant investor dilution
thresholds. The Liquidity Committee also determines and periodically reviews a
highly liquid investment minimum for certain funds, monitors the funds' holdings
of assets classified as illiquid investments to seek to ensure they do not
exceed 15% of a fund's net assets and establishes policies and procedures
regarding redemptions in kind.
At the April 26, 2021 meeting of the Board of Trustees, as required by Rule
22e-4 and the Program, the Advisor provided the Board with a written report
prepared by the Advisor that addressed the operation of the Program during the
period from March 20, 2020 through the Liquidity Committee's annual meeting held
on March 16, 2021 and assessed the Program's adequacy and effectiveness of
implementation during this period, including the operation of the highly liquid
investment minimum for each fund that is required under the Program to have one,
and any material changes to the Program. Note that because the Funds primarily
hold assets that are highly liquid investments, the Funds have not adopted any
highly liquid investment minimums.
As stated in the written report, during the review period, no fund breached the
15% limitation on illiquid investments, no fund with a highly liquid investment
minimum breached that minimum and no fund filed a Form N-LIQUID. The Advisor
concluded that each fund's investment strategy is appropriate for an open-end
fund; that the Program operated effectively in all material respects during the
review period; and that the Program is reasonably designed to assess and manage
the liquidity risk of each fund and to maintain compliance with Rule 22e-4.
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BOARD OF TRUSTEES AND OFFICERS
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
The following tables identify the Trustees and Officers of the Trust. Unless
otherwise indicated, the address of all persons is 120 East Liberty Drive, Suite
400, Wheaton, IL 60187.
The Trust's statement of additional information includes additional information
about the Trustees and is available, without charge, upon request, by calling
(800) 988-5891.
<TABLE>
<CAPTION>
NUMBER OF OTHER
PORTFOLIOS IN TRUSTEESHIPS OR
TERM OF OFFICE THE FIRST TRUST DIRECTORSHIPS
NAME, AND YEAR FIRST FUND COMPLEX HELD BY TRUSTEE
YEAR OF BIRTH AND ELECTED OR PRINCIPAL OCCUPATIONS OVERSEEN BY DURING PAST
POSITION WITH THE TRUST APPOINTED DURING PAST 5 YEARS TRUSTEE 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard E. Erickson, Trustee o Indefinite Term Physician, Officer, Wheaton Orthopedics; 210 None
(1951) Limited Partner, Gundersen Real Estate
o Since Inception Limited Partnership (June 1992 to
December 2016)
Thomas R. Kadlec, Trustee o Indefinite Term President, ADM Investors Services, Inc. 210 Director of ADM
(1957) (Futures Commission Merchant) Investor Services,
o Since Inception Inc., ADM
Investor Services
International,
Futures Industry
Association, and
National Futures
Association
Robert F. Keith, Trustee o Indefinite Term President, Hibs Enterprises (Financial 210 Director of Trust
(1956) and Management Consulting) Company of
o Since Inception Illinois
Niel B. Nielson, Trustee o Indefinite Term Senior Advisor (August 2018 to Present), 210 None
(1954) Managing Director and Chief Operating
o Since Inception Officer (January 2015 to August 2018),
Pelita Harapan Educational Foundation
(Educational Products and Services)
------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
James A. Bowen(1), Trustee, o Indefinite Term Chief Executive Officer, First Trust 210 None
Chairman of the Board Advisors L.P. and First Trust
(1955) o Since Inception Portfolios L.P.; Chairman of the
Board of Directors, BondWave LLC
(Software Development Company)
and Stonebridge Advisors LLC
(Investment Advisor)
</TABLE>
-----------------------------
(1) Mr. Bowen is deemed an "interested person" of the Trust due to his
position as Chief Executive Officer of First Trust Advisors L.P.,
investment advisor of the Trust.
Page 31
<PAGE>
--------------------------------------------------------------------------------
BOARD OF TRUSTEES AND OFFICERS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
POSITION AND TERM OF OFFICE
NAME OFFICES AND LENGTH OF PRINCIPAL OCCUPATIONS
AND YEAR OF BIRTH WITH TRUST SERVICE DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS(2)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
James M. Dykas President and Chief o Indefinite Term Managing Director and Chief Financial Officer
(1966) Executive Officer (January 2016 to Present), Controller (January 2011
o Since Inception to January 2016), Senior Vice President (April 2007
to January 2016), First Trust Advisors L.P. and First
Trust Portfolios L.P.; Chief Financial Officer
(January 2016 to Present), BondWave LLC
(Software Development Company) and Stonebridge
Advisors LLC (Investment Advisor)
Donald P. Swade Treasurer, Chief Financial o Indefinite Term Senior Vice President (July 2016 to Present), Vice
(1972) Officer and Chief President (April 2012 to July 2016), First Trust
Accounting Officer o Since Inception Advisors L.P. and First Trust Portfolios L.P.
W. Scott Jardine Secretary and Chief o Indefinite Term General Counsel, First Trust Advisors L.P. and
(1960) Legal Officer First Trust Portfolios L.P.; Secretary and General
o Since Inception Counsel, BondWave LLC; Secretary, Stonebridge
Advisors LLC
Daniel J. Lindquist Vice President o Indefinite Term Managing Director, First Trust Advisors L.P. and
(1970) First Trust Portfolios L.P.
o Since Inception
Kristi A. Maher Chief Compliance Officer o Indefinite Term Deputy General Counsel, First Trust Advisors L.P.
(1966) and Assistant Secretary and First Trust Portfolios L.P.
o Since Inception
Roger F. Testin Vice President o Indefinite Term Senior Vice President, First Trust Advisors L.P.
(1966) and First Trust Portfolios L.P.
o Since Inception
Stan Ueland Vice President o Indefinite Term Senior Vice President, First Trust Advisors L.P.
(1970) and First Trust Portfolios L.P.
o Since Inception
</TABLE>
-----------------------------
(2) The term "officer" means the president, vice president, secretary,
treasurer, controller or any other officer who performs a policy making
function.
Page 32
<PAGE>
--------------------------------------------------------------------------------
PRIVACY POLICY
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
PRIVACY POLICY
First Trust values our relationship with you and considers your privacy an
important priority in maintaining that relationship. We are committed to
protecting the security and confidentiality of your personal information.
SOURCES OF INFORMATION
We collect nonpublic personal information about you from the following sources:
o Information we receive from you and your broker-dealer, investment
professional or financial representative through interviews,
applications, agreements or other forms;
o Information about your transactions with us, our affiliates or
others;
o Information we receive from your inquiries by mail, e-mail or
telephone; and
o Information we collect on our website through the use of "cookies".
For example, we may identify the pages on our website that your
browser requests or visits.
INFORMATION COLLECTED
The type of data we collect may include your name, address, social security
number, age, financial status, assets, income, tax information, retirement and
estate plan information, transaction history, account balance, payment history,
investment objectives, marital status, family relationships and other personal
information.
DISCLOSURE OF INFORMATION
We do not disclose any nonpublic personal information about our customers or
former customers to anyone, except as permitted by law. In addition to using
this information to verify your identity (as required under law), the permitted
uses may also include the disclosure of such information to unaffiliated
companies for the following reasons:
o In order to provide you with products and services and to effect
transactions that you request or authorize, we may disclose your
personal information as described above to unaffiliated financial
service providers and other companies that perform administrative or
other services on our behalf, such as transfer agents, custodians
and trustees, or that assist us in the distribution of investor
materials such as trustees, banks, financial representatives, proxy
services, solicitors and printers.
o We may release information we have about you if you direct us to do
so, if we are compelled by law to do so, or in other legally limited
circumstances (for example to protect your account from fraud).
In addition, in order to alert you to our other financial products and services,
we may share your personal information within First Trust.
USE OF WEBSITE ANALYTICS
We currently use third party analytics tools, Google Analytics and AddThis to
gather information for purposes of improving First Trust's website and marketing
our products and services to you. These tools employ cookies, which are small
pieces of text stored in a file by your web browser and sent to websites that
you visit, to collect information, track website usage and viewing trends such
as the number of hits, pages visited, videos and PDFs viewed and the length of
user sessions in order to evaluate website performance and enhance navigation of
the website. We may also collect other anonymous information, which is generally
limited to technical and web navigation information such as the IP address of
your device, internet browser type and operating system for purposes of
analyzing the data to make First Trust's website better and more useful to our
users. The information collected does not include any personal identifiable
information such as your name, address, phone number or email address unless you
provide that information through the website for us to contact you in order to
answer your questions or respond to your requests. To find out how to opt-out of
these services click on: Google Analytics and AddThis.
CONFIDENTIALITY AND SECURITY
With regard to our internal security procedures, First Trust restricts access to
your nonpublic personal information to those First Trust employees who need to
know that information to provide products or services to you. We maintain
physical, electronic and procedural safeguards to protect your nonpublic
personal information.
POLICY UPDATES AND INQUIRIES
As required by federal law, we will notify you of our privacy policy annually.
We reserve the right to modify this policy at any time, however, if we do change
it, we will tell you promptly. For questions about our policy, or for additional
copies of this notice, please go to www.ftportfolios.com, or contact us at
1-800-621-1675 (First Trust Portfolios) or 1-800-222-6822 (First Trust
Advisors).
March 2021
Page 33
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<PAGE>
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<PAGE>
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<PAGE>
FIRST TRUST
First Trust Exchange-Traded Fund VIII
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 VIII
--------------------------------------------------------------------------------
First Trust TCW Opportunistic Fixed Income ETF (FIXD)
First Trust TCW Unconstrained Plus Bond ETF (UCON)
First Trust TCW Securitized Plus ETF (DEED)
First Trust TCW Emerging Markets Debt ETF (EFIX)
First Trust TCW ESG Premier Equity ETF (EPRE)
----------------------------
Annual Report
For the Period Ended
August 31, 2021
----------------------------
<PAGE>
--------------------------------------------------------------------------------
TABLE OF CONTENTS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021
Shareholder Letter.......................................................... 2
Fund Performance Overview
First Trust TCW Opportunistic Fixed Income ETF (FIXD).................... 3
First Trust TCW Unconstrained Plus Bond ETF (UCON)....................... 5
First Trust TCW Securitized Plus ETF (DEED).............................. 7
First Trust TCW Emerging Markets Debt ETF (EFIX)......................... 9
First Trust TCW ESG Premier Equity ETF (EPRE)............................ 11
Notes to Fund Performance Overview.......................................... 13
Portfolio Commentary........................................................ 14
Understanding Your Fund Expenses............................................ 21
Portfolio of Investments
First Trust TCW Opportunistic Fixed Income ETF (FIXD).................... 23
First Trust TCW Unconstrained Plus Bond ETF (UCON)....................... 52
First Trust TCW Securitized Plus ETF (DEED).............................. 76
First Trust TCW Emerging Markets Debt ETF (EFIX)......................... 89
First Trust TCW ESG Premier Equity ETF (EPRE)............................ 94
Statements of Assets and Liabilities........................................ 96
Statements of Operations.................................................... 98
Statements of Changes in Net Assets......................................... 100
Financial Highlights........................................................ 102
Notes to Financial Statements............................................... 105
Report of Independent Registered Public Accounting Firm..................... 119
Additional Information...................................................... 121
Board of Trustees and Officers.............................................. 131
Privacy Policy.............................................................. 133
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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/or TCW Investment Management Company LLC ("TCW" or
the "Sub-Advisor") and their respective 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
the series of First Trust Exchange-Traded Fund VIII (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/or Sub-Advisor and their respective 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 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 portfolio commentary from the portfolio management team of the
Funds, you may obtain an understanding of how the market environment affected
each Fund's performance. The statistical information that follows may help you
understand each Fund's performance compared to that of a relevant market
benchmark.
It is important to keep in mind that the opinions expressed by personnel of the
Advisor and/or Sub-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 the prospectus, the statement of
additional information, and other Fund regulatory filings.
Page 1
<PAGE>
--------------------------------------------------------------------------------
SHAREHOLDER LETTER
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL LETTER FROM THE CHAIRMAN AND CEO
AUGUST 31, 2021
Dear Shareholders:
First Trust is pleased to provide you with the annual report for certain series
of the First Trust Exchange-Traded Fund VIII (the "Funds"), which contains
detailed information about the Funds for the twelve months ended August 31,
2021. Please note that the First Trust TCW Emerging Markets Debt ETF ("EFIX")
was incepted on February 17, 2021 and the First Trust TCW ESG Premier Equity ETF
("EPRE") was incepted on May 25, 2021, and so information in this letter and the
annual report prior to the inception date of each Fund will not apply to these
Funds.
The coronavirus ("COVID-19") pandemic has proven to be as stubborn as
advertised. We were warned by the scientific community early on that we would
have to coexist with this virus from here on out, and that appears to be the
case some 19 months after its onset. While the three main vaccines have proven
to be effective at keeping those people who have gotten all the required shots
out of the hospital, the U.S., unfortunately, had only achieved a 54% fully
vaccinated rate as of September 9, 2021, according to the Centers for Disease
Control and Prevention. If you add in the people ages 18 and older who have
received just one of the two-dose vaccines, it jumps to 75.3%. The U.S. and
global economies continue to underperform due to the pandemic. The U.S. alone
had a record high 10.9 million job openings at the end of July 2021, according
to the latest Job Openings and Labor Turnover Survey from the Department of
Labor. It appears that many people do not seem to want to work right now. An
estimated 7.5 million unemployment recipients in the U.S. were scheduled to lose
their benefits on September 6, 2021. Perhaps that will be enough to incentivize
people to go back to work.
The Federal Reserve (the "Fed") continues to play a major role in the U.S.
economy. It has kept short-term interest rates artificially low for the better
part of the past 13 years. The Federal Funds target rate (upper bound), while
held at 0.25% for roughly nine of those 13 years, reached as high as 2.50% in
the same 13-year period, but only for a few months and that was just prior to
the COVID-19 pandemic, according to data from the Fed. For comparative purposes,
the target rate averaged 2.56% for the 30-year period ended September 21, 2021.
It currently stands at 0.25%. In addition to keeping rates low, the Fed has been
buying assets, specifically Treasuries and mortgage-backed securities. It has
been buying a combined $120 billion of these securities every month. This has
helped keep bond yields artificially low as well. As of February 26, 2020, the
value of the assets on the Fed's balance sheet totaled $4.16 trillion, according
to its own data. As of September 15, 2021, the assets were valued at $8.45
trillion. Keep in mind, the balance sheet stood at $1 trillion on September 17,
2008. That was during the 2007-2008 Financial Crisis. Due to the reopening of
the U.S. economy and a bigger-than-expected rise in inflation this year, the Fed
has signaled that it could begin to taper its bond buying program by the end of
2021. With respect to the Federal Funds rate, the Fed continues to say it
intends to leave short-term rates where they are until 2023. In other words, the
Fed is poised to maintain its accommodative stance towards monetary policy. They
are not looking to get tight - just less loose. We will monitor this scenario
closely in the months ahead to see if the Fed's actions impact the direction of
interest rates and bond yields.
Overall, I am pleased to report that the securities markets have performed well
in this tumultuous climate. It appears, in our opinion, that the extremely low
interest rates offered on savings vehicles has motivated many investors to
assume more risk to potentially generate higher returns. The S&P 500(R) Index
(the "Index") posted a total return of 31.17% for the 12-month period ended
August 31, 2021, according to Bloomberg. For comparative purposes, from 1926
through 2020 (95 years), the Index returned an average of 10.28% per year on a
total return basis, according to Morningstar/Ibbotson Associates. Should
interest rates and bond yields eventually trend higher, investors should be
prepared for a bit of turbulence as stocks and bonds may be subjected to some
potential short-term profit taking, in my opinion. Having said that, I encourage
investors to stay the course. I remain optimistic due in large part to the
trillions of dollars in government stimulus money already circulating in the
economy as well as the potential for trillions of additional dollars from
President Joe Biden's infrastructure and "human infrastructure" bills still
weaving their way through Congress. It's hard to bet against growth in the
current climate.
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
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED)
--------------------------------------------------------------------------------
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
The investment objective of the First Trust TCW Opportunistic Fixed Income ETF
(the "Fund") is to seek to maximize long-term total return. Under normal market
conditions, the Fund pursues its objective by investing at least 80% of its net
assets (including investment borrowings) in fixed income securities. The Fund's
investments principally include securities issued or guaranteed by the U.S.
government or its agencies, instrumentalities or U.S. government-sponsored
entities; Treasury Inflation Protected Securities (TIPS); agency and non-agency
residential mortgage-backed securities (RMBS); agency and non-agency commercial
mortgage-backed securities (CMBS); agency and non-agency asset-backed securities
(ABS); U.S. corporate bonds; fixed income securities issued by non-U.S.
corporations and governments, including issuers with significant ties to
emerging market countries; bank loans, including first lien senior secured
floating rate bank loans; municipal bonds; collateralized loan obligations
(CLOs); Rule 144A securities, and other debt securities bearing fixed, floating
or variable interest rates of any maturity. The Fund may utilize listed and
over-the-counter derivatives instruments. Shares of the Fund are listed on The
Nasdaq Stock Market LLC under the ticker symbol "FIXD."
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
------------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
1 Year Ended Inception (2/14/17) Inception (2/14/17)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 0.77% 4.62% 22.76%
Market Value 0.82% 4.64% 22.86%
INDEX PERFORMANCE
Bloomberg U.S. Aggregate Bond Index -0.08% 4.08% 19.94%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 13.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
FEBRUARY 14, 2017 - AUGUST 31, 2021
First Trust TCW Bloomberg
Opportunistic Fixed U.S. Aggregate
Income ETF Bond Index
<S> <C> <C>
2/14/17 $10,000 $10,000
2/28/17 10,068 10,066
8/31/17 10,323 10,342
2/28/18 10,130 10,117
8/31/18 10,265 10,233
2/28/19 10,470 10,437
8/31/19 11,325 11,274
2/29/20 11,699 11,657
8/31/20 12,182 12,004
2/28/21 12,048 11,818
8/31/21 12,276 11,994
</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 index does
not actually hold a portfolio of securities and therefore does 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 3
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD) (CONTINUED)
----------------------------------------------------------
% OF TOTAL
FUND ALLOCATION NET ASSETS
----------------------------------------------------------
U.S. Government Bonds and Notes 36.9%
U.S. Government Agency Mortgage-Backed
Securities 30.1
Corporate Bonds and Notes 17.9
Asset-Backed Securities 7.6
Mortgage-Backed Securities 7.6
Foreign corporate Bonds and Notes 5.2
Senior Floating-Rate Loan Interests 1.8
Foreign Sovereign Bonds and Notes 1.6
Municipal Bond 0.9
U.S. Treasury Bills 10.8
Money Market Funds 2.6
Put Swaptions Purchased 0.0*
Put Options Purchased 0.0*
Put Options Written 0.0*
Net Other Assets and Liabilities** (23.0)
-------
Total 100.0%
=======
* Amount is less than 0.1%.
** Includes variation margin on futures contracts and unrealized appreciation/
depreciation on interest rate swap agreements.
----------------------------------------------------------
% OF
FIXED-INCOME
CREDIT QUALITY(1) INVESTMENTS
----------------------------------------------------------
Government/Agency 64.6%
AAA 3.5
AA+ 0.3
AA 0.8
AA- 1.0
A+ 0.6
A 1.6
A- 2.6
BBB+ 4.3
BBB 5.9
BBB- 3.6
BB+ 2.0
BB 1.0
BB- 0.8
B+ 0.2
B 0.9
B- 0.3
CCC+ 0.1
CCC 1.2
CCC- 0.6
CC 2.4
C 0.5
D 1.0
NR 0.2
-------
Total 100.0%
=======
----------------------------------------------------------
% OF
FIXED-INCOME
TOP TEN HOLDINGS INVESTMENTS
----------------------------------------------------------
U.S. Treasury Note, 0.13%, 08/31/23 7.1%
Federal National Mortgage Association, Pool
TBA, 2.00%, 10/15/51 7.0
Federal National Mortgage Association, Pool
TBA, 2.50%, 10/15/51 6.9
U.S. Treasury Note, 0.13%, 07/31/23 5.7
U.S. Treasury Bond, 2.00%, 08/15/51 4.2
U.S. Treasury Bill, 0.00%, 12/09/21 3.7
U.S. Treasury Note, 0.75%, 08/31/26 3.2
U.S. Treasury Note, 0.63%, 07/31/26 2.9
U.S. Treasury Note, 0.88%, 06/30/26 2.8
U.S. Treasury Bond, 2.38%, 05/15/51 1.5
-------
Total 45.0%
=======
-----------------------------
(1) The credit quality and ratings information presented above reflect the
ratings assigned by one or more nationally recognized statistical rating
organizations (NRSROs), including Standard & Poor's Rating Group, a
division of McGraw Hill Companies, Inc., Moody's Investors Service, Inc.,
Fitch Ratings, or a comparably rated NRSRO. For situations in which a
security is rated by more than one NRSRO and the ratings are not
equivalent, the lowest ratings are used. Sub-investment grade ratings are
those rated BB+/Ba1 or lower. Investment grade ratings are those rated
BBB-/Baa3 or higher. The credit ratings shown relate to the
creditworthiness of the issuers of the underlying securities in the Fund,
and not to the Fund or its shares. U.S. Treasury, U.S. Agency and U.S.
Agency mortgage-backed securities appear under "Government/Agency". Credit
ratings are subject to change.
Page 4
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
The investment objective of the First Trust TCW Unconstrained Plus Bond ETF (the
"Fund") is to seek to maximize long-term total return. Under normal market
conditions, the Fund pursues its objective by investing at least 80% of its net
assets (including investment borrowings) in a portfolio of fixed income
securities. The Fund's investment sub-advisor, TCW Investment Management Company
LLC, manages the Fund's portfolio in an "unconstrained" manner, meaning that its
investment universe is not limited to the securities of any particular index and
it has discretion to invest in fixed income securities of any type or credit
quality. The Fund's investments principally include securities issued or
guaranteed by the U.S. government or its agencies, instrumentalities or U.S.
government-sponsored entities; Treasury Inflation Protected Securities (TIPS);
agency and non-agency residential mortgage-backed securities (RMBS); agency and
non-agency commercial mortgage-backed securities (CMBS); agency and non-agency
asset-backed securities (ABS); U.S. corporate bonds; fixed income securities
issued by non-U.S. corporations and governments, including issuers with
significant ties to emerging market countries; bank loans, including first lien
senior secured floating rate bank loans; municipal bonds; collateralized loan
obligations (CLOs); Rule 144A securities, and other debt securities bearing
fixed, floating or variable interest rates of any maturity. The Fund may also
invest in preferred stock and common stock and the Fund may utilize listed and
over-the-counter derivatives. Under normal market conditions, the Fund's average
portfolio duration will vary from between 0 to 10 years. Shares of the Fund are
listed on The NYSE Arca, Inc. under the ticker symbol "UCON."
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
------------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
1 Year Ended Inception (6/4/18) Inception (6/4/18)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 4.04% 5.01% 17.16%
Market Value 3.99% 5.05% 17.33%
INDEX PERFORMANCE
ICE BofA US Dollar 3-Month Deposit Offered Rate Average Index 0.21% 1.51% 4.96%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 13.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
JUNE 4, 2018 - AUGUST 31, 2021
First Trust TCW ICE BofA US Dollar
Opportunistic Fixed 3-Month Deposit Offered
Income ETF Rate Average Index
<S> <C> <C>
6/4/18 $10,000 $10,000
8/31/18 10,106 10,057
2/28/19 10,323 10,185
8/31/19 10,728 10,318
2/29/20 10,960 10,425
8/31/20 11,261 10,475
2/28/21 11,596 10,488
8/31/21 11,716 10,496
</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 index does
not actually hold a portfolio of securities and therefore does 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 TCW UNCONSTRAINED PLUS BOND ETF (UCON) (CONTINUED)
----------------------------------------------------------
% OF TOTAL
FUND ALLOCATION NET ASSETS
----------------------------------------------------------
Asset-Backed Securities 18.4%
Mortgage-Backed Securities 18.3
Corporate Bonds and Notes 18.2
U.S. Government Agency Mortgage-Backed
Securities 14.6
Foreign Corporate Bonds and Notes 6.4
Foreign Sovereign Bonds 3.9
U.S. Government Bonds and Notes 0.4
Municipal Bonds 0.3
U.S. Treasury Bills 22.1
Money Market Funds 7.1
Net Other Assets and Liabilities* (9.7)
-------
Total 100.0%
=======
* Includes variation margin on futures contracts and unrealized appreciation/
depreciation on interest rate swap agreements.
----------------------------------------------------------
% OF
FIXED-INCOME
CREDIT QUALITY(1) INVESTMENTS
----------------------------------------------------------
Government/Agency 36.2%
AAA 6.6
AA+ 0.4
AA 1.3
AA- 1.4
A+ 0.8
A 2.1
A- 3.8
BBB+ 3.9
BBB 6.4
BBB- 4.6
BB+ 2.8
BB 2.3
BB- 3.1
B+ 1.3
B 2.8
B- 1.5
CCC+ 0.6
CCC 4.5
CCC- 2.8
CC 6.9
C 1.8
D 2.1
-------
Total 100.0%
=======
----------------------------------------------------------
% OF
FIXED-INCOME
TOP TEN HOLDINGS INVESTMENTS
----------------------------------------------------------
Federal National Mortgage Association, Pool
TBA, 2.00%, 10/15/51 5.3%
U.S. Treasury Bill, 0.00%, 01/06/22 4.8
U.S. Treasury Bill, 0.00%, 12/09/21 4.5
Federal National Mortgage Association, Pool
TBA, 2.50%, 10/15/51 4.3
U.S. Treasury Bill, 0.00%, 02/03/22 3.4
U.S. Treasury Bill, 0.00%, 01/20/22 2.6
U.S. Treasury Bill, 0.00%, 10/05/21 2.3
U.S. Cash Management Bill, 0.00%, 12/14/21 2.2
U.S. Treasury Bill, 0.00%, 10/07/21 1.7
IndyMac INDX Mortgage Loan Trust, Series
2006-AR2, Class 1A1B, 1 Mo. LIBOR +
0.42%, 0.50%, 04/25/46 0.5
-------
Total 31.6%
=======
-----------------------------
(1) The credit quality and ratings information presented above reflect the
ratings assigned by one or more nationally recognized statistical rating
organizations (NRSROs), including Standard & Poor's Rating Group, a
division of McGraw Hill Companies, Inc., Moody's Investors Service, Inc.,
Fitch Ratings, or a comparably rated NRSRO. For situations in which a
security is rated by more than one NRSRO and the ratings are not
equivalent, the lowest ratings are used. Sub-investment grade ratings are
those rated BB+/Ba1 or lower. Investment grade ratings are those rated
BBB-/Baa3 or higher. The credit ratings shown relate to the
creditworthiness of the issuers of the underlying securities in the Fund,
and not to the Fund or its shares. U.S. Treasury, U.S. Agency and U.S.
Agency mortgage-backed securities appear under "Government/Agency". Credit
ratings are subject to change.
Page 6
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST TCW SECURITIZED PLUS ETF (DEED)
The First Trust TCW Securitized Plus ETF seeks to maximize long-term total
return. Under normal market conditions, the Fund will invest at least 80% of its
net assets (including investment borrowings) in securitized debt securities,
including asset-backed securities, residential and commercial mortgage-backed
securities and collateralized loan obligations ("CLOs"). The Fund's investment
sub-advisor, TCW Investment Management Company LLC ("TCW" or the "Sub-Advisor")
seeks to outperform the Bloomberg U.S. Mortgage-Backed Securities Index over
time through the utilization of independent, bottom-up research to identify
securities that are relatively undervalued. Under normal conditions, the Fund's
average portfolio duration varies within two years (plus or minus) of the
portfolio duration of the securities comprising the Bloomberg U.S.
Mortgage-Backed Securities Index. As a separate measure, there is no limit on
the weighted average maturity of the Fund's portfolio. While maturity refers to
the expected life of a security, duration is a measure of the expected price
volatility of a debt security as a result of changes in market rates of
interest. Shares of the Fund are listed on The NYSE Arca, Inc. under the ticker
symbol "DEED."
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
------------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
1 Year Ended Inception (4/29/20) Inception (4/29/20)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 2.93% 5.06% 6.84%
Market Value 3.05% 5.06% 6.84%
INDEX PERFORMANCE
Bloomberg U.S. Mortgage-Backed Securities Index -0.18% 0.14% 0.18%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 13.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
APRIL 29, 2020 - AUGUST 31, 2021
Bloomberg
First Trust TCW U.S. Mortgage-Backed
Securitized Plus ETF Securities Index
<S> <C> <C>
4/29/20 $10,000 $10,000
4/29/20 10,000 10,000
8/31/20 10,380 10,036
2/28/21 10,492 9,990
8/31/21 10,684 10,018
</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 index does
not actually hold a portfolio of securities and therefore does 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 TCW SECURITIZED PLUS ETF (DEED) (CONTINUED)
----------------------------------------------------------
% OF TOTAL
FUND ALLOCATION NET ASSETS
----------------------------------------------------------
U.S. Government Agency Mortgage-Backed
Securities 52.1%
U.S. Treasury Bills 31.3
Mortgage-Backed Securities 26.5
U.S. Government Bonds and Notes 20.0
Asset-Backed Securities 18.9
Money Market Funds 1.5
Net Other Assets and Liabilities* (50.3)
-------
Total 100.0%
=======
* Includes variation margin on futures contracts and unrealized appreciation on
forward foreign currency contracts.
----------------------------------------------------------
% OF
FIXED-INCOME
CREDIT QUALITY(1) INVESTMENTS
----------------------------------------------------------
Government/Agency 69.5%
AAA 6.2
AA+ 0.8
AA 1.1
AA- 0.3
A+ 0.2
A 1.5
A- 1.2
BBB 0.5
BBB- 0.9
BB 0.9
BB- 0.6
B+ 0.8
B 0.7
B- 1.3
CCC+ 0.2
CCC 4.0
CCC- 1.2
CC 5.0
C 1.7
D 1.4
-------
Total 100.0%
=======
----------------------------------------------------------
% OF
FIXED-INCOME
TOP TEN HOLDINGS INVESTMENTS
----------------------------------------------------------
Federal National Mortgage Association, Pool
TBA, 2.00%, 10/15/51 12.2%
Federal National Mortgage Association, Pool
TBA, 2.50%, 10/15/51 12.2
U.S. Treasury Bill, 0.00%, 10/05/21 6.2
U.S. Cash Management Bill, 0.00%, 12/21/21 6.0
U.S. Treasury Note, 0.13%, 08/31/23 4.8
Government National Mortgage Association,
Pool TBA, 2.50%, 10/15/51 3.3
U.S. Treasury Bill, 0.00%, 01/06/22 3.2
Federal National Mortgage Association, Pool
TBA, 2.00%, 10/15/36 2.6
U.S. Treasury Bill, 0.00%, 01/20/22 2.4
U.S. Treasury Note, 0.13%, 07/31/23 2.2
-------
Total 55.1%
=======
-----------------------------
(1) The credit quality and ratings information presented above reflect the
ratings assigned by one or more nationally recognized statistical rating
organizations (NRSROs), including Standard & Poor's Rating Group, a
division of McGraw Hill Companies, Inc., Moody's Investors Service, Inc.,
Fitch Ratings, or a comparably rated NRSRO. For situations in which a
security is rated by more than one NRSRO and the ratings are not
equivalent, the lowest ratings are used. Sub-investment grade ratings are
those rated BB+/Ba1 or lower. Investment grade ratings are those rated
BBB-/Baa3 or higher. The credit ratings shown relate to the
creditworthiness of the issuers of the underlying securities in the Fund,
and not to the Fund or its shares. U.S. Treasury, U.S. Agency and U.S.
Agency mortgage-backed securities appear under "Government/Agency." Credit
ratings are subject to change.
Page 8
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST TCW EMERGING MARKETS DEBT ETF (EFIX)
The First Trust TCW Emerging Markets Debt ETF (the "Fund") seeks to provide high
total return from current income and capital appreciation. Under normal market
conditions, the Fund will invest at least 80% of its net assets (including
investment borrowings) in debt securities issued or guaranteed by companies,
financial institutions and government entities located in emerging market
countries. An "emerging market country" is a country that, at the time the Fund
invests in the related security or instrument, is classified as an emerging or
developing economy by any supranational organization such as the World Bank or
the United Nations, or related entities, or is considered an emerging market
country for purposes of constructing a major emerging market securities index.
The Fund's investments include, but are not limited to, debt securities issued
by sovereign entities, quasi-sovereign entities and corporations.
"Quasi-Sovereign" refers to an entity that is either 100% owned by a sovereign
entity or whose debt is 100% guaranteed by a sovereign entity. The Fund may
invest up to 25% of its net assets in securities issued by corporations in
emerging market countries that are not Quasi-Sovereign entities. The Fund will
invest at least 90% of its assets in dollar-denominated securities. The Fund may
invest up to 10% of its assets in securities denominated in Euros and/or
Japanese yen. Shares of the Fund are listed on The NYSE Arca, Inc. under the
ticker symbol "EFIX."
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
------------------------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception (2/17/21)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 1.93%
Market Value 1.58%
INDEX PERFORMANCE
JP Morgan Emerging Market Bond Index Global Diversified 2.65%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 13.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
FEBRUARY 17, 2021 - AUGUST 31, 2021
First Trust TCW JP Morgan Emerging
Emerging Markets Market Bond Index
Debt ETF Global Diversified
<S> <C> <C>
2/17/21 $10,000 $10,000
2/28/21 9,825 9,822
8/31/21 10,193 10,265
</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 index does
not actually hold a portfolio of securities and therefore does 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 TCW EMERGING MARKETS DEBT ETF (EFIX) (CONTINUED)
----------------------------------------------------------
% OF TOTAL
ASSET CLASSIFICATION INVESTMENTS
----------------------------------------------------------
Foreign Sovereign Bonds and Notes 61.8%
Foreign Corporate Bonds and Notes 34.7
Money Market Funds 3.5
-------
Total 100.0%
=======
----------------------------------------------------------
% OF
FIXED-INCOME
CREDIT QUALITY(1) INVESTMENTS
----------------------------------------------------------
AA 3.5%
AA- 4.4
A 2.2
A- 5.2
BBB 5.6
BBB- 10.3
BB+ 6.6
BB 3.7
BB- 19.4
B+ 7.4
B 10.9
B- 11.9
CCC+ 2.1
CCC 3.2
CCC- 2.0
CC 1.6
-------
Total 100.0%
=======
----------------------------------------------------------
% OF
FIXED-INCOME
TOP TEN HOLDINGS INVESTMENTS
----------------------------------------------------------
Qatar Petroleum (USD), 2.25%, 07/12/31 3.2%
Egypt Government International Bond (USD),
7.05%, 01/15/32 2.9
Paraguay Government International Bond
(USD), 5.60%, 03/13/48 2.6
Dominican Republic International Bond (USD),
4.88%, 09/23/32 2.5
Bahrain Government International Bond (USD),
5.25%, 01/25/33 2.3
KazMunayGas National Co. JSC (USD), 3.50%,
04/14/33 2.2
Panama Government International Bond (USD),
2.25%, 09/29/32 2.1
Ukraine Government International Bond (USD),
7.75%, 09/01/27 2.1
Colombia Government International Bond
(USD), 4.13%, 02/22/42 2.1
Petroleos Mexicanos (USD), 5.35%, 02/12/28 2.0
-------
Total 24.0%
=======
-----------------------------
(1) The credit quality and ratings information presented above reflect the
ratings assigned by one or more nationally recognized statistical rating
organizations (NRSROs), including Standard & Poor's Rating Group, a
division of McGraw Hill Companies, Inc., Moody's Investors Service, Inc.,
Fitch Ratings, or a comparably rated NRSRO. For situations in which a
security is rated by more than one NRSRO and the ratings are not
equivalent, the lowest ratings are used. Sub-investment grade ratings are
those rated BB+/Ba1 or lower. Investment grade ratings are those rated
BBB-/Baa3 or higher. The credit ratings shown relate to the
creditworthiness of the issuers of the underlying securities in the Fund,
and not to the Fund or its shares. U.S. Treasury, U.S. Agency and U.S.
Agency mortgage-backed securities appear under "Government/Agency." Credit
ratings are subject to change.
Page 10
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST TCW ESG PREMIER EQUITY ETF (EPRE) The First Trust TCW ESG Premier
Equity ETF's (the "Fund") investment objective is to seek to provide investors
with long-term capital appreciation. Under normal market conditions, the Fund
seeks to achieve its investment objective by investing at least 80% of its net
assets (plus any borrowings for investment purposes) in equity securities of
U.S. companies that meet TCW Investment Management Company LLC's environmental,
social and governance (ESG) criteria. Although the Fund emphasizes investments
in equity securities of large capitalization companies, it may invest in the
equity securities of companies of any size. Shares of the Fund are listed on The
NYSE Arca, Inc. under the ticker "EPRE."
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
------------------------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception (5/25/21)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 7.56%
Market Value 7.66%
INDEX PERFORMANCE
Russell 1000(R) Index 8.23%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 13.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
MAY 25, 2021 - AUGUST 31, 2021
First Trust TCW ESG
Premier Equity ETF Russell 1000(R) Index
<S> <C> <C>
5/25/21 $10,000 $10,000
8/31/21 10,756 10,823
</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 index does
not actually hold a portfolio of securities and therefore does 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 TCW ESG PREMIER EQUITY ETF (EPRE) (CONTINUED)
----------------------------------------------------------
% OF TOTAL
LONG-TERM
SECTOR CLASSIFICATION INVESTMENTS
----------------------------------------------------------
Industrials 49.8%
Information Technology 28.3
Financials 9.2
Health Care 5.1
Consumer Staples 4.6
Consumer Discretionary 3.0
-------
Total 100.0%
=======
----------------------------------------------------------
% OF TOTAL
LONG-TERM
TOP TEN HOLDINGS INVESTMENTS
----------------------------------------------------------
Clarivate PLC 10.4%
Vertiv Holdings Co. 8.4
HEICO Corp. 5.9
Microsoft Corp. 5.8
Dye & Durham Ltd. 5.7
Mettler-Toledo International, Inc. 5.1
IHS Markit Ltd. 5.0
Copart, Inc. 4.9
MSCI, Inc. 4.7
Fiserv, Inc. 4.7
-------
Total 60.6%
=======
Page 12
<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. The total returns would have been lower if certain fees had not been
waived 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 13
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
ADVISOR
First Trust Advisors L.P. ("First Trust") is the investment advisor to the First
Trust TCW Opportunistic Fixed Income ETF ("FIXD"), the First Trust TCW
Unconstrained Plus Bond ETF ("UCON"), the First Trust TCW Securitized Plus ETF
("DEED"), the First Trust TCW Emerging Markets Debt ETF ("EFIX"), and the First
Trust TCW ESG Premier Equity ETF ("EPRE") (each a "Fund"). First Trust is
responsible for the ongoing monitoring of each Fund's investment portfolio,
managing each Fund's business affairs and providing certain administrative
services necessary for the management of each Fund.
SUB-ADVISOR
TCW Investment Management Company LLC ("TCW" or the "Sub-Advisor") serves as
investment sub-advisor. In this capacity, TCW is responsible for the selection
and ongoing monitoring of the securities in each Fund's investment portfolio.
TCW, with principal offices at 865 South Figueroa Street, Los Angeles,
California 90017, was founded in 1987, and is a wholly-owned subsidiary of The
TCW Group, Inc. ("TCW Group"). TCW, together with TCW Group and its other
subsidiaries, which provide investment management and investment advisory
services, had approximately $270.8 billion under management or committed to
management, including $233.1 billion of U.S. fixed income investments, as of
August 31, 2021.
PORTFOLIO MANAGEMENT TEAM
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
Tad Rivelle, Chief Investment Officer of the Fixed Income Group of TCW
Stephen M. Kane, CFA, Generalist Portfolio Manager in the Fixed Income
Group of TCW
Laird Landmann, Co-Director and Generalist Portfolio Manager in the Fixed Income
Group of TCW
Bryan T. Whalen, CFA, Generalist Portfolio Manager in the Fixed Income
Group of TCW
FIRST TRUST TCW SECURITIZED PLUS ETF (DEED)
Bryan T. Whalen, CFA, Generalist Portfolio Manager in the Fixed Income
Group of TCW
Mitchell Flack, Managing Director of Securitized Products at TCW
Elizabeth J. Crawford, Senior Vice President of Securitized Products at TCW
Harrison Choi, Managing Director of Securitized Products at TCW
FIRST TRUST TCW EMERGING MARKETS DEBT ETF (EFIX)
Penelope D. Foley, Group Managing Director at TCW
David I. Robbins, Group Managing Director at TCW
Alex Stanojevic, Group Managing Director at TCW
FIRST TRUST TCW ESG PREMIER EQUITY ETF (EPRE)
Joseph R. Shaposhnik, Managing Director of TCW
COMMENTARY
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
MARKET RECAP
Financial markets gained momentum in the latter part of 2020 on optimism
surrounding the introduction of effective vaccines for the coronavirus
("COVID-19") and continued their pursuit of record highs (particularly in the
equity space). This led to increased concerns regarding inflation, and thus a
significant re-pricing higher of interest rates in the opening months of 2021.
Pricing pressures did ultimately manifest in the second quarter of 2021, with
consecutive upside surprises for the consumer price index ("CPI") which brought
year-over-year advance to 5.4% as of July 2021, the highest level since 2008.
While the reflation trade subsequently stalled as markets appeared to buy into
the Federal Reserve's (the "Fed") narrative that these higher inflation prints
would prove transitory, the 10-Year U.S. Treasury yield still was over 60 basis
points ("bps") higher year-over-year, closing August 2021 at 1.31%.
Macroeconomic data prints were generally positive during the 12-month period
ended August 31, 2021, including a surge in manufacturing indices, relatively
strong earnings results, and an uptick in consumer confidence from pandemic
Page 14
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
depths. However, there was some pull back in the summer of 2021 as risk-off
concerns have more recently reared their head over the spread of the Delta
variant, bringing into question the sustainability of the global economic
recovery with softer data prints. Still, the valuation backdrop could be
arguably characterized as 'complacent' given that yield spreads for fixed income
sectors are trading through historical tights despite heightened potential for a
policy misstep going forward. Central bank support remains critical, and the Fed
maintains an accommodative policy stance having left rates and the pace of bond
buying unchanged at their June 2021 meeting, followed by cautious remarks from
Fed Chairman Jerome Powell at the Fed's Jackson Hole annual policy retreat in
August. Despite leaving the door open for a possible September taper
announcement, Powell indicated there is still room for improvement in employment
metrics and reiterated the transitory nature of recent inflation prints.
Nevertheless, the most recent median policy rate, or "dot plot", forecasted two
rate hikes by the end of 2023, a faster than anticipated pace of tightening due
to upgraded estimates for growth and inflation. If monetary support is withdrawn
more quickly than markets expect (or at an earlier date than expected), there is
little cushion in current spread levels to take this into account, suggesting
caution is warranted.
While equity markets continued to notch record highs and gained a staggering 30%
through August 2021, the Bloomberg U.S. Aggregate Bond Index delivered a slight
negative total return profile (-0.08%), largely driven by a -2.1% return for
Treasuries. Agency mortgage-backed securities ("MBS") were also weighed down by
rate volatility as well as concerns over the prospect of Fed tapering, despite
still benefitting from the central bank's sponsorship. The sector fell -0.2%
during the period and was one of the only to post negative excess returns. In
contrast, corporate credit was the beneficiary of solid demand amid a global
dearth of yield and advanced 2.5%, outpacing Treasuries by 533 bps. Even more
impressively, high yield garnered a 10.1% return as investors sought out higher
yielding products, and the option-adjusted spread ("OAS") of the sector
compressed to historical tights (+288 bps at the end of August 2021). Lower
quality credits outperformed, with an 18.7% return during the period.
Securitized products generally trailed corporates, though legacy non-agency MBS
delivered steady positive returns, recovering from early 2020 losses amid a
strong housing market, improved sentiment, and ongoing improvement in the macro
environment. Commercial MBS gained 1.6%, driven by non-agency backed collateral,
which delivered nearly 390 bps of positive excess returns. Finally, asset-backed
securities ("ABS") rose 0.9% and performed ahead of duration-matched Treasuries
by roughly 84 bps.
PERFORMANCE ANALYSIS
The Fund returned 0.77% based on net asset value ("NAV") and 0.82% based on
market price for the 12-month period ended August 31, 2021, while the Bloomberg
U.S. Aggregate Index (the "Index") fell by -0.08%. Outperformance was driven by
the issue selection, particularly within investment grade corporates,
notwithstanding a drag from an underweight to the sector as spreads compressed
amid the improved economy. More specifically credit holdings in the portfolio
maintained a higher average yield than those in the benchmark, which benefitted
relative returns, along with the emphasis on wirelines, airlines, and finance
companies, all top performing sectors over the period, and an underweight to
lagging utilities. Among securitized products, the overweight to agency MBS held
back returns as the sector trailed Treasuries on a duration-adjusted basis,
though the portfolio's preference for lower coupon To Be Announced ("TBAs")
benefitted relative performance on an issue selection basis as TBAs continued to
provide higher running yields than pools. Additionally, legacy non-agency MBS
holdings contributed as the sector benefitted from the ongoing strength in
housing with the added bonus of being mostly floating rate amid the rise in
yields. Meanwhile, ABS were sustained in part by the progress in the labor
markets, with positive contributions led by floating rate government guaranteed
student loans. Finally, the duration profile of the portfolio has been adjusted
in a disciplined manner given the evolving value proposition but was shorter
than the Index for most of the period, which rewarded returns as Treasury yields
rose. Derivative positioning in the Fund is largely focused on futures positions
used to manage duration, with a small allocation to interest rate swaps and
options, of which the impact on performance was minimal.
MARKET AND FUND OUTLOOK
COVID-19 and the associated disruptions delivered an unprecedented shock to the
U.S. economy and the recovery has proceeded in fits and starts. With no
historical corollary to reference, economic forecasting is particularly
difficult. Perhaps most uniquely, U.S. households experienced a massive gain in
wealth in 2020 (roughly $13.5 trillion), in stark contrast with the last
recession, during which households lost $8 trillion. The impact of government
stimulus efforts has clearly been substantial, while the impact on consumer
finances and overall demand as that stimulus fades in the coming months is
uncertain. All of this implies that asset prices at all-time highs supported by
relentlessly optimistic economic outlooks, in our opinion, do not fully account
for the myriad risks confronting the economy today. In our view, those downside
risks include the potential for slowing growth in the U.S. or China later this
year, as well as policymakers' significant challenge of engineering a smooth
exit from policy support or shifting to a more hawkish policy stance in the face
of rising price pressures. Facing this uncertainty, current market spreads seem
to reflect a Goldilocks scenario of strong growth, contained inflation, and
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PORTFOLIO COMMENTARY (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
rising earnings, yet debt has grown to record levels. In the unlikely event the
Goldilocks scenario plays out, the scope for further spread tightening is
limited, reducing the potential upside, while any of the numerous risks could
lead to substantially wider spreads and poor performance.
Given prevailing conditions, the Fund is more defensively positioned, with what
we view as ample levels of liquidity to respond to potential volatility. Within
credit, the team has taken a prudent approach, de-risking exposure by moving up
the quality spectrum (given tight A/BBB relationships), reducing tight
commodity-exposed names/sectors, swapping into shorter-dated maturities (where
curves are flat), and enhancing liquidity. The focus remains on sectors that
offer more stability in times of volatility (such as consumer non-cyclicals and
communications) and on idiosyncratic opportunities where wider spreads offer
more compelling value. Within securitized, the Fund continues to prefer current
coupon agency MBS TBAs which remain attractive given the relatively high carry
of TBAs versus specified pools; the sector continues to benefit from the
significant tailwind of Fed sponsorship as well as money center banks. In our
view, legacy non-agency MBS remains attractive from a collateral perspective,
with the added benefit of having largely floating rate coupons, and the strategy
will seek to add new exposure at favorable valuations. In commercial
mortgage-backed securities ("CMBS"), though current holdings continue to focus
on top-of the-capital structure exposures in single asset, single borrower
("SASB") AAA-rated issues, opportunities are beginning to present in AA- and
A-rated collateral with good loan-to-value ("LTV") ratios, i.e., protection, and
good spread compensation. A similar strategy applies to collateralized loan
obligations ("CLOs"), with possible additions on well-collateralized AA-rated
issues offering good yields. Lastly, though currently a small position, emerging
market debt issues are add candidates on cheaper entry points.
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
MARKET RECAP
Financial markets gained momentum in the latter part of 2020 on optimism
surrounding the introduction of effective vaccines for the coronavirus
("COVID-19") and continued their pursuit of record highs (particularly in the
equity space). This led to increased concerns regarding inflation, and thus a
significant re-pricing higher of interest rates in the opening months of 2021.
Pricing pressures did ultimately manifest in the second quarter of 2021, with
consecutive upside surprises for the CPI which brought year-over-year advance to
5.4% as of July 2021, the highest level since 2008. While the reflation trade
subsequently stalled as markets appeared to buy into the Fed's narrative that
these higher inflation prints would prove transitory, the 10-Year U.S. Treasury
yield still was over 60 basis points ("bps") higher year-over-year, closing
August 2021 at 1.31%. Macroeconomic data prints were generally positive during
the 12-month period ended August 31, 2021, including a surge in manufacturing
indices, relatively strong earnings results, and an uptick in consumer
confidence from pandemic depths. However, there was some pull back in the summer
of 2021 as risk-off concerns have more recently reared their head over the
spread of the Delta variant, bringing into question the sustainability of the
global economic recovery with softer data prints. Still, the valuation backdrop
could be arguably characterized as 'complacent' given that yield spreads for
fixed income sectors are trading through historical tights despite heightened
potential for a policy misstep going forward. Central bank support remains
critical, and the Fed maintains an accommodative policy stance having left rates
and the pace of bond buying unchanged at their June 2021 meeting, followed by
cautious remarks from Fed Chairman Jerome Powell at the Fed's Jackson Hole
annual policy retreat in August. Despite leaving the door open for a possible
September taper announcement, Powell indicated there is still room for
improvement in employment metrics and reiterated the transitory nature of recent
inflation prints. Nevertheless, the most recent median policy rate, or "dot
plot", forecasted two rate hikes by the end of 2023, a faster than anticipated
pace of tightening due to upgraded estimates for growth and inflation. If
monetary support is withdrawn more quickly than markets expect (or at an earlier
date than expected), there is little cushion in current spread levels to take
this into account, suggesting caution is warranted.
While equity markets continued to notch record highs and gained a staggering 30%
through August 2021, the Bloomberg U.S. Aggregate Bond Index delivered a slight
negative total return profile (-0.08%), largely driven by a -2.1% return for
Treasuries. Agency MBS were also weighed down by rate volatility as well as
concerns over the prospect of Fed tapering, despite still benefitting from the
central bank's sponsorship. The sector fell -0.2% during the period and was one
of the only to post negative excess returns. In contrast, corporate credit was
the beneficiary of solid demand amid a global dearth of yield and advanced 2.5%,
outpacing Treasuries by 533 bps. Even more impressively, high yield garnered a
10.1% return as investors sought out higher yielding products, and the OAS of
the sector compressed to historical tights (+288 bps at the end of August 2021).
Lower quality credits outperformed, with an 18.7% return during the period.
Securitized products generally trailed corporates, though legacy non-agency MBS
delivered steady positive returns, recovering from early 2020 losses amid a
strong housing market, improved sentiment, and ongoing improvement in the macro
environment. Commercial MBS gained 1.6%, driven by non-agency backed collateral,
which delivered nearly 390 bps of positive excess returns. Finally, ABS rose
0.9% and performed ahead of duration-matched Treasuries by roughly 84 bps.
Page 16
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PORTFOLIO COMMENTARY (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
PERFORMANCE ANALYSIS
The Fund returned 4.04% based on NAV and 3.99% based on market price, for the
12-month period ended August 31, 2021, while the ICE BofA US Dollar 3-Month
Deposit Offered Rate Average Index returned 0.21%. While the positive duration
position of the portfolio resulted in a drag on performance as Treasury yields
rose, favorable issue selection among corporate credit and non-agency MBS more
than offset the drag, driving outperformance. Agency MBS, CMBS, and ABS also
contributed, though somewhat more modestly. Among corporates, the allocation to
high yield credit boosted returns as the sector outpaced Treasuries by over
1,000 bps, while investment grade credit also performed well with yield premiums
declining. The largest contributions came from finance companies, midstream
energy, and airline holdings, all top performing areas of the corporate market,
and alongside this outperformance, the overall allocation to corporate credit
was selectively trimmed over the period. The small position in emerging market
debt was also additive as the sector reversed course in the second half of the
period as growth estimates picked up amid improved economic metrics in the U.S.
and China, notwithstanding a slower pace of COVID-19 vaccinations and delayed
reopenings. Derivative positioning in the Fund is largely focused on futures
positions used to manage duration, with a small allocation to interest rate
swaps and options, of which the impact on performance was minimal.
MARKET AND FUND OUTLOOK
COVID-19 and the associated disruptions delivered an unprecedented shock to the
U.S. economy and the recovery has proceeded in fits and starts. With no
historical corollary to reference, economic forecasting is particularly
difficult. Perhaps most uniquely, U.S. households experienced a massive gain in
wealth in 2020 (roughly $13.5 trillion), in stark contrast with the last
recession, during which households lost $8 trillion. The impact of government
stimulus efforts has clearly been substantial, while the impact on consumer
finances and overall demand as that stimulus fades in the coming months is
uncertain. All of this implies that asset prices at all-time highs supported by
relentlessly optimistic economic outlooks, in our opinion, do not fully account
for the myriad risks confronting the economy today. In our view, those downside
risks include the potential for slowing growth in the U.S. or China later this
year, as well as policymakers' significant challenge of engineering a smooth
exit from policy support or shifting to a more hawkish policy stance in the face
of rising price pressures. Facing this uncertainty, current market spreads seem
to reflect a Goldilocks scenario of strong growth, contained inflation, and
rising earnings, yet debt has grown to record levels. In the unlikely event the
Goldilocks scenario plays out, the scope for further spread tightening is
limited, reducing the potential upside, while any of the numerous risks could
lead to substantially wider spreads and poor performance.
Given prevailing conditions, the Fund is more defensively positioned, with what
we view as ample levels of liquidity to respond to potential volatility. Within
credit, the team has taken a prudent approach, de-risking exposure by moving up
the quality spectrum (given tight A/BBB relationships), reducing tight
commodity-exposed names/sectors, swapping into shorter-dated maturities (where
curves are flat), and enhancing liquidity. The focus remains on sectors that
offer more stability in times of volatility (such as consumer non-cyclicals and
communications) and on idiosyncratic opportunities where wider spreads offer
more compelling value. Within securitized, the Fund continues to prefer current
coupon agency MBS TBAs which remain attractive given the relatively high carry
of TBAs versus specified pools; the sector continues to benefit from the
significant tailwind of Fed sponsorship as well as money center banks. In our
view, legacy non-agency MBS remains attractive from a collateral perspective,
with the added benefit of having largely floating rate coupons, and the strategy
will seek to add new exposure at favorable valuations. In CMBS, though current
holdings continue to focus on top-of the-capital structure exposures in single
asset, SASB AAA-rated issues, opportunities are beginning to present in AA- and
A-rated collateral with good LTV ratios, i.e., protection, and good spread
compensation. A similar strategy applies to CLOs, with possible additions on
well-collateralized AA-rated issues offering good yields. Lastly, though
currently a small position, emerging market debt issues are add candidates on
cheaper entry points.
FIRST TRUST TCW SECURITIZED PLUS ETF (DEED)
MARKET RECAP
Financial markets gained momentum in the latter part of 2020 on optimism
surrounding the introduction of effective vaccines for COVID-19 and continued
their pursuit of record highs (particularly in the equity space). This led to
increased concerns regarding inflation, and thus a significant re-pricing higher
of interest rates in the opening months of 2021. Pricing pressures did
ultimately manifest in the second quarter of 2021, with consecutive upside
surprises for the CPI which brought year-over-year advance to 5.4% as of July
2021, the highest level since 2008. While the reflation trade subsequently
stalled as markets appeared to buy into the Fed's narrative that these higher
inflation prints would prove transitory, the 10-Year U.S. Treasury yield still
was over 60 bps higher year-over-year, closing August 2021 at 1.31%.
Macroeconomic data prints were generally positive during the 12-month period
ended August 31, 2021, including a surge in manufacturing indices, relatively
strong earnings results, and an uptick in consumer confidence from pandemic
depths. However, there was some pull back in the summer of 2021 as risk-off
Page 17
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PORTFOLIO COMMENTARY (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
concerns have more recently reared their head over the spread of the Delta
variant, bringing into question the sustainability of the global economic
recovery with softer data prints. Still, the valuation backdrop could be
arguably characterized as 'complacent' given that yield spreads for fixed income
sectors are trading through historical tights despite heightened potential for a
policy misstep going forward. Central bank support remains critical, and the Fed
maintains an accommodative policy stance having left rates and the pace of bond
buying unchanged at their June 2021 meeting, followed by cautious remarks from
Fed Chairman Jerome Powell at the Fed's Jackson Hole annual policy retreat in
August. Despite leaving the door open for a possible September taper
announcement, Powell indicated there is still room for improvement in employment
metrics and reiterated the transitory nature of recent inflation prints.
Nevertheless, the most recent median policy rate, or "dot plot", forecasted two
rate hikes by the end of 2023, a faster than anticipated pace of tightening due
to upgraded estimates for growth and inflation. If monetary support is withdrawn
more quickly than markets expect (or at an earlier date than expected), there is
little cushion in current spread levels to take this into account, suggesting
caution is warranted.
While equity markets continued to notch record highs and gained a staggering 30%
through August 2021, the Bloomberg U.S. Aggregate Bond Index delivered a slight
negative total return profile (-0.08%), largely driven by a -2.1% return for
Treasuries. Agency MBS were also weighed down by rate volatility as well as
concerns over the prospect of Fed tapering, despite still benefitting from the
central bank's sponsorship. The sector fell -0.2% during the period and was one
of the only to post negative excess returns. In contrast, corporate credit was
the beneficiary of solid demand amid a global dearth of yield and advanced 2.5%,
outpacing Treasuries by 533 bps. Even more impressively, high yield garnered a
10.1% return as investors sought out higher yielding products, and the OAS of
the sector compressed to historical tights (+288 bps at the end of August 2021).
Lower quality credits outperformed, with an 18.7% return during the period.
Securitized products generally trailed corporates, though legacy non-agency MBS
delivered steady positive returns, recovering from early 2020 losses amid a
strong housing market, improved sentiment, and ongoing improvement in the macro
environment. Commercial MBS gained 1.6%, driven by non-agency backed collateral,
which delivered nearly 390 bps of positive excess returns. Finally, ABS rose
0.9% and performed ahead of duration-matched Treasuries by roughly 84 bps.
PERFORMANCE ANALYSIS
The Fund returned 2.93% based on NAV and 3.05% based on market price for the
12-month period ended August 31, 2021, while the Bloomberg U.S. Mortgage-Backed
Securities Index (the "Index") fell by -0.18%. The underweight to agency MBS
benefitted returns as the sector lagged Treasuries by nearly 50 bps, though the
emphasis on lower coupons was a drag as higher coupons led. Nevertheless, the
portfolio's emphasis on TBAs provided a tailwind to performance given the yield
advantage of TBA positions. Non-agency MBS was also additive, as the largely
floating rate holdings performed well amid rising rates, with the biggest
contributions coming from issues backed by subprime and option adjustable-rate
mortgage collateral. CMBS and ABS holdings were also significant to
outperformance as reopenings and an improved outlook helped both sectors, along
with strong sponsorship. Finally, the duration profile of the portfolio has been
adjusted in a disciplined manner given the evolving value proposition but was
shorter than the Index for most of the period, which rewarded returns as
Treasury yields rose. Derivative positioning in the Fund is largely focused on
futures positions used to manage duration, with a small allocation to currency
forwards which had little impact on performance.
MARKET AND FUND OUTLOOK
COVID-19 and the associated disruptions delivered an unprecedented shock to the
U.S. economy and the recovery has proceeded in fits and starts. With no
historical corollary to reference, economic forecasting is particularly
difficult. Perhaps most uniquely, U.S. households experienced a massive gain in
wealth in 2020 (roughly $13.5 trillion), in stark contrast with the last
recession, during which households lost $8 trillion. The impact of government
stimulus efforts has clearly been substantial, while the impact on consumer
finances and overall demand as that stimulus fades in the coming months is
uncertain. All of this implies that asset prices at all-time highs supported by
relentlessly optimistic economic outlooks, in our opinion, do not fully account
for the myriad risks confronting the economy today. In our view, those downside
risks include the potential for slowing growth in the U.S. or China later this
year, as well as policymakers' significant challenge of engineering a smooth
exit from policy support or shifting to a more hawkish policy stance in the face
of rising price pressures. Facing this uncertainty, current market spreads seem
to reflect a Goldilocks scenario of strong growth, contained inflation, and
rising earnings, yet debt has grown to record levels. In the unlikely event the
Goldilocks scenario plays out, the scope for further spread tightening is
limited, reducing the potential upside, while any of the numerous risks could
lead to substantially wider spreads and poor performance.
Page 18
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PORTFOLIO COMMENTARY (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
Given prevailing conditions, the Fund is more defensively positioned, with what
we view as ample levels of liquidity to respond to potential volatility. Within
credit, the team has taken a prudent approach, de-risking exposure by moving up
the quality spectrum (given tight A/BBB relationships), reducing tight
commodity-exposed names/sectors, swapping into shorter-dated maturities (where
curves are flat), and enhancing liquidity. The focus remains on sectors that
offer more stability in times of volatility (such as consumer non-cyclicals and
communications) and on idiosyncratic opportunities where wider spreads offer
more compelling value. Within securitized, the Fund continues to prefer current
coupon agency MBS TBAs which remain attractive given the relatively high carry
of TBAs versus specified pools; the sector continues to benefit from the
significant tailwind of Fed sponsorship as well as money center banks. In our
view, legacy non-agency MBS remains attractive from a collateral perspective,
with the added benefit of having largely floating rate coupons, and the strategy
will seek to add new exposure at favorable valuations. In CMBS, though current
holdings continue to focus on top-of the-capital structure exposures in single
asset, SASB AAA-rated issues, opportunities are beginning to present in AA- and
A-rated collateral with good LTV ratios, i.e., protection, and good spread
compensation. A similar strategy applies to CLOs, with possible additions on
well-collateralized AA-rated issues offering good yields. Lastly, though
currently a small position, emerging market debt issues are add candidates on
cheaper entry points.
FIRST TRUST TCW EMERGING MARKETS DEBT ETF (EFIX)
MARKET RECAP
Emerging Markets ("EMs") sovereign spreads are 12 bps wider, and EMs corporate
spreads are 9 bps wider for the third quarter through September 21, 2021. The
market environment has been mixed, due to a combination of growth concerns
related to the Delta variant earlier in the quarter, followed by some relief
following the Jackson Hole meetings and comfort around tapering. More recently,
regulatory concerns related to the Chinese property sector and general risk-off
sentiment have weighed on the market (largely Asia high yield, which is
approximately 70 bps wider for the quarter through September 21, 2021).
PERFORMANCE ANALYSIS
From the Fund's inception date of February 17, 2021 through August 31, 2021, the
Fund returned 1.93% based on NAV and 1.58% based on market price, while the JP
Morgan Emerging Market Bond Index Global Diversified returned 2.65%. The
underperformance of 72 bps has been driven by Chinese property exposure, along
with underweight positioning to Sri Lanka and Ecuador. We have reduced exposure
to Chinese property given regulatory headwinds. For Sri Lanka, the underweight
has been predicated upon concerns about debt sustainability. We believe we have
been early with this call, as the sovereign has been able to muddle through.
That said, we remain concerned about fundamentals and are remaining underweight.
For Ecuador, we had been underweight heading into that country's Presidential
elections in February 2021, as our research assessment, along with polls,
suggested that the less market-friendly candidate was likely to win, which, in
our view, would pressure the sovereign's relationship with the International
Monetary Fund ("IMF") and hurt long-term economic growth. Unexpectedly, the
market-friendly candidate, Guillermo Lasso, won and we missed the immediate
rally after the news. We have since shifted to a moderate overweight in Ecuador
on the basis of a more constructive economic backdrop and relationship with the
IMF.
MARKET AND FUND OUTLOOK
We believe EMs will benefit from the improving global economic backdrop and
continued policy accommodation from Developed Market central banks. Furthermore,
we believe that the downside risks from the Delta variant are manageable, and
that it has delayed, but not derailed, the overall improving global growth
momentum, particularly as vaccine dissemination improves internationally (in
both EMs and Europe). We believe returns for the balance of the year for
dollar-denominated debt will largely be driven by carry, with some potential for
spread tightening following the Fed's Jackson Hole meeting in August 2021,
offset partially by rates grinding higher. Yields of approximately 5% for EM
Fixed Income appears attractive to us in the context of global fixed income.
We are positioned for an improvement in global growth, expressed via an
overweight to high yield (which is less rate sensitive) relative to investment
grade. Additionally, the Fund is moderately overweight Latin America, with
select overweights concentrated in Mexico, Brazil, and other higher yielding
sovereigns. The Fund is underweight Asia, largely due to valuations, and
underweight in Europe, which reflects an overweight to Ukraine and an
underweight to Russia due to tighter trading spreads in Central and Eastern
Europe sovereigns. The Fund is overweight the Middle East/Africa region as it
will benefit, in our view, from an improvement in global growth and a supportive
commodity backdrop.
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PORTFOLIO COMMENTARY (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
FIRST TRUST TCW ESG PREMIER EQUITY ETF (EPRE)
MARKET RECAP
Financial markets remained relatively steady during the 12-month period ended
August 31, 2021, as investors were optimistic about the reopening of the
economy. Despite the ongoing pandemic, concerns regarding inflation, and rising
interest rates, equities continued to trend upwards, hitting all-time highs
during the period. Although there is lasting uncertainty regarding COVID-19 and
new variants arising, the increasing number of vaccinated individuals seems to
be curbing new cases and easing restrictions, at least in the United States. The
Fed has maintained that the rising CPI is not an indication of lasting
inflation, rather a transitory adjustment. Short-term material shortages have
led to sharp valuation/price increases for most commodities, although for the
most part these have retreated to normal, pre-pandemic levels. Globally,
different countries have faced a variety of issues stemming from the pandemic
however many have continued to shrug off concerns similar to the U.S. markets.
The Chinese government took steps to crack down on some if its larger internet
and educational companies, incorporating strict rules that companies must follow
and harsh punishments for infractions. Although not directly targeted, companies
like Alibaba Group and Tencent Holdings Ltd. were negatively impacted by the
decision.
PERFORMANCE ANALYSIS
On a NAV basis, the Fund was up 7.56% during the period from the Fund's
inception date of May 25, 2021 through August 31, 2021. On a market price basis,
the Fund returned 7.66% from the Fund's inception date of May 25, 2021, through
August 31, 2021. The Fund's NAV return underperformed the Russell 1000(R) Index,
which increased by 8.23%. Top performers in the period included MSCI Inc.
(Financials), Vertiv Holdings Co. (Industrials), and Microsoft Corp.
(Information Technology).
These companies implement responsible environmental, social and governance
("ESG") strategies and exemplify our belief that businesses that are conscious
of their ESG impact are more likely to perform better in the long run. MSCI Inc.
is one holding we believe is worth noting as its services, namely ESG ratings
and research, help investment managers identify how well companies are managing
their impact across various environmental, social, and governance factors. The
company presents these ratings similar to bond ratings, (AAA-CCC) while also
providing related analysis of the performance of each business. We continue to
prefer MSCI shares, as the company is a leader in providing critical data and
support services to investment professionals and institutions worldwide.
The weakest performers in the period included Clarivate PLC (Industrials),
Cricut, Inc. (Consumer Discretionary), and HEICO Corp. (Industrials).
MARKET AND FUND OUTLOOK
We believe that the reopening of the U.S. and Global economies is providing a
boost to economic output and corporate earnings. We expect this will create a
favorable environment for equities, but we will continue to closely monitor the
risks to this outlook, including the expensive valuation the market is currently
assigning to the stock market and rising inflation expectations within the US.
We expect continued push and pull between the distribution of the COVID-19
vaccine aiding reopening, while the delta variant drives renewed shutdowns in
certain regions.
We will also monitor interest rates and the Fed's stance on inflation and the
pressures it may put on the markets. Fed Chairman Jerome Powell has reiterated
that the inflation is transitory, and, if this holds true, we expect the
equities markets to continue rising.
We also note that equity prices are being supported by a still very constructive
outlook for corporate earnings growth. Earnings results for the second quarter
of 2021 were nothing short of stellar, and the market consensus expects 9%
earnings per share growth for next year, driven by 7% revenue growth, according
to Factset. We recognize the possibility these estimates are disrupted by the
on-going COVID-19 pandemic, substantial tax increases proposed by Congress, and
finally, we are mindful that equity market valuations are demanding, with the
S&P 500(R) Index trading at 21.1 times forward earnings, which is approximately
30% above its ten-year average of 16.3.
We continue to believe (supported by data) that companies that manage their
environmental and social resources in a superior manner and have sensible
corporate governance practices are likely to manage the rest of their business
in a superior manner. Going forward, we will continue to seek out high quality
businesses which offer predictable growth, consistent free cash flow, and
capital light business models while also performing better than peers from an
ESG standpoint.
Page 20
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FIRST TRUST EXCHANGE-TRADED FUND VIII
UNDERSTANDING YOUR FUND EXPENSES
AUGUST 31, 2021 (UNAUDITED)
As a shareholder of First Trust TCW Opportunistic Fixed Income ETF, First Trust
TCW Unconstrained Plus Bond ETF, First Trust TCW Securitized Plus ETF, First
Trust TCW Emerging Markets Debt ETF or First Trust TCW ESG Premier Equity 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 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 (or since inception) and held through the six-month (or shorter) period
ended August 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
(or shorter) 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
MARCH 1, 2021 AUGUST 31, 2021 PERIOD (a) PERIOD (b)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
Actual $1,000.00 $1,018.90 0.55% $2.80
Hypothetical (5% return before expenses) $1,000.00 $1,022.43 0.55% $2.80
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
Actual $1,000.00 $1,010.40 0.75% $3.80
Hypothetical (5% return before expenses) $1,000.00 $1,021.42 0.75% $3.82
FIRST TRUST TCW SECURITIZED PLUS ETF (DEED)
Actual $1,000.00 $1,018.30 0.65% $3.31
Hypothetical (5% return before expenses) $1,000.00 $1,021.93 0.65% $3.31
FIRST TRUST TCW EMERGING MARKETS DEBT ETF (EFIX)
Actual $1,000.00 $1,037.50 0.85% $4.37
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
</TABLE>
Page 21
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
UNDERSTANDING YOUR FUND EXPENSES (CONTINUED)
AUGUST 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED EXPENSES PAID
EXPENSE RATIO DURING THE PERIOD
BEGINNING ENDING BASED ON THE MAY 25, 2021 (c)
ACCOUNT VALUE ACCOUNT VALUE NUMBER OF DAYS TO
MAY 25, 2021 (c) AUGUST 31, 2021 IN THE PERIOD AUGUST 31, 2021 (d)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIRST TRUST TCW ESG PREMIER EQUITY ETF (EPRE)
Actual $1,000.00 $1,075.60 0.85% $2.39
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
</TABLE>
(a) These expense ratios reflect an expense waiver. 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 (March 1,
2021 through August 31, 2021), multiplied by 184/365 (to reflect the
six-month period).
(c) Inception date.
(d) Actual expenses are equal to the annualized expense ratio as indicated in
the table multiplied by the average account value over the period (May 25,
2021 through August 31,2021), multiplied by 99/365. Hypothetical expenses
are assumed for the most recent six-month period.
Page 22
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
U.S. GOVERNMENT BONDS AND NOTES -- 36.9%
<S> <C> <C> <C> <C>
$ 56,704,000 U.S. Treasury Bond.................................................. 2.25% 05/15/41 $ 60,646,700
85,125,000 U.S. Treasury Bond.................................................. 2.38% 05/15/51 93,896,866
265,460,000 U.S. Treasury Bond.................................................. 2.00% 08/15/51 269,815,203
11,726,242 U.S. Treasury Inflation Indexed Bond................................ 0.13% 02/15/51 13,322,265
93,210,000 U.S. Treasury Note.................................................. 0.13% 06/30/23 93,140,821
362,675,000 U.S. Treasury Note.................................................. 0.13% 07/31/23 362,264,158
452,325,000 U.S. Treasury Note.................................................. 0.13% 08/31/23 451,600,574
174,865,000 U.S. Treasury Note.................................................. 0.88% 06/30/26 175,862,276
186,425,000 U.S. Treasury Note.................................................. 0.63% 07/31/26 185,172,457
207,010,000 U.S. Treasury Note.................................................. 0.75% 08/31/26 206,807,842
40,665,000 U.S. Treasury Note.................................................. 1.25% 08/15/31 40,471,206
--------------
TOTAL U.S. GOVERNMENT BONDS AND NOTES.......................................................... 1,953,000,368
(Cost $1,939,062,233) --------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES -- 30.1%
COLLATERALIZED MORTGAGE OBLIGATIONS -- 0.2%
Federal Home Loan Mortgage Corporation
263,309 Series 2017-4656, Class EZ....................................... 4.00% 02/15/47 303,868
Federal National Mortgage Association
2,742,804 Series 2012-20, Class ZT......................................... 3.50% 03/25/42 2,905,043
3,023,599 Series 2012-84, Class VZ......................................... 3.50% 08/25/42 3,245,506
473,490 Series 2018-38, Class PA......................................... 3.50% 06/25/47 492,096
1,070,654 Series 2018-43, Class CT......................................... 3.00% 06/25/48 1,114,958
453,596 Series 2018-86, Class JA......................................... 4.00% 05/25/47 472,514
169,501 Series 2018-94, Class KD......................................... 3.50% 12/25/48 178,045
212,837 Series 2019-1, Class KP.......................................... 3.25% 02/25/49 223,032
208,697 Series 2019-20, Class BA......................................... 3.50% 02/25/48 214,795
98,281 Series 2019-52, Class PA......................................... 3.00% 09/25/49 102,159
Government National Mortgage Association
287,522 Series 2018-115, Class DE........................................ 3.50% 08/20/48 307,964
308,426 Series 2018-124, Class NW........................................ 3.50% 09/20/48 331,500
825,066 Series 2019-12, Class QA......................................... 3.50% 09/20/48 866,933
85,526 Series 2019-71, Class PT......................................... 3.00% 06/20/49 88,418
836,402 Series 2019-119, Class JE........................................ 3.00% 09/20/49 865,837
--------------
11,712,668
--------------
PASS-THROUGH SECURITIES -- 29.9%
Federal Home Loan Mortgage Corporation
92,899 Pool C91981...................................................... 3.00% 02/01/38 97,350
71,595 Pool G07961...................................................... 3.50% 03/01/45 77,411
69,623 Pool G08692...................................................... 3.00% 02/01/46 73,597
2,060,193 Pool G08715...................................................... 3.00% 08/01/46 2,176,763
40,986 Pool G08721...................................................... 3.00% 09/01/46 43,299
472,920 Pool G08726...................................................... 3.00% 10/01/46 502,170
1,135,915 Pool G08732...................................................... 3.00% 11/01/46 1,206,536
155,676 Pool G08738...................................................... 3.50% 12/01/46 166,192
290,019 Pool G08741...................................................... 3.00% 01/01/47 307,912
200,150 Pool G08747...................................................... 3.00% 02/01/47 212,696
152,209 Pool G08748...................................................... 3.50% 02/01/47 162,516
642,785 Pool G08750...................................................... 3.00% 03/01/47 678,202
166,643 Pool G08766...................................................... 3.50% 06/01/47 177,242
</TABLE>
See Notes to Financial Statements Page 23
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
PASS-THROUGH SECURITIES (CONTINUED)
Federal Home Loan Mortgage Corporation (Continued)
$ 453,718 Pool G08788...................................................... 3.50% 11/01/47 $ 482,127
1,496,552 Pool G08792...................................................... 3.50% 12/01/47 1,593,214
210,499 Pool G08800...................................................... 3.50% 02/01/48 223,299
313,364 Pool G08816...................................................... 3.50% 06/01/48 332,051
101,276 Pool G08833...................................................... 5.00% 07/01/48 111,366
20,579 Pool G08838...................................................... 5.00% 09/01/48 22,638
341,233 Pool G08843...................................................... 4.50% 10/01/48 370,131
79,086 Pool G08844...................................................... 5.00% 10/01/48 86,922
226,486 Pool G08849...................................................... 5.00% 11/01/48 249,007
594,581 Pool G16085...................................................... 2.50% 02/01/32 626,854
364,312 Pool G16350...................................................... 2.50% 10/01/32 383,458
470,795 Pool G16396...................................................... 3.50% 02/01/33 504,931
1,379,456 Pool G16524...................................................... 3.50% 05/01/33 1,490,613
150,499 Pool G18670...................................................... 3.00% 12/01/32 159,628
43,722 Pool G18691...................................................... 3.00% 06/01/33 46,201
129,926 Pool G18713...................................................... 3.50% 11/01/33 138,609
1,719,917 Pool G60038...................................................... 3.50% 01/01/44 1,867,620
468,925 Pool G60080...................................................... 3.50% 06/01/45 510,890
983,909 Pool G60344...................................................... 4.00% 12/01/45 1,091,451
304,460 Pool G60440...................................................... 3.50% 03/01/46 331,699
972,897 Pool G60582...................................................... 3.50% 05/01/46 1,054,251
874,361 Pool G60658...................................................... 3.50% 07/01/46 963,104
448,034 Pool G61556...................................................... 3.50% 08/01/48 484,876
2,785,665 Pool G61748...................................................... 3.50% 11/01/48 3,033,055
917,669 Pool G67700...................................................... 3.50% 08/01/46 999,736
2,086,442 Pool G67703...................................................... 3.50% 04/01/47 2,276,521
7,754,922 Pool G67706...................................................... 3.50% 12/01/47 8,423,151
1,829,286 Pool G67707...................................................... 3.50% 01/01/48 2,017,847
10,365,400 Pool G67708...................................................... 3.50% 03/01/48 11,197,734
1,942,178 Pool G67709...................................................... 3.50% 03/01/48 2,115,240
1,560,290 Pool G67710...................................................... 3.50% 03/01/48 1,680,744
2,348,014 Pool G67714...................................................... 4.00% 07/01/48 2,577,051
3,163,284 Pool G67717...................................................... 4.00% 11/01/48 3,486,443
5,170,024 Pool G67718...................................................... 4.00% 01/01/49 5,639,482
164,192 Pool Q44452...................................................... 3.00% 11/01/46 173,114
318,790 Pool Q50135...................................................... 3.50% 08/01/47 339,393
10,969,662 Pool QA7837...................................................... 3.50% 03/01/50 11,943,135
18,486,478 Pool RA3078...................................................... 3.00% 07/01/50 19,692,078
1,622,768 Pool RE6029...................................................... 3.00% 02/01/50 1,660,103
17,905,149 Pool SD0231...................................................... 3.00% 01/01/50 19,039,666
5,434,831 Pool SD7511...................................................... 3.50% 01/01/50 5,879,460
15,845,384 Pool SD7513...................................................... 3.50% 04/01/50 17,178,166
8,913,602 Pool SD7518...................................................... 3.00% 06/01/50 9,491,322
367,089 Pool U90772...................................................... 3.50% 01/01/43 398,557
449,175 Pool U99114...................................................... 3.50% 02/01/44 487,680
894,706 Pool ZA4692...................................................... 3.50% 06/01/46 961,242
468,271 Pool ZM0063...................................................... 4.00% 08/01/45 517,671
20,673,356 Pool ZM1779...................................................... 3.00% 09/01/46 21,900,775
4,454,608 Pool ZS4667...................................................... 3.00% 06/01/46 4,709,478
</TABLE>
Page 24 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
PASS-THROUGH SECURITIES (CONTINUED)
Federal Home Loan Mortgage Corporation (Continued)
$ 7,299,692 Pool ZS4688...................................................... 3.00% 11/01/46 $ 7,751,435
12,799,416 Pool ZS4735...................................................... 3.50% 09/01/47 13,535,000
461,028 Pool ZS8602...................................................... 3.00% 03/01/31 488,987
800,690 Pool ZS9844...................................................... 3.50% 07/01/46 863,199
2,413,611 Pool ZT0277...................................................... 3.50% 10/01/46 2,601,300
1,023,096 Pool ZT0531...................................................... 3.50% 04/01/47 1,115,995
1,007,275 Pool ZT0536...................................................... 3.50% 03/01/48 1,087,858
3,152,550 Pool ZT0537...................................................... 3.50% 03/01/48 3,432,526
581,497 Pool ZT0542...................................................... 4.00% 07/01/48 638,071
138,983 Pool ZT1403...................................................... 3.50% 11/01/33 148,640
1,708,617 Pool ZT1703...................................................... 4.00% 01/01/49 1,863,395
Federal National Mortgage Association
3,710,596 Pool AL8825...................................................... 3.50% 06/01/46 4,016,166
110,176 Pool AM5673...................................................... 3.65% 04/01/23 114,200
116,219 Pool AN2786...................................................... 2.76% 09/01/36 128,280
1,682,656 Pool AS0225...................................................... 4.00% 08/01/43 1,849,918
1,863,198 Pool AS3134...................................................... 3.50% 08/01/44 2,014,262
451,680 Pool AS6620...................................................... 3.50% 02/01/46 485,568
142,658 Pool AS9334...................................................... 3.00% 03/01/32 151,077
132,730 Pool AS9749...................................................... 4.00% 06/01/47 143,393
118,985 Pool BD7081...................................................... 4.00% 03/01/47 128,779
9,213,855 Pool BE3774...................................................... 4.00% 07/01/47 9,967,882
1,138,190 Pool BJ2692...................................................... 3.50% 04/01/48 1,208,710
2,120,000 Pool BL6060...................................................... 2.46% 04/01/40 2,270,465
1,325,618 Pool BM1903...................................................... 3.50% 08/01/47 1,445,962
377,064 Pool BM2000...................................................... 3.50% 05/01/47 402,109
1,025,188 Pool BM3260...................................................... 3.50% 01/01/48 1,099,821
606,135 Pool BM4299...................................................... 3.00% 03/01/30 638,640
574,884 Pool BM4304...................................................... 3.00% 02/01/30 605,466
1,082,878 Pool BM4472...................................................... 3.50% 07/01/48 1,178,406
2,418,319 Pool BM5585...................................................... 3.00% 11/01/48 2,558,017
18,117,557 Pool BN7755...................................................... 3.00% 09/01/49 19,223,992
1,330,080 Pool CA0854...................................................... 3.50% 12/01/47 1,437,645
620,947 Pool CA0907...................................................... 3.50% 12/01/47 672,895
535,338 Pool CA0996...................................................... 3.50% 01/01/48 578,631
3,903,377 Pool CA1182...................................................... 3.50% 02/01/48 4,217,334
763,135 Pool CA1187...................................................... 3.50% 02/01/48 813,088
561,892 Pool CA1710...................................................... 4.50% 05/01/48 609,216
362,639 Pool CA1711...................................................... 4.50% 05/01/48 393,074
238,890 Pool CA2208...................................................... 4.50% 08/01/48 259,144
649,444 Pool CA2327...................................................... 4.00% 09/01/48 719,302
4,325,243 Pool CA3633...................................................... 3.50% 06/01/49 4,703,479
16,580,967 Pool CA4534...................................................... 3.00% 11/01/49 17,583,248
5,643,381 Pool FM2870...................................................... 3.00% 03/01/50 5,995,633
9,363,346 Pool FM5397...................................................... 3.00% 12/01/50 10,015,057
339,019 Pool MA1146...................................................... 4.00% 08/01/42 372,574
575,861 Pool MA1373...................................................... 3.50% 03/01/43 625,054
597,133 Pool MA2077...................................................... 3.50% 11/01/34 643,418
153,504 Pool MA2145...................................................... 4.00% 01/01/45 167,282
</TABLE>
See Notes to Financial Statements Page 25
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
PASS-THROUGH SECURITIES (CONTINUED)
Federal National Mortgage Association (Continued)
$ 666,699 Pool MA2670...................................................... 3.00% 07/01/46 $ 702,935
629,251 Pool MA2806...................................................... 3.00% 11/01/46 662,375
18,846 Pool MA2896...................................................... 3.50% 02/01/47 20,096
623,365 Pool MA3057...................................................... 3.50% 07/01/47 663,118
297,519 Pool MA3088...................................................... 4.00% 08/01/47 320,813
649,864 Pool MA3210...................................................... 3.50% 12/01/47 692,049
7,250,960 Pool MA3238...................................................... 3.50% 01/01/48 7,712,552
678,288 Pool MA3239...................................................... 4.00% 01/01/48 733,586
311,017 Pool MA3276...................................................... 3.50% 02/01/48 331,217
897,794 Pool MA3332...................................................... 3.50% 04/01/48 953,294
241,904 Pool MA3336...................................................... 3.50% 04/01/38 257,128
172,524 Pool MA3410...................................................... 3.50% 07/01/33 184,570
269,242 Pool MA3537...................................................... 4.50% 12/01/48 291,541
1,056,715 Pool MA3846...................................................... 3.00% 11/01/49 1,086,774
12,049,008 Pool MA4093...................................................... 2.00% 08/01/40 12,289,588
8,315,748 Pool MA4128...................................................... 2.00% 09/01/40 8,528,212
8,919,966 Pool MA4152...................................................... 2.00% 10/01/40 9,147,912
4,838,381 Pool MA4176...................................................... 2.00% 11/01/40 4,945,765
15,782,386 Pool MA4364...................................................... 2.00% 06/01/41 16,186,279
60,175,000 Pool TBA (a)..................................................... 1.50% 10/15/36 61,089,299
82,825,000 Pool TBA (a)..................................................... 2.00% 10/15/36 85,597,588
443,960,000 Pool TBA (a)..................................................... 2.00% 10/15/51 449,381,014
424,450,000 Pool TBA (a)..................................................... 2.50% 10/15/51 440,111,394
Government National Mortgage Association
249,201 Pool MA1157...................................................... 3.50% 07/20/43 268,985
804,108 Pool MA2825...................................................... 3.00% 05/20/45 852,458
279,331 Pool MA3521...................................................... 3.50% 03/20/46 296,884
11,649,628 Pool MA3662...................................................... 3.00% 05/20/46 12,357,905
1,085,931 Pool MA3663...................................................... 3.50% 05/20/46 1,156,851
717,137 Pool MA3735...................................................... 3.00% 06/20/46 757,217
15,069,900 Pool MA3937...................................................... 3.50% 09/20/46 16,074,904
208,079 Pool MA4069...................................................... 3.50% 11/20/46 221,856
115,825 Pool MA4195...................................................... 3.00% 01/20/47 122,170
142,739 Pool MA4196...................................................... 3.50% 01/20/47 152,377
677,289 Pool MA4261...................................................... 3.00% 02/20/47 715,889
181,620 Pool MA4262...................................................... 3.50% 02/20/47 193,644
4,876,942 Pool MA4322...................................................... 4.00% 03/20/47 5,220,989
4,930,727 Pool MA4382...................................................... 3.50% 04/20/47 5,210,051
62,725 Pool MA4453...................................................... 4.50% 05/20/47 68,083
63,283 Pool MA4586...................................................... 3.50% 07/20/47 67,208
435,353 Pool MA4588...................................................... 4.50% 07/20/47 470,261
1,065,317 Pool MA4651...................................................... 3.00% 08/20/47 1,122,535
1,615,426 Pool MA4652...................................................... 3.50% 08/20/47 1,717,044
570,432 Pool MA4719...................................................... 3.50% 09/20/47 606,044
73,677 Pool MA4722...................................................... 5.00% 09/20/47 80,341
53,554 Pool MA4777...................................................... 3.00% 10/20/47 56,466
1,414,167 Pool MA4778...................................................... 3.50% 10/20/47 1,509,218
1,294,933 Pool MA4836...................................................... 3.00% 11/20/47 1,364,729
1,402,011 Pool MA4837...................................................... 3.50% 11/20/47 1,487,455
</TABLE>
Page 26 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
PASS-THROUGH SECURITIES (CONTINUED)
Government National Mortgage Association (Continued)
$ 485,345 Pool MA4838...................................................... 4.00% 11/20/47 $ 521,252
80,319 Pool MA4901...................................................... 4.00% 12/20/47 85,610
342,889 Pool MA4961...................................................... 3.00% 01/20/48 361,205
498,076 Pool MA4962...................................................... 3.50% 01/20/48 529,348
738,986 Pool MA4963...................................................... 4.00% 01/20/48 787,884
382,824 Pool MA5078...................................................... 4.00% 03/20/48 406,610
973,283 Pool MA5136...................................................... 3.50% 04/20/48 1,035,598
821,007 Pool MA5399...................................................... 4.50% 08/20/48 878,989
307,197 Pool MA5466...................................................... 4.00% 09/20/48 326,690
87,231 Pool MA5467...................................................... 4.50% 09/20/48 93,389
254,789 Pool MA5597...................................................... 5.00% 11/20/48 274,650
438,941 Pool MA5976...................................................... 3.50% 06/20/49 452,969
89,151 Pool MA6030...................................................... 3.50% 07/20/49 92,314
406,353 Pool MA6080...................................................... 3.00% 08/20/49 418,802
44,050,000 Pool TBA (a)..................................................... 2.00% 10/15/51 44,898,307
64,950,000 Pool TBA (a)..................................................... 2.50% 10/15/51 67,246,084
--------------
1,582,239,627
--------------
TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES........................................ 1,593,952,295
(Cost $1,586,753,099) --------------
CORPORATE BONDS AND NOTES -- 17.9%
AEROSPACE/DEFENSE -- 0.2%
143,000 BAE Systems Holdings, Inc. (b)...................................... 3.85% 12/15/25 157,502
8,500,000 Boeing (The) Co..................................................... 1.43% 02/04/24 8,520,317
1,610,000 Boeing (The) Co..................................................... 4.88% 05/01/25 1,800,689
--------------
10,478,508
--------------
AGRICULTURE -- 0.5%
11,920,000 BAT Capital Corp.................................................... 3.56% 08/15/27 12,909,755
2,650,000 BAT Capital Corp.................................................... 2.73% 03/25/31 2,644,291
2,280,000 BAT Capital Corp.................................................... 4.39% 08/15/37 2,480,866
545,000 BAT Capital Corp.................................................... 4.54% 08/15/47 584,004
4,250,000 Reynolds American, Inc.............................................. 5.70% 08/15/35 5,199,447
3,735,000 Reynolds American, Inc.............................................. 5.85% 08/15/45 4,622,980
--------------
28,441,343
--------------
AIRLINES -- 0.4%
976,428 American Airlines Pass-Through Trust, Series 2014-1, Class A........ 3.70% 10/01/26 993,277
114,475 American Airlines Pass-Through Trust, Series 2015-2, Class AA....... 3.60% 09/22/27 119,233
3,809,360 American Airlines Pass-Through Trust, Series 2016-1, Class AA....... 3.58% 01/15/28 3,933,363
538,327 Continental Airlines Pass-Through Trust, Series 2007-1, Class A..... 5.98% 04/19/22 546,858
4,701,030 Delta Air Lines Pass-Through Trust, Series 2020-1, Class AA......... 2.00% 06/10/28 4,718,691
8,705,534 JetBlue Pass-Through Trust, Series 2020-1, Class A.................. 4.00% 11/15/32 9,573,989
428,165 US Airways Pass-Through Trust, Series 2012-1, Class A............... 5.90% 10/01/24 450,290
--------------
20,335,701
--------------
AUTO MANUFACTURERS -- 0.6%
1,440,000 Daimler Finance North America LLC (b)............................... 2.20% 10/30/21 1,444,718
1,965,000 Daimler Finance North America LLC, 3 Mo. LIBOR +
0.90% (b) (c).................................................... 1.02% 02/15/22 1,973,058
285,000 Ford Motor Credit Co. LLC, 3 Mo. LIBOR + 0.88% (c).................. 1.00% 10/12/21 285,010
</TABLE>
See Notes to Financial Statements Page 27
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
AUTO MANUFACTURERS (CONTINUED)
$ 1,585,000 Ford Motor Credit Co. LLC........................................... 3.81% 10/12/21 $ 1,587,726
2,916,000 Ford Motor Credit Co. LLC........................................... 5.60% 01/07/22 2,957,845
8,467,000 Ford Motor Credit Co. LLC........................................... 3.22% 01/09/22 8,530,503
390,000 Ford Motor Credit Co. LLC, 3 Mo. LIBOR + 1.27% (c).................. 1.42% 03/28/22 390,163
705,000 Ford Motor Credit Co. LLC........................................... 3.34% 03/28/22 713,199
150,000 Ford Motor Credit Co. LLC, 3 Mo. LIBOR + 1.08% (c).................. 1.20% 08/03/22 149,589
4,000,000 Ford Motor Credit Co. LLC........................................... 2.98% 08/03/22 4,063,800
655,000 Ford Motor Credit Co. LLC........................................... 4.25% 09/20/22 674,650
2,360,000 General Motors Financial Co., Inc................................... 4.38% 09/25/21 2,366,075
2,140,000 General Motors Financial Co., Inc................................... 4.20% 11/06/21 2,155,034
760,000 General Motors Financial Co., Inc................................... 3.45% 04/10/22 770,228
2,095,000 General Motors Financial Co., Inc................................... 3.15% 06/30/22 2,137,544
--------------
30,199,142
--------------
BANKS -- 3.6%
14,290,000 Bank of America Corp. (d)........................................... 1.73% 07/22/27 14,485,635
19,465,000 Bank of America Corp., Series N (d)................................. 1.66% 03/11/27 19,688,776
1,500,000 Bank of America Corp., Medium-Term Note (d)......................... 1.32% 06/19/26 1,505,551
2,345,000 Bank of America Corp., Medium-Term Note (d)......................... 3.97% 03/05/29 2,648,989
10,270,000 Bank of America Corp., Medium-Term Note (d)......................... 2.09% 06/14/29 10,426,312
210,000 Bank of America Corp., Medium-Term Note (d)......................... 4.27% 07/23/29 241,706
2,839,000 Bank of America Corp., Medium-Term Note (d)......................... 3.97% 02/07/30 3,228,307
840,000 Bank of America Corp., Medium-Term Note (d)......................... 2.50% 02/13/31 863,291
2,180,000 Citigroup, Inc. (d)................................................. 3.35% 04/24/25 2,324,287
7,680,000 Citigroup, Inc. (d)................................................. 1.46% 06/09/27 7,706,734
2,375,000 Citigroup, Inc. (d)................................................. 3.52% 10/27/28 2,612,761
1,670,000 Citigroup, Inc. (d)................................................. 4.41% 03/31/31 1,959,860
2,720,000 Fifth Third Bancorp................................................. 2.55% 05/05/27 2,887,507
13,860,000 Goldman Sachs Group (The), Inc. (d)................................. 1.43% 03/09/27 13,920,555
750,000 Goldman Sachs Group (The), Inc. (d)................................. 2.91% 07/24/23 766,632
1,950,000 Goldman Sachs Group (The), Inc. (d)................................. 3.27% 09/29/25 2,088,319
734,000 Goldman Sachs Group (The), Inc...................................... 3.50% 11/16/26 799,583
955,000 Goldman Sachs Group (The), Inc. (d)................................. 1.09% 12/09/26 948,134
9,105,000 Goldman Sachs Group (The), Inc. (d)................................. 1.54% 09/10/27 9,153,719
13,465,000 JPMorgan Chase & Co. (d)............................................ 0.97% 06/23/25 13,508,655
500,000 JPMorgan Chase & Co................................................. 3.90% 07/15/25 551,628
5,610,000 JPMorgan Chase & Co. (d)............................................ 0.77% 08/09/25 5,598,151
1,895,000 JPMorgan Chase & Co. (d)............................................ 2.01% 03/13/26 1,955,041
4,875,000 JPMorgan Chase & Co. (d)............................................ 2.08% 04/22/26 5,036,571
7,940,000 JPMorgan Chase & Co. (d)............................................ 1.58% 04/22/27 8,019,099
495,000 Morgan Stanley (d).................................................. 0.99% 12/10/26 489,259
7,635,000 Morgan Stanley (d).................................................. 1.59% 05/04/27 7,711,465
2,145,000 Morgan Stanley, Global Medium-Term Note, SOFR + 0.70% (c)........... 0.75% 01/20/23 2,150,240
15,355,000 Morgan Stanley, Global Medium-Term Note (d)......................... 1.51% 07/20/27 15,425,446
400,000 PNC Bank N.A........................................................ 3.80% 07/25/23 424,358
5,385,000 Wells Fargo & Co. (d)............................................... 2.19% 04/30/26 5,595,530
3,270,000 Wells Fargo & Co. (d)............................................... 3.07% 04/30/41 3,433,254
2,300,000 Wells Fargo & Co., Medium-Term Note................................. 3.75% 01/24/24 2,466,600
6,305,000 Wells Fargo & Co., Medium-Term Note (d)............................. 2.16% 02/11/26 6,547,153
1,600,000 Wells Fargo & Co., Medium-Term Note (d)............................. 3.58% 05/22/28 1,776,670
5,364,000 Wells Fargo & Co., Medium-Term Note (d)............................. 2.39% 06/02/28 5,597,867
</TABLE>
Page 28 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
BANKS (CONTINUED)
$ 5,790,000 Wells Fargo & Co., Medium-Term Note (d)............................. 2.88% 10/30/30 $ 6,162,205
--------------
190,705,850
--------------
BEVERAGES -- 0.1%
2,700,000 Anheuser-Busch Cos. LLC / Anheuser-Busch InBev Worldwide, Inc....... 4.90% 02/01/46 3,447,605
635,000 Anheuser-Busch InBev Worldwide, Inc................................. 4.75% 01/23/29 755,744
1,200,000 Anheuser-Busch InBev Worldwide, Inc................................. 4.60% 04/15/48 1,480,552
200,000 Anheuser-Busch InBev Worldwide, Inc................................. 4.44% 10/06/48 241,721
--------------
5,925,622
--------------
BIOTECHNOLOGY -- 0.4%
1,412,000 Amgen, Inc.......................................................... 4.40% 05/01/45 1,730,367
11,260,000 Gilead Sciences, Inc., 3 Mo. LIBOR + 0.52% (c)...................... 0.67% 09/29/23 11,263,978
175,000 Gilead Sciences, Inc................................................ 3.65% 03/01/26 193,062
2,600,000 HCRX Investments Holdco L.P. (b).................................... 4.50% 08/01/29 2,637,277
5,510,000 Regeneron Pharmaceuticals, Inc...................................... 1.75% 09/15/30 5,306,468
--------------
21,131,152
--------------
CHEMICALS -- 0.2%
4,758,000 International Flavors & Fragrances, Inc. (b)........................ 2.30% 11/01/30 4,824,992
3,114,000 International Flavors & Fragrances, Inc............................. 5.00% 09/26/48 4,150,479
--------------
8,975,471
--------------
COMMERCIAL SERVICES -- 0.1%
2,500,000 RELX Capital, Inc................................................... 3.00% 05/22/30 2,687,236
--------------
DIVERSIFIED FINANCIAL SERVICES -- 0.4%
1,485,000 Air Lease Corp...................................................... 3.50% 01/15/22 1,501,984
1,890,000 Air Lease Corp...................................................... 3.25% 03/01/25 2,009,392
940,000 Air Lease Corp., Medium-Term Note................................... 0.70% 02/15/24 936,034
360,000 Air Lease Corp., Medium-Term Note................................... 2.30% 02/01/25 372,169
6,755,000 Discover Financial Services......................................... 3.95% 11/06/24 7,355,441
6,562,000 GE Capital Funding LLC.............................................. 4.40% 05/15/30 7,695,754
450,000 Raymond James Financial, Inc........................................ 4.95% 07/15/46 590,770
--------------
20,461,544
--------------
ELECTRIC -- 1.2%
2,000,000 Aep Transmission Co. LLC............................................ 3.75% 12/01/47 2,311,893
4,128,000 Alliant Energy Finance LLC (b)...................................... 3.75% 06/15/23 4,353,248
2,655,000 Alliant Energy Finance LLC (b)...................................... 1.40% 03/15/26 2,641,814
200,000 Ameren Illinois Co.................................................. 3.70% 12/01/47 234,243
3,000,000 Appalachian Power Co., Series Z..................................... 3.70% 05/01/50 3,352,947
750,000 Cleco Power LLC..................................................... 6.00% 12/01/40 1,048,030
500,000 Consolidated Edison Co. of New York, Inc............................ 4.50% 05/15/58 622,348
1,695,000 Dominion Energy, Inc., Series A..................................... 3.30% 03/15/25 1,829,947
155,000 Duke Energy Carolinas LLC........................................... 3.70% 12/01/47 177,611
7,030,000 Duke Energy Corp.................................................... 2.55% 06/15/31 7,237,846
750,000 Entergy Texas, Inc.................................................. 3.45% 12/01/27 818,290
11,418,000 FirstEnergy Transmission LLC (b).................................... 2.87% 09/15/28 12,089,400
1,250,000 Interstate Power and Light Co....................................... 3.25% 12/01/24 1,340,948
4,855,000 Interstate Power and Light Co....................................... 2.30% 06/01/30 4,944,564
3,000,000 ITC Holdings Corp. (b).............................................. 2.95% 05/14/30 3,193,265
1,750,000 Jersey Central Power & Light Co. (b)................................ 4.30% 01/15/26 1,949,216
830,000 Metropolitan Edison Co. (b)......................................... 4.00% 04/15/25 883,255
2,253,000 Metropolitan Edison Co. (b)......................................... 4.30% 01/15/29 2,544,563
</TABLE>
See Notes to Financial Statements Page 29
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
ELECTRIC (CONTINUED)
$ 10,000,000 Niagara Mohawk Power Corp. (b)...................................... 3.03% 06/27/50 $ 9,894,556
825,000 Public Service Co. of New Mexico.................................... 3.85% 08/01/25 899,111
300,000 Southwestern Electric Power Co...................................... 3.55% 02/15/22 301,977
700,000 Trans-Allegheny Interstate Line Co. (b)............................. 3.85% 06/01/25 760,363
1,505,000 Xcel Energy, Inc.................................................... 4.80% 09/15/41 1,893,548
--------------
65,322,983
--------------
FOOD -- 0.2%
1,000,000 Kraft Heinz Foods Co................................................ 5.00% 07/15/35 1,241,822
2,635,000 Kraft Heinz Foods Co................................................ 5.20% 07/15/45 3,384,823
2,755,000 Kraft Heinz Foods Co................................................ 4.88% 10/01/49 3,428,186
97,000 Kroger (The) Co..................................................... 5.40% 01/15/49 134,890
1,250,000 Post Holdings, Inc. (b)............................................. 5.50% 12/15/29 1,340,625
2,877,000 Post Holdings, Inc. (b)............................................. 4.63% 04/15/30 2,941,207
--------------
12,471,553
--------------
FOREST PRODUCTS & PAPER -- 0.0%
2,200,000 Georgia-Pacific LLC (b)............................................. 2.30% 04/30/30 2,272,838
--------------
GAS -- 0.0%
500,000 Piedmont Natural Gas Co., Inc....................................... 3.35% 06/01/50 528,269
400,000 Southern Co. Gas Capital Corp....................................... 5.88% 03/15/41 566,078
200,000 Spire, Inc.......................................................... 3.54% 02/27/24 206,663
--------------
1,301,010
--------------
HEALTHCARE-PRODUCTS -- 0.2%
525,000 Alcon Finance Corp. (b)............................................. 2.75% 09/23/26 556,956
1,500,000 Alcon Finance Corp. (b)............................................. 2.60% 05/27/30 1,550,462
3,015,000 DENTSPLY SIRONA, Inc................................................ 3.25% 06/01/30 3,270,142
6,000,000 PerkinElmer, Inc.................................................... 2.55% 03/15/31 6,179,872
--------------
11,557,432
--------------
HEALTHCARE-SERVICES -- 1.4%
120,000 Anthem, Inc......................................................... 3.65% 12/01/27 134,434
2,300,000 Anthem, Inc......................................................... 2.88% 09/15/29 2,456,837
4,800,000 Bon Secours Mercy Health, Inc., Series 20-2......................... 2.10% 06/01/31 4,838,989
11,208,000 Centene Corp........................................................ 2.45% 07/15/28 11,388,085
4,135,000 CommonSpirit Health................................................. 2.76% 10/01/24 4,346,414
1,985,000 CommonSpirit Health................................................. 3.35% 10/01/29 2,157,934
1,475,000 CommonSpirit Health................................................. 2.78% 10/01/30 1,544,638
4,999,000 Fresenius Medical Care US Finance II, Inc. (b)...................... 5.88% 01/31/22 5,109,312
7,704,000 HCA, Inc............................................................ 5.00% 03/15/24 8,476,286
950,000 HCA, Inc............................................................ 5.25% 04/15/25 1,084,937
1,400,000 HCA, Inc............................................................ 7.69% 06/15/25 1,704,129
3,250,000 HCA, Inc............................................................ 4.50% 02/15/27 3,686,062
2,625,000 HCA, Inc............................................................ 7.05% 12/01/27 3,305,230
8,233,000 HCA, Inc............................................................ 4.13% 06/15/29 9,324,071
500,000 Humana, Inc......................................................... 3.15% 12/01/22 513,923
360,000 Humana, Inc......................................................... 2.90% 12/15/22 370,767
5,410,000 Humana, Inc......................................................... 2.15% 02/03/32 5,403,063
2,000,000 Molina Healthcare, Inc. (b)......................................... 4.38% 06/15/28 2,100,000
200,000 New York and Presbyterian (The) Hospital............................ 3.56% 08/01/36 227,737
4,075,000 UnitedHealth Group, Inc............................................. 3.05% 05/15/41 4,323,751
160,000 UnitedHealth Group, Inc............................................. 4.45% 12/15/48 208,280
</TABLE>
Page 30 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
HEALTHCARE-SERVICES (CONTINUED)
$ 725,000 UnitedHealth Group, Inc............................................. 3.88% 08/15/59 $ 877,966
2,630,000 Universal Health Services, Inc. (b)................................. 1.65% 09/01/26 2,633,196
--------------
76,216,041
--------------
INSURANCE -- 1.0%
10,180,000 Athene Global Funding, SOFR + 0.70% (b) (c)......................... 0.75% 05/24/24 10,242,027
5,585,000 Athene Global Funding (b)........................................... 1.99% 08/19/28 5,555,768
1,650,000 Farmers Exchange Capital (b)........................................ 7.05% 07/15/28 2,068,115
700,000 Farmers Exchange Capital III (b) (d)................................ 5.45% 10/15/54 885,009
600,000 Farmers Insurance Exchange (b)...................................... 8.63% 05/01/24 715,180
3,495,000 Farmers Insurance Exchange (b) (d).................................. 4.75% 11/01/57 4,023,888
7,000,000 National General Holdings Corp. (b)................................. 6.75% 05/15/24 8,108,870
1,525,000 Nationwide Mutual Insurance Co., 3 Mo. LIBOR + 2.29% (b) (c)........ 2.41% 12/15/24 1,526,923
6,760,000 New York Life Insurance Co. (b)..................................... 3.75% 05/15/50 7,812,019
1,790,000 Teachers Insurance & Annuity Association of America (b)............. 4.90% 09/15/44 2,360,045
3,910,000 Teachers Insurance & Annuity Association of America (b)............. 4.27% 05/15/47 4,823,280
3,770,000 Teachers Insurance & Annuity Association of America (b)............. 3.30% 05/15/50 4,057,779
240,000 Teachers Insurance & Annuity Association of America (b) (d)......... 4.38% 09/15/54 251,763
--------------
52,430,666
--------------
INTERNET -- 0.1%
4,825,000 Amazon.com, Inc..................................................... 2.88% 05/12/41 5,061,774
--------------
MEDIA -- 0.7%
2,475,000 Charter Communications Operating LLC / Charter Communications
Operating Capital................................................ 4.91% 07/23/25 2,803,987
1,410,000 Charter Communications Operating LLC / Charter Communications
Operating Capital................................................ 2.30% 02/01/32 1,375,250
1,471,000 Charter Communications Operating LLC / Charter Communications
Operating Capital................................................ 5.38% 04/01/38 1,821,741
6,920,000 Charter Communications Operating LLC / Charter Communications
Operating Capital................................................ 5.38% 05/01/47 8,525,266
100,000 Comcast Corp........................................................ 3.97% 11/01/47 117,707
7,180,000 Cox Communications, Inc. (b)........................................ 2.60% 06/15/31 7,359,304
5,275,000 Diamond Sports Group LLC / Diamond Sports Finance Co. (b)........... 5.38% 08/15/26 3,504,974
2,450,000 Time Warner Cable LLC............................................... 5.50% 09/01/41 3,063,428
4,000,000 ViacomCBS, Inc...................................................... 4.20% 05/19/32 4,624,648
1,380,000 Walt Disney (The) Co................................................ 3.60% 01/13/51 1,594,028
--------------
34,790,333
--------------
MISCELLANEOUS MANUFACTURING -- 0.1%
1,000,000 General Electric Co., Global Medium-Term Note....................... 6.88% 01/10/39 1,514,454
1,000,000 General Electric Co., Medium-Term Note, 3 Mo. LIBOR +
0.38% (c)........................................................ 0.50% 05/05/26 988,703
2,775,000 General Electric Co., Medium-Term Note.............................. 6.75% 03/15/32 3,854,663
--------------
6,357,820
--------------
OIL & GAS -- 0.1%
635,000 Exxon Mobil Corp.................................................... 4.23% 03/19/40 768,684
3,180,000 Exxon Mobil Corp.................................................... 4.33% 03/19/50 3,978,960
400,000 Hess Corp........................................................... 5.60% 02/15/41 499,736
--------------
5,247,380
--------------
</TABLE>
See Notes to Financial Statements Page 31
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
PACKAGING & CONTAINERS -- 0.2%
$ 1,995,000 Amcor Flexibles North America, Inc.................................. 2.63% 06/19/30 $ 2,075,276
4,157,000 Berry Global, Inc. (b).............................................. 1.57% 01/15/26 4,198,861
2,125,000 Berry Global, Inc. (b).............................................. 4.88% 07/15/26 2,243,575
3,670,000 WRKCo, Inc.......................................................... 3.00% 06/15/33 3,910,562
--------------
12,428,274
--------------
PHARMACEUTICALS -- 1.3%
1,390,000 AbbVie, Inc......................................................... 3.80% 03/15/25 1,516,501
4,997,000 AbbVie, Inc......................................................... 4.50% 05/14/35 6,079,735
690,000 AbbVie, Inc......................................................... 4.05% 11/21/39 810,938
4,150,000 AbbVie, Inc......................................................... 4.40% 11/06/42 5,052,918
1,870,000 AbbVie, Inc......................................................... 4.45% 05/14/46 2,295,689
1,895,000 Bayer US Finance II LLC (b)......................................... 3.88% 12/15/23 2,021,821
1,045,000 Bayer US Finance II LLC (b)......................................... 3.38% 07/15/24 1,109,103
11,880,000 Bayer US Finance II LLC (b)......................................... 4.25% 12/15/25 13,234,061
3,160,000 Bayer US Finance II LLC (b)......................................... 4.38% 12/15/28 3,632,548
815,000 Bayer US Finance II LLC (b)......................................... 4.63% 06/25/38 978,720
425,000 Bayer US Finance II LLC (b)......................................... 4.40% 07/15/44 497,803
2,540,000 Bayer US Finance II LLC (b)......................................... 4.88% 06/25/48 3,219,431
1,534,000 Becton Dickinson and Co............................................. 3.36% 06/06/24 1,638,524
1,000,000 Becton Dickinson and Co............................................. 6.70% 08/01/28 1,278,096
2,000,000 Cigna Corp.......................................................... 3.40% 03/01/27 2,204,941
75,000 Cigna Corp.......................................................... 3.05% 10/15/27 81,033
4,204,000 Cigna Corp.......................................................... 2.40% 03/15/30 4,336,694
1,030,000 Cigna Corp.......................................................... 3.88% 10/15/47 1,170,306
2,279,000 Cigna Corp.......................................................... 3.40% 03/15/51 2,437,359
150,000 CVS Health Corp..................................................... 3.88% 07/20/25 165,221
4,225,000 CVS Health Corp..................................................... 1.75% 08/21/30 4,118,449
1,850,000 CVS Health Corp..................................................... 5.13% 07/20/45 2,443,092
4,775,000 CVS Health Corp..................................................... 5.05% 03/25/48 6,323,537
--------------
66,646,520
--------------
PIPELINES -- 0.7%
145,000 Energy Transfer L.P................................................. 5.20% 02/01/22 146,097
375,000 Energy Transfer L.P................................................. 4.20% 04/15/27 417,356
198,000 Energy Transfer L.P................................................. 5.50% 06/01/27 233,927
2,030,000 Energy Transfer L.P................................................. 4.95% 06/15/28 2,353,583
315,000 Energy Transfer L.P................................................. 3.75% 05/15/30 342,408
3,200,000 Energy Transfer L.P................................................. 4.90% 03/15/35 3,686,466
1,463,000 Energy Transfer L.P................................................. 6.50% 02/01/42 1,915,948
1,135,000 Energy Transfer L.P................................................. 5.30% 04/01/44 1,324,127
260,000 Energy Transfer L.P................................................. 5.15% 03/15/45 302,017
2,600,000 Energy Transfer L.P................................................. 6.13% 12/15/45 3,350,018
3,606,000 Energy Transfer L.P................................................. 5.40% 10/01/47 4,369,434
1,225,000 Energy Transfer L.P................................................. 5.00% 05/15/50 1,437,630
1,270,000 Kinder Morgan Energy Partners L.P................................... 5.80% 03/15/35 1,637,368
650,000 Kinder Morgan, Inc.................................................. 5.30% 12/01/34 805,900
3,640,000 NGPL PipeCo LLC (b)................................................. 4.88% 08/15/27 4,168,500
150,000 Plains All American Pipeline L.P. / PAA Finance Corp................ 2.85% 01/31/23 153,692
425,000 Plains All American Pipeline L.P. / PAA Finance Corp................ 3.55% 12/15/29 450,802
1,350,000 Plains All American Pipeline L.P. / PAA Finance Corp................ 3.80% 09/15/30 1,456,295
716,000 Rockies Express Pipeline LLC (b).................................... 4.95% 07/15/29 745,825
</TABLE>
Page 32 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
PIPELINES (CONTINUED)
$ 1,500,000 Rockies Express Pipeline LLC (b).................................... 4.80% 05/15/30 $ 1,553,190
1,360,000 Rockies Express Pipeline LLC (b).................................... 6.88% 04/15/40 1,504,656
329,909 Ruby Pipeline LLC (e)............................................... 8.00% 04/01/22 310,723
1,775,000 TransMontaigne Partners L.P. / TLP Finance Corp..................... 6.13% 02/15/26 1,825,206
--------------
34,491,168
--------------
REAL ESTATE INVESTMENT TRUSTS -- 1.4%
250,000 Alexandria Real Estate Equities, Inc................................ 4.30% 01/15/26 280,808
1,107,000 Alexandria Real Estate Equities, Inc................................ 3.80% 04/15/26 1,234,405
612,000 Alexandria Real Estate Equities, Inc................................ 4.50% 07/30/29 723,882
4,320,000 American Campus Communities Operating Partnership L.P............... 3.75% 04/15/23 4,508,122
800,000 American Campus Communities Operating Partnership L.P............... 4.13% 07/01/24 870,941
4,545,000 American Campus Communities Operating Partnership L.P............... 3.30% 07/15/26 4,902,342
332,000 American Campus Communities Operating Partnership L.P............... 3.63% 11/15/27 364,218
215,000 American Tower Corp................................................. 3.00% 06/15/23 224,483
785,000 Boston Properties L.P............................................... 3.20% 01/15/25 838,777
1,593,000 Boston Properties L.P............................................... 3.25% 01/30/31 1,717,964
625,000 CC Holdings GS V LLC / Crown Castle GS III Corp..................... 3.85% 04/15/23 658,336
750,000 CubeSmart L.P....................................................... 4.38% 02/15/29 862,702
3,425,000 CyrusOne L.P. / CyrusOne Finance Corp............................... 2.90% 11/15/24 3,594,298
1,945,000 CyrusOne L.P. / CyrusOne Finance Corp............................... 2.15% 11/01/30 1,851,912
1,150,000 GLP Capital L.P. / GLP Financing II, Inc............................ 5.38% 11/01/23 1,247,718
4,785,000 GLP Capital L.P. / GLP Financing II, Inc............................ 3.35% 09/01/24 5,061,831
2,135,000 GLP Capital L.P. / GLP Financing II, Inc............................ 5.25% 06/01/25 2,396,228
5,705,000 GLP Capital L.P. / GLP Financing II, Inc............................ 5.38% 04/15/26 6,548,028
1,210,000 GLP Capital L.P. / GLP Financing II, Inc............................ 5.30% 01/15/29 1,422,446
3,525,000 GLP Capital L.P. / GLP Financing II, Inc............................ 4.00% 01/15/30 3,811,362
914,000 Healthcare Realty Trust, Inc........................................ 3.63% 01/15/28 1,010,154
2,000,000 Healthcare Realty Trust, Inc........................................ 2.05% 03/15/31 1,970,878
2,000,000 Healthcare Trust of America Holdings L.P............................ 3.10% 02/15/30 2,140,103
3,490,000 Healthcare Trust of America Holdings L.P............................ 2.00% 03/15/31 3,393,513
3,680,000 Hudson Pacific Properties L.P....................................... 3.95% 11/01/27 4,068,059
1,000,000 Hudson Pacific Properties L.P....................................... 4.65% 04/01/29 1,166,979
1,000,000 Kilroy Realty L.P................................................... 3.45% 12/15/24 1,069,337
860,000 Kilroy Realty L.P................................................... 2.50% 11/15/32 865,901
1,300,000 Kimco Realty Corp................................................... 3.40% 11/01/22 1,339,141
1,605,000 Lexington Realty Trust.............................................. 2.70% 09/15/30 1,650,812
1,837,000 Lexington Realty Trust.............................................. 2.38% 10/01/31 1,823,579
200,000 Life Storage L.P.................................................... 3.88% 12/15/27 225,695
1,135,000 Life Storage L.P.................................................... 2.20% 10/15/30 1,138,725
350,000 Piedmont Operating Partnership L.P.................................. 3.40% 06/01/23 363,370
670,000 Piedmont Operating Partnership L.P.................................. 3.15% 08/15/30 692,495
300,000 SL Green Operating Partnership L.P.................................. 3.25% 10/15/22 308,291
550,000 SL Green Realty Corp................................................ 4.50% 12/01/22 571,439
1,000,000 Ventas Realty L.P................................................... 2.65% 01/15/25 1,049,062
220,000 Ventas Realty L.P................................................... 2.50% 09/01/31 221,448
2,150,000 Ventas Realty L.P................................................... 4.88% 04/15/49 2,723,525
75,000 Welltower, Inc...................................................... 4.50% 01/15/24 81,028
1,125,000 Welltower, Inc...................................................... 4.00% 06/01/25 1,237,334
--------------
72,231,671
--------------
</TABLE>
See Notes to Financial Statements Page 33
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
RETAIL -- 0.2%
$ 7,335,000 7-Eleven, Inc. (b).................................................. 0.80% 02/10/24 $ 7,337,866
5,035,000 Magic Mergeco, Inc. (b)............................................. 5.25% 05/01/28 5,173,463
500,000 Walgreens Boots Alliance, Inc....................................... 3.30% 11/18/21 500,683
--------------
13,012,012
--------------
SEMICONDUCTORS -- 0.1%
6,300,000 Intel Corp.......................................................... 3.05% 08/12/51 6,471,801
--------------
SOFTWARE -- 0.3%
140,000 Change Healthcare Holdings LLC / Change Healthcare Finance,
Inc. (b)......................................................... 5.75% 03/01/25 141,575
1,400,000 Fiserv, Inc......................................................... 2.25% 06/01/27 1,456,377
510,000 Fiserv, Inc......................................................... 2.65% 06/01/30 530,290
2,625,000 Oracle Corp......................................................... 2.88% 03/25/31 2,768,135
9,540,000 Oracle Corp......................................................... 3.95% 03/25/51 10,592,549
--------------
15,488,926
--------------
TELECOMMUNICATIONS -- 2.2%
4,945,000 AT&T, Inc. (b)...................................................... 2.55% 12/01/33 4,975,909
3,175,000 AT&T, Inc........................................................... 4.50% 05/15/35 3,770,854
3,500,000 AT&T, Inc........................................................... 5.25% 03/01/37 4,430,776
3,140,000 AT&T, Inc........................................................... 4.30% 12/15/42 3,630,676
8,270,000 AT&T, Inc........................................................... 4.75% 05/15/46 10,091,003
3,880,000 AT&T, Inc........................................................... 4.50% 03/09/48 4,598,403
14,047,000 AT&T, Inc. (b)...................................................... 3.80% 12/01/57 14,953,368
1,985,000 Level 3 Financing, Inc. (b)......................................... 3.40% 03/01/27 2,094,870
4,500,000 SES GLOBAL Americas Holdings G.P. (b)............................... 5.30% 03/25/44 5,279,145
6,670,313 Sprint Spectrum Co. LLC / Sprint Spectrum Co. II LLC / Sprint
Spectrum Co. III LLC (b)......................................... 4.74% 03/20/25 7,135,233
18,250,000 Sprint Spectrum Co. LLC / Sprint Spectrum Co. II LLC / Sprint
Spectrum Co. III LLC (b)......................................... 5.15% 03/20/28 21,040,425
4,987,000 T-Mobile USA, Inc................................................... 2.25% 02/15/26 5,099,207
5,090,000 T-Mobile USA, Inc. (b).............................................. 2.25% 02/15/26 5,204,525
8,595,000 T-Mobile USA, Inc................................................... 3.75% 04/15/27 9,525,366
2,300,000 T-Mobile USA, Inc................................................... 3.88% 04/15/30 2,576,805
4,600,000 T-Mobile USA, Inc................................................... 2.55% 02/15/31 4,697,612
2,845,000 T-Mobile USA, Inc................................................... 4.38% 04/15/40 3,333,927
750,000 T-Mobile USA, Inc................................................... 4.50% 04/15/50 903,881
2,515,000 Verizon Communications, Inc......................................... 2.10% 03/22/28 2,580,780
2,585,000 Verizon Communications, Inc......................................... 2.55% 03/21/31 2,673,420
--------------
118,596,185
--------------
TOTAL CORPORATE BONDS AND NOTES................................................................ 951,737,956
(Cost $921,459,658) --------------
ASSET-BACKED SECURITIES -- 7.6%
ACE Securities Corp. Home Equity Loan Trust
16,892,011 Series 2007-HE1, Class A1, 1 Mo. LIBOR + 0.30% (c)............... 0.38% 01/25/37 11,299,750
14,388,160 Series 2007-WM2, Class A1, 1 Mo. LIBOR + 0.21% (c)............... 0.29% 02/25/37 8,353,169
AGL CLO 12 Ltd.
13,000,000 Series 2021-12A, Class A1, 3 Mo. LIBOR + 1.16% (b) (c)........... 1.29% 07/20/34 13,015,873
Ajax Mortgage Loan Trust
3,724,608 Series 2019-F, Class A1, steps up to 3.86% on 11/25/26 (b) (f)... 2.86% 07/25/59 3,767,507
</TABLE>
Page 34 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
ASSET-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
Ammc CLO 19 Ltd.
$ 3,176,040 Series 2016-19A, Class AR, 3 Mo. LIBOR + 1.14% (b) (c)........... 1.27% 10/16/28 $ 3,177,621
Argent Securities, Inc.
210,612 Series 2005-W2, Class M1, 1 Mo. LIBOR + 0.74% (c)................ 0.82% 10/25/35 210,901
Asset Backed Funding Certificates Trust
9,806,458 Series 2006-HE1, Class A2B, 1 Mo. LIBOR + 0.11% (c).............. 0.19% 01/25/37 6,854,867
61,842 Series 2006-OPT1, Class A2, 1 Mo. LIBOR + 0.28% (c).............. 0.36% 09/25/36 61,503
Barings CLO Ltd.
343,243 Series 2013-IA, Class AR, 3 Mo. LIBOR + 0.80% (b) (c)............ 0.93% 01/20/28 343,638
590,306 Series 2016-2A, Class AR, 3 Mo. LIBOR + 1.08% (b) (c)............ 1.21% 07/20/28 590,515
12,500,000 Series 2019-2A, Class A2R, 3 Mo. LIBOR + 1.70% (b) (c)........... 1.83% 04/15/36 12,497,359
Brazos Higher Education Authority, Inc.
270,000 Series 2011-1, Class A3, 3 Mo. LIBOR + 1.05% (c)................. 1.18% 11/25/33 274,793
300,000 Series 2011-2, Class A3, 3 Mo. LIBOR + 1.00% (c)................. 1.13% 10/27/36 303,752
Carrington Mortgage Loan Trust
1,129,610 Series 2006-OPT1, Class M1, 1 Mo. LIBOR + 0.53% (c).............. 0.61% 02/25/36 1,126,852
Citigroup Mortgage Loan Trust
1,054,229 Series 2006-HE2, Class M1, 1 Mo. LIBOR + 0.29% (c)............... 0.37% 08/25/36 1,049,989
Dryden Senior Loan Fund
885,483 Series 2013-26A, Class AR, 3 Mo. LIBOR + 0.90% (b) (c)........... 1.03% 04/15/29 885,675
572,000 Series 2013-28A, Class A1LR, 3 Mo. LIBOR + 1.20% (b) (c)......... 1.32% 08/15/30 572,872
ECMC Group Student Loan Trust
1,621,417 Series 2017-2A, Class A, 1 Mo. LIBOR + 1.05% (b) (c)............. 1.13% 05/25/67 1,656,329
EFS Volunteer No 3 LLC
123,674 Series 2012-1, Class A3, 1 Mo. LIBOR + 1.00% (b) (c)............. 1.08% 04/25/33 124,464
First Franklin Mortgage Loan Trust
19,206,508 Series 2006-FF13, Class A2C, 1 Mo. LIBOR + 0.32% (c)............. 0.40% 10/25/36 15,606,935
14,083,479 Series 2007-FF2, Class A1, 1 Mo. LIBOR + 0.14% (c)............... 0.22% 03/25/37 9,603,843
GE-WMC Mortgage Securities LLC
708,543 Series 2005-1, Class M1, 1 Mo. LIBOR + 0.66% (c)................. 0.74% 10/25/35 704,920
GoldenTree Loan Management US CLO Ltd.
5,000,000 Series 2020-8A, Class A, 3 Mo. LIBOR + 1.55% (b) (c)............. 1.68% 07/20/31 5,004,340
5,000,000 Series 2020-8A, Class AR (b) (c) (g)............................. 0.00% 10/20/34 5,003,015
GSAA Home Equity Trust
1,207,948 Series 2005-6, Class M1, 1 Mo. LIBOR + 0.65% (c)................. 0.73% 06/25/35 1,216,996
GSAMP Trust
14,925,305 Series 2006-NC2, Class A2C, 1 Mo. LIBOR + 0.30% (c).............. 0.38% 06/25/36 10,668,280
10,633,380 Series 2007-FM2, Class A1, 1 Mo. LIBOR + 0.14% (c)............... 0.22% 01/25/37 7,793,652
JP Morgan Mortgage Acquisition Trust
86,152 Series 2006-ACC1, Class M1, 1 Mo. LIBOR + 0.41% (c).............. 0.49% 05/25/36 86,372
2,424,499 Series 2006-WF1, Class A6........................................ 6.50% 07/25/36 1,032,819
19,790,990 Series 2006-WMC2, Class A4, 1 Mo. LIBOR + 0.30% (c).............. 0.38% 07/25/36 11,652,282
20,939,630 Series 2006-WMC2, Class A5, 1 Mo. LIBOR + 0.50% (c).............. 0.58% 07/25/36 12,600,608
405,000 Series 2007-CH2, Class MV1, 1 Mo. LIBOR + 0.28% (c).............. 0.36% 01/25/37 403,525
Legacy Mortgage Asset Trust
2,607,408 Series 2019-GS1, Class A1 (b) (f)................................ 4.00% 01/25/59 2,614,532
1,808,095 Series 2019-GS4, Class A1 (b) (f)................................ 3.44% 05/25/59 1,811,671
Lehman XS Trust
3,609,784 Series 2006-9, Class A1C, 1 Mo. LIBOR + 0.52% (c)................ 0.60% 05/25/46 3,465,788
Long Beach Mortgage Loan Trust
654,825 Series 2006-1, Class 1A, 1 Mo. LIBOR + 0.44% (c)................. 0.52% 02/25/36 652,094
</TABLE>
See Notes to Financial Statements Page 35
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
ASSET-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
Magnetite VII Ltd.
$ 4,634,184 Series 2012-7A, Class A1R2, 3 Mo. LIBOR + 0.80% (b) (c).......... 0.93% 01/15/28 $ 4,638,472
Magnetite XXVII Ltd.
2,500,000 Series 2020-27A, Class A1, 3 Mo. LIBOR + 1.55% (b) (c)........... 1.68% 07/20/33 2,503,115
Mastr Asset Backed Securities Trust
7,665,497 Series 2006-WMC3, Class A2, 1 Mo. LIBOR + 0.05% (c).............. 0.13% 08/25/36 3,466,987
Merrill Lynch First Franklin Mortgage Loan Trust
327,435 Series 2007-3, Class A2B, 1 Mo. LIBOR + 0.13% (c)................ 0.21% 06/25/37 308,062
Mid-State Trust
149,881 Series 2003-11, Class A1......................................... 4.86% 07/15/38 158,165
Morgan Stanley ABS Capital I, Inc. Trust
11,526,950 Series 2006-HE4, Class A3, 1 Mo. LIBOR + 0.30% (c)............... 0.38% 06/25/36 7,642,554
6,063,922 Series 2006-HE8, Class A2B, 1 Mo. LIBOR + 0.10% (c).............. 0.18% 10/25/36 3,617,881
662,340 Series 2006-NC1, Class M1, 1 Mo. LIBOR + 0.57% (c)............... 0.65% 12/25/35 663,336
6,740,948 Series 2007-HE1, Class A2D, 1 Mo. LIBOR + 0.23% (c).............. 0.31% 11/25/36 4,979,023
28,816,198 Series 2007-HE2, Class A2D, 1 Mo. LIBOR + 0.21% (c).............. 0.29% 01/25/37 17,856,911
7,894,017 Series 2007-NC3, Class A2D, 1 Mo. LIBOR + 0.26% (c).............. 0.34% 05/25/37 7,046,810
Navient Student Loan Trust
250,369 Series 2014-1, Class A3, 1 Mo. LIBOR + 0.51% (c)................. 0.59% 06/25/31 244,994
215,460 Series 2014-3, Class A, 1 Mo. LIBOR + 0.62% (c).................. 0.70% 03/25/83 216,424
180,734 Series 2015-1, Class A2, 1 Mo. LIBOR + 0.60% (c)................. 0.68% 04/25/40 182,127
1,750,000 Series 2016-2A, Class A3, 1 Mo. LIBOR + 1.50% (b) (c)............ 1.58% 06/25/65 1,818,660
3,819,787 Series 2016-5A, Class A, 1 Mo. LIBOR + 1.25% (b) (c)............. 1.33% 06/25/65 3,918,655
300,000 Series 2017-3A, Class A3, 1 Mo. LIBOR + 1.05% (b) (c)............ 1.13% 07/26/66 305,614
3,292,219 Series 2017-5A, Class A, 1 Mo. LIBOR + 0.80% (b) (c)............. 0.88% 07/26/66 3,303,276
New Century Home Equity Loan Trust
1,959,032 Series 2005-4, Class M3, 1 Mo. LIBOR + 0.83% (c)................. 0.91% 09/25/35 1,963,835
OCP CLO Ltd.
6,200,000 Series 2020-19A, Class A1, 3 Mo. LIBOR + 1.75% (b) (c)........... 1.88% 07/20/31 6,210,926
6,200,000 Series 2020-19A, Class AR (b) (c) (g)............................ 0.00% 10/20/34 6,203,739
8,620,000 Series 2021-21A, Class B, 3 Mo. LIBOR + 1.70% (b) (c)............ 1.83% 07/20/34 8,632,283
Octagon Investment Partners 46 Ltd.
14,000,000 Series 2020-2A, Class AR, 3 Mo. LIBOR + 1.16% (b) (c)............ 1.27% 07/15/36 14,012,222
Palmer Square Loan Funding Ltd.
99,258 Series 2019-1A, Class A1, 3 Mo. LIBOR + 1.05% (b) (c)............ 1.18% 04/20/27 99,382
1,069,609 Series 2019-4A, Class A1, 3 Mo. LIBOR + 0.90% (b) (c)............ 1.03% 10/24/27 1,070,144
Residential Asset Securities Corp.
167,314 Series 2006-EMX3, Class A3, 1 Mo. LIBOR + 0.56% (c).............. 0.64% 04/25/36 165,951
1,139,542 Series 2006-KS3, Class M1, 1 Mo. LIBOR + 0.50% (c)............... 0.58% 04/25/36 1,140,682
Rockford Tower CLO Ltd.
10,000,000 Series 2017-3A, Class A, 3 Mo. LIBOR + 1.19% (b) (c)............. 1.32% 10/20/30 10,005,000
Saxon Asset Securities Trust
634,407 Series 2007-2, Class A2C, 1 Mo. LIBOR + 0.24% (c)................ 0.32% 05/25/47 551,528
Securitized Asset-Backed Receivables LLC Trust
71,865 Series 2006-OP1, Class M2, 1 Mo. LIBOR + 0.59% (c)............... 0.67% 10/25/35 71,857
25,551,435 Series 2006-WM4, Class A1, 1 Mo. LIBOR + 0.19% (b) (c)........... 0.46% 11/25/36 15,856,102
SFO Commercial Mortgage Trust
10,000,000 Series 2021-555, Class A, 1 Mo. LIBOR + 1.15% (b) (c)............ 1.25% 05/15/38 10,043,588
Skyline Aircraft Finance LLC
13,618,272 Series 2020-1, Class A (h) (i)................................... 3.23% 05/10/37 13,787,139
</TABLE>
Page 36 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
ASSET-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
SLC Student Loan Trust
$ 5,054,000 Series 2006-1, Class A6, 3 Mo. LIBOR + 0.16% (c)................. 0.28% 03/15/55 $ 4,982,113
126,871 Series 2006-2, Class A6, 3 Mo. LIBOR + 0.16% (c)................. 0.28% 09/15/39 125,000
1,656,387 Series 2008-1, Class A4A, 3 Mo. LIBOR + 1.60% (c)................ 1.72% 12/15/32 1,675,471
SLM Student Loan Trust
59,468 Series 2003-10A, Class A3, 3 Mo. LIBOR + 0.47% (b) (c)........... 0.59% 12/15/27 59,484
535,228 Series 2005-9, Class A7A, 3 Mo. LIBOR + 0.60% (c)................ 0.73% 01/25/41 539,459
80,000 Series 2007-7, Class B, 3 Mo. LIBOR + 0.75% (c).................. 0.88% 10/27/70 73,043
830,559 Series 2008-1, Class A4, 3 Mo. LIBOR + 0.65% (c)................. 0.78% 01/25/22 815,007
4,860,170 Series 2008-2, Class A3, 3 Mo. LIBOR + 0.75% (c)................. 0.88% 04/25/23 4,810,285
130,000 Series 2008-2, Class B, 3 Mo. LIBOR + 1.20% (c).................. 1.33% 01/25/83 117,176
700,000 Series 2008-3, Class B, 3 Mo. LIBOR + 1.20% (c).................. 1.33% 04/26/83 657,358
4,920,359 Series 2008-6, Class A4, 3 Mo. LIBOR + 1.10% (c)................. 1.23% 07/25/23 4,938,491
320,000 Series 2008-7, Class B, 3 Mo. LIBOR + 1.85% (c).................. 1.98% 07/26/83 321,361
2,312,178 Series 2008-8, Class A4, 3 Mo. LIBOR + 1.50% (c)................. 1.63% 04/25/23 2,327,349
4,150,000 Series 2011-2, Class A2, 1 Mo. LIBOR + 1.20% (c)................. 1.28% 10/25/34 4,249,539
704,380 Series 2012-2, Class A, 1 Mo. LIBOR + 0.70% (c).................. 0.78% 01/25/29 693,586
687,135 Series 2012-3, Class A, 1 Mo. LIBOR + 0.65% (c).................. 0.73% 12/27/38 691,131
255,834 Series 2012-6, Class A3, 1 Mo. LIBOR + 0.75% (c)................. 0.83% 05/26/26 253,627
3,701,277 Series 2012-7, Class A3, 1 Mo. LIBOR + 0.65% (c)................. 0.73% 05/26/26 3,632,404
555,000 Series 2012-7, Class B, 1 Mo. LIBOR + 1.80% (c).................. 1.88% 09/25/43 556,458
131,067 Series 2013-2, Class A, 1 Mo. LIBOR + 0.45% (c).................. 0.53% 06/25/43 130,521
Soundview Home Loan Trust
7,374,822 Series 2007-OPT4, Class 1A1, 1 Mo. LIBOR + 1.00% (c)............. 1.08% 09/25/37 5,970,181
Structured Asset Investment Loan Trust
816,687 Series 2004-6, Class A3, 1 Mo. LIBOR + 0.80% (c)................. 0.88% 07/25/34 811,312
152,277 Series 2005-2, Class M2, 1 Mo. LIBOR + 0.74% (c)................. 0.82% 03/25/35 152,096
Structured Asset Securities Corp. Mortgage Loan Trust
1,350,000 Series 2005-NC2, Class M5, 1 Mo. LIBOR + 0.93% (c)............... 1.01% 05/25/35 1,353,542
TAL Advantage VII LLC
10,845,000 Series 2020-1A, Class A (b)...................................... 2.05% 09/20/45 10,993,180
TIF Funding II LLC
8,972,500 Series 2020-1A, Class A (b)...................................... 2.09% 08/20/45 9,077,475
Treman Park CLO Ltd.
573,281 Series 2015-1A, Class ARR, 3 Mo. LIBOR + 1.07% (b) (c)........... 1.20% 10/20/28 574,126
Voya CLO Ltd.
13,000,000 Series 2020-1A, Class AR, 3 Mo. LIBOR + 1.15% (b) (c)............ 1.26% 07/16/34 12,995,224
Wachovia Student Loan Trust
886,939 Series 2006-1, Class A6, 3 Mo. LIBOR + 0.17% (b) (c)............. 0.30% 04/25/40 872,232
WaMu Asset-Backed Certificates WaMu Trust
1,160,659 Series 2007-HE2, Class 2A1, 1 Mo. LIBOR + 0.11% (c).............. 0.19% 04/25/37 567,426
4,027,685 Series 2007-HE2, Class 2A2, 1 Mo. LIBOR + 0.19% (c).............. 0.27% 04/25/37 1,996,816
8,630,753 Series 2007-HE2, Class 2A3, 1 Mo. LIBOR + 0.25% (c).............. 0.33% 04/25/37 4,322,868
Wellman Park CLO
11,650,000 Series 2021-1A, Class B, 3 Mo. LIBOR + 1.60% (b) (c)............. 1.73% 07/15/34 11,662,256
--------------
TOTAL ASSET-BACKED SECURITIES.................................................................. 401,772,142
(Cost $398,909,726) --------------
</TABLE>
See Notes to Financial Statements Page 37
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
MORTGAGE-BACKED SECURITIES -- 7.6%
<S> <C> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS -- 5.3%
Alternative Loan Trust
$ 6,080,811 Series 2005-16, Class A4, 1 Mo. LIBOR + 0.48% (c)................ 0.56% 06/25/35 $ 5,699,758
832,947 Series 2005-56, Class 1A1, 1 Mo. LIBOR + 1.46% (c)............... 1.54% 11/25/35 826,823
7,509,595 Series 2005-67CB, Class A1....................................... 5.50% 01/25/36 7,068,458
2,961,664 Series 2007-13, Class A1......................................... 6.00% 06/25/47 2,215,886
American Home Mortgage Assets Trust
13,382,862 Series 2007-1, Class A1, 12 Mo. Treasury Average + 0.70% (c)..... 0.80% 02/25/47 7,621,559
American Home Mortgage Investment Trust
1,925,167 Series 2005-4, Class 1A1, 1 Mo. LIBOR + 0.58% (c)................ 0.66% 11/25/45 1,883,357
Banc of America Funding Trust
695,157 Series 2014-R6, Class 2A13 (b) (j)............................... 0.35% 07/26/36 684,281
Bear Stearns Mortgage Funding Trust
121,342 Series 2006-AR1, Class 1A1, 1 Mo. LIBOR + 0.21% (c).............. 0.29% 07/25/36 117,438
2,969,895 Series 2006-AR3, Class 1A1, 1 Mo. LIBOR + 0.18% (c).............. 0.26% 10/25/36 2,845,302
4,013,938 Series 2006-AR5, Class 2A1, 1 Mo. LIBOR + 0.19% (c).............. 0.27% 01/25/37 3,760,468
207,714 Series 2007-AR5, Class 1A1G, 1 Mo. LIBOR + 0.16% (c)............. 0.24% 06/25/47 198,316
CIM Trust
8,776,315 Series 2018-R6, Class A1, 1 Mo. LIBOR + 1.08% (b) (c)............ 1.17% 09/25/58 8,721,592
3,817,405 Series 2019-R1, Class A (b)...................................... 3.25% 10/25/58 3,561,170
4,610,083 Series 2019-R4, Class A1 (b)..................................... 3.00% 10/25/59 4,704,532
7,698,252 Series 2020-R3, Class A1A (b).................................... 4.00% 01/26/60 7,459,300
9,862,290 Series 2020-R4, Class A1A (b) (k)................................ 3.30% 06/25/60 9,874,852
21,112,000 Series 2020-R7, Class A1B (b) (k)................................ 2.25% 12/27/61 18,720,141
22,617,960 Series 2021-R3, Class A1A (b).................................... 1.95% 06/25/57 22,745,213
9,388,724 Series 2021-NR3, Class A1, steps up to 5.57% on
04/26/24 (b) (f)............................................... 2.57% 06/25/57 9,409,699
CitiMortgage Alternative Loan Trust
2,530,619 Series 2006-A4, Class 1A8........................................ 6.00% 09/25/36 2,495,204
Credit Suisse Mortgage Trust
10,290,165 Series 2007-2, Class 1A4......................................... 5.75% 03/25/37 8,317,854
28,977,326 Series 2007-3, Class 1A1A........................................ 5.84% 04/25/37 10,877,152
30,492 Series 2010-7R, Class 1A12 (b)................................... 4.00% 01/26/37 30,541
109,816 Series 2010-8R, Class 4A5 (b) (j)................................ 2.89% 12/26/35 110,602
42,981 Series 2010-8R, Class 10A5 (b) (j)............................... 2.99% 04/26/47 42,966
11,107,553 Series 2019-RPL8, Class A1 (b) (c)............................... 3.32% 10/25/58 11,187,939
GMACM Mortgage Loan Trust
1,525,024 Series 2006-AR1, Class 1A1 (j)................................... 3.05% 04/19/36 1,341,093
1,659,399 Series 2006-J1, Class A4......................................... 5.75% 04/25/36 1,672,960
GreenPoint Mortgage Funding Trust
128,042 Series 2006-AR1, Class A1A, 1 Mo. LIBOR + 0.58% (c).............. 0.66% 02/25/36 127,674
GSR Mortgage Loan Trust
24,140,731 Series 2006-OA1, Class 2A2, 1 Mo. LIBOR + 0.52% (c).............. 0.60% 08/25/46 13,839,210
HarborView Mortgage Loan Trust
441,576 Series 2005-10, Class 2A1A, 1 Mo. LIBOR + 0.62% (c).............. 0.71% 11/19/35 397,258
1,371,886 Series 2007-7, Class 1A1, 1 Mo. LIBOR + 1.00% (c)................ 1.08% 10/25/37 1,333,831
HomeBanc Mortgage Trust
878,029 Series 2004-2, Class A1, 1 Mo. LIBOR + 0.74% (c)................. 0.82% 12/25/34 927,313
Impac CMB Trust
225,696 Series 2005-2, Class 1A1, 1 Mo. LIBOR + 0.52% (c)................ 0.60% 04/25/35 226,099
755,981 Series 2005-4, Class 1A1A, 1 Mo. LIBOR + 0.54% (c)............... 0.62% 05/25/35 754,720
</TABLE>
Page 38 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
MORTGAGE-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
IndyMac INDX Mortgage Loan Trust
$ 1,563,962 Series 2005-AR14, Class 2A1A, 1 Mo. LIBOR + 0.60% (c)............ 0.68% 07/25/35 $ 1,458,783
21,056,737 Series 2005-AR29, Class A1 (j)................................... 3.05% 01/25/36 20,341,814
4,040,697 Series 2006-AR6, Class 2A1A, 1 Mo. LIBOR + 0.40% (c)............. 0.48% 06/25/46 3,715,674
5,035,069 Series 2007-FLX4, Class 2A2, 1 Mo. LIBOR + 0.25% (c)............. 0.33% 07/25/37 4,903,987
JP Morgan Mortgage Trust
1,788,410 Series 2006-A4, Class 1A1 (j).................................... 2.86% 06/25/36 1,558,385
Lehman XS Trust
287,160 Series 2006-16N, Class A4A, 1 Mo. LIBOR + 0.19% (c).............. 0.27% 11/25/46 276,023
5,553,383 Series 2007-16N, Class 1A1, 1 Mo. LIBOR + 0.47% (c).............. 0.55% 09/25/47 5,561,543
3,087,105 Series 2007-16N, Class 2A1, 1 Mo. LIBOR + 0.40% (c).............. 0.48% 09/25/47 2,988,008
Merrill Lynch Alternative Note Asset Trust
4,375,010 Series 2007-OAR3, Class A1, 1 Mo. LIBOR + 0.19% (c).............. 0.27% 07/25/47 4,168,774
Morgan Stanley Mortgage Loan Trust
800,707 Series 2004-6AR, Class 1M1, 1 Mo. LIBOR + 0.98% (c).............. 1.06% 07/25/34 813,163
42,895 Series 2005-2AR, Class A, 1 Mo. LIBOR + 0.26% (c)................ 0.34% 04/25/35 42,754
MortgageIT Trust
70,723 Series 2005-5, Class A1, 1 Mo. LIBOR + 0.52% (c)................. 0.60% 12/25/35 71,239
Nomura Resecuritization Trust
1,865,978 Series 2015-5R, Class 1A1 (b).................................... 4.00% 08/26/37 1,908,216
Opteum Mortgage Acceptance Corp.
1,127,792 Series 2005-5, Class 1A1D, 1 Mo. LIBOR + 0.76% (c)............... 0.84% 12/25/35 1,137,224
381,662 Series 2006-1, Class 1APT, 1 Mo. LIBOR + 0.42% (c)............... 0.50% 04/25/36 367,618
RALI Trust
8,286,331 Series 2007-QS7, Class 1A1....................................... 6.00% 05/25/37 8,166,997
3,873,904 Series 2007-QS9, Class A33....................................... 6.50% 07/25/37 3,825,159
RFMSI Trust
8,163,401 Series 2007-S6, Class 1A4........................................ 6.00% 06/25/37 8,042,998
Stanwich Mortgage Loan Co. LLC
3,329,697 Series 2019-RPL1, Class A, steps up to 4.72% on
12/15/22 (b) (f)............................................... 3.72% 02/15/49 3,363,547
Structured Adjustable Rate Mortgage Loan Trust
26,881 Series 2004-12, Class 3A1 (j).................................... 2.45% 09/25/34 27,483
26,879,041 Series 2006-2, Class 4A1 (j)..................................... 3.15% 03/25/36 20,917,896
Structured Asset Mortgage Investments II Trust
2,725,300 Series 2006-AR1, Class 3A1, 1 Mo. LIBOR + 0.46% (c).............. 0.54% 02/25/36 2,626,296
7,747,766 Series 2006-AR7, Class A1A, 1 Mo. LIBOR + 0.42% (c).............. 0.50% 08/25/36 7,841,412
4,041,283 Series 2007-AR6, Class A1, 12 Mo. Treasury Average +
1.50% (c)...................................................... 1.60% 08/25/47 3,971,561
WaMu Mortgage Pass-Through Certificates Trust
93,292 Series 2005-AR1, Class A2A1, 1 Mo. LIBOR + 0.68% (c)............. 0.76% 01/25/45 93,482
175,599 Series 2005-AR15, Class A1A1, 1 Mo. LIBOR + 0.52% (c)............ 0.60% 11/25/45 173,466
244,506 Series 2006-AR3, Class A1A, 12 Mo. Treasury Average +
1.00% (c)...................................................... 1.10% 02/25/46 246,975
364,353 Series 2006-AR4, Class 1A1A, 12 Mo. Treasury Average +
0.94% (c)...................................................... 1.05% 05/25/46 361,698
--------------
280,772,736
--------------
</TABLE>
See Notes to Financial Statements Page 39
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
MORTGAGE-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
COMMERCIAL MORTGAGE-BACKED SECURITIES -- 2.3%
BX Commercial Mortgage Trust
$ 9,741,001 Series 2019-XL, Class A, 1 Mo. LIBOR + 0.92% (b) (c)............. 1.02% 10/15/36 $ 9,766,402
Citigroup Commercial Mortgage Trust
14,620,261 Series 2020-WSS, Class A, 1 Mo. LIBOR + 1.95% (b) (c)............ 2.05% 02/15/39 15,162,894
COMM Mortgage Trust
8,249,616 Series 2012-CR4, Class A3........................................ 2.85% 10/15/45 8,422,751
206,646 Series 2012-CR5, Class A3........................................ 2.54% 12/10/45 209,882
315,000 Series 2012-CR5, Class A4........................................ 2.77% 12/10/45 322,702
13,200,000 Series 2013-SFS, Class A2 (b) (j)................................ 3.09% 04/12/35 13,511,744
DBJPM Mortgage Trust
2,050,000 Series 2016-SFC, Class A (b)..................................... 2.83% 08/10/36 2,118,641
DROP Mortgage Trust
12,284,000 Series 2021-FILE, Class B, 1 Mo. LIBOR + 1.70% (b) (c)........... 1.80% 04/15/26 12,345,784
Eleven Madison Mortgage Trust
305,000 Series 2015-11MD, Class A (b) (j)................................ 3.67% 09/10/35 331,754
GS Mortgage Securities Corp. Trust
25,000,000 Series 2012-ALOH, Class A (b).................................... 3.55% 04/10/34 25,190,725
9,581,658 Series 2019-70P, Class A, 1 Mo. LIBOR + 1.00% (b) (c)............ 1.10% 10/15/36 9,592,479
JP Morgan Chase Commercial Mortgage Securities Trust
5,575,809 Series 2012-HSBC, Class A (b).................................... 3.09% 07/05/32 5,670,914
Manhattan West
3,855,000 Series 2020-1MW, Class A (b)..................................... 2.13% 09/10/39 3,980,445
MKT Mortgage Trust
1,730,000 Series 2020-525M, Class A (b).................................... 2.69% 02/12/40 1,832,774
Natixis Commercial Mortgage Securities Trust
1,490,000 Series 2020-2PAC, Class A (b).................................... 2.97% 12/15/38 1,562,845
SFAVE Commercial Mortgage Securities Trust
9,265,000 Series 2015-5AVE, Class A2A (b) (j).............................. 3.66% 01/05/43 10,383,966
50,000 Series 2015-5AVE, Class A2B (b) (j).............................. 4.14% 01/05/43 55,560
UBS-Barclays Commercial Mortgage Trust
242,490 Series 2013-C6, Class A3......................................... 2.97% 04/10/46 248,890
--------------
120,711,152
--------------
TOTAL MORTGAGE-BACKED SECURITIES............................................................... 401,483,888
(Cost $401,878,115) --------------
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (U.S. DOLLAR)
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
FOREIGN CORPORATE BONDS AND NOTES -- 5.2%
AGRICULTURE -- 0.2%
2,325,000 Imperial Brands Finance PLC (USD) (b)............................... 3.13% 07/26/24 2,452,341
5,085,000 Imperial Brands Finance PLC (USD) (b)............................... 4.25% 07/21/25 5,586,589
--------------
8,038,930
--------------
AIRLINES -- 0.0%
634,800 Air Canada Pass-Through Trust, Series 2017-1, Class AA
(USD) (b)........................................................ 3.30% 01/15/30 647,397
--------------
</TABLE>
Page 40 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (U.S. DOLLAR)
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
FOREIGN CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
BANKS -- 2.3%
460,000 Credit Suisse Group AG (USD)........................................ 4.55% 04/17/26 $ 521,179
4,095,000 Credit Suisse Group AG (USD) (b) (d)................................ 2.19% 06/05/26 4,203,328
13,020,000 Credit Suisse Group AG (USD) (b) (d)................................ 1.31% 02/02/27 12,822,475
3,365,000 Credit Suisse Group AG (USD) (b).................................... 4.28% 01/09/28 3,765,420
4,760,000 Credit Suisse Group AG (USD) (b) (d)................................ 3.09% 05/14/32 4,968,808
400,000 Global Bank Corp. (USD) (d) (l)..................................... 5.25% 04/16/29 428,082
4,310,000 HSBC Holdings PLC (USD) (d)......................................... 0.98% 05/24/25 4,313,386
20,000 HSBC Holdings PLC (USD) (d)......................................... 2.63% 11/07/25 20,944
6,920,000 HSBC Holdings PLC (USD) (d)......................................... 4.29% 09/12/26 7,691,473
6,665,000 HSBC Holdings PLC (USD) (d)......................................... 1.59% 05/24/27 6,690,252
7,100,000 HSBC Holdings PLC (USD) (d)......................................... 2.01% 09/22/28 7,171,504
7,800,000 HSBC Holdings PLC (USD) (d)......................................... 2.21% 08/17/29 7,867,441
1,870,000 Lloyds Banking Group PLC (USD)...................................... 3.90% 03/12/24 2,019,370
4,280,000 Lloyds Banking Group PLC (USD) (d).................................. 3.87% 07/09/25 4,636,745
5,000,000 Lloyds Banking Group PLC (USD) (d).................................. 1.63% 05/11/27 5,021,312
7,600,000 Macquarie Group Ltd. (USD) (b) (d).................................. 1.34% 01/12/27 7,580,011
8,170,000 NatWest Group PLC (USD) (d)......................................... 4.27% 03/22/25 8,858,543
9,565,000 Santander UK Group Holdings PLC (USD) (d)........................... 4.80% 11/15/24 10,398,891
10,045,000 Santander UK Group Holdings PLC (USD) (d)........................... 1.09% 03/15/25 10,076,984
1,585,000 Santander UK Group Holdings PLC (USD) (d)........................... 1.53% 08/21/26 1,593,409
2,855,000 Santander UK Group Holdings PLC (USD) (d)........................... 1.67% 06/14/27 2,866,314
1,190,000 Santander UK Group Holdings PLC (USD) (d)........................... 3.82% 11/03/28 1,315,627
7,900,000 UBS AG (USD), SOFR + 0.45% (b) (c).................................. 0.50% 08/09/24 7,945,709
--------------
122,777,207
--------------
BEVERAGES -- 0.2%
6,760,000 Bacardi Ltd. (USD) (b).............................................. 4.45% 05/15/25 7,509,745
245,000 Bacardi Ltd. (USD) (b).............................................. 4.70% 05/15/28 286,156
385,000 Bacardi Ltd. (USD) (b).............................................. 5.30% 05/15/48 513,555
1,800,000 Diageo Capital PLC (USD)............................................ 2.13% 04/29/32 1,821,500
--------------
10,130,956
--------------
COMMERCIAL SERVICES -- 0.3%
2,800,000 DP World Crescent Ltd. (USD) (b).................................... 4.85% 09/26/28 3,218,152
1,689,000 IHS Markit Ltd. (USD) (b)........................................... 5.00% 11/01/22 1,756,475
2,500,000 IHS Markit Ltd. (USD)............................................... 3.63% 05/01/24 2,667,000
3,510,000 IHS Markit Ltd. (USD) (b)........................................... 4.75% 02/15/25 3,901,716
5,865,000 IHS Markit Ltd. (USD) (b)........................................... 4.00% 03/01/26 6,488,743
250,000 IHS Markit Ltd. (USD)............................................... 4.75% 08/01/28 296,179
--------------
18,328,265
--------------
DIVERSIFIED FINANCIAL SERVICES -- 0.6%
1,500,000 AerCap Ireland Capital DAC / AerCap Global Aviation
Trust (USD)...................................................... 3.95% 02/01/22 1,517,079
1,100,000 AerCap Ireland Capital DAC / AerCap Global Aviation
Trust (USD)...................................................... 3.50% 05/26/22 1,121,140
3,111,000 AerCap Ireland Capital DAC / AerCap Global Aviation
Trust (USD)...................................................... 4.88% 01/16/24 3,378,163
2,930,000 AerCap Ireland Capital DAC / AerCap Global Aviation
Trust (USD)...................................................... 2.88% 08/14/24 3,056,897
1,000,000 AerCap Ireland Capital DAC / AerCap Global Aviation
Trust (USD)...................................................... 3.50% 01/15/25 1,059,049
</TABLE>
See Notes to Financial Statements Page 41
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (U.S. DOLLAR)
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
FOREIGN CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
DIVERSIFIED FINANCIAL SERVICES (CONTINUED)
1,185,000 AerCap Ireland Capital DAC / AerCap Global Aviation
Trust (USD)...................................................... 4.45% 10/01/25 $ 1,301,560
135,000 Avolon Holdings Funding Ltd. (USD) (b).............................. 5.25% 05/15/24 148,123
1,755,000 Avolon Holdings Funding Ltd. (USD) (b).............................. 2.88% 02/15/25 1,810,597
5,121,518 Avolon Holdings Funding Ltd. (USD) (b).............................. 2.53% 11/18/27 5,088,283
840,000 Fondo Mivivienda S.A. (USD) (l)..................................... 3.50% 01/31/23 866,284
7,750,000 GE Capital International Funding Co. Unlimited Co. (USD)............ 4.42% 11/15/35 9,412,201
850,000 Park Aerospace Holdings Ltd. (USD) (b).............................. 4.50% 03/15/23 892,281
467,000 Park Aerospace Holdings Ltd. (USD) (b).............................. 5.50% 02/15/24 512,679
--------------
30,164,336
--------------
ELECTRIC -- 0.0%
1,200,000 Empresas Publicas de Medellin ESP (USD) (l)......................... 4.38% 02/15/31 1,188,024
600,000 Minejesa Capital B.V. (USD) (b)..................................... 5.63% 08/10/37 651,537
250,000 Mong Duong Finance Holdings B.V. (USD) (l).......................... 5.13% 05/07/29 251,563
--------------
2,091,124
--------------
FOOD -- 0.0%
150,000 JBS USA LUX S.A. / JBS USA Food Co. / JBS USA Finance, Inc.
(USD) (b)........................................................ 5.50% 01/15/30 169,470
--------------
INTERNET -- 0.1%
2,775,000 Tencent Holdings Ltd. (USD) (b)..................................... 3.98% 04/11/29 3,080,267
4,540,000 Tencent Holdings Ltd. (USD) (b)..................................... 3.84% 04/22/51 4,920,177
--------------
8,000,444
--------------
MEDIA -- 0.1%
345,000 Virgin Media Secured Finance PLC (USD) (b).......................... 5.50% 05/15/29 370,013
6,737,000 Virgin Media Secured Finance PLC (USD) (b).......................... 4.50% 08/15/30 6,841,760
--------------
7,211,773
--------------
MINING -- 0.2%
267,000 Corp. Nacional del Cobre de Chile (USD) (l)......................... 4.50% 09/16/25 299,108
3,947,000 Corp. Nacional del Cobre de Chile (USD) (l)......................... 3.15% 01/14/30 4,172,591
2,860,000 Indonesia Asahan Aluminium Persero PT (USD) (b)..................... 6.53% 11/15/28 3,515,898
600,000 Indonesia Asahan Aluminium Persero PT (USD) (b)..................... 5.45% 05/15/30 702,180
--------------
8,689,777
--------------
OIL & GAS -- 0.4%
1,600,000 KazMunayGas National Co. JSC (USD) (b).............................. 3.50% 04/14/33 1,677,600
1,133,000 KazMunayGas National Co. JSC (USD) (l).............................. 5.38% 04/24/30 1,359,588
1,567,000 KazMunayGas National Co. JSC (USD) (l).............................. 3.50% 04/14/33 1,642,999
235,000 KazMunayGas National Co. JSC (USD) (l).............................. 5.75% 04/19/47 292,500
2,504,000 Pertamina Persero PT (USD) (b)...................................... 3.10% 08/27/30 2,620,385
215,000 Petroleos Mexicanos (USD)........................................... 6.63% 06/15/35 208,546
2,430,000 Petroleos Mexicanos (USD)........................................... 6.75% 09/21/47 2,149,335
3,095,000 Petroleos Mexicanos (USD)........................................... 7.69% 01/23/50 2,977,421
1,705,000 Petroleos Mexicanos (USD)........................................... 6.95% 01/28/60 1,506,896
2,913,000 Petronas Capital Ltd. (USD) (b)..................................... 3.50% 04/21/30 3,214,442
1,650,000 Petronas Capital Ltd. (USD) (b)..................................... 2.48% 01/28/32 1,682,219
1,150,000 Saudi Arabian Oil Co. (USD) (b)..................................... 2.25% 11/24/30 1,144,296
650,000 Saudi Arabian Oil Co. (USD) (l)..................................... 1.63% 11/24/25 657,345
158,790 Transocean Pontus Ltd. (USD) (b).................................... 6.13% 08/01/25 158,040
517,000 Transocean Poseidon Ltd. (USD) (b).................................. 6.88% 02/01/27 500,844
--------------
21,792,456
--------------
</TABLE>
Page 42 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (U.S. DOLLAR)
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
FOREIGN CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
OIL & GAS SERVICES -- 0.1%
1,781,447 Transocean Phoenix 2 Ltd. (USD) (b)................................. 7.75% 10/15/24 $ 1,810,396
2,763,750 Transocean Proteus Ltd. (USD) (b)................................... 6.25% 12/01/24 2,725,748
--------------
4,536,144
--------------
PHARMACEUTICALS -- 0.0%
625,000 Bayer US Finance II LLC (USD) (b)................................... 2.85% 04/15/25 649,853
2,481,000 Endo Dac / Endo Finance LLC / Endo Finco, Inc. (USD) (b)............ 6.00% 06/30/28 1,554,036
--------------
2,203,889
--------------
PIPELINES -- 0.1%
1,800,000 Galaxy Pipeline Assets Bidco Ltd. (USD) (b)......................... 2.16% 03/31/34 1,795,788
800,000 Southern Gas Corridor CJSC (USD) (l)................................ 6.88% 03/24/26 949,916
--------------
2,745,704
--------------
RETAIL -- 0.1%
100,000 Alimentation Couche-Tard, Inc. (USD) (b)............................ 3.55% 07/26/27 110,704
4,230,000 Alimentation Couche-Tard, Inc. (USD) (b)............................ 3.80% 01/25/50 4,637,210
--------------
4,747,914
--------------
SAVINGS & LOANS -- 0.3%
4,895,000 Nationwide Building Society (USD) (b) (d)........................... 3.62% 04/26/23 4,996,892
6,645,000 Nationwide Building Society (USD) (b) (d)........................... 3.77% 03/08/24 6,949,878
1,300,000 Nationwide Building Society (USD) (b) (d)........................... 4.36% 08/01/24 1,387,442
--------------
13,334,212
--------------
TELECOMMUNICATIONS -- 0.2%
400,000 C&W Senior Financing DAC (USD) (b).................................. 6.88% 09/15/27 425,740
2,000,000 Intelsat Jackson Holdings S.A. (USD) (m)............................ 5.50% 08/01/23 1,057,500
3,860,000 Intelsat Jackson Holdings S.A. (USD) (b) (m)........................ 8.50% 10/15/24 2,089,225
390,000 Intelsat Jackson Holdings S.A. (USD) (b) (m)........................ 9.75% 07/15/25 211,088
500,000 SES S.A. (USD) (b).................................................. 3.60% 04/04/23 521,336
2,777,000 Vodafone Group PLC (USD)............................................ 4.88% 06/19/49 3,574,868
1,375,000 Vodafone Group PLC (USD)............................................ 4.25% 09/17/50 1,620,504
--------------
9,500,261
--------------
TRANSPORTATION -- 0.0%
726,000 Empresa de Transporte de Pasajeros Metro S.A. (USD) (b)............. 3.65% 05/07/30 795,236
--------------
TOTAL FOREIGN CORPORATE BONDS AND NOTES........................................................ 275,905,495
(Cost $273,776,271) --------------
PRINCIPAL STATED
VALUE DESCRIPTION RATE (n) MATURITY (o) VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
SENIOR FLOATING-RATE LOAN INTERESTS -- 1.8%
CABLE AND SATELLITE -- 0.1%
$ 1,000,000 DIRECTV Financing, LLC, Term Loan, 1 Mo. LIBOR + 5.00%,
0.75% Floor...................................................... 5.75% 08/02/27 999,430
2,338,010 EagleView Technology Corp. Term Loan B, 3 Mo. LIBOR + 3.50%,
0.00% Floor...................................................... 3.64% 08/14/25 2,302,940
725,000 Virgin Media Bristol LLC, Term Loan N, 1 Mo. LIBOR + 2.50%,
0.00% Floor...................................................... 2.60% 01/31/28 716,844
--------------
4,019,214
--------------
</TABLE>
See Notes to Financial Statements Page 43
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED
VALUE DESCRIPTION RATE (n) MATURITY (o) VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
SENIOR FLOATING-RATE LOAN INTERESTS (CONTINUED)
<S> <C> <C> <C> <C>
CONSUMER PRODUCTS -- 0.1%
$ 7,118,151 Zep, Inc., Term Loan B, 3 Mo. LIBOR + 4.00%, 1.00% Floor............ 5.00% 08/11/24 $ 6,869,016
--------------
DIVERSIFIED MANUFACTURING -- 0.0%
1,290,101 Mirion Technologies, Inc., Term Loan B, 3 Mo. LIBOR + 4.00%,
0.00% Floor...................................................... 4.23% - 4.27% 03/06/26 1,288,089
--------------
ENTERTAINMENT -- 0.0%
641 Caesars Resort Collection, LLC, Term Loan B, 3 Mo. LIBOR +
2.75%, 0.00% Floor............................................... 2.85% 12/22/24 635
--------------
ENVIRONMENTAL -- 0.0%
241,698 GFL Environmental, Inc., Term Loan B, 1 Mo. LIBOR + 3.00%,
0.50% Floor...................................................... 3.50% 05/31/25 241,785
--------------
FINANCE COMPANIES -- 0.1%
5,000,000 Avolon TLB Borrower 1 (U.S.) LLC, Term Loan B, 1 Mo. LIBOR +
2.25%, 0.50% Floor............................................... 2.75% 12/01/27 4,996,100
--------------
FOOD AND BEVERAGE -- 0.0%
175,056 Hostess Brands, LLC, Term Loan B, 1 Mo. LIBOR + 2.25%, 0.75%
Floor............................................................ 3.00% 08/03/25 173,962
1,629 Hostess Brands, LLC, Term Loan B, 2 Mo. LIBOR + 2.25%, 0.75%
Floor............................................................ 3.00% 08/03/25 1,619
463,541 Hostess Brands, LLC, Term Loan B, 3 Mo. LIBOR + 2.25%, 0.75%
Floor............................................................ 3.00% 08/03/25 460,643
--------------
636,224
--------------
GAMING -- 0.0%
250,000 VICI Properties 1 LLC, Term Loan B, 1 Mo. LIBOR + 1.75%,
0.00% Floor...................................................... 1.84% 12/22/24 248,465
--------------
HEALTHCARE -- 0.2%
2,144,625 ADMI Corp., Term Loan B, 1 Mo. LIBOR + 3.13%, 0.50%
Floor............................................................ 3.63% 12/23/27 2,112,906
893,216 CPI Holdco, LLC, Term Loan B, 1 Mo. LIBOR + 4.00%, 0.00%
Floor............................................................ 3.83% 11/04/26 891,305
1,388,120 Gentiva Health Services, Inc., Term Loan B, 1 Mo. LIBOR + 2.75%,
0.00% Floor...................................................... 2.88% 07/02/25 1,384,650
3,828,068 Grifols Worldwide Operations Ltd., Term Loan B, 1 Mo. LIBOR +
2.00%, 0.00% Floor............................................... 2.09% 11/15/27 3,774,475
2,073,409 ICON Luxemburg S.A.R.L., Term Loan B, 1 Mo. LIBOR + 2.50%,
0.50% Floor...................................................... 3.00% 07/01/28 2,071,252
1,465,563 Pathway Vet Alliance LLC, Term Loan A, 1 Mo. LIBOR + 3.75%,
0.00% Floor...................................................... 3.84% 03/31/27 1,455,714
516,591 PRA Health Sciences, Term Loan, 1 Mo. LIBOR + 2.50%, 0.50%
Floor............................................................ 3.00% 07/01/28 516,054
--------------
12,206,356
--------------
INSURANCE -- 0.1%
4,975,000 AmWINS Group, Inc., Term Loan B, 1 Mo. LIBOR + 2.25%, 0.75%
Floor............................................................ 3.00% 02/19/28 4,924,553
--------------
LEISURE -- 0.1%
3,231,658 Cineworld Group PLC (Crown), Priority Term Loan B-1, Fixed Rate
at 15.25% (p).................................................... 15.25% 05/23/24 3,970,706
--------------
</TABLE>
Page 44 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED
VALUE DESCRIPTION RATE (n) MATURITY (o) VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
SENIOR FLOATING-RATE LOAN INTERESTS (CONTINUED)
<S> <C> <C> <C> <C>
MEDIA ENTERTAINMENT -- 0.0%
$ 947,589 Diamond Sports Group, LLC, Term Loan, 1 Mo. LIBOR + 3.25%,
0.00% Floor...................................................... 3.35% 08/24/26 $ 589,476
--------------
MEDICAL EQUIPMENT & DEVICES -- 0.1%
4,228,750 Avantor Funding, Inc., Term Loan B, 1 Mo. LIBOR + 2.25%, 0.50%
Floor............................................................ 2.75% 11/06/27 4,223,464
--------------
PACKAGING -- 0.2%
1,273,386 Berry Global, Inc., Term Loan Z, 1 Mo. LIBOR + 1.75%, 0.00%
Floor............................................................ 1.85% 07/01/26 1,261,186
3,144,786 Charter NEX U.S., Inc., Term Loan, 1 Mo. LIBOR + 3.75%, 0.75%
Floor............................................................ 4.50% 12/01/27 3,144,283
1,542,250 Plaze, Inc., Term Loan B, 1 Mo. LIBOR + 3.75%, 0.75% Floor.......... 4.50% 08/03/26 1,530,683
2,224,187 Proampac PG Borrower LLC, Term Loan B, 1 Mo. LIBOR + 3.75%,
0.75% Floor...................................................... 4.50% 11/03/25 2,222,808
--------------
8,158,960
--------------
PHARMACEUTICALS -- 0.3%
5,054,811 Elanco Animal Health, Inc., Term Loan B, 1 Mo. LIBOR + 1.75%,
0.00% Floor...................................................... 1.85% 08/01/27 4,963,623
4,339,125 Horizon Therapeutics USA, Inc., Term Loan B, 1 Mo. LIBOR +
2.00%, 0.50% Floor............................................... 2.50% 03/15/28 4,317,429
2,375,000 Jazz Financing LUX SARL, Term Loan B, 1 Mo. LIBOR + 3.50%,
0.50% Floor...................................................... 4.00% 05/05/28 2,375,000
4,000,000 Organon & Co., Term Loan, 1 Mo. LIBOR + 3.00%, 0.50%
Floor............................................................ 3.50% 06/02/28 4,011,680
--------------
15,667,732
--------------
RESTAURANTS -- 0.1%
3,696,419 Northeast Foods LLC, Term Loan B, 3 Mo. LIBOR + 3.75%, 0.00%
Floor............................................................ 3.85% 07/20/25 3,664,076
--------------
SERVICES -- 0.0%
1,690,763 Spin Holdco Inc., Term Loan, 1 Mo. LIBOR + 4.00%, 0.75%
Floor............................................................ 4.75% 03/04/28 1,691,608
--------------
TECHNOLOGY -- 0.2%
3,989,848 Commscope, Inc., Term Loan B2, 3 Mo. LIBOR + 3.25%, 0.00%
Floor............................................................ 3.34% 04/04/26 3,940,972
4,001,473 Waystar Technologies, Inc., Term Loan B, 1 Mo. LIBOR + 4.00%,
0.00% Floor...................................................... 4.10% 10/23/26 3,988,988
--------------
7,929,960
--------------
TELECOMMUNICATIONS -- 0.0%
2,000,000 Intelsat Jackson Holdings S.A., Term Loan B, 1 Mo. LIBOR + 4.75%,
1.00% Floor...................................................... 8.00% 11/27/23 2,028,760
1,250,000 Intelsat Jackson Holdings S.A., Term Loan B......................... 6.63% 01/02/24 1,269,725
--------------
3,298,485
--------------
WIRELINES -- 0.2%
7,360,000 Level 3 Financing, Inc., Term Loan B, 1 Mo. LIBOR + 1.75%,
0.00% Floor...................................................... 1.84% 03/01/27 7,249,600
2,236,149 Lumen Technologies, Inc., Term Loan B, 1 Mo. LIBOR + 2.25%,
0.00% Floor...................................................... 2.34% 03/15/27 2,207,258
--------------
9,456,858
--------------
TOTAL SENIOR FLOATING-RATE LOAN INTERESTS...................................................... 94,081,762
(Cost $94,247,833) --------------
</TABLE>
See Notes to Financial Statements Page 45
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (U.S. DOLLAR)
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
FOREIGN SOVEREIGN BONDS AND NOTES -- 1.6%
<S> <C> <C> <C> <C>
BRAZIL -- 0.1%
1,200,000 Brazilian Government International Bond (USD)....................... 2.88% 06/06/25 $ 1,240,692
3,830,000 Brazilian Government International Bond (USD)....................... 3.88% 06/12/30 3,846,661
--------------
5,087,353
--------------
CHILE -- 0.1%
3,100,000 Chile Government International Bond (USD)........................... 2.45% 01/31/31 3,185,219
300,000 Chile Government International Bond (USD)........................... 2.55% 01/27/32 308,931
--------------
3,494,150
--------------
COLOMBIA -- 0.1%
6,785,000 Colombia Government International Bond (USD)........................ 3.00% 01/30/30 6,666,704
--------------
DOMINICAN REPUBLIC -- 0.1%
3,485,000 Dominican Republic International Bond (USD) (b)..................... 4.50% 01/30/30 3,633,147
1,680,000 Dominican Republic International Bond (USD) (l)..................... 4.88% 09/23/32 1,768,217
--------------
5,401,364
--------------
EGYPT -- 0.1%
800,000 Egypt Government International Bond (USD) (l)....................... 5.25% 10/06/25 844,080
1,200,000 Egypt Government International Bond (USD) (b)....................... 7.60% 03/01/29 1,320,180
--------------
2,164,260
--------------
INDONESIA -- 0.1%
957,000 Indonesia Government International Bond (USD)....................... 2.85% 02/14/30 1,007,467
2,600,000 Perusahaan Penerbit SBSN Indonesia III (USD) (b).................... 2.80% 06/23/30 2,705,534
--------------
3,713,001
--------------
MEXICO -- 0.2%
4,500,000 Mexico Government International Bond (USD).......................... 3.75% 01/11/28 4,979,452
4,772,000 Mexico Government International Bond (USD).......................... 2.66% 05/24/31 4,736,544
1,400,000 Mexico Government International Bond (USD).......................... 4.75% 04/27/32 1,625,498
310,000 Mexico Government International Bond (USD).......................... 3.77% 05/24/61 296,213
--------------
11,637,707
--------------
PANAMA -- 0.1%
5,583,000 Panama Government International Bond (USD).......................... 3.16% 01/23/30 5,923,228
500,000 Panama Government International Bond (USD).......................... 2.25% 09/29/32 488,465
--------------
6,411,693
--------------
PARAGUAY -- 0.1%
3,300,000 Paraguay Government International Bond (USD) (b).................... 4.95% 04/28/31 3,832,158
647,000 Paraguay Government International Bond (USD) (b).................... 2.74% 01/29/33 644,574
--------------
4,476,732
--------------
PERU -- 0.1%
4,775,000 Peruvian Government International Bond (USD)........................ 2.84% 06/20/30 4,946,423
--------------
PHILIPPINES -- 0.0%
1,570,000 Philippine Government International Bond (USD)...................... 2.46% 05/05/30 1,659,264
240,000 Philippine Government International Bond (USD)...................... 1.65% 06/10/31 236,693
--------------
1,895,957
--------------
QATAR -- 0.1%
3,724,000 Qatar Government International Bond (USD) (l)....................... 4.50% 04/23/28 4,403,630
1,900,000 Qatar Government International Bond (USD) (l)....................... 3.75% 04/16/30 2,168,751
250,000 Qatar Government International Bond (USD) (l)....................... 4.63% 06/02/46 317,500
--------------
6,889,881
--------------
</TABLE>
Page 46 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (U.S. DOLLAR)
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
FOREIGN SOVEREIGN BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
ROMANIA -- 0.1%
3,000,000 Romanian Government International Bond (USD) (l).................... 3.00% 02/14/31 $ 3,137,370
--------------
SAUDI ARABIA -- 0.1%
800,000 Saudi Government International Bond (USD) (l)....................... 3.25% 10/26/26 870,404
3,340,000 Saudi Government International Bond (USD) (l)....................... 3.63% 03/04/28 3,709,063
860,000 Saudi Government International Bond (USD) (b)....................... 2.75% 02/03/32 895,032
--------------
5,474,499
--------------
SOUTH AFRICA -- 0.1%
6,024,000 Republic of South Africa Government International Bond (USD)........ 4.85% 09/30/29 6,384,994
--------------
TURKEY -- 0.0%
1,200,000 Turkey Government International Bond (USD).......................... 3.25% 03/23/23 1,207,370
--------------
UNITED ARAB EMIRATES -- 0.0%
2,037,000 Abu Dhabi Government International Bond (USD) (l)................... 2.50% 09/30/29 2,158,540
--------------
URUGUAY -- 0.1%
3,260,000 Uruguay Government International Bond (USD)......................... 4.38% 01/23/31 3,833,010
--------------
TOTAL FOREIGN SOVEREIGN BONDS AND NOTES........................................................ 84,981,008
(Cost $85,065,742) --------------
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
MUNICIPAL BONDS -- 0.9%
CALIFORNIA -- 0.3%
$ 4,040,000 City of San Francisco CA Public Utilities Commission Water Rev.. 2.83% 11/01/41 4,159,324
2,585,000 Los Angeles CA Unif School District................................. 5.75% 07/01/34 3,488,793
4,715,000 Regents of the Univ of CA Medical Center Pooled Rev................. 3.26% 05/15/60 5,052,411
--------------
12,700,528
--------------
FLORIDA -- 0.0%
2,000,000 Cnty of Miami-Dade FL Aviation Rev.................................. 2.53% 10/01/30 2,078,672
--------------
MASSACHUSETTS -- 0.0%
1,845,000 Massachusetts Sch Bldg Auth......................................... 2.97% 10/15/32 1,999,099
--------------
NEW JERSEY -- 0.1%
2,000,000 NJ St Turnpike Auth Rev............................................. 1.86% 01/01/31 2,006,730
500,000 NJ St Turnpike Auth Rev............................................. 3.73% 01/01/36 591,774
--------------
2,598,504
--------------
NEW YORK -- 0.5%
3,170,000 City of New York NY................................................. 3.62% 04/01/31 3,535,463
3,620,000 City of New York NY................................................. 1.92% 08/01/31 3,638,902
1,225,000 Metro Transprtn Auth................................................ 5.18% 11/15/49 1,694,894
400,000 New York City NY Transitional Fin Auth Rev Qualified Sch Constr,
Ser BD G-3....................................................... 5.27% 05/01/27 483,017
970,000 New York City NY Transitional Fin Auth Rev, Ser A-3................. 3.96% 08/01/32 1,098,808
6,940,000 New York City NY Transitional Fin Auth Rev, Ser B-3................. 1.85% 08/01/32 6,905,182
5,140,000 New York State Urban Development Corp............................... 2.97% 03/15/34 5,513,501
2,690,000 NY St Dorm Auth..................................................... 5.00% 03/15/24 2,982,690
1,405,000 NY St Dorm Auth..................................................... 2.96% 02/15/32 1,531,937
--------------
27,384,394
--------------
TOTAL MUNICIPAL BONDS.......................................................................... 46,761,197
(Cost $45,412,544) --------------
</TABLE>
See Notes to Financial Statements Page 47
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
U.S. TREASURY BILLS -- 10.8%
<S> <C> <C> <C> <C>
$ 36,725,000 U.S. Cash Management Bill........................................... (q) 12/14/21 $ 36,720,968
43,090,000 U.S. Cash Management Bill........................................... (q) 12/21/21 43,084,951
80,785,000 U.S. Treasury Bill.................................................. (q) 10/05/21 80,782,116
27,770,000 U.S. Treasury Bill.................................................. (q) 10/07/21 27,768,959
238,750,000 U.S. Treasury Bill.................................................. (q) 12/09/21 238,722,095
56,430,000 U.S. Treasury Bill.................................................. (q) 01/06/22 56,422,037
13,970,000 U.S. Treasury Bill.................................................. (q) 01/13/22 13,967,920
60,415,000 U.S. Treasury Bill.................................................. (q) 01/20/22 60,405,535
15,695,000 U.S. Treasury Bill.................................................. (q) 02/10/22 15,691,998
--------------
TOTAL U.S. TREASURY BILLS....................................................................... 573,566,579
(Cost $573,568,022) --------------
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 2.6%
<S> <C> <C>
138,848,485 JPMorgan 100% U.S. Treasury Securities Money Market Fund - Institutional Class - 0.01% (r)..... 138,848,485
(Cost $138,848,485) --------------
TOTAL INVESTMENTS -- 123.0%.................................................................... 6,516,091,175
(Cost $6,458,981,728) (s) --------------
NOTIONAL EXERCISE EXPIRATION
DESCRIPTION COUNTERPARTY AMOUNT RATE DATE VALUE
---------------------------------------------------- -------------- -------------- ----------- ------------ --------------
PUT SWAPTIONS PURCHASED -- 0.0%
<S> <C> <C> <C> <C> <C>
30 Year Interest Rate Swap, Pays 2.75% Semi-
Annual, Receives 3 Mo. LIBOR Quarterly Barclays PLC $ 19,380,000 2.75% 01/23/54 527,389
(Cost $571,710) --------------
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- ---------------------------------------------------- -------------- ----------- ------------ --------------
PURCHASED OPTIONS -- 0.0%
PUT OPTIONS PURCHASED -- 0.0%
3,170 Eurodollar 2-Year Mid-Curve Options
Futures Put...................................... $ 791,113,125 $99.13 12/10/21 1,525,562
(Cost $1,391,414) --------------
WRITTEN OPTIONS -- (0.0)%
PUT OPTIONS WRITTEN -- (0.0)%
(6,340) Eurodollar 2-Year Mid-Curve Options
Futures Put...................................... (1,582,226,250) 98.75 12/10/21 (871,750)
(Premiums received $894,422) --------------
NET OTHER ASSETS AND LIABILITIES -- (23.0)%.................................................. (1,219,604,904)
--------------
NET ASSETS -- 100.0%......................................................................... $5,297,667,472
==============
</TABLE>
Page 48 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
Futures Contracts at August 31, 2021 (See Note 2D - Futures Contracts in the
Notes to Financial Statements):
<TABLE>
<CAPTION>
UNREALIZED
APPRECIATION
NUMBER OF (DEPRECIATION)/
FUTURES CONTRACTS POSITION CONTRACTS EXPIRATION DATE NOTIONAL VALUE VALUE
----------------------------------- ---------------- --------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
U.S. Treasury Ultra Bond Futures Long 33 Dec-2021 $ 6,510,281 $ 15,378
U.S. 2-Year Treasury Notes Short 4 Dec-2021 (881,312) (586)
U.S. 10-Year Ultra Treasury Notes Short 57 Dec-2021 (8,436,891) (8,156)
------------- -----------
$ (2,807,922) $ 6,636
============= ===========
</TABLE>
Interest Rate Swap Agreements at August 31, 2021 (see Note 2F - Swap Agreements
in the Notes to Financial Statements):
<TABLE>
<CAPTION>
UNREALIZED
APPRECIATION
FLOATING EXPIRATION NOTIONAL (DEPRECIATION)/
COUNTERPARTY RATE DATE VALUE FIXED RATE VALUE
----------------------------------- ---------------- --------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Citibank, Global Markets, Inc. 3 month LIBOR(1) 07/24/2025 $ 117,450,000 1.026%(1) $ (173,804)
Citibank, Global Markets, Inc. 3 month LIBOR(1) 07/24/2025 86,880,000 1.034%(1) (114,837)
Citibank, Global Markets, Inc 3 month LIBOR(1) 07/24/2025 58,725,000 1.073%(1) (32,379)
Citibank, Global Markets, Inc 3 month LIBOR(2) 07/24/2053 9,810,000 1.773%(2) 35,356
Citibank, Global Markets, Inc 3 month LIBOR(2) 07/24/2053 7,260,000 1.785%(2) 4,352
Citibank, Global Markets, Inc 3 month LIBOR(2) 07/24/2053 4,905,000 1.807%(2) (23,589)
--------------- -----------
$ 285,030,000 $ (304,901)
=============== ===========
</TABLE>
(1) The Fund pays the floating rate and receives the fixed rate. The floating
rate is not effective until 07/24/2023 and no interest is being accrued
until that date.
(2) The Fund pays the fixed rate and receives the floating rate. The floating
rate is not effective until 07/24/2023 and no interest is being accrued
until that date.
-----------------------------
(a) All or a portion of this security is part of a mortgage dollar roll
agreement (see Note 2K - Mortgage Dollar Rolls in the Notes to Financial
Statements).
(b) This security, sold within the terms of a private placement memorandum, 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.
Pursuant to procedures adopted by the Trust's Board of Trustees, this
security has been determined to be liquid by First Trust Advisors L.P.,
the Fund's Advisor (the "Advisor"). Although market instability can result
in periods of increased overall market illiquidity, liquidity for each
security is determined based on security specific factors and assumptions,
which require subjective judgment. At August 31, 2021, securities noted as
such amounted to $800,582,232 or 15.1% of net assets.
(c) Floating or variable rate security.
(d) Fixed-to-floating or fixed-to-variable rate security. The interest rate
shown reflects the fixed rate in effect at August 31, 2021. At a
predetermined date, the fixed rate will change to a floating rate or a
variable rate.
(e) This security, sold within the terms of a private placement memorandum, is
exempt from registration upon resale under Rule 144A under the 1933 act,
and may be resold in transactions exempt from registration, normally to
qualified institutional buyers (see Note 2C - Restricted Securities in the
Notes to Financial Statements).
(f) Step-up security. A security where the coupon increases or steps up at a
predetermined date.
(g) When-issued security. The interest rate shown reflects the rate in effect
at August 31, 2021. Interest will begin accruing on the security's first
settlement date.
(h) 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 August 31, 2021, securities noted as such are valued at
$13,787,139 or 0.3% of net assets.
(i) This security's value was determined using significant unobservable inputs
(See Note 2A - Portfolio Valuation in the Notes to Financial Statements).
(j) Collateral Strip Rate security. Coupon is based on the weighted net
interest rate of the investment's underlying collateral. The interest rate
resets periodically.
See Notes to Financial Statements Page 49
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
(k) Weighted Average Coupon security. Coupon is based on the blended interest
rate of the underlying holdings, which may have different coupons. The
coupon may change in any period.
(l) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(m) This issuer is in default and interest is not being accrued by the Fund
nor paid by the issuer.
(n) Senior Floating-Rate Loan Interests ("Senior Loans") in which the Fund
invests generally pay interest at rates which are periodically
predetermined by reference to a base lending rate plus a premium. These
base lending rates are generally (i) the lending rate offered by one or
more major European banks, such as the LIBOR, (ii) the prime rate offered
by one or more United States banks or (iii) the certificate of deposit
rate. Certain Senior Loans are subject to a LIBOR floor that establishes a
minimum LIBOR rate. When a range of rates is disclosed, the Fund holds
more than one contract within the same tranche with identical LIBOR
period, spread and floor, but different LIBOR reset.
(o) Senior Loans generally are subject to mandatory and/or optional
prepayment. As a result, the actual remaining maturity of Senior Loans may
be substantially less than the stated maturities shown.
(p) The issuer will pay interest on the loans in cash and in Payment-In-Kind
("PIK") interest. Interest paid in cash will accrue at the rate of 7.00%
per annum ("Cash Interest Rate") and PIK interest will accrue on the loan
at the rate of 8.25% per annum. For the fiscal year ended August 31, 2021,
the Fund received a portion of the interest in cash and PIK interest with
a principal value of $141,658 for Cineworld Group PLC.
(q) Zero coupon security
(r) Rate shown reflects yield as of August 31, 2021.
(s) Aggregate cost for federal income tax purposes is $6,462,962,461. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$75,919,647 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$22,561,809. The net unrealized appreciation was $53,357,838. The
unrealized amounts presented are inclusive of derivative contracts
LIBOR - London Interbank Offered Rate
SOFR - Secured Overnight Finance Rate
TBA - To-Be-Announced Security
Currency Abbreviations:
USD - United States Dollar
Page 50 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
---------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C>
U.S. Government Bonds and Notes....................... $ 1,953,000,368 $ -- $ 1,953,000,368 $ --
U.S. Government Agency Mortgage-Backed Securities..... 1,593,952,295 -- 1,593,952,295 --
Corporate Bonds and Notes*............................ 951,737,956 -- 951,737,956 --
Asset-Backed Securities............................... 401,772,142 -- 387,985,003 13,787,139
Mortgage-Backed Securities............................ 401,483,888 -- 401,483,888 --
Foreign Corporate Bonds and Notes*.................... 275,905,495 -- 275,905,495 --
Senior Floating-Rate Loan Interests*.................. 94,081,762 -- 94,081,762 --
Foreign Sovereign Bonds and Notes **.................. 84,981,008 -- 84,981,008 --
Municipal Bonds***.................................... 46,761,197 -- 46,761,197 --
U.S. Treasury Bills................................... 573,566,579 -- 573,566,579 --
Money Market Funds.................................... 138,848,485 138,848,485 -- --
---------------- --------------- ---------------- ----------------
Total Investments..................................... 6,516,091,175 138,848,485 6,363,455,551 13,787,139
Put Swaptions Purchased............................... 527,389 -- 527,389 --
Put Options Purchased................................. 1,525,562 1,525,562 -- --
Futures Contracts****................................. 15,378 15,378 -- --
Interest Rate Swap Agreements......................... 39,708 -- 39,708 --
---------------- --------------- ---------------- ----------------
Total................................................. $ 6,518,199,212 $ 140,389,425 $ 6,364,022,648 $ 13,787,139
================ =============== ================ ================
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
---------------- --------------- ---------------- ----------------
Put Options Written................................... $ (871,750) $ (871,750) $ -- $ --
Futures Contracts****................................. (8,742) (8,742) -- --
Interest Rate Swap Agreements......................... (344,609) -- (344,609) --
---------------- --------------- ---------------- ----------------
Total................................................. $ (1,225,101) $ (880,492) $ (344,609) $ --
================ =============== ================ ================
</TABLE>
* See Portfolio of Investments for industry breakout.
** See Portfolio of Investments for country breakout.
*** See Portfolio of Investments for state breakout.
**** Includes cumulative appreciation/depreciation on futures contracts as
reported in the Futures Contracts table. Only the current day's variation
margin is presented on the Statements of Assets and Liabilities.
Level 3 Investments that are fair valued by the Advisor's Pricing Committee are
footnoted in the Portfolio of Investments. All Level 3 values are based on
unobservable inputs.
See Notes to Financial Statements Page 51
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
ASSET-BACKED SECURITIES -- 18.4%
<S> <C> <C> <C> <C>
321 Henderson Receivables LLC
$ 291,103 Series 2013-2A, Class A (a)...................................... 4.21% 03/15/62 $ 334,882
ABFC Trust
91,121 Series 2007-NC1, Class A2, 1 Mo. LIBOR + 0.30% (a) (b)........... 0.38% 05/25/37 88,001
1,110,831 Series 2007-WMC1, Class A1A, 1 Mo. LIBOR + 1.25% (b)............. 1.33% 06/25/37 991,684
ACE Securities Corp. Home Equity Loan Trust
3,717,176 Series 2006-ASP6, Class A2C, 1 Mo. LIBOR + 0.16% (b)............. 0.24% 12/25/36 1,782,133
906,098 Series 2006-HE3, Class A2C, 1 Mo. LIBOR + 0.30% (b).............. 0.38% 06/25/36 804,027
2,434,301 Series 2007-HE1, Class A1, 1 Mo. LIBOR + 0.30% (b)............... 0.38% 01/25/37 1,628,402
3,291,375 Series 2007-WM2, Class A1, 1 Mo. LIBOR + 0.21% (b)............... 0.29% 02/25/37 1,910,836
AGL CLO Ltd.
1,200,000 Series 2021-12A, Class A1, 3 Mo. LIBOR + 1.16% (a) (b)........... 1.29% 07/20/34 1,201,465
AIG CLO Ltd.
1,600,000 Series 2018-1A, Class BR, 3 Mo. LIBOR + 1.70% (a) (b)............ 1.83% 04/20/32 1,601,200
Ameriquest Mortgage Securities, Inc., Asset Backed Pass-Through
Certificates
670,015 Series 2002-AR1, Class M1, 1 Mo. LIBOR + 1.07% (b)............... 1.16% 09/25/32 693,448
Argent Securities Trust
1,376,674 Series 2006-W2, Class A2B, 1 Mo. LIBOR + 0.38% (b)............... 0.46% 03/25/36 939,055
Argent Securities, Inc., Asset-Backed Pass-Through Certificates
160,000 Series 2005-W3, Class M1, 1 Mo. LIBOR + 0.66% (b)................ 0.74% 11/25/35 158,161
2,200,000 Series 2005-W3, Class M2, 1 Mo. LIBOR + 0.69% (b)................ 0.77% 11/25/35 2,107,225
BCMSC Trust
2,369,065 Series 2000-A, Class A5.......................................... 8.32% 06/15/30 614,899
BNC Mortgage Loan Trust
855,261 Series 2006-2, Class A4, 1 Mo. LIBOR + 0.32% (b)................. 0.40% 11/25/36 845,158
Carrington Mortgage Loan Trust
26,678 Series 2005-NC5, Class M1, 1 Mo. LIBOR + 0.72% (b)............... 0.80% 10/25/35 26,784
C-BASS Trust
2,916,670 Series 2007-CB1, Class AF2 (c)................................... 3.26% 01/25/37 1,319,637
2,889,064 Series 2007-CB1, Class AF3 (c)................................... 3.26% 01/25/37 1,307,107
Cedar Funding XIV CLO Ltd.
1,850,000 Series 2021-14A, Class A, 3 Mo. LIBOR + 1.10% (a) (b)............ 1.19% 07/15/33 1,851,891
Citigroup Mortgage Loan Trust
1,136,273 Series 2006-HE3, Class A2B, 1 Mo. LIBOR + 0.20% (b).............. 0.28% 12/25/36 915,021
Citigroup Mortgage Loan Trust, Inc.
425,000 Series 2007-WFH3, Class M1, 1 Mo. LIBOR + 0.26% (b).............. 0.34% 06/25/37 417,975
Conseco Finance Corp.
4,085 Series 1996-7, Class M1.......................................... 7.70% 09/15/26 4,107
1,260,041 Series 1999-3, Class A8.......................................... 7.06% 02/01/31 1,225,242
CoreVest American Finance Trust
405,000 Series 2020-1, Class A2 (a)...................................... 2.30% 03/15/50 414,882
1,464,473 Series 2020-1, Class XA, IO (a) (d).............................. 2.84% 03/15/50 143,262
1,326,972 Series 2020-3, Class XA, IO (a) (d).............................. 3.81% 08/15/53 171,412
1,250,000 Series 2020-3, Class XB, IO (a) (d).............................. 2.75% 08/15/53 220,206
Countrywide Asset-Backed Certificates
157,943 Series 2006-6, Class 1A1, 1 Mo. LIBOR + 0.34% (b)................ 0.42% 09/25/36 157,433
Credit-Based Asset Servicing & Securitization LLC
957,000 Series 2006-MH1, Class B1 (a) (c)................................ 6.25% 10/25/36 989,176
CWABS Asset-Backed Certificates Trust
1,600,000 Series 2005-17, Class MV2, 1 Mo. LIBOR + 0.48% (b)............... 0.56% 05/25/36 1,567,242
</TABLE>
Page 52 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
ASSET-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
Dryden CLO Ltd.
$ 625,000 Series 2019-72A, Class BR, 3 Mo. LIBOR + 1.65% (a) (b)........... 1.77% 05/15/32 $ 625,013
Eaton Vance CLO Ltd.
1,800,000 Series 2019-1A, Class AR, 3 Mo. LIBOR + 1.10% (a) (b)............ 1.23% 04/15/31 1,801,681
1,750,000 Series 2020-1A, Class AR (a) (b) (e)............................. 0.00% 10/15/34 1,750,875
ECMC Group Student Loan Trust
1,801,575 Series 2017-2A, Class A, 1 Mo. LIBOR + 1.05% (a) (b)............. 1.13% 05/25/67 1,840,366
EquiFirst Mortgage Loan Trust
52,888 Series 2005-1, Class M3, 1 Mo. LIBOR + 0.72% (b)................. 0.80% 04/25/35 52,987
First Franklin Mortgage Loan Trust
76,663 Series 2006-FF11, Class 2A3, 1 Mo. LIBOR + 0.30% (b)............. 0.38% 08/25/36 75,246
Flatiron CLO Ltd.
1,000,000 Series 2021-1A, Class B, 3 Mo. LIBOR + 1.60% (a) (b)............. 1.75% 07/19/34 998,806
Fremont Home Loan Trust
60,856 Series 2005-D, Class 2A4, 1 Mo. LIBOR + 0.68% (b)................ 0.76% 11/25/35 60,753
GCI Funding I LLC
1,597,465 Series 2021-1, Class A (a)....................................... 2.38% 06/18/46 1,612,273
Goldentree Loan Management US CLO Ltd.
1,200,000 Series 2019-4A, Class AR, 3 Mo. LIBOR + 1.11% (a) (b)............ 1.24% 04/24/31 1,200,300
Golub Capital Partners CLO L.P.
1,575,000 Series 2021-54A, Class A, 3 Mo. LIBOR + 1.53% (a) (b)............ 1.65% 08/05/33 1,575,934
GSAA Home Equity Trust
513,072 Series 2007-8, Class A3, 1 Mo. LIBOR + 0.90% (b)................. 0.98% 08/25/37 513,815
GSAMP Trust
1,168,900 Series 2006-HE4, Class A2D, 1 Mo. LIBOR + 0.52% (b).............. 0.60% 06/25/36 1,152,033
1,280,775 Series 2007-FM2, Class A1, 1 Mo. LIBOR + 0.14% (b)............... 0.22% 01/25/37 938,734
HPS Loan Management Ltd.
1,225,000 Series 10A-16, Class A1RR, 3 Mo. LIBOR + 1.14% (a) (b)........... 1.27% 04/20/34 1,226,411
Invitation Homes Trust
1,147,889 Series 2018-SFR4, Class A, 1 Mo. LIBOR + 1.10% (a) (b)........... 1.19% 01/17/38 1,151,839
JP Morgan Mortgage Acquisition Trust
784,280 Series 2006-CH2, Class AF6, steps up to 6.04% after Redemption
Date (c)...................................................... 5.54% 10/25/36 613,952
653,264 Series 2006-WF1, Class A5........................................ 6.91% 07/25/36 278,061
1,093,425 Series 2007-CH2, Class AF6, steps up to 6.05% after Redemption
Date (c)...................................................... 4.55% 01/25/37 783,378
Lehman XS Trust
1,656,229 Series 2006-15, Class A4, 1 Mo. LIBOR + 0.34% (b)................ 0.42% 10/25/36 1,635,445
986,279 Series 2007-11, Class A3, 1 Mo. LIBOR + 0.52% (b)................ 0.60% 02/25/47 985,488
Long Beach Mortgage Loan Trust
2,426,187 Series 2006-8, Class 2A3, 1 Mo. LIBOR + 0.32% (b)................ 0.40% 09/25/36 966,735
Mastr Asset Backed Securities Trust
136,467 Series 2006-HE5, Class A3, 1 Mo. LIBOR + 0.16% (b)............... 0.24% 11/25/36 100,552
1,792,731 Series 2006-NC2, Class A3, 1 Mo. LIBOR + 0.22% (b)............... 0.30% 08/25/36 930,803
Merrill Lynch First Franklin Mortgage Loan Trust
1,995,151 Series 2007-1, Class A1, 1 Mo. LIBOR + 0.14% (b)................. 0.22% 04/25/37 1,223,301
3,586,796 Series 2007-5, Class 1A, 1 Mo. LIBOR + 0.85% (b)................. 0.93% 10/25/37 2,884,462
Merrill Lynch Mortgage Investors Trust
3,171,455 Series 2006-HE6, Class A2C, 1 Mo. LIBOR + 0.46% (b).............. 0.54% 11/25/37 1,576,505
</TABLE>
See Notes to Financial Statements Page 53
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
ASSET-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
Morgan Stanley ABS Capital I, Inc. Trust
$ 2,044,675 Series 2006-HE8, Class A2B, 1 Mo. LIBOR + 0.10% (b).............. 0.18% 10/25/36 $ 1,219,902
1,979,633 Series 2006-HE8, Class A2C, 1 Mo. LIBOR + 0.14% (b).............. 0.22% 10/25/36 1,188,273
1,376,021 Series 2007-HE4, Class A2B, 1 Mo. LIBOR + 0.18% (b).............. 0.26% 02/25/37 608,290
2,113,591 Series 2007-NC3, Class A2D, 1 Mo. LIBOR + 0.26% (b).............. 0.34% 05/25/37 1,886,755
Navient Student Loan Trust
27,480 Series 2014-1, Class A3, 1 Mo. LIBOR + 0.51% (b)................. 0.59% 06/25/31 26,890
967,000 Series 2016-2A, Class A3, 1 Mo. LIBOR + 1.50% (a) (b)............ 1.58% 06/25/65 1,004,939
1,804,624 Series 2016-5A, Class A, 1 Mo. LIBOR + 1.25% (a) (b)............. 1.33% 06/25/65 1,851,333
Nelnet Student Loan Trust
2,271,250 Series 2006-1, Class A6, 3 Mo. LIBOR + 0.45% (a) (b)............. 0.58% 08/23/36 2,261,629
Neuberger Berman Loan Advisers CLO Ltd.
1,300,000 Series 2021-43A, Class A, 3 Mo. LIBOR + 1.13% (a) (b)............ 1.24% 07/17/35 1,301,375
NovaStar Mortgage Funding Trust
842,616 Series 2007-2, Class A1A, 1 Mo. LIBOR + 0.20% (b)................ 0.28% 09/25/37 829,254
OCP CLO Ltd.
1,500,000 Series 2021-21A, Class B, 3 Mo. LIBOR + 1.70% (a) (b)............ 1.83% 07/20/34 1,502,137
OHA Credit Funding Ltd.
2,000,000 Series 2019-3A, Class AR, 3 Mo. LIBOR + 1.14% (a) (b)............ 1.29% 07/02/35 2,002,500
Progress Residential Trust
1,766,000 Series 2018-SFR3, Class E (a).................................... 4.87% 10/17/35 1,770,951
1,045,000 Series 2018-SFR3, Class G (a).................................... 5.62% 10/17/35 1,047,400
1,100,000 Series 2019-SFR1, Class F (a).................................... 5.06% 08/17/35 1,124,474
1,226,000 Series 2019-SFR2, Class E (a).................................... 4.14% 05/17/36 1,252,838
1,200,000 Series 2019-SFR3, Class F (a).................................... 3.87% 09/17/36 1,229,907
Residential Asset Mortgage Products, Inc.
41,565 Series 2005-RZ3, Class M3, 1 Mo. LIBOR + 0.83% (b)............... 0.91% 09/25/35 41,586
1,400,000 Series 2006-NC2, Class M1, 1 Mo. LIBOR + 0.54% (b)............... 0.62% 02/25/36 1,360,545
2,150,000 Series 2006-RZ2, Class M1, 1 Mo. LIBOR + 0.50% (b)............... 0.58% 05/25/36 2,124,049
Residential Asset Securities Corp.
97,419 Series 2005-KS11, Class M2, 1 Mo. LIBOR + 0.63% (b).............. 0.71% 12/25/35 97,266
118,292 Series 2006-KS3, Class M1, 1 Mo. LIBOR + 0.50% (b)............... 0.58% 04/25/36 118,410
Sabey Data Center Issuer LLC
1,210,000 Series 2020-1, Class A2 (a)...................................... 3.81% 04/20/45 1,288,007
Saxon Asset Securities Trust
1,613,237 Series 2006-1, Class M1, 1 Mo. LIBOR + 0.47% (b)................. 0.55% 03/25/36 1,607,780
Securitized Asset Backed Receivables LLC Trust
2,715,331 Series 2006-CB5, Class A3, 1 Mo. LIBOR + 0.28% (b)............... 0.36% 06/25/36 2,111,149
Skyline Aircraft Finance LLC
680,914 Series 2020-1, Class A (f) (g)................................... 3.23% 05/10/37 689,357
SLC Student Loan Trust
1,193,427 Series 2008-1, Class A4A, 3 Mo. LIBOR + 1.60% (b)................ 1.72% 12/15/32 1,207,177
SLM Student Loan Trust
1,375 Series 2007-4, Class R (f)....................................... 0.00% 01/25/42 706,475
905,000 Series 2007-7, Class B, 3 Mo. LIBOR + 0.75% (b).................. 0.88% 10/27/70 826,294
300,000 Series 2008-2, Class B, 3 Mo. LIBOR + 1.20% (b).................. 1.33% 01/25/83 270,405
300,000 Series 2008-3, Class B, 3 Mo. LIBOR + 1.20% (b).................. 1.33% 04/26/83 281,725
918,870 Series 2008-4, Class A4, 3 Mo. LIBOR + 1.65% (b)................. 1.78% 07/25/22 928,478
1,569,972 Series 2008-5, Class A4, 3 Mo. LIBOR + 1.70% (b)................. 1.83% 07/25/23 1,586,213
650,000 Series 2008-5, Class B, 3 Mo. LIBOR + 1.85% (b).................. 1.98% 07/25/73 643,754
300,000 Series 2008-6, Class B, 3 Mo. LIBOR + 1.85% (b).................. 1.98% 07/26/83 301,254
</TABLE>
Page 54 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
ASSET-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
SLM Student Loan Trust (Continued)
$ 220,000 Series 2008-8, Class B, 3 Mo. LIBOR + 2.25% (b).................. 2.38% 10/25/75 $ 223,436
1,274,899 Series 2008-9, Class A, 3 Mo. LIBOR + 1.50% (b).................. 1.63% 04/25/23 1,285,109
800,000 Series 2008-9, Class B, 3 Mo. LIBOR + 2.25% (b).................. 2.38% 10/25/83 809,060
100,000 Series 2012-7, Class B, 1 Mo. LIBOR + 1.80% (b).................. 1.88% 09/25/43 100,263
Soundview Home Loan Trust
2,389,453 Series 2007-OPT1, Class 2A3, 1 Mo. LIBOR + 0.21% (b)............. 0.29% 06/25/37 1,955,227
242,147 Series 2007-OPT2, Class 2A4, 1 Mo. LIBOR + 0.25% (b)............. 0.33% 07/25/37 217,359
Specialty Underwriting & Residential Finance Trust
3,281,337 Series 2006-AB3, Class A2C, 1 Mo. LIBOR + 0.24% (b).............. 0.32% 09/25/37 2,739,492
Stack Infrastructure Issuer LLC
848,250 Series 2019-1A, Class A2 (a)..................................... 4.54% 02/25/44 896,385
Structured Asset Securities Corp Mortgage Loan Trust
1,274,334 Series 2006-BC3, Class A3, 1 Mo. LIBOR + 0.32% (b)............... 0.40% 10/25/36 1,231,258
Structured Receivables Finance LLC
100,457 Series 2010-B, Class A (a)....................................... 3.73% 08/15/36 104,790
TAL Advantage VII LLC
2,259,375 Series 2020-1A, Class A (a)...................................... 2.05% 09/20/45 2,290,246
Textainer Marine Containers VIII Ltd.
1,828,385 Series 2020-2A, Class A (a)...................................... 2.10% 09/20/45 1,860,903
Tricon American Homes Trust
823,000 Series 2017-SFR1, Class D (a).................................... 3.41% 09/17/34 823,427
1,400,000 Series 2017-SFR2, Class E (a).................................... 4.22% 01/17/36 1,442,385
Wachovia Student Loan Trust
1,747,459 Series 2006-1, Class B, 3 Mo. LIBOR + 0.24% (a) (b).............. 0.37% 04/25/40 1,655,192
WaMu Asset-Backed Certificates WaMu Trust
1,726,151 Series 2007-HE2, Class 2A3, 1 Mo. LIBOR + 0.25% (b).............. 0.33% 04/25/37 864,574
Washington Mutural Asset-Backed Certificates WMABS Trust
500,815 Series 2006-HE5, Class 1A, 1 Mo. LIBOR + 0.16% (b)............... 0.24% 10/25/36 436,144
--------------
TOTAL ASSET-BACKED SECURITIES................................................................... 112,221,722
(Cost $112,582,761) --------------
MORTGAGE-BACKED SECURITIES -- 18.3%
COLLATERALIZED MORTGAGE OBLIGATIONS -- 11.5%
Adjustable Rate Mortgage Trust
99,841 Series 2005-8, Class 3A21 (d).................................... 2.59% 11/25/35 87,785
Alternative Loan Trust
855,425 Series 2005-13CB, Class A8....................................... 5.50% 05/25/35 861,145
281,384 Series 2005-16, Class A3, 1 Mo. LIBOR + 0.50% (b)................ 0.58% 06/25/35 264,047
866,815 Series 2005-65CB, Class 2A4...................................... 5.50% 12/25/35 794,479
81,738 Series 2005-76, Class 1A1, 12 Mo. Treasury Average + 1.48% (b)... 1.58% 01/25/36 82,461
318,244 Series 2006-33CB, Class 2A1...................................... 6.00% 11/25/36 253,453
1,037,145 Series 2007-15CB, Class A6....................................... 5.75% 07/25/37 847,276
548,094 Series 2007-OA6, Class A1B, 1 Mo. LIBOR + 0.20% (b).............. 0.28% 06/25/37 530,418
American Home Mortgage Assets Trust
1,622,693 Series 2006-1, Class 1A1, 1 Mo. LIBOR + 0.42% (b)................ 0.50% 05/25/46 1,543,041
1,546,892 Series 2007-1, Class A1, 12 Mo. Treasury Average + 0.70% (b). 0.80% 02/25/47 880,957
American Home Mortgage Investment Trust
647,556 Series 2005-4, Class 1A1, 1 Mo. LIBOR + 0.58% (b)................ 0.66% 11/25/45 633,493
Banc of America Funding Trust
829,190 Series 2007-1, Class TA3A, 1 Mo. LIBOR + 0.32% (b)............... 0.40% 01/25/37 757,790
</TABLE>
See Notes to Financial Statements Page 55
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
MORTGAGE-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED)
BCAP LLC Trust
$ 487,595 Series 2007-AA3, Class 1A1A, 1 Mo. LIBOR + 0.42% (b)............. 0.50% 04/25/37 $ 470,131
765,051 Series 2015-RR2, Class 25A3 (a) (d).............................. 0.51% 10/28/36 760,634
Bear Stearns ALT-A Trust
1,107,768 Series 2004-8, Class M1, 1 Mo. LIBOR + 0.92% (b)................. 1.00% 09/25/34 1,117,498
2,028,881 Series 2006-1, Class 21A2 (d).................................... 3.06% 02/25/36 1,708,836
Bear Stearns Mortgage Funding Trust
670,574 Series 2006-AR1, Class 1A1, 1 Mo. LIBOR + 0.21% (b).............. 0.29% 07/25/36 648,998
596,764 Series 2006-AR3, Class 1A1, 1 Mo. LIBOR + 0.18% (b).............. 0.26% 10/25/36 571,728
217,245 Series 2007-AR1, Class 1A1, 1 Mo. LIBOR + 0.16% (b).............. 0.24% 01/25/37 207,862
199,037 Series 2007-AR3, Class 1A1, 1 Mo. LIBOR + 0.14% (b).............. 0.22% 03/25/37 190,634
CIM Trust
195,029 Series 2018-R6, Class A1, 1 Mo. LIBOR + 1.08% (a) (b)............ 1.17% 09/25/58 193,813
835,351 Series 2020-R7, Class A1A (a) (h)................................ 2.25% 12/27/61 840,064
1,614,287 Series 2021-R3, Class A1A (a).................................... 1.95% 06/25/57 1,623,370
Citigroup Mortgage Loan Trust
610,558 Series 2005-8, Class 2A4A........................................ 5.50% 09/25/35 607,612
1,312,651 Series 2009-10, Class 2A2 (a).................................... 7.00% 12/25/35 1,229,527
Credit Suisse Mortgage Trust
24,775 Series 2010-7R, Class 1A12 (a)................................... 4.00% 01/26/37 24,814
61,507 Series 2014-2R, Class 28A1 (a) (d)............................... 3.00% 06/27/37 62,118
906,261 Series 2014-8R, Class 3A2 (a) (d)................................ 3.84% 02/27/36 778,927
1,632,800 Series 2014-11R, Class 17A2, 1 Mo. LIBOR + 0.15% (a) (b)......... 0.24% 12/27/36 1,501,053
1,790,549 Series 2021-RPL4, Class A1 (a)................................... 1.80% 12/27/60 1,801,014
Deutsche Alt-A Securities Mortgage Loan Trust
1,588,063 Series 2007-AR3, Class 2A5, 1 Mo. LIBOR + 0.40% (b).............. 0.48% 06/25/37 1,531,410
DSLA Mortgage Loan Trust
64,593 Series 2004-AR4, Class 2A1A, 1 Mo. LIBOR + 0.72% (b)............. 0.81% 01/19/45 58,664
First Horizon Alternative Mortgage Securities Trust
46,222 Series 2004-AA4, Class A1 (d).................................... 2.38% 10/25/34 47,919
2,185,793 Series 2005-AA4, Class 2A1 (d)................................... 2.35% 06/25/35 2,136,343
1,181,579 Series 2007-FA1, Class A4........................................ 6.25% 03/25/37 768,720
GreenPoint Mortgage Funding Trust
70,644 Series 2006-AR1, Class A1A, 1 Mo. LIBOR + 0.58% (b).............. 0.66% 02/25/36 70,441
415,527 Series 2007-AR1, Class 2A1A, 1 Mo. LIBOR + 0.20% (b)............. 0.28% 03/25/47 422,939
677,539 Series 2007-AR2, Class 2A1, 1 Mo. LIBOR + 0.40% (b).............. 0.48% 05/25/37 678,239
GreenPoint MTA Trust
396,091 Series 2005-AR3, Class 1A1, 1 Mo. LIBOR + 0.48% (b).............. 0.56% 08/25/45 383,320
HarborView Mortgage Loan Trust
196,119 Series 2005-9, Class 2A1A, 1 Mo. LIBOR + 0.68% (b)............... 0.77% 06/20/35 193,202
540,416 Series 2005-9, Class 2A1C, 1 Mo. LIBOR + 0.90% (b)............... 0.99% 06/20/35 536,985
838,375 Series 2007-7, Class 1A1, 1 Mo. LIBOR + 1.00% (b)................ 1.08% 10/25/37 815,119
HomeBanc Mortgage Trust
131,179 Series 2005-4, Class A1, 1 Mo. LIBOR + 0.54% (b)................. 0.62% 10/25/35 131,445
Impac CMB Trust
62,845 Series 2005-1, Class 1A1, 1 Mo. LIBOR + 0.52% (b)................ 0.60% 04/25/35 63,614
IndyMac INDX Mortgage Loan Trust
1,788,765 Series 2005-16IP, Class A1, 1 Mo. LIBOR + 0.64% (b).............. 0.72% 07/25/45 1,595,724
3,169,101 Series 2006-AR2, Class 1A1B, 1 Mo. LIBOR + 0.42% (b)............. 0.50% 04/25/46 3,036,423
587,769 Series 2006-AR4, Class A1A, 1 Mo. LIBOR + 0.42% (b).............. 0.50% 05/25/46 575,812
</TABLE>
Page 56 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
MORTGAGE-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED)
IndyMac INDX Mortgage Loan Trust (Continued)
$ 247,167 Series 2006-AR21, Class A1, 1 Mo. LIBOR + 0.24% (b).............. 0.32% 08/25/36 $ 243,796
174,244 Series 2007-FLX2, Class A1C, 1 Mo. LIBOR + 0.19% (b)............. 0.27% 04/25/37 166,753
JP Morgan Alternative Loan Trust
685,986 Series 2006-S1, Class 3A4........................................ 6.18% 03/25/36 689,909
70,430 Series 2007-S1, Class A2, 1 Mo. LIBOR + 0.68% (b)................ 0.76% 04/25/47 69,333
Legacy Mortgage Asset Trust
909,849 Series 2020-GS2, Class A1, steps up to 5.75% on
03/26/23 (a) (c).............................................. 2.75% 03/25/60 916,951
Lehman Mortgage Trust
894,076 Series 2006-1, Class 1A5......................................... 5.50% 02/25/36 683,907
Lehman XS Trust
222,791 Series 2005-5N, Class 3A1A, 1 Mo. LIBOR + 0.30% (b).............. 0.38% 11/25/35 221,592
825,491 Series 2006-2N, Class 2A1, 12 Mo. Treasury Average +
2.02% (b)..................................................... 2.12% 02/25/36 842,586
704,434 Series 2007-12N, Class 1A3A, 1 Mo. LIBOR + 0.20% (b)............. 0.28% 07/25/47 708,614
1,768,852 Series 2007-16N, Class 1A1, 1 Mo. LIBOR + 0.47% (b).............. 0.55% 09/25/47 1,771,451
MASTR Adjustable Rate Mortgages Trust
721,505 Series 2004-14, Class B1, 1 Mo. LIBOR + 2.15% (b)................ 2.23% 01/25/35 765,794
414,309 Series 2007-2, Class A1, 1 Mo. LIBOR + 0.30% (b)................. 0.38% 03/25/47 405,460
4,700,000 Series 2007-HF2, Class A2, 1 Mo. LIBOR + 1.10% (b)............... 1.18% 09/25/37 2,281,763
Merrill Lynch Mortgage Investors Trust
150,616 Series 2003-D, Class A, 1 Mo. LIBOR + 0.62% (b).................. 0.70% 08/25/28 150,900
227,713 Series 2004-E, Class A2B, 6 Mo. LIBOR + 0.72% (b)................ 0.93% 11/25/29 234,122
Morgan Stanley Resecuritization Trust
75,060 Series 2014-R8, Class 3B1, 12 Mo. Treasury Average +
0.75% (a) (b)................................................. 0.86% 06/26/47 75,005
Nomura Resecuritization Trust
2,383,526 Series 2014-1R, Class 1A13, 1 Mo. LIBOR + 0.32% (a) (b).......... 0.41% 10/26/36 2,295,267
Opteum Mortgage Acceptance Corp Trust
2,779,376 Series 2006-1, Class 1AC1, 1 Mo. LIBOR + 0.60% (b)............... 0.68% 04/25/36 2,705,434
RALI Trust
1,801,217 Series 2005-QO1, Class A1, 1 Mo. LIBOR + 0.30% (b)............... 0.38% 08/25/35 1,544,956
3,079,471 Series 2006-QO10, Class A1, 1 Mo. LIBOR + 0.32% (b).............. 0.40% 01/25/37 2,959,245
574,736 Series 2006-QS6, Class 1A15...................................... 6.00% 06/25/36 554,390
1,205,453 Series 2007-QH4, Class A1, 1 Mo. LIBOR + 0.19% (b)............... 0.27% 05/25/37 1,162,176
1,117,799 Series 2007-QH9, Class A1 (d).................................... 1.36% 11/25/37 1,071,752
Structured Adjustable Rate Mortgage Loan Trust
42,836 Series 2005-12, Class 3A1 (d).................................... 2.52% 06/25/35 41,249
441,897 Series 2006-11, Class 1A1, 1 Mo. LIBOR + 0.32% (b)............... 0.40% 12/25/36 436,594
695,567 Series 2007-4, Class 1A1, 1 Mo. LIBOR + 0.48% (b)................ 0.56% 05/25/37 715,070
667,498 Series 2007-4, Class 1A2, 1 Mo. LIBOR + 0.44% (b)................ 0.52% 05/25/37 652,809
Structured Asset Mortgage Investments II Trust
329,311 Series 2005-AR2, Class 2A1, 1 Mo. LIBOR + 0.46% (b).............. 0.54% 05/25/45 329,959
514,402 Series 2006-AR1, Class 3A1, 1 Mo. LIBOR + 0.46% (b).............. 0.54% 02/25/36 495,715
398,863 Series 2006-AR3, Class 12A1, 1 Mo. LIBOR + 0.44% (b)............. 0.52% 05/25/36 390,599
451,820 Series 2006-AR4, Class 3A1, 1 Mo. LIBOR + 0.38% (b).............. 0.46% 06/25/36 427,521
65,684 Series 2006-AR5, Class 1A1, 1 Mo. LIBOR + 0.42% (b).............. 0.50% 05/25/36 57,795
1,958,548 Series 2006-AR6, Class 2A1, 1 Mo. LIBOR + 0.38% (b).............. 0.46% 07/25/46 1,713,263
1,077,242 Series 2006-AR8, Class A1A, 1 Mo. LIBOR + 0.40% (b).............. 0.48% 10/25/36 1,046,631
468,177 Series 2007-AR1, Class 1A1, 1 Mo. LIBOR + 0.16% (b).............. 0.24% 01/25/37 454,355
</TABLE>
See Notes to Financial Statements Page 57
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
MORTGAGE-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED)
Structured Asset Mortgage Investments II Trust (Continued)
$ 182,170 Series 2007-AR1, Class 2A1, 1 Mo. LIBOR + 0.18% (b).............. 0.26% 01/25/37 $ 175,415
730,352 Series 2007-AR6, Class A1, 12 Mo. Treasury Average +
1.50% (b)..................................................... 1.60% 08/25/47 717,752
Structured Asset Mortgage Investments Trust
148,514 Series 2003-AR3, Class A1, 1 Mo. LIBOR + 0.68% (b)............... 0.77% 11/19/33 149,081
TBW Mortgage-Backed Trust
416,294 Series 2006-4, Class A4.......................................... 6.66% 09/25/36 412,259
WaMu Mortgage Pass-Through Certificates Trust
146,021 Series 2004-AR12, Class A2A, 1 Mo. LIBOR + 0.78% (b)............. 0.86% 10/25/44 144,269
344,713 Series 2006-AR3, Class A1A, 12 Mo. Treasury Average +
1.00% (b)..................................................... 1.10% 02/25/46 348,194
54,134 Series 2006-AR11, Class 1A, 12 Mo. Treasury Average +
0.96% (b)..................................................... 1.06% 09/25/46 51,164
915,164 Series 2007-OA5, Class 1A, 12 Mo. Treasury Average +
0.75% (b)..................................................... 0.85% 06/25/47 884,322
Washington Mutual Mortgage Pass-Through Certificates WMALT
Trust
2,475,494 Series 2006-AR6, Class 2A, 12 Mo. Treasury Average +
0.96% (b)..................................................... 1.06% 08/25/46 1,655,827
762,049 Series 2007-OC1, Class A4, 1 Mo. LIBOR + 0.32% (b)............... 0.40% 01/25/47 784,077
Wells Fargo Mortgage Backed Securities Trust
289,372 Series 2007-AR5, Class A1 (d).................................... 3.04% 10/25/37 286,128
--------------
69,812,501
--------------
COMMERCIAL MORTGAGE-BACKED OBLIGATIONS -- 6.8%
AREIT Trust
680,000 Series 2020-CRE4, Class B, SOFR + 4.26% (a) (b).................. 4.31% 04/15/37 691,084
Banc of America Commercial Mortgage Trust
15,307,770 Series 2015-UBS7, Class XA, IO (d)............................... 0.94% 09/15/48 415,098
Bayview Commercial Asset Trust
839,422 Series 2005-4A, Class A1, 1 Mo. LIBOR + 0.45% (a) (b)............ 0.53% 01/25/36 808,439
BBCMS Mortgage Trust
1,640,000 Series 2020-BID, Class A, 1 Mo. LIBOR + 2.14% (a) (b)............ 2.24% 10/15/37 1,654,552
BDS Ltd.
1,125,000 Series 2020-FL6, Class D, SOFR + 2.86% (a) (b)................... 2.91% 09/15/35 1,145,134
Benchmark Mortgage Trust
1,182,454 Series 2018-B6, Class A2......................................... 4.20% 10/10/51 1,246,034
BF Mortgage Trust
1,300,000 Series 2019-NYT, Class D, 1 Mo. LIBOR + 2.00% (a) (b)............ 2.10% 12/15/35 1,298,656
BFLD Trust
782,000 Series 2021-FPM, Class A, 1 Mo. LIBOR + 1.60% (a) (b)............ 1.70% 06/15/38 785,047
BXMT Ltd.
1,175,000 Series 2020-FL3, Class A, SOFR + 1.51% (a) (b)................... 1.56% 03/15/37 1,178,120
CAMB Commercial Mortgage Trust
1,000,000 Series 2019-LIFE, Class F, 1 Mo. LIBOR + 2.55% (a) (b)........... 2.65% 12/15/37 1,005,138
Citigroup Commercial Mortgage Trust
976,637 Series 2020-WSS, Class B, 1 Mo. LIBOR + 2.00% (a) (b)............ 2.10% 02/15/39 992,269
COMM Mortgage Trust
1,054,000 Series 2012-CR4, Class AM........................................ 3.25% 10/15/45 1,062,465
1,524,094 Series 2012-CR4, Class XA, IO (d)................................ 1.84% 10/15/45 21,779
1,421,511 Series 2014-CR14, Class A2....................................... 3.15% 02/10/47 1,439,785
</TABLE>
Page 58 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
MORTGAGE-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
COMMERCIAL MORTGAGE-BACKED OBLIGATIONS (CONTINUED)
COMM Mortgage Trust (Continued)
$ 4,601,344 Series 2020-CBM, Class XCP, IO (a) (d)........................... 0.72% 02/10/37 $ 90,578
21,254,000 Series 2020-SBX, Class X, IO (a) (d)............................. 0.66% 01/10/38 507,014
Credit Suisse Mortgage Trust
1,700,000 Series 2019-UVIL, Class D (a) (d)................................ 3.39% 12/15/41 1,623,065
1,180,000 Series 2020-TMIC, Class A, 1 Mo. LIBOR + 3.00%, 3.25%
Floor (a) (b)................................................. 3.25% 12/15/35 1,200,609
25,699,000 Series 2021-980M, Class X, IO (a) (d) (f)........................ 1.11% 07/15/31 1,176,038
DBWF Mortgage Trust
600,000 Series 2016-85T, Class A (a)..................................... 3.79% 12/10/36 670,441
DROP Mortgage Trust
1,000,000 Series 2021-FILE, Class B, 1 Mo. LIBOR + 1.70% (a) (b)........... 1.80% 04/15/26 1,005,030
GPMT Ltd.
1,815,000 Series 2021-FL3, Class A, 1 Mo. LIBOR + 1.25% (a) (b)............ 1.34% 07/16/35 1,818,194
GS Mortgage Securities Corp Trust
2,600,000 Series 2020-UPTN, Class XA, IO (a) (d)........................... 0.45% 02/10/37 31,655
GS Mortgage Securities Trust
1,004,580 Series 2014-GC18, Class A3....................................... 3.80% 01/10/47 1,045,490
Hilton USA Trust
1,630,000 Series 2016-SFP, Class C (a)..................................... 4.12% 11/05/35 1,645,358
JP Morgan Chase Commercial Mortgage Securities Trust
1,321,000 Series 2021-1440, Class B, 1 Mo. LIBOR + 1.75% (a) (b)........... 1.85% 03/15/36 1,323,651
700,000 Series 2021-1440, Class C, 1 Mo. LIBOR + 2.30% (a) (b)........... 2.40% 03/15/36 701,722
Life Mortgage Trust
1,130,000 Series 2021-BMR, Class G, 1 Mo. LIBOR + 2.95% (a) (b)............ 3.05% 03/15/38 1,134,202
Merit Hill Commercial Mortgage Pass-Through Certificates
900,000 Series 2020-HILL, Class F, 1 Mo. LIBOR + 4.10% (a) (b)........... 4.20% 08/15/37 909,395
Morgan Stanley Capital I Trust
1,603,000 Series 2016-UB12, Class A3....................................... 3.34% 12/15/49 1,720,503
28,903,282 Series 2018-H4, Class XA, IO (d)................................. 1.03% 12/15/51 1,494,690
1,050,000 Series 2018-MP, Class A (a) (d).................................. 4.42% 07/11/40 1,193,895
MSCG Trust
945,000 Series 2015-ALDR, Class A2 (a) (d)............................... 3.58% 06/07/35 980,241
1,645,000 Series 2018-SELF, Class E, 1 Mo. LIBOR + 2.15% (a) (b)........... 2.25% 10/15/37 1,650,622
MSDB Trust
500,000 Series 2017-712F, Class A (a) (d)................................ 3.43% 07/11/39 539,175
Natixis Commercial Mortgage Securities Trust
1,100,000 Series 2018-850T, Class A, 1 Mo. LIBOR + 0.78% (a) (b)........... 0.88% 07/15/33 1,096,123
One Market Plaza Trust
476,000 Series 2017-1MKT, Class A (a).................................... 3.61% 02/10/32 484,467
RBS Commercial Funding, Inc. Trust
1,285,000 Series 2013-GSP, Class A (a) (d)................................. 3.96% 01/15/32 1,360,086
SFAVE Commercial Mortgage Securities Trust
545,000 Series 2015-5AVE, Class C (a) (d)................................ 4.53% 01/05/43 505,900
VMC Finance LLC
779,000 Series 2021-FL4, Class B, 1 Mo. LIBOR + 1.80% (a) (b)............ 1.89% 06/16/36 781,394
Wells Fargo Commercial Mortgage Trust
10,467,000 Series 2021-SAVE, Class XCP, IO (a) (d).......................... 10.12% 02/15/40 838,320
--------------
41,271,458
--------------
TOTAL MORTGAGE-BACKED SECURITIES............................................................... 111,083,959
(Cost $110,612,526) --------------
</TABLE>
See Notes to Financial Statements Page 59
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
CORPORATE BONDS AND NOTES -- 18.2%
<S> <C> <C> <C> <C>
ADVERTISING -- 0.1%
$ 675,000 National CineMedia LLC (a).......................................... 5.88% 04/15/28 $ 596,960
--------------
AEROSPACE/DEFENSE -- 0.1%
635,000 Boeing (The) Co..................................................... 1.43% 02/04/24 636,518
--------------
AGRICULTURE -- 0.4%
30,000 BAT Capital Corp.................................................... 2.73% 03/25/31 29,935
1,250,000 BAT Capital Corp.................................................... 4.54% 08/15/47 1,339,458
645,000 Reynolds American, Inc.............................................. 5.85% 08/15/45 798,346
--------------
2,167,739
--------------
AIRLINES -- 0.3%
325,476 American Airlines Pass-Through Trust, Series 2014-1, Class A........ 3.70% 10/01/26 331,092
179,442 Continental Airlines Pass-Through Trust, Series 2007-1, Class A..... 5.98% 04/19/22 182,286
580,369 JetBlue Pass-Through Trust, Series 2020-1, Class A.................. 4.00% 11/15/32 638,266
489,719 United Airlines Pass-Through Trust, Series 2013-1, Class A.......... 4.30% 08/15/25 529,816
121,638 US Airways Pass-Through Trust, Series 2012-1, Class A............... 5.90% 10/01/24 127,923
--------------
1,809,383
--------------
AUTO MANUFACTURERS -- 0.6%
310,000 Daimler Finance North America LLC (a)............................... 2.20% 10/30/21 311,016
520,000 Daimler Finance North America LLC, 3 Mo. LIBOR +
0.90% (a) (b).................................................... 1.02% 02/15/22 522,132
300,000 Ford Motor Credit Co. LLC, 3 Mo. LIBOR + 0.88% (b).................. 1.00% 10/12/21 300,011
96,000 Ford Motor Credit Co. LLC........................................... 3.22% 01/09/22 96,720
500,000 Ford Motor Credit Co. LLC, 3 Mo. LIBOR + 1.27% (b).................. 1.42% 03/28/22 500,208
1,554,000 Ford Motor Credit Co. LLC........................................... 3.34% 03/28/22 1,572,073
115,000 General Motors Financial Co., Inc................................... 4.38% 09/25/21 115,296
80,000 General Motors Financial Co., Inc................................... 3.45% 04/10/22 81,077
--------------
3,498,533
--------------
BANKS -- 2.7%
750,000 Bank of America Corp. (i)........................................... 1.73% 07/22/27 760,268
2,305,000 Bank of America Corp., Series N (i)................................. 1.66% 03/11/27 2,331,499
390,000 Bank of America Corp., Medium-Term Note (i)......................... 3.82% 01/20/28 434,882
815,000 Bank of America Corp., Medium-Term Note (i)......................... 2.09% 06/14/29 827,404
465,000 Bank of America Corp., Medium-Term Note (i)......................... 3.97% 02/07/30 528,765
165,000 Bank of America Corp., Medium-Term Note (i)......................... 2.88% 10/22/30 174,901
100,000 Citigroup, Inc. (i)................................................. 2.88% 07/24/23 102,194
500,000 Citigroup, Inc. (i)................................................. 3.35% 04/24/25 533,093
225,000 Citigroup, Inc. (i)................................................. 4.08% 04/23/29 255,399
135,000 Comerica, Inc. (i).................................................. 5.63% (j) 149,512
1,495,000 Goldman Sachs Group (The), Inc. (i)................................. 1.43% 03/09/27 1,501,532
615,000 Goldman Sachs Group (The), Inc. (i)................................. 1.54% 09/10/27 618,291
955,000 JPMorgan Chase & Co. (i)............................................ 0.97% 06/23/25 958,096
705,000 JPMorgan Chase & Co. (i)............................................ 0.77% 08/09/25 703,511
355,000 JPMorgan Chase & Co. (i)............................................ 2.01% 03/13/26 366,248
130,000 JPMorgan Chase & Co. (i)............................................ 2.08% 04/22/26 134,309
1,150,000 JPMorgan Chase & Co. (i)............................................ 1.58% 04/22/27 1,161,456
200,000 JPMorgan Chase & Co. (i)............................................ 4.01% 04/23/29 227,177
540,000 Morgan Stanley ABS Capital I, Inc. Trust (i)........................ 1.59% 05/04/27 545,408
510,000 Morgan Stanley, Global Medium-Term Note............................. 3.70% 10/23/24 555,743
1,605,000 Morgan Stanley, Global Medium-Term Note (i)......................... 1.51% 07/20/27 1,612,363
140,000 Wells Fargo & Co., Medium-Term Note (i)............................. 2.16% 02/11/26 145,377
</TABLE>
Page 60 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
BANKS (CONTINUED)
$ 510,000 Wells Fargo & Co., Medium-Term Note (i)............................. 3.58% 05/22/28 $ 566,313
360,000 Wells Fargo & Co., Medium-Term Note (i)............................. 2.39% 06/02/28 375,696
250,000 Wells Fargo & Co., Medium-Term Note................................. 4.15% 01/24/29 287,935
305,000 Wells Fargo & Co., Medium-Term Note (i)............................. 2.88% 10/30/30 324,607
--------------
16,181,979
--------------
BEVERAGES -- 0.4%
235,000 Anheuser-Busch Cos. LLC / Anheuser-Busch InBev Worldwide,
Inc.............................................................. 4.90% 02/01/46 300,069
215,000 Anheuser-Busch InBev Worldwide, Inc................................. 4.60% 04/15/48 265,266
500,000 Anheuser-Busch InBev Worldwide, Inc................................. 4.50% 06/01/50 620,924
390,000 Constellation Brands, Inc........................................... 4.25% 05/01/23 413,424
720,000 Primo Water Holdings, Inc. (a)...................................... 4.38% 04/30/29 727,747
--------------
2,327,430
--------------
BIOTECHNOLOGY -- 0.5%
650,000 Gilead Sciences, Inc., 3 Mo. LIBOR + 0.52% (b)...................... 0.67% 09/29/23 650,230
1,080,000 HCRX Investments Holdco L.P. (a).................................... 4.50% 08/01/29 1,095,484
1,000,000 Illumina, Inc....................................................... 2.55% 03/23/31 1,026,693
--------------
2,772,407
--------------
CHEMICALS -- 0.1%
475,000 International Flavors & Fragrances, Inc. (a)........................ 1.23% 10/01/25 473,871
--------------
COMMERCIAL SERVICES -- 0.1%
336,000 Adtalem Global Education, Inc. (a).................................. 5.50% 03/01/28 344,407
375,000 Carriage Services, Inc. (a)......................................... 4.25% 05/15/29 376,054
61,000 Service Corp. International......................................... 4.63% 12/15/27 64,565
--------------
785,026
--------------
COMPUTERS -- 0.1%
465,000 NCR Corp. (a)....................................................... 5.13% 04/15/29 482,711
--------------
DIVERSIFIED FINANCIAL SERVICES -- 0.1%
570,000 Air Lease Corp...................................................... 3.88% 07/03/23 602,113
--------------
ELECTRIC -- 0.7%
75,000 Alliant Energy Finance LLC (a)...................................... 3.75% 06/15/23 79,093
365,000 Appalachian Power Co., Series X..................................... 3.30% 06/01/27 397,819
100,000 Evergy Metro, Inc................................................... 4.20% 06/15/47 123,000
1,254,000 FirstEnergy Corp., Series C......................................... 3.40% 03/01/50 1,251,241
100,000 Metropolitan Edison Co. (a)......................................... 3.50% 03/15/23 103,646
550,000 NextEra Energy Capital Holdings, Inc., 3 Mo. LIBOR + 0.27% (b)...... 0.40% 02/22/23 550,062
345,000 NextEra Energy Capital Holdings, Inc................................ 0.65% 03/01/23 346,437
500,000 Pennsylvania Electric Co. (a)....................................... 4.15% 04/15/25 537,968
100,000 Puget Sound Energy, Inc............................................. 4.22% 06/15/48 123,912
450,000 Southwestern Electric Power Co., Series M........................... 4.10% 09/15/28 513,764
--------------
4,026,942
--------------
ENGINEERING & CONSTRUCTION -- 0.1%
563,000 Artera Services LLC (a)............................................. 9.03% 12/04/25 615,781
--------------
ENTERTAINMENT -- 0.3%
189,000 Caesars Entertainment, Inc. (a)..................................... 6.25% 07/01/25 200,000
515,000 Churchill Downs, Inc. (a)........................................... 5.50% 04/01/27 535,600
600,000 Cinemark USA, Inc. (a).............................................. 5.25% 07/15/28 570,801
117,000 Live Nation Entertainment, Inc. (a)................................. 4.75% 10/15/27 119,018
</TABLE>
See Notes to Financial Statements Page 61
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
ENTERTAINMENT (CONTINUED)
$ 341,000 Live Nation Entertainment, Inc. (a)................................. 3.75% 01/15/28 $ 341,518
--------------
1,766,937
--------------
ENVIRONMENTAL CONTROL -- 0.1%
200,000 Clean Harbors, Inc. (a)............................................. 4.88% 07/15/27 209,646
370,000 Waste Pro USA, Inc. (a)............................................. 5.50% 02/15/26 377,552
--------------
587,198
--------------
FOOD -- 0.7%
240,000 Kraft Heinz Foods Co................................................ 4.38% 06/01/46 278,486
765,000 Kraft Heinz Foods Co................................................ 4.88% 10/01/49 951,928
140,000 Kroger (The) Co..................................................... 4.45% 02/01/47 170,715
20,000 Pilgrim's Pride Corp. (a)........................................... 5.88% 09/30/27 21,370
286,000 Pilgrim's Pride Corp. (a)........................................... 4.25% 04/15/31 308,333
1,200,000 Pilgrim's Pride Corp. (a) (e)....................................... 3.50% 03/01/32 1,227,234
615,000 Post Holdings, Inc. (a)............................................. 4.63% 04/15/30 628,725
400,000 Post Holdings, Inc. (a)............................................. 4.50% 09/15/31 404,000
387,000 Smithfield Foods, Inc. (a).......................................... 5.20% 04/01/29 452,126
--------------
4,442,917
--------------
FOREST PRODUCTS & PAPER -- 0.1%
600,000 Clearwater Paper Corp. (a).......................................... 4.75% 08/15/28 616,770
--------------
GAS -- 0.0%
155,000 Southern Co. Gas Capital Corp....................................... 5.88% 03/15/41 219,355
--------------
HEALTHCARE-PRODUCTS -- 0.0%
208,000 Hologic, Inc. (a)................................................... 4.63% 02/01/28 221,529
--------------
HEALTHCARE-SERVICES -- 1.5%
635,000 Barnabas Health, Inc., Series 2012.................................. 4.00% 07/01/28 724,944
135,000 Centene Corp........................................................ 4.25% 12/15/27 142,762
953,000 Centene Corp........................................................ 2.45% 07/15/28 968,312
621,000 Centene Corp........................................................ 3.00% 10/15/30 641,547
250,000 CommonSpirit Health................................................. 3.35% 10/01/29 271,780
370,000 CommonSpirit Health................................................. 2.78% 10/01/30 387,468
700,000 Fresenius Medical Care US Finance II, Inc. (a)...................... 5.88% 01/31/22 715,447
260,000 HCA, Inc............................................................ 5.00% 03/15/24 286,064
90,000 HCA, Inc............................................................ 5.25% 04/15/25 102,784
360,000 HCA, Inc............................................................ 7.05% 12/01/27 453,289
417,000 HCA, Inc............................................................ 4.13% 06/15/29 472,263
520,000 HCA, Inc............................................................ 2.38% 07/15/31 520,158
470,000 HCA, Inc............................................................ 5.25% 06/15/49 612,727
365,000 HCA, Inc., Medium-Term Note......................................... 7.58% 09/15/25 443,632
100,000 Humana, Inc......................................................... 3.15% 12/01/22 102,785
919,000 Molina Healthcare, Inc. (a)......................................... 3.88% 11/15/30 981,157
874,000 Prime Healthcare Services, Inc. (a)................................. 7.25% 11/01/25 936,272
150,000 Tenet Healthcare Corp............................................... 4.63% 07/15/24 152,250
250,000 Tenet Healthcare Corp. (a).......................................... 4.88% 01/01/26 259,637
178,000 Tenet Healthcare Corp. (a).......................................... 4.63% 06/15/28 184,453
--------------
9,359,731
--------------
INSURANCE -- 0.8%
315,000 Acrisure LLC / Acrisure Finance, Inc. (a)........................... 4.25% 02/15/29 312,250
550,000 AmWINS Group, Inc. (a).............................................. 4.88% 06/30/29 559,625
775,000 Farmers Insurance Exchange (a)...................................... 8.63% 05/01/24 923,774
</TABLE>
Page 62 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
INSURANCE (CONTINUED)
$ 465,000 Farmers Insurance Exchange (a) (i).................................. 4.75% 11/01/57 $ 535,367
750,000 MassMutual Global Funding II (a).................................... 3.40% 03/08/26 826,662
1,000,000 Nationwide Mutual Insurance Co., 3 Mo. LIBOR + 2.29% (a) (b)........ 2.41% 12/15/24 1,001,261
50,000 Teachers Insurance & Annuity Association of America (a)............. 4.27% 05/15/47 61,679
220,000 Teachers Insurance & Annuity Association of America (a)............. 3.30% 05/15/50 236,794
175,000 Teachers Insurance & Annuity Association of America (a) (i)......... 4.38% 09/15/54 183,577
--------------
4,640,989
--------------
MEDIA -- 1.1%
624,000 Cable One, Inc. (a)................................................. 4.00% 11/15/30 632,171
609,000 CCO Holdings LLC / CCO Holdings Capital Corp. (a)................... 4.50% 08/15/30 637,124
295,000 Charter Communications Operating LLC / Charter Communications
Operating Capital................................................ 2.30% 02/01/32 287,729
370,000 Charter Communications Operating LLC / Charter Communications
Operating Capital................................................ 5.38% 05/01/47 455,831
100,000 Charter Communications Operating LLC / Charter Communications
Operating Capital................................................ 5.75% 04/01/48 128,769
173,000 Cox Communications, Inc. (a)........................................ 3.15% 08/15/24 184,017
680,000 Cox Communications, Inc. (a)........................................ 2.60% 06/15/31 696,981
20,000 CSC Holdings LLC (a)................................................ 5.38% 02/01/28 21,075
287,000 CSC Holdings LLC (a)................................................ 6.50% 02/01/29 317,135
500,000 CSC Holdings LLC (a)................................................ 3.38% 02/15/31 476,290
772,000 Diamond Sports Group LLC / Diamond Sports Finance Co. (a)........... 5.38% 08/15/26 512,955
312,000 Diamond Sports Group LLC / Diamond Sports Finance Co. (a)........... 6.63% 08/15/27 134,550
450,000 DIRECTV Holdings LLC / DIRECTV Financing Co., Inc. (a).............. 5.88% 08/15/27 470,995
459,000 Scripps Escrow II, Inc. (a)......................................... 5.38% 01/15/31 454,900
1,145,000 Sinclair Television Group, Inc. (a)................................. 4.13% 12/01/30 1,120,812
390,000 Walt Disney (The) Co................................................ 4.00% 10/01/23 418,788
--------------
6,950,122
--------------
OIL & GAS -- 0.3%
105,000 Antero Resources Corp. (a).......................................... 8.38% 07/15/26 119,045
210,000 Exxon Mobil Corp.................................................... 4.33% 03/19/50 262,761
295,000 Hess Corp........................................................... 4.30% 04/01/27 328,069
800,000 Sunoco L.P. / Sunoco Finance Corp................................... 4.50% 05/15/29 811,248
--------------
1,521,123
--------------
OIL & GAS SERVICES -- 0.1%
536,000 Archrock Partners L.P. / Archrock Partners Finance Corp. (a)........ 6.25% 04/01/28 546,720
340,000 USA Compression Partners L.P. / USA Compression Finance
Corp............................................................. 6.88% 04/01/26 353,716
--------------
900,436
--------------
PACKAGING & CONTAINERS -- 0.2%
58,000 Ball Corp........................................................... 4.00% 11/15/23 61,407
650,000 Berry Global, Inc. (a).............................................. 4.88% 07/15/26 686,270
58,000 Graphic Packaging International LLC................................. 4.88% 11/15/22 60,596
20,000 Mauser Packaging Solutions Holding Co. (a).......................... 5.50% 04/15/24 20,259
60,000 Sealed Air Corp. (a)................................................ 5.50% 09/15/25 67,390
20,000 Sealed Air Corp. (a)................................................ 4.00% 12/01/27 21,481
--------------
917,403
--------------
</TABLE>
See Notes to Financial Statements Page 63
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
PHARMACEUTICALS -- 1.1%
$ 390,000 AbbVie, Inc......................................................... 4.55% 03/15/35 $ 475,964
433,000 AbbVie, Inc......................................................... 4.50% 05/14/35 526,821
105,000 AbbVie, Inc......................................................... 4.05% 11/21/39 123,404
200,000 AbbVie, Inc......................................................... 4.45% 05/14/46 245,528
180,000 Bayer US Finance II LLC (a)......................................... 4.25% 12/15/25 200,516
880,000 Bayer US Finance II LLC (a)......................................... 4.38% 12/15/28 1,011,596
265,000 Bayer US Finance II LLC (a)......................................... 4.63% 06/25/38 318,234
400,000 Bayer US Finance II LLC (a)......................................... 4.88% 06/25/48 506,997
330,000 Cigna Corp.......................................................... 4.38% 10/15/28 385,461
400,000 Cigna Corp.......................................................... 4.90% 12/15/48 524,184
820,000 CVS Health Corp..................................................... 5.05% 03/25/48 1,085,927
447,000 Elanco Animal Health, Inc........................................... 5.27% 08/28/23 479,430
847,000 Organon & Co. / Organon Foreign Debt Co-Issuer B.V. (a)............. 5.13% 04/30/31 889,553
--------------
6,773,615
--------------
PIPELINES -- 1.0%
50,000 Energy Transfer L.P................................................. 4.00% 10/01/27 55,616
930,000 Energy Transfer L.P................................................. 5.40% 10/01/47 1,126,892
470,000 Energy Transfer L.P................................................. 5.00% 05/15/50 551,580
594,000 Energy Transfer L.P., Series B (i).................................. 6.63% (j) 573,952
250,000 Kinder Morgan, Inc.................................................. 5.55% 06/01/45 324,596
307,000 NGL Energy Operating LLC / NGL Energy Finance Corp. (a)............. 7.50% 02/01/26 311,989
845,000 Plains All American Pipeline L.P. / PAA Finance Corp................ 4.50% 12/15/26 950,132
350,000 Rockies Express Pipeline LLC (a).................................... 4.95% 07/15/29 364,579
100,000 Rockies Express Pipeline LLC (a).................................... 6.88% 04/15/40 110,637
598,788 Ruby Pipeline LLC (k)............................................... 8.00% 04/01/22 563,965
174,000 TransMontaigne Partners L.P. / TLP Finance Corp..................... 6.13% 02/15/26 178,922
850,000 Venture Global Calcasieu Pass LLC (a)............................... 4.13% 08/15/31 893,643
--------------
6,006,503
--------------
REAL ESTATE INVESTMENT TRUSTS -- 1.8%
450,000 Alexandria Real Estate Equities, Inc................................ 3.80% 04/15/26 501,791
75,000 Alexandria Real Estate Equities, Inc., Class E...................... 3.45% 04/30/25 81,462
75,000 American Campus Communities Operating Partnership L.P............... 3.75% 04/15/23 78,266
500,000 American Campus Communities Operating Partnership L.P............... 4.13% 07/01/24 544,338
250,000 Boston Properties L.P............................................... 2.75% 10/01/26 266,804
200,000 Boston Properties L.P............................................... 3.40% 06/21/29 219,710
550,000 Camden Property Trust............................................... 2.95% 12/15/22 564,567
500,000 CubeSmart L.P....................................................... 4.38% 02/15/29 575,135
515,000 CyrusOne L.P. / CyrusOne Finance Corp............................... 2.90% 11/15/24 540,457
665,000 CyrusOne L.P. / CyrusOne Finance Corp............................... 3.45% 11/15/29 699,486
200,000 GLP Capital L.P. / GLP Financing II, Inc............................ 5.38% 11/01/23 216,994
595,000 GLP Capital L.P. / GLP Financing II, Inc............................ 5.25% 06/01/25 667,801
250,000 GLP Capital L.P. / GLP Financing II, Inc............................ 5.38% 04/15/26 286,943
175,000 GLP Capital L.P. / GLP Financing II, Inc............................ 5.75% 06/01/28 208,641
185,000 GLP Capital L.P. / GLP Financing II, Inc............................ 5.30% 01/15/29 217,481
465,000 GLP Capital L.P. / GLP Financing II, Inc............................ 4.00% 01/15/30 502,775
500,000 Healthcare Realty Trust, Inc........................................ 3.63% 01/15/28 552,601
500,000 Hudson Pacific Properties L.P....................................... 3.95% 11/01/27 552,725
175,000 Hudson Pacific Properties L.P....................................... 4.65% 04/01/29 204,221
400,000 Kilroy Realty L.P................................................... 3.45% 12/15/24 427,735
400,000 Kilroy Realty L.P................................................... 4.38% 10/01/25 444,452
</TABLE>
Page 64 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
REAL ESTATE INVESTMENT TRUSTS (CONTINUED)
$ 500,000 Kimco Realty Corp................................................... 3.40% 11/01/22 $ 515,054
505,000 Lexington Realty Trust.............................................. 2.70% 09/15/30 519,414
117,000 MGM Growth Properties Operating Partnership L.P. / MGP Finance
Co-Issuer, Inc................................................... 5.63% 05/01/24 127,676
109,000 MGM Growth Properties Operating Partnership L.P. / MGP Finance
Co-Issuer, Inc. (a).............................................. 4.63% 06/15/25 117,290
250,000 National Retail Properties, Inc..................................... 3.90% 06/15/24 269,800
40,000 SBA Communications Corp............................................. 4.88% 09/01/24 40,650
325,000 SL Green Operating Partnership L.P.................................. 3.25% 10/15/22 333,982
300,000 Ventas Realty L.P................................................... 3.75% 05/01/24 320,994
250,000 Ventas Realty L.P................................................... 2.65% 01/15/25 262,266
75,000 Ventas Realty L.P................................................... 4.00% 03/01/28 84,341
250,000 VEREIT Operating Partnership L.P.................................... 4.63% 11/01/25 283,404
--------------
11,229,256
--------------
RETAIL -- 0.3%
479,000 FirstCash, Inc. (a)................................................. 4.63% 09/01/28 498,737
350,000 Michaels (The) Cos., Inc. (a)....................................... 5.25% 05/01/28 359,625
835,000 Michaels (The) Cos., Inc. (a)....................................... 7.88% 05/01/29 861,469
300,000 Walgreens Boots Alliance, Inc....................................... 3.30% 11/18/21 300,410
--------------
2,020,241
--------------
SEMICONDUCTORS -- 0.1%
75,000 Broadcom, Inc....................................................... 3.63% 10/15/24 81,150
415,000 Intel Corp.......................................................... 3.73% 12/08/47 475,538
100,000 Intel Corp.......................................................... 3.05% 08/12/51 102,727
--------------
659,415
--------------
SOFTWARE -- 0.2%
500,000 Oracle Corp......................................................... 2.88% 03/25/31 527,264
850,000 Oracle Corp......................................................... 3.95% 03/25/51 943,780
--------------
1,471,044
--------------
TELECOMMUNICATIONS -- 2.2%
436,000 AT&T, Inc........................................................... 2.25% 02/01/32 433,609
775,000 AT&T, Inc. (a)...................................................... 2.55% 12/01/33 779,844
150,000 AT&T, Inc........................................................... 4.50% 05/15/35 178,151
200,000 AT&T, Inc........................................................... 5.25% 03/01/37 253,187
594,000 AT&T, Inc........................................................... 4.85% 03/01/39 729,379
605,000 AT&T, Inc........................................................... 4.75% 05/15/46 738,217
1,000,000 AT&T, Inc. (a)...................................................... 3.80% 12/01/57 1,064,524
456,000 Frontier Communications Holdings LLC (a)............................ 5.00% 05/01/28 477,090
625,000 Level 3 Financing, Inc. (a)......................................... 4.63% 09/15/27 645,312
350,000 Level 3 Financing, Inc. (a)......................................... 3.63% 01/15/29 340,123
300,000 Level 3 Financing, Inc. (a)......................................... 3.75% 07/15/29 292,875
850,000 Lumen Technologies, Inc. (a)........................................ 5.38% 06/15/29 874,429
54,000 Qwest Corp.......................................................... 6.75% 12/01/21 54,850
342,000 Qwest Corp.......................................................... 7.25% 09/15/25 405,424
335,000 SES GLOBAL Americas Holdings G.P. (a)............................... 5.30% 03/25/44 393,003
542,000 Sprint Corp......................................................... 7.88% 09/15/23 614,736
2,010,938 Sprint Spectrum Co. LLC / Sprint Spectrum Co. II LLC / Sprint
Spectrum Co. III LLC (a)......................................... 4.74% 03/20/25 2,151,100
</TABLE>
See Notes to Financial Statements Page 65
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
TELECOMMUNICATIONS (CONTINUED)
$ 200,000 Sprint Spectrum Co. LLC / Sprint Spectrum Co. II LLC / Sprint
Spectrum Co. III LLC (a)......................................... 5.15% 03/20/28 $ 230,580
125,000 T-Mobile USA, Inc................................................... 2.25% 02/15/26 127,813
950,000 T-Mobile USA, Inc. (a).............................................. 2.25% 02/15/26 971,375
620,000 T-Mobile USA, Inc................................................... 3.75% 04/15/27 687,112
74,000 T-Mobile USA, Inc................................................... 4.75% 02/01/28 79,058
200,000 T-Mobile USA, Inc................................................... 3.88% 04/15/30 224,070
35,000 T-Mobile USA, Inc................................................... 2.55% 02/15/31 35,743
250,000 T-Mobile USA, Inc................................................... 4.38% 04/15/40 292,964
135,000 Verizon Communications, Inc......................................... 2.10% 03/22/28 138,531
400,000 Verizon Communications, Inc......................................... 2.55% 03/21/31 413,682
--------------
13,626,781
--------------
TOTAL CORPORATE BONDS AND NOTES................................................................ 110,908,758
(Cost $105,795,094) --------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES -- 14.6%
COLLATERALIZED MORTGAGE OBLIGATIONS -- 0.4%
Federal Home Loan Mortgage Corporation
325,323 Series 2019-4919, Class FP, 1 Mo. LIBOR + 0.45% (b).............. 0.53% 09/25/49 328,107
Federal National Mortgage Association
1,553,525 Series 2011-116, Class SA, IO, 1 Mo. LIBOR (x) -1 +
6.00% (l)...................................................... 5.92% 11/25/41 215,213
209,521 Series 2011-130, Class NW, 1 Mo. LIBOR + 1.20% (b)............... 1.30% 12/25/41 213,095
183,944 Series 2012-56, Class FK, 1 Mo. LIBOR + 0.45% (b)................ 0.53% 06/25/42 185,868
256,195 Series 2012-128, Class UA........................................ 2.50% 06/25/42 267,872
1,602,129 Series 2013-18, Class MI, IO..................................... 3.00% 02/25/33 104,007
346,908 Series 2019-33, Class FN, 1 Mo. LIBOR + 0.40% (b)................ 0.48% 07/25/49 349,919
Government National Mortgage Association
1,245,028 Series 2003-110, Class S, IO, 1 Mo. LIBOR (x) -1 +
6.60% (l)...................................................... 6.51% 10/20/33 143,021
1,367,624 Series 2018-63, Class IO, IO..................................... 4.00% 09/20/47 175,873
369,335 Series 2019-86, Class FE, 1 Mo. LIBOR + 0.40% (b)................ 0.49% 07/20/49 373,692
246,181 Series 2020-133, Class FA (h).................................... 0.49% 02/20/49 247,310
--------------
2,603,977
--------------
COMMERCIAL MORTGAGE-BACKED SECURITIES -- 3.7%
Federal Home Loan Mortgage Corporation Multiclass Certificates
11,374,110 Series 2021-P009, Class X, IO (d)................................ 1.57% 01/25/31 890,421
Federal Home Loan Mortgage Corporation Multifamily PC REMIC
Trust
4,095,000 Series 2019-P002, Class X, IO (h)................................ 1.14% 07/25/33 468,366
Federal Home Loan Mortgage Corporation Multifamily Structured
Pass Through Certificates
8,139,000 Series 2012-K021, Class X3, IO (d)............................... 2.03% 07/25/40 95,309
2,500,000 Series 2012-K022, Class X3, IO (d)............................... 1.87% 08/25/40 29,857
11,075,000 Series 2013-K025, Class X3, IO (d)............................... 1.81% 11/25/40 214,759
30,000,000 Series 2013-K026, Class X3, IO (d)............................... 1.86% 12/25/40 646,473
73,958,799 Series 2013-K031, Class X1, IO (d)............................... 0.31% 04/25/23 222,439
17,246,059 Series 2013-K035, Class X1, IO (d)............................... 0.47% 08/25/23 99,068
4,000,000 Series 2013-K035, Class X3, IO (d)............................... 1.85% 12/25/41 119,630
2,500,000 Series 2014-K037, Class X3, IO (d)............................... 2.28% 01/25/42 126,819
31,539,103 Series 2014-K039, Class X1, IO (d)............................... 0.84% 07/25/24 563,260
2,145,000 Series 2014-K039, Class X3, IO (d)............................... 2.18% 08/25/42 137,372
</TABLE>
Page 66 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
COMMERCIAL MORTGAGE-BACKED SECURITIES (CONTINUED)
Federal Home Loan Mortgage Corporation Multifamily Structured
Pass Through Certificates (Continued)
$ 1,747,990 Series 2014-K715, Class X3, IO (d)............................... 3.95% 02/25/41 $ 20,148
517,991 Series 2014-K716, Class X3, IO (d)............................... 3.87% 08/25/42 5
9,368,111 Series 2015-K042, Class X1, IO (d)............................... 1.17% 12/25/24 276,387
31,736,087 Series 2015-K043, Class X1, IO (d)............................... 0.65% 12/25/24 493,277
13,990,334 Series 2015-K044, Class X1, IO (d)............................... 0.85% 01/25/25 270,214
8,502,575 Series 2015-K045, Class X1, IO (d)............................... 0.56% 11/25/25 108,174
16,435,353 Series 2015-K051, Class X1, IO (d)............................... 0.67% 09/25/25 307,691
416,295 Series 2015-K719, Class X1, IO (d)............................... 0.81% 06/25/22 254
1,304,748 Series 2015-K720, Class X1, IO (d)............................... 0.62% 08/25/22 2,833
6,897,149 Series 2016-K056, Class X3, IO (d)............................... 2.18% 06/25/44 633,454
4,756,578 Series 2016-K057, Class X1, IO (d)............................... 1.31% 07/25/26 233,326
1,900,000 Series 2016-K060, Class X3, IO (d)............................... 1.96% 12/25/44 168,949
26,114,565 Series 2016-K723, Class X3, IO (d)............................... 1.98% 10/25/34 1,002,836
135,324 Series 2016-KF25, Class A, 1 Mo. LIBOR + 0.48% (b)............... 0.57% 10/25/23 135,546
4,985,909 Series 2016-KIR1, Class X, IO (d)................................ 1.19% 03/25/26 203,609
868,429 Series 2016-KS05, Class X, IO (d)................................ 0.76% 01/25/23 924
3,699,875 Series 2016-KS06, Class X, IO (d)................................ 1.19% 08/25/26 138,364
4,925,250 Series 2016-KS07, Class X, IO (d)................................ 0.77% 09/25/25 115,949
39,961,937 Series 2016-KW01, Class X1, IO (d)............................... 1.11% 01/25/26 1,409,997
10,664,559 Series 2017-K726, Class X1, IO (d)............................... 1.02% 04/25/24 192,462
2,230,000 Series 2017-K728, Class X3, IO (d)............................... 2.01% 11/25/45 126,330
3,630,000 Series 2018-K078, Class X3, IO (d)............................... 2.29% 06/25/46 485,791
125,000 Series 2018-K155, Class A3....................................... 3.75% 04/25/33 149,546
125,000 Series 2018-W5FX, Class AFX (d).................................. 3.34% 04/25/28 140,019
1,364,259 Series 2019-KC04, Class X1, IO (d)............................... 1.40% 12/25/26 61,299
7,172,219 Series 2019-KC05, Class X1, IO (d)............................... 1.34% 06/25/27 343,738
1,145,424 Series 2019-KF66, Class A, 1 Mo. LIBOR + 0.52% (b)............... 0.61% 07/25/29 1,155,218
182,928 Series 2019-KF73, Class AL, 1 Mo. LIBOR + 0.60% (b).............. 0.69% 11/25/29 184,722
5,665,313 Series 2019-KLU1, Class X3, IO (d)............................... 4.10% 01/25/31 884,331
1,800,000 Series 2019-KS11, Class XFX, IO (d).............................. 1.76% 06/25/29 180,781
467,814 Series 2020-KF75, Class AL, 1 Mo. LIBOR + 0.51% (b).............. 0.60% 12/25/29 474,272
291,651 Series 2020-KF80, Class AL, 1 Mo. LIBOR + 0.44% (b).............. 0.53% 06/25/30 293,521
877,752 Series 2020-KF84, Class AL, 1 Mo. LIBOR + 0.30% (b).............. 0.39% 07/25/30 880,928
1,869,935 Series 2020-KF85, Class AL, 1 Mo. LIBOR + 0.30% (b).............. 0.39% 08/25/30 1,876,662
560,814 Series 2020-KF86, Class AL, 1 Mo. LIBOR + 0.29% (b).............. 0.38% 08/25/27 562,154
1,950,000 Series 2020-KF87, Class AL, 1 Mo. LIBOR + 0.35% (b).............. 0.44% 08/25/30 1,957,405
1,346,166 Series 2020-KF88, Class AL, 1 Mo. LIBOR + 0.33% (b).............. 0.42% 09/25/30 1,351,316
Federal National Mortgage Association
1,187,380 Series 2012-M4, Class X1, IO (d) (h) (m)......................... 0.51% 04/25/22 934
18,117,956 Series 2015-M4, Class X2, IO (d)................................. 0.63% 07/25/22 22,421
148,718 Series 2016-M2, Class AL......................................... 3.47% 04/25/36 149,867
62,092 Series 2016-M2, Class X3, IO (d) (m)............................. 2.09% 04/25/36 1
2,436,296 Series 2016-M4, Class X2, IO (d)................................. 2.71% 01/25/39 109,733
183,656 Series 2016-M11, Class X2, IO (d)................................ 2.97% 07/25/39 4,231
1,060,593 Series 2018-M10, Class A1 (d).................................... 3.48% 07/25/28 1,153,572
6,100,000 Series 2019-M29, Class X4, IO.................................... 0.70% 03/25/29 248,232
</TABLE>
See Notes to Financial Statements Page 67
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
COMMERCIAL MORTGAGE-BACKED SECURITIES (CONTINUED)
Government National Mortgage Association
$ 385,949 Series 2011-119, Class D......................................... 3.51% 04/16/45 $ 400,407
0 Series 2011-77, Class IO, IO (h)................................. 4.31% 04/16/42 0
481,352 Series 2013-125, Class IO, IO (h)................................ 0.26% 10/16/54 7,922
985,618 Series 2014-125, Class IO, IO (h)................................ 0.90% 11/16/54 35,548
--------------
22,569,073
--------------
PASS-THROUGH SECURITIES -- 10.5%
Federal Home Loan Mortgage Corporation
568,929 Pool WN0006...................................................... 3.42% 07/01/30 646,733
Federal National Mortgage Association
395,402 Pool 464398...................................................... 5.97% 01/01/40 455,090
299,673 Pool 464400...................................................... 5.97% 01/01/40 344,910
474,285 Pool AM2974...................................................... 4.10% 04/01/43 536,847
1,531,489 Pool AM9897...................................................... 3.50% 09/01/35 1,728,922
32,575,000 Pool TBA (n)..................................................... 2.00% 10/15/51 32,972,760
26,050,000 Pool TBA (n)..................................................... 2.50% 10/15/51 27,011,195
--------------
63,696,457
--------------
TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES........................................ 88,869,507
(Cost $89,660,700) --------------
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (U.S. DOLLAR)
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
FOREIGN CORPORATE BONDS AND NOTES -- 6.4%
BANKS -- 1.7%
365,000 Credit Suisse Group AG (USD)........................................ 3.75% 03/26/25 396,053
65,000 Credit Suisse Group AG (USD) (a) (i)................................ 2.59% 09/11/25 67,670
125,000 Credit Suisse Group AG (USD)........................................ 4.55% 04/17/26 141,625
1,275,000 Credit Suisse Group AG (USD) (a) (i)................................ 2.19% 06/05/26 1,308,728
520,000 Credit Suisse Group AG (USD) (a) (i)................................ 1.31% 02/02/27 512,111
420,000 Credit Suisse Group AG (USD) (a) (i)................................ 3.09% 05/14/32 438,424
200,000 Global Bank Corp. (USD) (i) (o)..................................... 5.25% 04/16/29 214,041
590,000 HSBC Holdings PLC (USD) (i)......................................... 0.98% 05/24/25 590,464
525,000 HSBC Holdings PLC (USD) (i)......................................... 1.59% 05/24/27 526,989
540,000 HSBC Holdings PLC (USD) (i)......................................... 2.01% 09/22/28 545,438
1,440,000 HSBC Holdings PLC (USD) (i)......................................... 2.21% 08/17/29 1,452,451
115,000 Lloyds Banking Group PLC (USD) (i).................................. 2.86% 03/17/23 116,536
200,000 Lloyds Banking Group PLC (USD)...................................... 3.90% 03/12/24 215,976
365,000 Lloyds Banking Group PLC (USD) (i).................................. 3.87% 07/09/25 395,423
565,000 Macquarie Group Ltd. (USD) (a) (i).................................. 1.34% 01/12/27 563,514
350,000 Macquarie Group Ltd. (USD) (a) (i).................................. 1.63% 09/23/27 351,687
100,000 Santander UK Group Holdings PLC (USD) (i)........................... 4.80% 11/15/24 108,718
525,000 Santander UK Group Holdings PLC (USD) (i)........................... 1.09% 03/15/25 526,672
1,795,000 Santander UK Group Holdings PLC (USD) (i)........................... 1.67% 06/14/27 1,802,113
--------------
10,274,633
--------------
BEVERAGES -- 0.3%
505,000 Bacardi Ltd. (USD) (a).............................................. 2.75% 07/15/26 532,201
670,000 Bacardi Ltd. (USD) (a).............................................. 4.70% 05/15/28 782,549
</TABLE>
Page 68 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (U.S. DOLLAR)
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
FOREIGN CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
BEVERAGES (CONTINUED)
265,000 Bacardi Ltd. (USD) (a).............................................. 5.30% 05/15/48 $ 353,486
--------------
1,668,236
--------------
CHEMICALS -- 0.0%
275,000 Herens Holdco Sarl (USD) (a)........................................ 4.75% 05/15/28 276,328
--------------
COMMERCIAL SERVICES -- 0.5%
200,000 DP World Crescent Ltd. (USD) (a).................................... 4.85% 09/26/28 229,868
1,430,000 IHS Markit Ltd. (USD) (a)........................................... 5.00% 11/01/22 1,487,128
980,000 IHS Markit Ltd. (USD) (a)........................................... 4.75% 02/15/25 1,089,368
215,000 IHS Markit Ltd. (USD)............................................... 4.75% 08/01/28 254,714
--------------
3,061,078
--------------
DIVERSIFIED FINANCIAL SERVICES -- 0.9%
20,000 AerCap Ireland Capital DAC / AerCap Global Aviation
Trust (USD)...................................................... 3.95% 02/01/22 20,228
110,000 AerCap Ireland Capital DAC / AerCap Global Aviation
Trust (USD)...................................................... 3.50% 05/26/22 112,114
55,000 AerCap Ireland Capital DAC / AerCap Global Aviation
Trust (USD)...................................................... 4.13% 07/03/23 58,099
900,000 AerCap Ireland Capital DAC / AerCap Global Aviation
Trust (USD)...................................................... 3.50% 01/15/25 953,144
115,000 AerCap Ireland Capital DAC / AerCap Global Aviation
Trust (USD)...................................................... 3.88% 01/23/28 123,426
100,000 Avolon Holdings Funding Ltd. (USD) (a).............................. 3.95% 07/01/24 106,726
785,000 Avolon Holdings Funding Ltd. (USD) (a).............................. 2.88% 02/15/25 809,868
230,000 Avolon Holdings Funding Ltd. (USD) (a).............................. 2.53% 11/18/27 228,507
2,440,000 GE Capital International Funding Co. Unlimited Co. (USD)............ 4.42% 11/15/35 2,963,325
82,000 Park Aerospace Holdings Ltd. (USD) (a).............................. 5.50% 02/15/24 90,021
--------------
5,465,458
--------------
ELECTRIC -- 0.0%
250,000 Mong Duong Finance Holdings B.V. (USD) (o).......................... 5.13% 05/07/29 251,563
--------------
ENVIRONMENTAL CONTROL -- 0.1%
300,000 Waste Connections, Inc. (USD)....................................... 2.60% 02/01/30 313,822
--------------
FOOD -- 0.1%
443,000 JBS USA LUX S.A. / JBS USA Food Co. / JBS USA
Finance, Inc. (USD) (a).......................................... 5.50% 01/15/30 500,501
300,000 JBS USA LUX S.A. / JBS USA Food Co. / JBS USA
Finance, Inc. (USD) (a).......................................... 3.75% 12/01/31 316,875
--------------
817,376
--------------
INTERNET -- 0.1%
200,000 Tencent Holdings Ltd. (USD) (a)..................................... 3.68% 04/22/41 211,180
200,000 Tencent Holdings Ltd. (USD) (a)..................................... 3.84% 04/22/51 216,748
--------------
427,928
--------------
MACHINERY-DIVERSIFIED -- 0.0%
222,000 Titan Acquisition Ltd. / Titan Co.-Borrower LLC (USD) (a)........... 7.75% 04/15/26 228,427
--------------
MEDIA -- 0.1%
270,000 Virgin Media Secured Finance PLC (USD) (a).......................... 5.50% 05/15/29 289,575
100,000 Virgin Media Secured Finance PLC (USD) (a).......................... 4.50% 08/15/30 101,555
--------------
391,130
--------------
</TABLE>
See Notes to Financial Statements Page 69
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (U.S. DOLLAR)
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
FOREIGN CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
MINING -- 0.3%
450,000 Corp. Nacional del Cobre de Chile (USD) (o)......................... 3.15% 01/14/30 $ 475,720
700,000 Indonesia Asahan Aluminium Persero PT (USD) (o)..................... 4.75% 05/15/25 763,952
700,000 Indonesia Asahan Aluminium Persero PT (USD) (a)..................... 6.53% 11/15/28 860,534
--------------
2,100,206
--------------
MISCELLANEOUS MANUFACTURING -- 0.0%
40,000 Ingersoll-Rand Luxembourg Finance S.A. (USD)........................ 3.55% 11/01/24 43,213
--------------
OIL & GAS -- 0.8%
200,000 KazMunayGas National Co. JSC (USD) (a).............................. 3.50% 04/14/33 209,700
600,000 KazMunayGas National Co. JSC (USD) (o).............................. 3.50% 04/14/33 629,100
600,000 Pertamina Persero PT (USD) (a)...................................... 3.10% 08/27/30 627,888
370,000 Petroleos Mexicanos (USD)........................................... 6.63% 06/15/35 358,893
105,000 Petroleos Mexicanos (USD)........................................... 6.75% 09/21/47 92,872
180,000 Petroleos Mexicanos (USD)........................................... 7.69% 01/23/50 173,162
110,000 Petroleos Mexicanos (USD)........................................... 6.95% 01/28/60 97,219
1,300,000 Petronas Capital Ltd. (USD) (a)..................................... 3.50% 04/21/30 1,434,526
700,000 Saudi Arabian Oil Co. (USD) (o)..................................... 1.63% 11/24/25 707,910
200,000 Saudi Arabian Oil Co. (USD) (a)..................................... 2.25% 11/24/30 199,008
89,780 Transocean Pontus Ltd. (USD) (a).................................... 6.13% 08/01/25 89,356
379,000 Transocean Poseidon Ltd. (USD) (a).................................. 6.88% 02/01/27 367,156
--------------
4,986,790
--------------
OIL & GAS SERVICES -- 0.1%
35,750 Transocean Phoenix 2 Ltd. (USD) (a)................................. 7.75% 10/15/24 36,331
338,250 Transocean Proteus Ltd. (USD) (a)................................... 6.25% 12/01/24 333,599
--------------
369,930
--------------
PACKAGING & CONTAINERS -- 0.1%
395,000 Intertape Polymer Group, Inc. (USD) (a)............................. 4.38% 06/15/29 403,548
18,000 OI European Group B.V. (USD) (a).................................... 4.00% 03/15/23 18,649
--------------
422,197
--------------
PHARMACEUTICALS -- 0.3%
400,000 Bausch Health Cos., Inc. (USD) (a).................................. 4.88% 06/01/28 411,500
1,450,000 Endo Dac / Endo Finance LLC / Endo Finco, Inc. (USD) (a)............ 6.00% 06/30/28 908,244
365,000 Jazz Securities DAC (USD) (a)....................................... 4.38% 01/15/29 378,740
--------------
1,698,484
--------------
PIPELINES -- 0.1%
400,000 Galaxy Pipeline Assets Bidco Ltd. (USD) (a)......................... 2.16% 03/31/34 399,064
400,000 KazTransGas JSC (USD) (o)........................................... 4.38% 09/26/27 443,034
--------------
842,098
--------------
RETAIL -- 0.2%
568,000 1011778 BC ULC / New Red Finance, Inc. (USD) (a).................... 3.50% 02/15/29 565,946
510,000 Alimentation Couche-Tard, Inc. (USD) (a)............................ 3.55% 07/26/27 564,590
--------------
1,130,536
--------------
SAVINGS & LOANS -- 0.2%
630,000 Nationwide Building Society (USD) (a) (i)........................... 3.62% 04/26/23 643,114
135,000 Nationwide Building Society (USD) (a) (i)........................... 3.77% 03/08/24 141,194
175,000 Nationwide Building Society (USD) (a) (i)........................... 4.36% 08/01/24 186,771
--------------
971,079
--------------
</TABLE>
Page 70 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (U.S. DOLLAR)
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
FOREIGN CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
TELECOMMUNICATIONS -- 0.5%
200,000 C&W Senior Financing DAC (USD) (a).................................. 6.88% 09/15/27 $ 212,870
600,000 Intelsat Jackson Holdings S.A. (USD) (p)............................ 5.50% 08/01/23 317,250
750,000 Intelsat Jackson Holdings S.A. (USD) (a) (p)........................ 8.50% 10/15/24 405,938
303,000 Intelsat Jackson Holdings S.A. (USD) (a) (p)........................ 9.75% 07/15/25 163,999
200,000 SES S.A. (USD) (a).................................................. 3.60% 04/04/23 208,534
335,000 Vmed O2 UK Financing I PLC (USD) (a)................................ 4.25% 01/31/31 337,107
400,000 Vmed O2 UK Financing I PLC (USD) (a)................................ 4.75% 07/15/31 411,500
250,000 Vodafone Group PLC (USD)............................................ 5.25% 05/30/48 334,079
113,000 Vodafone Group PLC (USD)............................................ 4.88% 06/19/49 145,466
580,000 Vodafone Group PLC (USD)............................................ 4.25% 09/17/50 683,558
--------------
3,220,301
--------------
TRANSPORTATION -- 0.0%
200,000 Empresa de Transporte de Pasajeros Metro S.A. (USD) (a)............. 3.65% 05/07/30 219,073
--------------
TOTAL FOREIGN CORPORATE BONDS AND NOTES........................................................ 39,179,886
(Cost $38,310,182) --------------
FOREIGN SOVEREIGN BONDS -- 3.9%
BRAZIL -- 0.3%
950,000 Brazilian Government International Bond (USD)....................... 2.88% 06/06/25 982,215
850,000 Brazilian Government International Bond (USD)....................... 3.88% 06/12/30 853,697
--------------
1,835,912
--------------
CHILE -- 0.2%
500,000 Chile Government International Bond (USD)........................... 3.24% 02/06/28 544,232
400,000 Chile Government International Bond (USD)........................... 2.45% 01/31/31 410,996
400,000 Chile Government International Bond (USD)........................... 2.55% 01/27/32 411,908
--------------
1,367,136
--------------
COLOMBIA -- 0.4%
1,550,000 Colombia Government International Bond (USD)........................ 4.50% 01/28/26 1,687,741
1,000,000 Colombia Government International Bond (USD)........................ 3.00% 01/30/30 982,565
--------------
2,670,306
--------------
DOMINICAN REPUBLIC -- 0.2%
1,050,000 Dominican Republic International Bond (USD) (a)..................... 4.50% 01/30/30 1,094,635
350,000 Dominican Republic International Bond (USD) (o)..................... 4.88% 09/23/32 368,379
--------------
1,463,014
--------------
EGYPT -- 0.1%
200,000 Egypt Government International Bond (USD) (a)....................... 5.25% 10/05/25 211,020
200,000 Egypt Government International Bond (USD) (o)....................... 5.25% 10/05/25 211,020
--------------
422,040
--------------
INDONESIA -- 0.1%
600,000 Indonesia Government International Bond (USD)....................... 2.85% 02/14/30 631,641
--------------
MEXICO -- 0.5%
900,000 Mexico Government International Bond (USD).......................... 3.75% 01/11/28 995,891
1,460,000 Mexico Government International Bond (USD).......................... 2.66% 05/24/31 1,449,152
300,000 Mexico Government International Bond (USD).......................... 4.75% 04/27/32 348,321
--------------
2,793,364
--------------
</TABLE>
See Notes to Financial Statements Page 71
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (U.S. DOLLAR)
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
FOREIGN SOVEREIGN BONDS (CONTINUED)
<S> <C> <C> <C> <C>
OMAN -- 0.2%
600,000 Oman Government International Bond (USD) (o)........................ 6.75% 10/28/27 $ 678,490
500,000 Oman Government International Bond (USD) (o)........................ 5.63% 01/17/28 531,178
--------------
1,209,668
--------------
PANAMA -- 0.3%
1,100,000 Panama Government International Bond (USD).......................... 3.16% 01/23/30 1,167,034
400,000 Panama Government International Bond (USD).......................... 2.25% 09/29/32 390,772
--------------
1,557,806
--------------
PARAGUAY -- 0.1%
400,000 Paraguay Government International Bond (USD) (a).................... 4.95% 04/28/31 464,504
400,000 Paraguay Government International Bond (USD) (a).................... 2.74% 01/29/33 398,500
--------------
863,004
--------------
PERU -- 0.1%
453,000 Peruvian Government International Bond (USD)........................ 2.84% 06/20/30 469,263
--------------
PHILIPPINES -- 0.2%
1,100,000 Philippine Government International Bond (USD)...................... 2.46% 05/05/30 1,162,542
300,000 Philippine Government International Bond (USD)...................... 1.95% 01/06/32 300,322
--------------
1,462,864
--------------
QATAR -- 0.3%
902,000 Qatar Government International Bond (USD) (o)....................... 4.50% 04/23/28 1,066,615
600,000 Qatar Government International Bond (USD) (o)....................... 3.75% 04/16/30 684,869
--------------
1,751,484
--------------
ROMANIA -- 0.2%
950,000 Romanian Government International Bond (USD) (o).................... 3.00% 02/14/31 993,500
--------------
SAUDI ARABIA -- 0.2%
400,000 Saudi Government International Bond (USD) (o)....................... 3.25% 10/26/26 435,202
200,000 Saudi Government International Bond (USD) (o)....................... 3.63% 03/04/28 222,100
400,000 Saudi Government International Bond (USD) (o)....................... 3.25% 10/22/30 434,921
--------------
1,092,223
--------------
SOUTH AFRICA -- 0.3%
658,000 Republic of South Africa Government International Bond (USD)........ 4.30% 10/12/28 680,747
820,000 Republic of South Africa Government International Bond (USD)........ 4.85% 09/30/29 869,139
--------------
1,549,886
--------------
UNITED ARAB EMIRATES -- 0.1%
600,000 Abu Dhabi Government International Bond (USD) (o)................... 2.50% 09/30/29 635,800
--------------
URUGUAY -- 0.1%
600,000 Uruguay Government International Bond (USD)......................... 4.38% 01/23/31 705,462
--------------
TOTAL FOREIGN SOVEREIGN BONDS AND NOTES........................................................ 23,474,373
(Cost $23,240,079) --------------
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
U.S. GOVERNMENT BONDS AND NOTES -- 0.4%
$ 2,420,000 U.S. Treasury Floating Rate Note, 3 Mo. U.S. T-Bill Money Market
Yield + 0.06% (b)................................................ 0.10% 10/31/22 2,421,663
(Cost $2,420,142) --------------
</TABLE>
Page 72 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
MUNICIPAL BONDS -- 0.3%
<S> <C> <C> <C> <C>
CALIFORNIA -- 0.2%
$ 500,000 Los Angeles CA Unif School District................................. 5.75% 07/01/34 $ 674,815
500,000 Los Angeles Dept of Water........................................... 6.01% 07/01/39 677,376
75,000 Univ of CA Rev TXBL Gen Ref, Ser AJ................................. 4.60% 05/15/31 89,204
--------------
1,441,395
--------------
COLORADO -- 0.1%
220,000 City & Cnty of Denver Cnty Aprt Rev................................. 2.24% 11/15/30 229,708
--------------
FLORIDA -- 0.0%
105,000 Cnty of Miami-Dade FL Aviation Rev.................................. 3.45% 10/01/30 114,647
--------------
NEW YORK -- 0.0%
50,000 Metro Transprtn Auth................................................ 5.18% 11/15/49 69,179
--------------
TOTAL MUNICIPAL BONDS.......................................................................... 1,854,929
(Cost $1,699,160) --------------
U.S. TREASURY BILLS -- 22.1%
13,740,000 U.S. Cash Management Bill........................................... (q) 12/14/21 13,738,492
14,630,000 U.S. Treasury Bill.................................................. (q) 10/05/21 14,629,478
10,755,000 U.S. Treasury Bill.................................................. (q) 10/07/21 10,754,597
27,820,000 U.S. Treasury Bill.................................................. (q) 12/09/21 27,816,748
29,900,000 U.S. Treasury Bill.................................................. (q) 01/06/22 29,895,781
16,385,000 U.S. Treasury Bill.................................................. (q) 01/20/22 16,382,433
21,360,000 U.S. Treasury Bill.................................................. (q) 02/03/22 21,356,321
--------------
TOTAL U.S. TREASURY BILLS...................................................................... 134,573,850
(Cost $134,573,385) --------------
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 7.1%
<S> <C> <C>
42,951,583 JPMorgan 100% U.S. Treasury Securities Money Market Fund - Institutional Class - 0.01% (r)..... 42,951,583
(Cost $42,951,583) --------------
TOTAL INVESTMENTS -- 109.7%.................................................................... 667,540,230
(Cost $661,845,612) (s)
NET OTHER ASSETS AND LIABILITIES -- (9.7)%..................................................... (59,222,924)
--------------
NET ASSETS -- 100.0%........................................................................... $ 608,317,306
==============
</TABLE>
Futures Contracts at August 31, 2021 (See Note 2D - Futures Contracts in the
Notes to Financial Statements):
<TABLE>
<CAPTION>
UNREALIZED
APPRECIATION
NUMBER OF (DEPRECIATION)/
FUTURES CONTRACTS POSITION CONTRACTS EXPIRATION DATE NOTIONAL VALUE VALUE
----------------------------------- ---------------- --------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
U.S. 5-Year Treasury Notes Long 265 Dec-2021 $ 32,785,469 $ 74,240
U.S. 10-Year Ultra Treasury Notes Short 359 Dec-2021 (53,137,610) (51,705)
Ultra U.S. Treasury Bond Futures Short 101 Dec-2021 (19,925,406) (49,482)
------------- -----------
$ (40,277,547) $ (26,947)
============= ===========
</TABLE>
See Notes to Financial Statements Page 73
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
Interest Rate Swap Agreements at August 31, 2021 (see Note 2F - Swap Agreements
in the Notes to Financial Statements):
<TABLE>
<CAPTION>
UNREALIZED
APPRECIATION
FLOATING EXPIRATION NOTIONAL (DEPRECIATION)/
COUNTERPARTY RATE DATE VALUE FIXED RATE VALUE
----------------------------------- ---------------- --------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Citibank, Global Markets, Inc. 3 month LIBOR(1) 07/24/2025 $ 12,290,000 1.026%(1) $ (18,187)
Citibank, Global Markets, Inc. 3 month LIBOR(1) 07/24/2025 9,080,000 1.034%(1) (12,002)
Citibank, Global Markets, Inc. 3 month LIBOR(1) 07/24/2025 6,145,000 1.073%(1) (3,388)
Citibank, Global Markets, Inc. 3 month LIBOR(2) 07/24/2053 1,030,000 1.773%(2) 3,712
Citibank, Global Markets, Inc. 3 month LIBOR(2) 07/24/2053 755,000 1.785%(2) 453
Citibank, Global Markets, Inc. 3 month LIBOR(2) 07/24/2053 515,000 1.808%(2) (2,477)
--------------- -------------
$ 29,815,000 $ (31,889)
=============== =============
</TABLE>
(1) The Fund pays the floating rate and receives the fixed rate. The floating
rate is not effective until 07/24/2023 and no interest is being accrued
until that date.
(2) The Fund pays the fixed rate and receives the floating rate. The floating
rate is not effective until 07/24/2023 and no interest is being accrued
until that date.
-----------------------------
(a) This security, sold within the terms of a private placement memorandum, 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.
Pursuant to procedures adopted by the Trust's Board of Trustees, this
security has been determined to be liquid by First Trust Advisors L.P.,
the Fund's Advisor (the "Advisor"). Although market instability can result
in periods of increased overall market illiquidity, liquidity for each
security is determined based on security specific factors and assumptions,
which require subjective judgment. At August 31, 2021, securities noted as
such amounted to $158,443,384 or 26.0% of net assets.
(b) Floating or variable rate security.
(c) Step-up security. A security where the coupon increases or steps up at a
predetermined date. The coupon rate is determined based on the underlying
investments. The coupon rate resets periodically.
(d) Collateral Strip Rate security. Coupon is based on the weighted net
interest rate of the investment's underlying collateral. The interest rate
resets periodically.
(e) When-issued security. The interest rate shown reflects the rate in effect
at August 31, 2021. Interest will begin accruing on the security's first
settlement date.
(f) 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 August 31, 2021, securities noted as such are valued at
$2,571,870 or 0.4% of net assets.
(g) This security's value was determined using significant unobservable inputs
(See Note 2A - Portfolio Valuation in the Notes to Financial Statements).
(h) Weighted Average Coupon security. Coupon is based on the blended interest
rate of the underlying holdings, which may have different coupons. The
coupon may change in any period.
(i) Fixed-to-floating or fixed-to-variable rate security. The interest rate
shown reflects the fixed rate in effect at August 31, 2021. At a
predetermined date, the fixed rate will change to a floating rate or a
variable rate.
(j) Perpetual maturity.
(k) This security, sold within the terms of a private placement memorandum, is
exempt from registration upon resale under Rule 144A under the 1933 Act,
and may be resold in transactions exempt from registration, normally to
qualified institutional buyers (see Note 2C - Restricted Securities in the
Notes to Financial Statements).
(l) Inverse floating rate security.
(m) Pursuant to procedures adopted by the Trust's Board of Trustees, this
security has been determined to be illiquid by the Advisors.
(n) All or a portion of this security is part of a mortgage dollar roll
agreement (see Note 2K - Mortgage Dollar Rolls in the Notes to Financial
Statements).
(o) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(p) This issuer is in default and interest is not being accrued by the Fund
nor paid by the issuer.
(q) Zero coupon security.
(r) Rate shown reflects yield as of August 31, 2021.
Page 74 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
(s) Aggregate cost for federal income tax purposes is $661,692,472. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$9,295,559 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$3,506,637. The net unrealized appreciation was $5,788,922. The unrealized
amounts presented are inclusive of derivative contracts.
IO - Interest-Only Security -- Principal amount shown represents par value on
which interest payments are based.
LIBOR - London Interbank Offered Rate
SOFR - Secured Overnight Finance Rate
TBA - To-Be-Announced Security
Currency Abbreviations:
USD - United States Dollar
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
---------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Asset-Backed Securities............................... $ 112,221,722 $ -- $ 111,532,365 $ 689,357
Mortgage-Backed Securities............................ 111,083,959 -- 111,083,959 --
Corporate Bonds and Notes*............................ 110,908,758 -- 110,908,758 --
U.S. Government Agency Mortgage-Backed Securities..... 88,869,507 -- 88,869,507 --
Foreign Corporate Bonds and Notes*.................... 39,179,886 -- 39,179,886 --
Foreign Sovereign Bonds and Notes**................... 23,474,373 -- 23,474,373 --
U.S. Government Bonds and Notes....................... 2,421,663 -- 2,421,663 --
Municipal Bonds***.................................... 1,854,929 -- 1,854,929 --
U.S. Treasury Bills................................... 134,573,850 -- 134,573,850 --
Money Market Funds.................................... 42,951,583 42,951,583 -- --
---------------- --------------- ---------------- ----------------
Total Investments..................................... 667,540,230 42,951,583 623,899,290 689,357
Futures Contracts****................................. 74,240 74,240 -- --
Interest Rate Swap Agreements......................... 4,165 -- 4,165 --
---------------- --------------- ---------------- ----------------
Total................................................. $ 667,618,635 $ 43,025,823 $ 623,903,455 $ 689,357
================ =============== ================ ================
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
---------------- --------------- ---------------- ----------------
Futures Contracts****................................. $ (101,187) $ (101,187) $ -- $ --
Interest Rate Swap Agreements......................... (36,054) -- (36,054) --
---------------- --------------- --- ------------- ----------------
Total................................................. $ (137,241) $ (101,187) $ (36,054) $ --
================ =============== ================ ================
</TABLE>
* See Portfolio of Investments for industry breakout.
** See Portfolio of Investments for country breakout.
*** See Portfolio of Investments for state breakout.
**** Includes cumulative appreciation/depreciation on futures contracts as
reported in the Futures
Contracts table. Only the current day's variation margin is presented on the
Statements of Assets and Liabilities.
Level 3 Investments that are fair valued by the Advisor's Pricing Committee are
footnoted in the Portfolio of Investments. All Level 3 values are based on
unobservable inputs.
See Notes to Financial Statements Page 75
<PAGE>
FIRST TRUST TCW SECURITIZED PLUS ETF (DEED)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES -- 52.1%
<S> <C> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS -- 0.4%
Federal Home Loan Mortgage Corporation
$ 55,384 Series 2005-3071, Class TF, 1 Mo. LIBOR + 0.30% (a).............. 0.40% 04/15/35 $ 55,523
90,441 Series 2010-3778, Class L........................................ 3.50% 12/15/25 95,076
152,926 Series 2017-360, Class 250....................................... 2.50% 11/15/47 160,333
87,214 Series 2020-4993, Class OP, PO................................... (b) 10/25/58 84,626
Federal National Mortgage Association
158,229 Series 2006-56, Class FE, 1 Mo. LIBOR + 0.43% (a)................ 0.51% 07/25/36 159,790
124,445 Series 2011-47, Class GF, 1 Mo. LIBOR + 0.57% (a)................ 0.65% 06/25/41 126,522
184,787 Series 2018-50, Class BA......................................... 3.00% 07/25/48 192,765
12,886 Series 2018-86, Class JA......................................... 4.00% 05/25/47 13,424
112,298 Series 2019-67, Class FE, 1 Mo. LIBOR + 0.45% (a)................ 0.53% 11/25/49 113,205
--------------
1,001,264
--------------
COMMERCIAL MORTGAGE-BACKED SECURITIES -- 0.1%
Federal Home Loan Mortgage Corporation Multifamily Structured
Pass-Through Certificates
3,200,000 Series 2013-K024, Class X3, IO (c)............................... 1.71% 11/25/40 52,364
1,000,000 Series 2018-K732, Class X3, IO (c)............................... 2.25% 05/25/46 76,755
300,000 Series 2019-KS11, Class XFX, IO (c).............................. 1.76% 06/25/29 30,130
FREMF Mortgage Trust
21,686,166 Series 2017-K726, Class X2B, IO (d).............................. 0.10% 07/25/49 53,650
--------------
212,899
--------------
PASS-THROUGH SECURITIES -- 51.6%
Federal Home Loan Mortgage Corporation
77,138 Pool G08681...................................................... 3.50% 12/01/45 82,891
41,190 Pool G08792...................................................... 3.50% 12/01/47 43,850
137,420 Pool G60659...................................................... 3.50% 08/01/46 148,740
159,181 Pool G61748...................................................... 3.50% 11/01/48 173,317
183,168 Pool G67706...................................................... 3.50% 12/01/47 198,952
240,369 Pool G67710...................................................... 3.50% 03/01/48 258,926
147,404 Pool SD0499...................................................... 3.00% 08/01/50 157,206
88,859 Pool SD7502...................................................... 3.50% 07/01/49 95,472
181,767 Pool SD7511...................................................... 3.50% 01/01/50 196,637
105,285 Pool SD7513...................................................... 3.50% 04/01/50 114,141
107,959 Pool ZM1779...................................................... 3.00% 09/01/46 114,369
Federal National Mortgage Association
44,615 Pool BE3619...................................................... 4.00% 05/01/47 48,239
69,046 Pool CA0995...................................................... 3.50% 01/01/48 75,211
741,446 Pool CA5689...................................................... 3.00% 05/01/50 788,920
90,905 Pool FM2870...................................................... 3.00% 03/01/50 96,579
80,730 Pool MA4093...................................................... 2.00% 08/01/40 82,342
113,909 Pool MA4152...................................................... 2.00% 10/01/40 116,820
176,352 Pool MA4176...................................................... 2.00% 11/01/40 180,266
184,962 Pool MA4204...................................................... 2.00% 12/01/40 188,437
220,797 Pool MA4333...................................................... 2.00% 05/01/41 226,447
4,475,000 Pool TBA (e)..................................................... 1.50% 10/15/36 4,542,993
8,525,000 Pool TBA (e)..................................................... 2.00% 10/15/36 8,810,377
40,775,000 Pool TBA (e)..................................................... 2.00% 10/15/51 41,272,887
39,750,000 Pool TBA (e)..................................................... 2.50% 10/15/51 41,216,699
</TABLE>
Page 76 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW SECURITIZED PLUS ETF (DEED)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
PASS-THROUGH SECURITIES (CONTINUED)
Government National Mortgage Association
$ 71,060 Pool MA3873...................................................... 3.00% 08/20/46 $ 74,729
91,310 Pool MA4382...................................................... 3.50% 04/20/47 96,483
71,064 Pool MA4778...................................................... 3.50% 10/20/47 75,840
52,405 Pool MA4779...................................................... 4.00% 10/20/47 55,836
6,600,000 Pool TBA (e)..................................................... 2.00% 10/15/51 6,727,102
10,650,000 Pool TBA (e)..................................................... 2.50% 10/15/51 11,026,494
--------------
117,287,202
--------------
TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES........................................ 118,501,365
(Cost $118,262,587) --------------
MORTGAGE-BACKED SECURITIES -- 26.5%
COLLATERALIZED MORTGAGE OBLIGATIONS -- 13.5%
Alternative Loan Trust
255,804 Series 2005-16, Class A4, 1 Mo. LIBOR + 0.48% (a)................ 0.56% 06/25/35 239,774
114,326 Series 2006-HY12, Class A5 (c)................................... 2.98% 08/25/36 114,977
154,260 Series 2007-5CB, Class 1A11...................................... 6.00% 04/25/37 118,238
136,639 Series 2007-15CB, Class A5....................................... 5.75% 07/25/37 111,625
441,210 Series 2007-HY8C, Class A1, 1 Mo. LIBOR + 0.16% (a).............. 0.24% 09/25/47 430,350
203,362 Series 2007-OA7, Class A1A, 1 Mo. LIBOR + 0.18% (a).............. 0.26% 05/25/47 194,970
American Home Mortgage Assets Trust
435,490 Series 2006-1, Class 1A1, 1 Mo. LIBOR + 0.42% (a)................ 0.50% 05/25/46 414,113
140,234 Series 2006-3, Class 1A1, 12 Mo. Treasury Average +
0.97% (a)..................................................... 1.07% 10/25/46 134,700
419,381 Series 2007-2, Class A1, 1 Mo. LIBOR + 0.13% (a)................. 0.21% 03/25/47 403,742
American Home Mortgage Investment Trust
417,640 Series 2006-3, Class 11A1, 1 Mo. LIBOR + 0.36% (a)............... 0.44% 12/25/46 403,490
Banc of America Funding Trust
159,274 Series 2007-C, Class 7A1, 1 Mo. LIBOR + 0.42% (a)................ 0.51% 05/20/47 159,190
27,059 Series 2015-R2, Class 4A1, 1 Mo. LIBOR + 0.17% (a) (d)........... 0.25% 09/29/36 27,061
BCAP LLC Trust
113,189 Series 2006-AA2, Class A1, 1 Mo. LIBOR + 0.34% (a)............... 0.42% 01/25/37 111,957
Bear Stearns ALT-A Trust
980 Series 2004-8, Class 2A, 1 Mo. LIBOR + 0.68% (a)................. 0.76% 09/25/34 981
516,536 Series 2005-1, Class M2, 1 Mo. LIBOR + 1.13% (a)................. 1.21% 01/25/35 552,740
789,009 Series 2006-1, Class 21A2 (c).................................... 3.06% 02/25/36 664,547
Bear Stearns ARM Trust
210,876 Series 2005-1, Class 2A1 (c)..................................... 2.85% 03/25/35 211,289
Bear Stearns Mortgage Funding Trust
125,110 Series 2006-AR5, Class 2A1, 1 Mo. LIBOR + 0.19% (a).............. 0.27% 01/25/37 117,210
CHL Mortgage Pass-Through Trust
246,586 Series 2004-25, Class 2A1, 1 Mo. LIBOR + 0.68% (a)............... 0.76% 02/25/35 232,897
124,217 Series 2007-20, Class A1......................................... 6.50% 01/25/38 93,207
CIM Trust
331,826 Series 2021-R3, Class A1A (d).................................... 1.95% 06/25/57 333,692
784,618 Series 2021-R4, Class A1A (d).................................... 2.00% 05/01/61 790,307
143,066 Series 2021-NR3, Class A1, steps up to 5.57% on
04/26/24 (d) (f)............................................... 2.57% 06/25/57 143,386
Citigroup Mortgage Loan Trust
310,152 Series 2009-10, Class 2A2 (d).................................... 7.00% 12/25/35 290,512
</TABLE>
See Notes to Financial Statements Page 77
<PAGE>
FIRST TRUST TCW SECURITIZED PLUS ETF (DEED)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
MORTGAGE-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED)
Credit Suisse Mortgage Trust
$ 542,297 Series 2014-8R, Class 3A2 (c) (d)................................ 3.84% 02/27/36 $ 466,101
405,564 Series 2019-RPL9, Class A1 (d)................................... 2.97% 10/27/59 408,950
354,894 Series 2020-RPL2, Class A12 (d).................................. 3.43% 02/25/60 358,868
442,824 Series 2021-RPL4, Class A1 (d)................................... 1.80% 12/27/60 445,412
Deutsche Alt-A Securities Mortgage Loan Trust
218,244 Series 2007-3, Class 2A1, 1 Mo. LIBOR + 0.75% (a)................ 0.83% 10/25/47 205,949
370,548 Series 2007-AR3, Class 2A5, 1 Mo. LIBOR + 0.40% (a).............. 0.48% 06/25/37 357,329
DSLA Mortgage Loan Trust
480,460 Series 2005-AR6, Class 2A1A, 1 Mo. LIBOR + 0.29% (a)............. 0.38% 10/19/45 468,919
GreenPoint Mortgage Funding Trust
188,600 Series 2005-AR4, Class G41B, 1 Mo. LIBOR + 0.20% (a)............. 0.28% 10/25/45 177,254
GreenPoint MTA Trust
399,891 Series 2005-AR1, Class A2, 1 Mo. LIBOR + 0.44% (a)............... 0.52% 06/25/45 378,931
41,694 Series 2005-AR3, Class 1A1, 1 Mo. LIBOR + 0.48% (a).............. 0.56% 08/25/45 40,349
GSR Mortgage Loan Trust
259,979 Series 2006-OA1, Class 2A2, 1 Mo. LIBOR + 0.52% (a).............. 0.60% 08/25/46 149,038
HomeBanc Mortgage Trust
700,000 Series 2005-4, Class M1, 1 Mo. LIBOR + 0.71% (a)................. 0.79% 10/25/35 701,386
Impac CMB Trust
279,941 Series 2007-A, Class A, 1 Mo. LIBOR + 0.50% (a) (d).............. 0.58% 05/25/37 279,994
IndyMac INDX Mortgage Loan Trust
163,172 Series 2005-AR29, Class A1 (c)................................... 3.05% 01/25/36 157,631
978,873 Series 2006-AR2, Class 1A1B, 1 Mo. LIBOR + 0.42% (a)............. 0.50% 04/25/46 937,891
85,598 Series 2006-AR3, Class 2A1A (c).................................. 2.97% 03/25/36 75,940
65,881 Series 2006-AR9, Class 3A2, 1 Mo. LIBOR + 0.35% (a).............. 0.43% 06/25/36 60,747
734,935 Series 2006-AR13, Class A3 (c)................................... 2.91% 07/25/36 651,838
176,781 Series 2006-AR19, Class 5A2 (c).................................. 3.03% 08/25/36 157,735
572,898 Series 2006-AR31, Class A3 (c)................................... 3.13% 11/25/36 568,937
851,923 Series 2007-AR21, Class 6A1 (c).................................. 2.78% 09/25/37 733,089
122,269 Series 2007-FLX2, Class A1A, 1 Mo. LIBOR + 0.16% (a)............. 0.24% 04/25/37 115,801
975,212 Series 2007-FLX3, Class A1, 1 Mo. LIBOR + 0.24% (a).............. 0.32% 06/25/37 977,062
JP Morgan Alternative Loan Trust
482,611 Series 2006-A1, Class 1A1, 1 Mo. LIBOR + 0.46% (a)............... 0.54% 03/25/36 472,704
Lehman XS Trust
136,802 Series 2005-5N, Class 3A1A, 1 Mo. LIBOR + 0.30% (a).............. 0.38% 11/25/35 136,065
1,012,111 Series 2005-7N, Class 1A1A, 1 Mo. LIBOR + 0.54% (a).............. 0.62% 12/25/35 998,508
480,593 Series 2006-10N, Class 1A4A, 1 Mo. LIBOR + 0.60% (a)............. 0.68% 07/25/46 422,879
240,991 Series 2007-12N, Class 1A3A, 1 Mo. LIBOR + 0.20% (a)............. 0.28% 07/25/47 242,421
487,959 Series 2007-16N, Class 1A1, 1 Mo. LIBOR + 0.47% (a).............. 0.55% 09/25/47 488,676
Luminent Mortgage Trust
752,994 Series 2005-1, Class A1, 1 Mo. LIBOR + 0.52% (a)................. 0.60% 11/25/35 740,808
MASTR Adjustable Rate Mortgages Trust
707,087 Series 2007-2, Class A1, 1 Mo. LIBOR + 0.30% (a)................. 0.38% 03/25/47 691,985
1,800,000 Series 2007-HF2, Class A2, 1 Mo. LIBOR + 1.10% (a)............... 1.18% 09/25/37 873,866
Opteum Mortgage Acceptance Corp. Asset Backed Pass-Through Certificates
300,000 Series 2005-4, Class M2, 1 Mo. LIBOR + 0.75% (a)................. 0.83% 11/25/35 293,367
RALI Trust
562,763 Series 2005-QO1, Class A1, 1 Mo. LIBOR + 0.30% (a)............... 0.38% 08/25/35 482,698
158,519 Series 2006-QA6, Class A1, 1 Mo. LIBOR + 0.38% (a)............... 0.46% 07/25/36 161,387
</TABLE>
Page 78 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW SECURITIZED PLUS ETF (DEED)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
MORTGAGE-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED)
RALI Trust (Continued)
$ 3,400,020 Series 2006-QO2, Class A1, 1 Mo. LIBOR + 0.44% (a)............... 0.52% 02/25/46 $ 1,001,995
270,752 Series 2006-QS7, Class A2........................................ 6.00% 06/25/36 257,888
399,046 Series 2007-QH4, Class A1, 1 Mo. LIBOR + 0.19% (a)............... 0.27% 05/25/37 384,721
461,913 Series 2007-QH9, Class A1 (c).................................... 1.36% 11/25/37 442,885
124,576 Series 2007-QS1, Class 1A4....................................... 6.00% 01/25/37 122,011
224,397 Series 2007-QS2, Class A4........................................ 6.25% 01/25/37 215,908
Residential Asset Securitization Trust
269,448 Series 2006-A8, Class 3A4........................................ 6.00% 08/25/36 193,443
RFMSI Trust
738,488 Series 2006-S10, Class 1A1....................................... 6.00% 10/25/36 727,041
Structured Adjustable Rate Mortgage Loan Trust
993,140 Series 2005-17, Class 3A1 (c).................................... 2.88% 08/25/35 959,034
532,532 Series 2006-12, Class 1A1, 1 Mo. LIBOR + 0.32% (a)............... 0.40% 01/25/37 536,603
Structured Asset Mortgage Investments II Trust
268,954 Series 2005-AR8, Class A2, 12 Mo. Treasury Average + 1.48% (a)... 1.98% 02/25/36 266,457
746,113 Series 2006-AR6, Class 2A1, 1 Mo. LIBOR + 0.38% (a).............. 0.46% 07/25/46 652,672
184,735 Series 2006-AR7, Class A1A, 1 Mo. LIBOR + 0.42% (a).............. 0.50% 08/25/36 186,968
179,293 Series 2006-AR7, Class A1BG, 1 Mo. LIBOR + 0.12% (a)............. 0.20% 08/25/36 169,513
980,238 Series 2007-AR1, Class 2A1, 1 Mo. LIBOR + 0.18% (a).............. 0.26% 01/25/37 943,891
55,741 Series 2007-AR3, Class 2A1, 1 Mo. LIBOR + 0.19% (a).............. 0.27% 09/25/47 53,626
WaMu Mortgage Pass-Through Certificates Trust
403,702 Series 2005-AR8, Class 2AC2, 1 Mo. LIBOR + 0.92% (a)............. 1.00% 07/25/45 401,359
186,625 Series 2005-AR17, Class A1A2, 1 Mo. LIBOR + 0.58% (a)............ 0.66% 12/25/45 178,433
68,141 Series 2006-AR3, Class A1A, 12 Mo. Treasury Average +
1.00% (a)..................................................... 1.10% 02/25/46 68,829
1,105,369 Series 2006-AR17, Class 1A1A, 12 Mo. Treasury Average +
0.81% (a)..................................................... 0.92% 12/25/46 1,068,775
Washington Mutual Mortgage Pass-Through Certificates WMALT
742,648 Series 2006-AR6, Class 2A, 12 Mo. Treasury Average + 0.96% (a)... 1.06% 08/25/46 496,748
282,658 Series 2006-AR10, Class A2A, 1 Mo. LIBOR + 0.17% (a)............. 0.25% 12/25/36 276,416
--------------
30,780,686
--------------
COMMERCIAL MORTGAGE-BACKED SECURITIES -- 13.0%
BAMLL Commercial Mortgage Securities Trust
105,000 Series 2018-PARK, Class A (c) (d)................................ 4.23% 08/10/38 121,084
163,000 Series 2020-JGDN, Class A, 1 Mo. LIBOR + 2.75% (a) (d)........... 2.85% 11/15/30 165,939
BBCMS Mortgage Trust
210,000 Series 2013-TYSN, Class E (d).................................... 3.71% 09/05/32 209,822
120,000 Series 2015-SRCH, Class A2 (d)................................... 4.20% 08/10/35 136,887
500,000 Series 2020-BID, Class A, 1 Mo. LIBOR + 2.14% (a) (d)............ 2.24% 10/15/37 504,437
545,000 Series 2020-BID, Class D, 1 Mo. LIBOR + 4.63% (a) (d)............ 4.73% 10/15/37 553,025
BDS Ltd.
662,000 Series 2020-FL6, Class C, SOFR + 2.36% (a) (d)................... 2.41% 09/15/35 673,879
Benchmark Mortgage Trust
117,000 Series 2020-B18, Class AGNF (d).................................. 4.14% 07/15/53 119,170
BF Mortgage Trust
450,000 Series 2019-NYT, Class A, 1 Mo. LIBOR + 1.20% (a) (d)............ 1.30% 12/15/35 451,468
BFLD Trust
450,000 Series 2020-EYP, Class F, 1 Mo. LIBOR + 4.20% (a) (d)............ 4.30% 10/15/35 456,116
320,000 Series 2020-OBRK, Class A, 1 Mo. LIBOR + 2.05% (a) (d)........... 2.15% 11/15/28 323,797
200,000 Series 2021-FPM, Class B, 1 Mo. LIBOR + 2.50% (a) (d)............ 2.60% 06/15/38 200,932
</TABLE>
See Notes to Financial Statements Page 79
<PAGE>
FIRST TRUST TCW SECURITIZED PLUS ETF (DEED)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
MORTGAGE-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
COMMERCIAL MORTGAGE-BACKED SECURITIES (CONTINUED)
BPR Trust
$ 290,597 Series 2021-WILL, Class A, 1 Mo. LIBOR + 1.75% (a) (d)........... 1.85% 06/15/38 $ 291,165
BWAY Mortgage Trust
19,560,737 Series 2013-1515, Class XA, IO (c) (d)........................... 0.73% 03/10/33 329,057
BX Commercial Mortgage Trust
35,000 Series 2018-IND, Class G, 1 Mo. LIBOR + 2.05% (a) (d)............ 2.15% 11/15/35 35,149
405,071 Series 2020-FOX, Class F, 1 Mo. LIBOR + 4.25% (a) (d)............ 4.35% 11/15/32 408,450
750,000 Series 2021-SOAR, Class J, 1 Mo. LIBOR + 3.75% (a) (d)........... 3.85% 06/15/38 754,883
BX Trust
127,000 Series 2019-CALM, Class A, 1 Mo. LIBOR + 0.88% (a) (d)........... 0.97% 11/15/32 127,209
CALI Mortgage Trust
100,000 Series 2019-101C, Class A (d).................................... 3.96% 03/10/39 114,492
CAMB Commercial Mortgage Trust
332,500 Series 2019-LIFE, Class A, 1 Mo. LIBOR + 1.07% (a) (d)........... 1.17% 12/15/37 333,648
890,000 Series 2019-LIFE, Class G, 1 Mo. LIBOR + 3.25% (a) (d)........... 3.35% 12/15/37 895,674
Citigroup Commercial Mortgage Trust
1,113,133 Series 2012-GC8, Class XA, IO (c) (d)............................ 1.89% 09/10/45 11,708
757,724 Series 2013-GC15, Class XA, IO (c)............................... 1.00% 09/10/46 10,392
4,674,228 Series 2016-P3, Class XA, IO (c)................................. 1.85% 04/15/49 264,597
151,379 Series 2020-WSS, Class A, 1 Mo. LIBOR + 1.95% (a) (d)............ 2.05% 02/15/39 156,997
COMM Mortgage Trust
317,000 Series 2012-CR4, Class AM........................................ 3.25% 10/15/45 319,546
4,643,327 Series 2012-CR4, Class XA, IO (c)................................ 1.84% 10/15/45 66,352
7,619,284 Series 2013-CR12, Class XA, IO (c)............................... 1.28% 10/10/46 152,130
1,131,743 Series 2013-LC13, Class XA, IO (c)............................... 1.18% 08/10/46 18,606
567,014 Series 2014-CR14, Class A2....................................... 3.15% 02/10/47 574,303
25,005,324 Series 2014-CR14, Class XA, IO (c)............................... 0.71% 02/10/47 295,523
6,684,755 Series 2014-CR17, Class XA, IO (c)............................... 1.12% 05/10/47 138,099
1,638,022 Series 2014-UBS2, Class XA, IO (c)............................... 1.29% 03/10/47 37,315
579,050 Series 2014-UBS3, Class XA, IO (c)............................... 1.23% 06/10/47 13,980
11,151,000 Series 2014-UBS3, Class XB, IO (c) (d)........................... 0.42% 06/10/47 94,177
7,000,000 Series 2015-LC21, Class XE, IO (c) (d)........................... 1.23% 07/10/48 271,068
35,000 Series 2020-CX, Class E (c) (d).................................. 2.77% 11/10/46 33,648
CSAIL Commercial Mortgage Trust
21,838,335 Series 2015-C2, Class XA, IO (c)................................. 0.88% 06/15/57 489,137
6,154,525 Series 2015-C4, Class XA, IO (c)................................. 0.97% 11/15/48 183,496
3,080,123 Series 2016-C5, Class XA, IO (c)................................. 1.09% 11/15/48 97,878
Credit Suisse Mortgage Trust
182,000 Series 2019-UVIL, Class B (c) (d)................................ 3.39% 12/15/41 190,977
800,000 Series 2020-TMIC, Class A, 1 Mo. LIBOR + 3.00% (a) (d)........... 3.25% 12/15/35 813,972
611,000 Series 2021-BPNY, Class A, 1 Mo. LIBOR + 3.71% (a) (d)........... 3.81% 08/15/23 612,526
DBUBS Mortgage Trust
120,000 Series 2017-BRBK, Class A (d).................................... 3.45% 10/10/34 128,024
DC Office Trust
75,000 Series 2019-MTC, Class A (d)..................................... 2.97% 09/15/45 80,823
DROP Mortgage Trust
340,000 Series 2021-FILE, Class A, 1 Mo. LIBOR + 1.15% (a) (d)........... 1.25% 04/15/26 342,543
386,000 Series 2021-FILE, Class B, 1 Mo. LIBOR + 1.70% (a) (d)........... 1.80% 04/15/26 387,942
GPMT Ltd.
840,000 Series 2021-FL3, Class A, 1 Mo. LIBOR + 1.25% (a) (d)............ 1.34% 07/16/35 841,478
</TABLE>
Page 80 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW SECURITIZED PLUS ETF (DEED)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
MORTGAGE-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
COMMERCIAL MORTGAGE-BACKED SECURITIES (CONTINUED)
Grace Trust
$ 1,000,000 Series 2020-GRCE, Class X, IO (c) (d)............................ 0.30% 12/10/40 $ 26,358
GS Mortgage Securities Corp. Trust
763,434 Series 2019-BOCA, Class A, 1 Mo. LIBOR + 1.20% (a) (d)........... 1.30% 06/15/38 765,153
GS Mortgage Securities Corp. II
5,825,033 Series 2013-GC10, Class XA, IO (c)............................... 1.63% 02/10/46 95,838
GS Mortgage Securities Corp. Trust
320,000 Series 2012-ALOH, Class A (d).................................... 3.55% 04/10/34 322,441
175,000 Series 2020-TWN3, Class A, 1 Mo. LIBOR + 2.00% (a) (d)........... 2.10% 11/15/37 176,194
GS Mortgage Securities Trust
170,990 Series 2011-GC5, Class AS (d).................................... 5.21% 08/10/44 171,856
2,116,657 Series 2011-GC5, Class XA, IO (c) (g)............................ 0.09% 08/10/44 21
8,476,732 Series 2012-GC6, Class XA, IO (c) (g)............................ 1.91% 01/10/45 85
21,269,635 Series 2015-GC28, Class XA, IO (c)............................... 1.13% 02/10/48 601,531
280,000 Series 2018-HART, Class A, 1 Mo. LIBOR + 1.09% (a) (d)........... 1.19% 10/15/31 280,215
Hilton USA Trust
700,000 Series 2016-SFP, Class C (d)..................................... 4.12% 11/05/35 706,595
Hudson Yards Mortgage Trust
75,000 Series 2019-55HY, Class A (c) (d)................................ 3.04% 12/10/41 81,235
JP Morgan Chase Commercial Mortgage Securities Trust
5,358,061 Series 2013-C16, Class XA, IO (c)................................ 1.08% 12/15/46 87,724
1,905,060 Series 2013-LC11, Class XA, IO (c)............................... 1.38% 04/15/46 28,949
19,243,579 Series 2014-C20, Class XA, IO (c)................................ 1.01% 07/15/47 302,496
374,000 Series 2021-1440, Class B, 1 Mo. LIBOR + 1.75% (a) (d)........... 1.85% 03/15/36 374,751
JPMBB Commercial Mortgage Securities Trust
1,006,997 Series 2015-C32, Class XA, IO (c)................................ 1.36% 11/15/48 28,820
JPMCC Commercial Mortgage Securities Trust
184,217 Series 2017-JP5, Class A2........................................ 3.24% 03/15/50 185,493
JPMDB Commercial Mortgage Securities Trust
6,183,222 Series 2016-C2, Class XA, IO (c)................................. 1.71% 06/15/49 324,912
KKR Industrial Portfolio Trust
226,588 Series 2020-AIP, Class F, 1 Mo. LIBOR + 3.43% (a) (d)............ 3.52% 03/15/37 227,430
Last Mile Logistics Pan Euro Finance DAC........................
720,000 Series 1A, Class E, 3 Mo. EURIBOR + 2.70% (a) (d)................ 2.70% 08/17/33 851,599
Merit Hill Commercial Mortgage Pass-Through Certificates
320,000 Series 2020-HILL, Class F, 1 Mo. LIBOR + 4.10% (a) (d)........... 4.20% 08/15/37 323,340
MF1 Ltd.
365,288 Series 2020-FL3, Class A, SOFR + 2.16% (a) (d)................... 2.21% 07/15/35 369,507
MHC Commercial Mortgage Trust
205,000 Series 2021-MHC, Class E, 1 Mo. LIBOR + 2.10% (a) (d)............ 2.20% 04/15/38 205,565
MKT Mortgage Trust
95,000 Series 2020-525M, Class A (d).................................... 2.69% 02/12/40 100,644
Morgan Stanley Bank of America Merrill Lynch Trust
1,865,790 Series 2013-C13, Class XA, IO (c)................................ 1.11% 11/15/46 31,823
5,326,730 Series 2014-C14, Class XA, IO (c)................................ 1.16% 02/15/47 99,381
10,866,482 Series 2015-C20, Class XA, IO (c)................................ 1.41% 02/15/48 358,691
MSCG Trust
540,000 Series 2015-ALDR, Class A2 (c) (d)............................... 3.58% 06/07/35 560,137
</TABLE>
See Notes to Financial Statements Page 81
<PAGE>
FIRST TRUST TCW SECURITIZED PLUS ETF (DEED)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
MORTGAGE-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
COMMERCIAL MORTGAGE-BACKED SECURITIES (CONTINUED)
Natixis Commercial Mortgage Securities Trust
$ 415,000 Series 2019-1776, Class A (d).................................... 2.51% 10/15/36 $ 427,899
435,000 Series 2019-FAME, Class A (d).................................... 3.05% 08/15/36 445,552
330,000 Series 2019-MILE, Class D, 1 Mo. LIBOR + 2.75% (a) (d)........... 2.85% 07/15/36 330,529
75,000 Series 2020-2PAC, Class A (d).................................... 2.97% 12/15/38 78,667
One Bryant Park Trust
125,000 Series 2019-OBP, Class A (d)..................................... 2.52% 09/15/54 131,064
One Market Plaza Trust
1,055,000 Series 2017-1MKT, Class C (d).................................... 4.02% 02/10/32 1,070,377
417,000 Series 2017-1MKT, Class D (d).................................... 4.15% 02/10/32 423,851
SFAVE Commercial Mortgage Securities Trust
270,000 Series 2015-5AVE, Class A2A (c) (d).............................. 3.66% 01/05/43 302,609
340,000 Series 2015-5AVE, Class A2B (c) (d).............................. 4.14% 01/05/43 377,811
SG Commercial Mortgage Securities Trust
750,000 Series 2019-787E, Class E (c) (d)................................ 4.66% 02/15/41 768,453
Shops at Crystals Trust
170,000 Series 2016-CSTL, Class A (d).................................... 3.13% 07/05/36 179,072
SLG Office Trust
385,000 Series 2021-OVA, Class G (d)..................................... 2.85% 07/15/41 356,920
UBS Commercial Mortgage Trust
3,045,940 Series 2012-C1, Class XA, IO (c) (d)............................. 2.20% 05/10/45 9,963
UBS-Barclays Commercial Mortgage Trust
5,262,602 Series 2012-C2, Class XA, IO (c) (d)............................. 1.43% 05/10/63 35,607
650,922 Series 2012-C3, Class XA, IO (c) (d)............................. 1.98% 08/10/49 7,667
161,765 Series 2012-C4, Class A3......................................... 2.53% 12/10/45 162,285
Wells Fargo Commercial Mortgage Trust
8,808,922 Series 2015-C26, Class XA, IO (c)................................ 1.35% 02/15/48 305,971
16,256,221 Series 2015-C27, Class XA, IO (c)................................ 1.43% 02/15/48 392,540
29,398,553 Series 2015-C28, Class XA, IO (c)................................ 0.74% 05/15/48 550,714
3,527,038 Series 2015-C30, Class XA, IO (c)................................ 1.04% 09/15/58 107,141
1,993,112 Series 2015-LC22, Class XA, IO (c)............................... 0.93% 09/15/58 52,165
6,979,206 Series 2015-NXS3, Class XA, IO (c)............................... 1.05% 09/15/57 216,835
3,948,934 Series 2016-C33, Class XA, IO (c)................................ 1.78% 03/15/59 241,875
5,823,000 Series 2016-C37, Class XEF, IO (c) (d)........................... 1.60% 12/15/49 426,658
1,237,236 Series 2016-BNK1, Class XA, IO (c)............................... 1.86% 08/15/49 84,853
WFRBS Commercial Mortgage Trust
633,474 Series 2012-C9, Class XA, IO (c) (d)............................. 2.02% 11/15/45 8,345
3,862,381 Series 2014-C20, Class XA, IO (c)................................ 1.08% 05/15/47 72,730
1,039,474 Series 2014-C22, Class XA, IO (c)................................ 0.94% 09/15/57 20,080
4,999,709 Series 2014-C24, Class XA, IO (c)................................ 1.00% 11/15/47 115,274
13,098,729 Series 2014-LC14, Class XA, IO (c)............................... 1.43% 03/15/47 324,373
--------------
29,550,184
--------------
TOTAL MORTGAGE-BACKED SECURITIES............................................................... 60,330,870
(Cost $60,053,642) --------------
U.S. GOVERNMENT BONDS AND NOTES -- 20.0%
130,000 U.S. Treasury Bond.................................................. 2.38% 05/15/51 143,396
465,000 U.S. Treasury Bond.................................................. 2.00% 08/15/51 472,629
4,115,000 U.S. Treasury Note.................................................. 0.13% 06/30/23 4,111,946
7,570,000 U.S. Treasury Note.................................................. 0.13% 07/31/23 7,561,425
</TABLE>
Page 82 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW SECURITIZED PLUS ETF (DEED)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
U.S. GOVERNMENT BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
$ 16,215,000 U.S. Treasury Note.................................................. 0.13% 08/31/23 $ 16,189,031
3,795,000 U.S. Treasury Note.................................................. 0.88% 06/30/26 3,816,643
3,810,000 U.S. Treasury Note.................................................. 0.63% 07/31/26 3,784,402
4,330,000 U.S. Treasury Note.................................................. 0.75% 08/31/26 4,325,771
5,135,000 U.S. Treasury Note.................................................. 1.25% 08/15/31 5,110,528
--------------
Total U.S. Government Bonds and Notes.......................................................... 45,515,771
(Cost $45,421,028) --------------
ASSET-BACKED SECURITIES -- 18.9%
Accredited Mortgage Loan Trust
169,452 Series 2005-1, Class M2, 1 Mo. LIBOR + 1.04% (a)................. 1.12% 04/25/35 169,898
ACE Securities Corp. Home Equity Loan Trust
104,302 Series 2006-OP2, Class A1, 1 Mo. LIBOR + 0.16% (a)............... 0.24% 08/25/36 102,207
1,619,782 Series 2007-HE1, Class A1, 1 Mo. LIBOR + 0.30% (a)............... 0.38% 01/25/37 1,083,537
AGL CLO 7 Ltd.
1,000,000 Series 2020-7A, Class BR, 3 Mo. LIBOR + 1.70% (a) (d)............ 1.83% 07/15/34 1,001,240
AIG CLO Ltd.
320,000 Series 2018-1A, Class BR, 3 Mo. LIBOR + 1.70% (a) (d)............ 1.83% 04/20/32 320,240
Aimco CLO 12 Ltd.
850,000 Series 2020-12A, Class A, 3 Mo. LIBOR + 1.21% (a) (d)............ 1.34% 01/17/32 851,837
Ameriquest Mortgage Securities, Inc., Asset Backed Pass-Through Ctfs
290,000 Series 2005-R11, Class M3, 1 Mo. LIBOR + 0.75% (a)............... 0.83% 01/25/36 287,414
AMMC CLO
169,842 Series 2016-19A, Class AR, 3 Mo. LIBOR + 1.14% (a) (d)........... 1.27% 10/16/28 169,926
450,000 Series 2013-13A, Class A1R2, 3 Mo. LIBOR + 1.05% (a) (d)......... 1.18% 07/24/29 449,888
Argent Securities Trust
799,487 Series 2006-M1, Class A2C, 1 Mo. LIBOR + 0.30% (a)............... 0.38% 07/25/36 328,198
Argent Securities, Inc., Asset-Backed Pass-Through Certificates
600,000 Series 2005-W3, Class M2, 1 Mo. LIBOR + 0.69% (a)................ 0.77% 11/25/35 574,698
225,806 Series 2005-W5, Class A2D, 1 Mo. LIBOR + 0.64% (a)............... 0.72% 01/25/36 220,160
Blackrock DLF VIII-L CLO Trust
425,000 Series 2021-1A, Class A, 3 Mo. LIBOR + 1.35% (a) (d)............. 1.43% 04/17/32 425,210
BlueMountain CLO XXX Ltd.
60,000 Series 2020-30A, Class B, 3 Mo. LIBOR + 1.80% (a) (d)............ 1.93% 01/15/33 60,075
Carvana Auto Receivables Trust
750,000 Series 2021-N3, Class N (d) (h).................................. 2.53% 06/12/28 752,954
C-BASS Mortgage Loan Trust
910,443 Series 2007-CB3, Class A3 (f).................................... 3.43% 03/25/37 456,063
1,047,009 Series 2007-CB3, Class A4 (f).................................... 3.43% 03/25/37 524,261
C-BASS Trust
230,828 Series 2006-CB7, Class A5, 1 Mo. LIBOR + 0.24% (a)............... 0.32% 10/25/36 198,173
1,039,436 Series 2007-CB1, Class AF1B (f).................................. 3.26% 01/25/37 472,055
Citigroup Mortgage Loan Trust, Inc.
160,000 Series 2007-WFH3, Class M1, 1 Mo. LIBOR + 0.26% (a).............. 0.34% 06/25/37 157,355
CoreVest American Finance Trust
237,000 Series 2017-1, Class D (d)....................................... 4.36% 10/15/49 240,627
3,068,984 Series 2021-2, Class XA, IO (c) (d).............................. 3.16% 07/15/54 425,723
Credit-Based Asset Servicing and Securitization LLC
158,509 Series 2007-CB6, Class A1, 1 Mo. LIBOR + 0.12% (a) (d)........... 0.21% 07/25/37 126,161
</TABLE>
See Notes to Financial Statements Page 83
<PAGE>
FIRST TRUST TCW SECURITIZED PLUS ETF (DEED)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
ASSET-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
CWABS Asset-Backed Certificates Trust
$ 169,648 Series 2005-1, Class MV6, 1 Mo. LIBOR + 1.10% (a)................ 1.18% 07/25/35 $ 170,293
31,516 Series 2005-16, Class MV1, 1 Mo. LIBOR + 0.46% (a)............... 0.54% 05/25/36 31,518
350,000 Series 2005-17, Class MV2, 1 Mo. LIBOR + 0.48% (a)............... 0.56% 05/25/36 342,834
Dryden CLO Ltd.
615,000 Series 2019-72A, Class BR, 3 Mo. LIBOR + 1.65% (a) (d)........... 1.77% 05/15/32 615,013
Eaton Vance CLO Ltd.
575,000 Series 2019-1A, Class AR, 3 Mo. LIBOR + 1.10% (a) (d)............ 1.23% 04/15/31 575,537
First Franklin Mortgage Loan Trust
565,000 Series 2006-FF7, Class 2A4, 1 Mo. LIBOR + 0.48% (a).............. 0.56% 05/25/36 531,230
479,144 Series 2006-FF11, Class 2A3, 1 Mo. LIBOR + 0.30% (a)............. 0.38% 08/25/36 470,287
Fremont Home Loan Trust
90,214 Series 2005-A, Class M3, 1 Mo. LIBOR + 0.74% (a)................. 0.82% 01/25/35 89,750
GCI Funding I LLC
1,051,869 Series 2021-1, Class A (d)....................................... 2.38% 06/18/46 1,061,620
GoldenTree Loan Opportunities IX Ltd.
400,000 Series 2014-9A, Class AR2, 3 Mo. LIBOR + 1.11% (a) (d)........... 1.24% 10/29/29 400,199
Golub Capital Partners CLO L.P.
1,100,000 Series 2021-54A, Class A, 3 Mo. LIBOR + 1.53% (a) (d)............ 1.65% 08/05/33 1,100,652
GSAA Home Equity Trust
1,900,000 Series 2007-5, Class 1F3B........................................ 6.00% 05/25/37 258,372
GSAA Trust
1,720,472 Series 2007-6, Class 3A1A, 1 Mo. LIBOR + 0.42% (a)............... 0.50% 05/25/47 1,432,527
GSAMP Trust
193,963 Series 2005-HE6, Class M2, 1 Mo. LIBOR + 0.68% (a)............... 0.76% 11/25/35 193,380
300,000 Series 2006-HE3, Class A2D, 1 Mo. LIBOR + 0.50% (a).............. 0.58% 05/25/46 292,557
Home Partners of America Trust
545,000 Series 2017-1, Class E, 1 Mo. LIBOR + 2.65% (a) (d).............. 2.74% 07/17/34 546,743
HSI Asset Securitization Corp. Trust
231,665 Series 2006-WMC1, Class A4, 1 Mo. LIBOR + 0.50% (a).............. 0.58% 07/25/36 140,561
Invitation Homes Trust
722,733 Series 2018-SFR2, Class A, 1 Mo. LIBOR + 0.90% (a) (d)........... 1.00% 06/17/37 724,851
JP Morgan Mortgage Acquisition Corp.
37,340 Series 2005-OPT1, Class M2, 1 Mo. LIBOR + 0.71% (a).............. 0.79% 06/25/35 37,381
6,137 Series 2005-WMC1, Class M2, 1 Mo. LIBOR + 0.66% (a).............. 0.74% 09/25/35 6,273
208,713 Series 2006-FRE1, Class M1, 1 Mo. LIBOR + 0.59% (a).............. 0.67% 05/25/35 208,206
JP Morgan Mortgage Acquisition Trust
1,562,776 Series 2006-WMC2, Class A4, 1 Mo. LIBOR + 0.30% (a).............. 0.38% 07/25/36 920,111
141,029 Series 2006-WMC4, Class A1A, 1 Mo. LIBOR + 0.13% (a)............. 0.21% 12/25/36 105,270
Lehman XS Trust
414,057 Series 2006-15, Class A4, 1 Mo. LIBOR + 0.34% (a)................ 0.42% 10/25/36 408,861
Long Beach Mortgage Loan Trust
154,514 Series 2005-WL2, Class M2, 1 Mo. LIBOR + 0.74% (a)............... 0.82% 08/25/35 155,110
315,080 Series 2006-10, Class 2A3, 1 Mo. LIBOR + 0.16% (a)............... 0.24% 11/25/36 139,329
Madison Park Funding XLV Ltd.
825,000 Series 2020-45A, Class BR, 3 Mo. LIBOR + 1.70% (a) (d)........... 1.83% 07/15/34 826,023
Mastr Asset Backed Securities Trust
370,000 Series 2005-WMC1, Class M5, 1 Mo. LIBOR + 1.01% (a).............. 1.09% 03/25/35 371,013
1,685,941 Series 2006-HE2, Class A3, 1 Mo. LIBOR + 0.30% (a)............... 0.38% 06/25/36 929,927
Merrill Lynch First Franklin Mortgage Loan Trust
394,104 Series 2007-1, Class A1, 1 Mo. LIBOR + 0.14% (a)................. 0.22% 04/25/37 241,640
769,275 Series 2007-3, Class A2B, 1 Mo. LIBOR + 0.13% (a)................ 0.21% 06/25/37 723,760
</TABLE>
Page 84 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW SECURITIZED PLUS ETF (DEED)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
ASSET-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
Merrill Lynch Mortgage Investors Trust
$ 1,257,063 Series 2006-HE6, Class A2B, 1 Mo. LIBOR + 0.30% (a).............. 0.38% 11/25/37 $ 609,171
1,000,000 Series 2006-OPT1, Class A2D, 1 Mo. LIBOR + 0.24% (a)............. 0.32% 08/25/37 923,231
Morgan Stanley Capital I, Inc., Trust
212,025 Series 2006-HE1, Class A4, 1 Mo. LIBOR + 0.58% (a)............... 0.66% 01/25/36 209,685
30,411 Series 2006-NC2, Class A2D, 1 Mo. LIBOR + 0.58% (a).............. 0.66% 02/25/36 30,286
Navient Student Loan Trust
320,000 Series 2015-3, Class B, 1 Mo. LIBOR + 1.50% (a).................. 1.58% 10/25/58 323,936
Nelnet Student Loan Trust
404,953 Series 2005-4, Class B, 3 Mo. LIBOR + 0.28% (a).................. 0.41% 09/22/35 372,348
159,577 Series 2007-2A, Class A3L, 3 Mo. LIBOR + 0.35% (a) (d)........... 0.50% 03/25/26 159,459
215,000 Series 2014-4A, Class A2, 1 Mo. LIBOR + 0.95% (a) (d)............ 1.03% 11/25/48 220,128
370,000 Series 2015-3A, Class A3, 1 Mo. LIBOR + 0.90% (a) (d)............ 0.98% 06/25/54 365,616
Nomura Home Equity Loan, Inc., Home Equity Loan Trust
60,079 Series 2006-HE1, Class M1, 1 Mo. LIBOR + 0.62% (a)............... 0.70% 02/25/36 60,102
Oakwood Mortgage Investors, Inc.
1,005,445 Series 1999-C, Class A2.......................................... 7.48% 08/15/27 951,281
582,662 Series 2001-C, Class A2.......................................... 5.92% 06/15/31 101,065
Option One Mortgage Loan Trust
397,746 Series 2007-4, Class 2A3, 1 Mo. LIBOR + 0.24% (a)................ 0.32% 04/25/37 279,369
Ownit Mortgage Loan Trust
748,072 Series 2006-6, Class A2C, 1 Mo. LIBOR + 0.32% (a)................ 0.40% 09/25/37 460,277
Palmer Square CLO Ltd.
400,000 Series 2018-1A, Class A1, 3 Mo. LIBOR + 1.03% (a) (d)............ 1.16% 04/18/31 400,202
Park Avenue Institutional Advisers CLO Ltd.
150,000 Series 2018-1A, Class A2R, 3 Mo. LIBOR + 1.60% (a) (d)........... 1.73% 10/20/31 150,039
Park Place Securities Inc Asset-Backed Pass-Through Certificates
367,964 Series 2004-WHQ2, Class M4, 1 Mo. LIBOR + 1.58% (a).............. 1.66% 02/25/35 371,360
338,020 Series 2004-WWF1, Class M5, 1 Mo. LIBOR + 1.80% (a).............. 1.88% 12/25/34 341,556
Progress Residential Trust
370,000 Series 2018-SFR3, Class E (d).................................... 4.87% 10/17/35 371,037
364,000 Series 2018-SFR3, Class G (d).................................... 5.62% 10/17/35 364,836
500,000 Series 2019-SFR1, Class F (d).................................... 5.06% 08/17/35 511,125
1,169,000 Series 2019-SFR3, Class F (d).................................... 3.87% 09/17/36 1,198,134
RASC Trust
576,000 Series 2005-KS11, Class M3, 1 Mo. LIBOR + 0.66% (a).............. 0.74% 12/25/35 561,260
Rockford Tower CLO Ltd.
775,000 Series 2021-1A, Class A1, 3 Mo. LIBOR + 1.17% (a) (d)............ 1.25% 07/20/34 776,729
Sabey Data Center Issuer LLC
650,000 Series 2020-1, Class A2 (d)...................................... 3.81% 04/20/45 691,905
Saxon Asset Securities Trust
83,383 Series 2005-1, Class M2, 1 Mo. LIBOR + 0.72% (a)................. 0.80% 05/25/35 82,417
Securitized Asset Backed Receivables LLC Trust
662,511 Series 2006-CB5, Class A3, 1 Mo. LIBOR + 0.28% (a)............... 0.36% 06/25/36 515,097
95,004 Series 2006-NC2, Class A3, 1 Mo. LIBOR + 0.48% (a)............... 0.56% 03/25/36 94,290
411,656 Series 2007-NC2, Class A2B, 1 Mo. LIBOR + 0.14% (a).............. 0.22% 01/25/37 374,370
SLM Student Loan Trust
65,000 Series 2008-4, Class B, 3 Mo. LIBOR + 1.85% (a).................. 1.98% 04/25/73 64,565
709,395 Series 2008-5, Class A4, 3 Mo. LIBOR + 1.70% (a)................. 1.83% 07/25/23 716,733
65,000 Series 2008-5, Class B, 3 Mo. LIBOR + 1.85% (a).................. 1.98% 07/25/73 64,376
615,045 Series 2008-6, Class A4, 3 Mo. LIBOR + 1.10% (a)................. 1.23% 07/25/23 617,311
</TABLE>
See Notes to Financial Statements Page 85
<PAGE>
FIRST TRUST TCW SECURITIZED PLUS ETF (DEED)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL STATED STATED
VALUE DESCRIPTION COUPON MATURITY VALUE
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
ASSET-BACKED SECURITIES (CONTINUED)
<S> <C> <C> <C> <C>
Soundview Home Loan Trust
$ 112,063 Series 2006-2, Class M2, 1 Mo. LIBOR + 0.53% (a)................. 0.61% 03/25/36 $ 111,993
388,981 Series 2007-OPT1, Class 2A2, 1 Mo. LIBOR + 0.15% (a)............. 0.23% 06/25/37 316,128
231,853 Series 2007-OPT3, Class 1A1, 1 Mo. LIBOR + 0.17% (a)............. 0.25% 08/25/37 217,939
700,000 Series 2007-OPT3, Class 2A4, 1 Mo. LIBOR + 0.25% (a)............. 0.33% 08/25/37 642,241
Specialty Underwriting & Residential Finance Trust
1,409,336 Series 2006-AB3, Class A2C, 1 Mo. LIBOR + 0.24% (a).............. 0.32% 09/25/37 1,176,614
Structured Asset Securities Corp. Mortgage Loan Trust
95,954 Series 2006-OPT1, Class A1, 1 Mo. LIBOR + 0.18% (a).............. 0.26% 04/25/36 94,870
TAL Advantage VII LLC
519,656 Series 2020-1A, Class A (d)...................................... 2.05% 09/20/45 526,757
Textainer Marine Containers VIII Ltd.
91,419 Series 2020-2A, Class A (d)...................................... 2.10% 09/20/45 93,045
91,658 Series 2020-3A, Class A (d)...................................... 2.11% 09/20/45 92,892
TRP LLC
289,208 Series 2021-1, Class A (d)....................................... 2.07% 06/19/51 290,354
USQ Rail II LLC
1,190,776 Series 2021-3, Class A (d)....................................... 2.21% 06/28/51 1,199,862
VOYA CLO
175,000 Series 2017-2A, Class A2AR, 3 Mo. LIBOR + 1.65% (a) (d).......... 1.78% 06/07/30 175,356
Wachovia Student Loan Trust
670,342 Series 2006-1, Class B, 3 Mo. LIBOR + 0.24% (a) (d).............. 0.37% 04/25/40 634,947
WaMu Asset-Backed Certificates WaMuTrust
1,180,911 Series 2007-HE1, Class 2A4, 1 Mo. LIBOR + 0.23% (a).............. 0.31% 01/25/37 750,821
--------------
TOTAL ASSET-BACKED SECURITIES.................................................................. 43,105,843
(Cost $42,817,930) --------------
U.S. TREASURY BILLS -- 31.3%
3,890,000 U.S. Cash Management Bill........................................... (b) 12/14/21 3,889,573
20,220,000 U.S. Cash Management Bill........................................... (b) 12/21/21 20,217,631
21,020,000 U.S. Treasury Bill.................................................. (b) 10/05/21 21,019,249
7,000,000 U.S. Treasury Bill.................................................. (b) 10/28/21 6,999,446
10,915,000 U.S. Treasury Bill.................................................. (b) 01/06/22 10,913,460
8,120,000 U.S. Treasury Bill.................................................. (b) 01/20/22 8,118,728
--------------
TOTAL U.S. TREASURY BILLS...................................................................... 71,158,087
(Cost $71,158,139) --------------
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 1.5%
3,378,300 JPMorgan 100% U.S. Treasury Securities Money Market Fund - Institutional Class - 0.01% (i)..... 3,378,300
(Cost $3,378,300) --------------
TOTAL INVESTMENTS -- 150.3%.................................................................... 341,990,236
(Cost $341,091,626) (j)
NET OTHER ASSETS AND LIABILITIES -- (50.3)%.................................................... (114,446,066)
--------------
NET ASSETS -- 100.0%........................................................................... $ 227,544,170
==============
</TABLE>
Page 86 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW SECURITIZED PLUS ETF (DEED)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
Forward Foreign Currency Contracts at August 31, 2021 (See Note 2E - Forward
Foreign Currency Contracts in the Notes to Financial Statements):
<TABLE>
<CAPTION>
PURCHASE VALUE SALE VALUE UNREALIZED
SETTLEMENT AMOUNT AMOUNT AS OF AS OF APPRECIATION
DATE COUNTERPARTY PURCHASED SOLD AUGUST 31, 2021 AUGUST 31, 2021 (DEPRECIATION)
---------------- -------------- --------------- ---------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
10/22/2021 GS USD 852,035 EUR 720,000 $ 852,035 $ 851,021 $ 1,014
-------
Net Unrealized Appreciation (Depreciation) $ 1,014
=======
</TABLE>
Counterparty Abbreviations:
GS - Goldman Sachs and Co.
Futures Contracts at August 31, 2021 (See Note 2D - Futures Contracts in the
Notes to Financial Statements):
<TABLE>
<CAPTION>
UNREALIZED
APPRECIATION
NUMBER OF (DEPRECIATION)/
FUTURES CONTRACTS POSITION CONTRACTS EXPIRATION DATE NOTIONAL VALUE VALUE
----------------------------------- ---------------- --------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
U.S. 5-Year Treasury Notes Short 13 Dec-2021 $ (1,608,344) $ (1,698)
U.S. 10-Year Ultra Treasury Notes Short 2 Dec-2021 (296,031) (474)
Ultra U.S. Treasury Bond Futures Short 7 Dec-2021 (1,380,969) (2,503)
-------------- -----------
$ (3,285,344) $ (4,675)
============== ===========
</TABLE>
-----------------------------
(a) Floating or variable rate security.
(b) Zero coupon security.
(c) Collateral Strip Rate security. Coupon is based on the weighted net
interest rate of the investment's underlying collateral. The interest rate
resets periodically.
(d) This security, sold within the terms of a private placement memorandum, is
exempt from registration upon resale under Rule 144A of the Securities Act
of 1933, (the "1933 Act") as amended, and may be resold in transactions
exempt from registration, normally to qualified institutional buyers.
Pursuant to procedures adopted by the Trust's Board of Trustees, this
security has been determined to be liquid by First Trust Advisors L.P.,
the Fund's Advisor. Although market instability can result in periods of
increased overall market illiquidity, liquidity for each security is
determined based on security specific factors and assumptions, which
require subjective judgment. At August 31, 2021, securities noted as such
amounted to $44,591,105 or 19.6% of net assets.
(e) All or a portion of this security is part of a mortgage dollar roll
agreement (see Note 2K - Mortgage Dollar Rolls in the Notes to Financial
Statements).
(f) Step-up security. A security where the coupon increases or steps up at a
predetermined date.
(g) This security, sold within the terms of a private placement memorandum, is
exempt from registration upon resale under Rule 144A under the 1933 Act,
and may be resold in transactions exempt from registration, normally to
qualified institutional buyers (see Note 2C -- Restricted Securities in
the Notes to Financial Statements).
(h) When-issued security. The interest rate shown reflects the rate in effect
at August 31, 2021.
(i) Rate shown reflects yield as of August 31, 2021.
(j) Aggregate cost for federal income tax purposes is $340,960,328. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$1,540,004 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$513,757. The net unrealized appreciation was $1,026,247. The unrealized
amounts presented are inclusive of derivative contracts.
IO - Interest-Only Security -- Principal amount shown represents par value
on which interest payments are based.
EURIBOR - Euro Interbank Offered Rate
LIBOR - London Interbank Offered Rate
PO - Principal-Only Security
SOFR - Secured Overnight Finance Rate
TBA - To-Be-Announced Security
Currency Abbreviations:
EUR - Euro
USD - United States Dollar
See Notes to Financial Statements Page 87
<PAGE>
FIRST TRUST TCW SECURITIZED PLUS ETF (DEED)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
---------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C>
U.S. Government Agency Mortgage-Backed Securities..... $ 118,501,365 $ -- $ 118,501,365 $ --
Mortgage-Backed Securities............................ 60,330,870 -- 60,330,870 --
U.S. Government Bonds and Notes....................... 45,515,771 -- 45,515,771 --
Asset-Backed Securities............................... 43,105,843 -- 43,105,843 --
U.S. Treasury Bills................................... 71,158,087 -- 71,158,087 --
Money Market Funds.................................... 3,378,300 3,378,300 -- --
---------------- --------------- ---------------- ----------------
Total Investments..................................... 341,990,236 3,378,300 338,611,936 --
Forward Foreign Currency Contracts . . . ............. 1,014 -- 1,014 --
---------------- --------------- ---------------- ----------------
Total................................................. $ 341,991,250 $ 3,378,300 $ 338,612,950 $ --
================ =============== ================ ================
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
---------------- --------------- ---------------- ----------------
Futures Contracts*.................................... $ (4,675) $ (4,675) $ -- $ --
================ =============== ================ ================
</TABLE>
* Includes cumulative appreciation/depreciation on futures contracts as reported
in the Futures Contracts table. Only the current day's variation margin is
presented on the Statements of Assets and Liabilities.
Page 88 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW EMERGING MARKETS DEBT ETF (EFIX)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (U.S. DOLLAR)
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
FOREIGN SOVEREIGN BONDS AND NOTES -- 60.2%
<S> <C> <C> <C> <C>
ANGOLA -- 2.4%
200,000 Angolan Government International Bond (USD) (a)..................... 8.25% 05/09/28 $ 213,679
250,000 Angolan Government International Bond (USD) (a)..................... 9.13% 11/26/49 261,889
--------------
475,568
--------------
ARGENTINA -- 1.5%
61,000 Argentine Republic Government International Bond (USD).............. 1.00% 07/09/29 25,091
245,000 Argentine Republic Government International Bond, steps up to
1.50% on 07/10/2022 (USD) (b).................................... 1.13% 07/09/35 85,990
255,894 Argentine Republic Government International Bond, steps up to
3.50% on 07/10/2022 (USD) (b).................................... 2.50% 07/09/41 100,088
54,106 Argentine Republic Government International Bond, steps up to
3.88% on 07/10/2022 (USD) (b).................................... 2.00% 01/09/38 22,327
158,000 Argentine Republic Government International Bond, steps up to
0.75% on 07/10/2023 (USD) (b).................................... 0.50% 07/09/30 61,935
--------------
295,431
--------------
BAHRAIN -- 3.2%
450,000 Bahrain Government International Bond (USD) (a)..................... 5.25% 01/25/33 434,467
200,000 Bahrain Government International Bond (USD) (c)..................... 7.50% 09/20/47 212,508
--------------
646,975
--------------
BRAZIL -- 1.0%
200,000 Brazilian Government International Bond (USD)....................... 3.88% 06/12/30 200,870
--------------
CHILE -- 2.6%
300,000 Chile Government International Bond (USD)........................... 2.55% 01/27/32 308,931
200,000 Chile Government International Bond (USD)........................... 2.55% 07/27/33 204,044
--------------
512,975
--------------
COLOMBIA -- 2.9%
200,000 Colombia Government International Bond (USD)........................ 3.13% 04/15/31 195,792
400,000 Colombia Government International Bond (USD)........................ 4.13% 02/22/42 384,880
--------------
580,672
--------------
DOMINICAN REPUBLIC -- 2.4%
450,000 Dominican Republic International Bond (USD) (a)..................... 4.88% 09/23/32 473,629
--------------
ECUADOR -- 1.9%
65,000 Ecuador Government International Bond, steps up to 1.50% on
08/01/2022 (USD) (a) (b)......................................... 0.50% 07/31/40 41,763
285,000 Ecuador Government International Bond, steps up to 2.50% on
08/01/2022 (USD) (a) (b)......................................... 1.00% 07/31/35 206,628
153,700 Ecuador Government International Bond, steps up to 5.50% on
08/01/2022 (USD) (b) (c)......................................... 5.00% 07/31/30 137,179
--------------
385,570
--------------
EGYPT -- 3.8%
525,000 Egypt Government International Bond (USD) (a)....................... 7.05% 01/15/32 545,365
200,000 Egypt Government International Bond (USD) (c)....................... 8.50% 01/31/47 210,564
--------------
755,929
--------------
EL SALVADOR -- 1.0%
34,000 El Salvador Government International Bond (USD) (c)................. 6.38% 01/18/27 29,750
45,000 El Salvador Government International Bond (USD) (c)................. 8.25% 04/10/32 40,951
150,000 El Salvador Government International Bond (USD) (c)................. 7.63% 02/01/41 128,175
--------------
198,876
--------------
</TABLE>
See Notes to Financial Statements Page 89
<PAGE>
FIRST TRUST TCW EMERGING MARKETS DEBT ETF (EFIX)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (U.S. DOLLAR)
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
FOREIGN SOVEREIGN BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
GHANA -- 2.1%
225,000 Ghana Government International Bond (USD) (c)....................... 8.13% 03/26/32 $ 226,353
200,000 Ghana Government International Bond (USD) (a)....................... 8.95% 03/26/51 196,910
--------------
423,263
--------------
INDONESIA -- 3.2%
200,000 Indonesia Government International Bond (USD)....................... 3.85% 10/15/30 226,748
200,000 Perusahaan Penerbit SBSN Indonesia III (USD) (c).................... 2.55% 06/09/31 203,800
200,000 Perusahaan Penerbit SBSN Indonesia III (USD) (a).................... 3.80% 06/23/50 211,836
--------------
642,384
--------------
IRAQ -- 1.0%
203,125 Iraq International Bond (USD) (c)................................... 5.80% 01/15/28 195,173
--------------
IVORY COAST (COTE D'IVOIRE) -- 1.3%
100,000 Ivory Coast Government International Bond (EUR) (a)................. 4.88% 01/30/32 120,763
100,000 Ivory Coast Government International Bond (EUR) (a)................. 6.88% 10/17/40 132,359
--------------
253,122
--------------
MEXICO -- 1.6%
300,000 Mexico Government International Bond (USD).......................... 4.28% 08/14/41 321,795
--------------
NIGERIA -- 2.1%
200,000 Nigeria Government International Bond (USD) (c)..................... 7.88% 02/16/32 216,082
200,000 Nigeria Government International Bond (USD) (a)..................... 7.70% 02/23/38 205,630
--------------
421,712
--------------
OMAN -- 2.1%
200,000 Oman Government International Bond (USD) (a)........................ 6.25% 01/25/31 218,618
200,000 Oman Government International Bond (USD) (c)........................ 6.50% 03/08/47 201,333
--------------
419,951
--------------
PAKISTAN -- 2.1%
200,000 Pakistan Government International Bond (USD) (c).................... 6.88% 12/05/27 205,184
200,000 Pakistan Government International Bond (USD) (a).................... 7.38% 04/08/31 203,661
--------------
408,845
--------------
PANAMA -- 2.0%
400,000 Panama Government International Bond (USD).......................... 2.25% 09/29/32 390,772
--------------
PARAGUAY -- 2.4%
400,000 Paraguay Government International Bond (USD) (c).................... 5.60% 03/13/48 482,000
--------------
PHILIPPINES -- 2.0%
200,000 Philippine Government International Bond (USD)...................... 1.95% 01/06/32 200,215
200,000 Philippine Government International Bond (USD)...................... 3.20% 07/06/46 207,215
--------------
407,430
--------------
QATAR -- 1.1%
200,000 Qatar Government International Bond (USD) (a)....................... 3.75% 04/16/30 228,290
--------------
ROMANIA -- 1.4%
274,000 Romanian Government International Bond (USD) (a).................... 3.00% 02/14/31 286,546
--------------
SAUDI ARABIA -- 2.3%
200,000 Saudi Government International Bond (USD) (a)....................... 2.50% 02/03/27 209,505
250,000 Saudi Government International Bond (USD) (a)....................... 2.25% 02/02/33 246,879
--------------
456,384
--------------
SENEGAL -- 0.6%
100,000 Senegal Government International Bond (EUR) (a)..................... 5.38% 06/08/37 120,991
--------------
</TABLE>
Page 90 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW EMERGING MARKETS DEBT ETF (EFIX)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (U.S. DOLLAR)
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
FOREIGN SOVEREIGN BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
SOUTH AFRICA -- 1.0%
200,000 Republic of South Africa Government International Bond (USD)........ 5.75% 09/30/49 $ 201,770
--------------
SRI LANKA -- 0.7%
200,000 Sri Lanka Government International Bond (USD) (c)................... 6.75% 04/18/28 129,500
--------------
TURKEY -- 2.4%
200,000 Turkey Government International Bond (USD).......................... 4.25% 04/14/26 195,763
300,000 Turkey Government International Bond (USD).......................... 5.25% 03/13/30 291,957
--------------
487,720
--------------
UKRAINE -- 3.9%
350,000 Ukraine Government International Bond (USD) (c)..................... 7.75% 09/01/27 390,216
200,000 Ukraine Government International Bond (USD) (c)..................... 7.25% 03/15/33 212,399
150,000 Ukraine Government International Bond (USD) (c) (d)................. 1.26% 05/31/40 171,450
--------------
774,065
--------------
UNITED ARAB EMIRATES -- 1.2%
250,000 Abu Dhabi Government International Bond (USD) (c)................... 1.70% 03/02/31 246,033
--------------
URUGUAY -- 1.0%
164,000 Uruguay Government International Bond (USD)......................... 4.38% 01/23/31 192,826
--------------
TOTAL FOREIGN SOVEREIGN BONDS AND NOTES........................................................ 12,017,067
(Cost $11,980,235) --------------
FOREIGN CORPORATE BONDS AND NOTES -- 33.9%
BANKS -- 1.8%
200,000 Akbank TAS (USD) (a) (e)............................................ 6.80% 06/22/31 203,331
150,000 Banco GNB Sudameris S.A. (USD) (a) (e).............................. 7.50% 04/16/31 154,093
--------------
357,424
--------------
CHEMICALS -- 1.0%
200,000 OCP S.A. (USD) (a).................................................. 5.13% 06/23/51 202,577
--------------
ELECTRIC -- 4.7%
200,000 AES Andes S.A. (USD) (a) (e)........................................ 7.13% 03/26/79 214,250
200,000 Eskom Holdings SOC Ltd. (USD) (c)................................... 6.35% 08/10/28 221,798
250,000 India Green Power Holdings (USD) (a)................................ 4.00% 02/22/27 253,000
250,000 Mong Duong Finance Holdings B.V. (USD) (a).......................... 5.13% 05/07/29 251,562
--------------
940,610
--------------
ENGINEERING & CONSTRUCTION -- 1.3%
250,000 India Airport Infra (USD) (a)....................................... 6.25% 10/25/25 247,825
--------------
FOOD -- 1.0%
200,000 JBS Finance Luxembourg Sarl (USD) (a)............................... 3.63% 01/15/32 207,293
--------------
LODGING -- 1.0%
200,000 Studio City Finance Ltd. (USD) (a).................................. 5.00% 01/15/29 197,429
--------------
MINING -- 2.9%
200,000 Cia de Minas Buenaventura SAA (USD) (a)............................. 5.50% 07/23/26 197,641
45,000 Freeport-McMoRan, Inc. (USD)........................................ 4.63% 08/01/30 49,612
275,000 Indonesia Asahan Aluminium Persero PT (USD) (a)..................... 5.45% 05/15/30 321,833
--------------
569,086
--------------
OIL & GAS -- 15.2%
125,000 Energean Israel Finance Ltd. (USD) (a) (c).......................... 5.88% 03/30/31 128,452
400,000 KazMunayGas National Co. JSC (USD) (a).............................. 3.50% 04/14/33 419,400
</TABLE>
See Notes to Financial Statements Page 91
<PAGE>
FIRST TRUST TCW EMERGING MARKETS DEBT ETF (EFIX)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (U.S. DOLLAR)
-------------- -------------------------------------------------------------------- ----------- ------------ --------------
FOREIGN CORPORATE BONDS AND NOTES (CONTINUED)
<S> <C> <C> <C> <C>
OIL & GAS (CONTINUED)
80,000 Leviathan Bond Ltd. (USD) (a) (c)................................... 6.75% 06/30/30 $ 89,800
200,000 MC Brazil Downstream Trading Sarl (USD) (a)......................... 7.25% 06/30/31 208,462
200,000 OQ SAOC (USD) (c)................................................... 5.13% 05/06/28 203,355
109,000 Petrobras Global Finance B.V. (USD)................................. 5.50% 06/10/51 109,050
80,000 Petrobras Global Finance B.V. (USD)................................. 6.85% 06/05/15 88,800
370,000 Petroleos Mexicanos (USD)........................................... 5.35% 02/12/28 368,679
185,000 Petroleos Mexicanos (USD)........................................... 5.95% 01/28/31 181,652
235,000 Petroleos Mexicanos (USD)........................................... 6.63% 06/15/35 227,945
600,000 Qatar Petroleum (USD) (a)........................................... 2.25% 07/12/31 605,884
200,000 SA Global Sukuk Ltd. (USD) (c)...................................... 1.60% 06/17/26 200,589
200,000 SA Global Sukuk Ltd. (USD) (a)...................................... 2.69% 06/17/31 204,964
--------------
3,037,032
--------------
PIPELINES -- 2.0%
200,000 Galaxy Pipeline Assets Bidco Ltd. (USD) (a)......................... 2.63% 03/31/36 200,330
200,000 Galaxy Pipeline Assets Bidco Ltd. (USD) (a)......................... 2.94% 09/30/40 203,706
--------------
404,036
--------------
REAL ESTATE -- 2.0%
200,000 New Metro Global Ltd. (USD) (c)..................................... 6.80% 08/05/23 208,500
200,000 Ronshine China Holdings Ltd. (USD) (c).............................. 7.35% 12/15/23 181,000
--------------
389,500
--------------
TRANSPORTATION -- 1.0%
200,000 Georgian Railway JSC (USD) (a)...................................... 4.00% 06/17/28 203,460
--------------
TOTAL FOREIGN CORPORATE BONDS AND NOTES........................................................ 6,756,272
(Cost $6,732,044) --------------
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 3.4%
<S> <C> <C>
680,749 JPMorgan 100% U.S. Treasury Securities Money Market Fund - Institutional Class - 0.01% (f)..... 680,749
(Cost $680,749) --------------
TOTAL INVESTMENTS -- 97.5%..................................................................... 19,454,088
(Cost $19,393,028) (g)
NET OTHER ASSETS AND LIABILITIES -- 2.5%....................................................... 495,705
--------------
NET ASSETS -- 100.0%........................................................................... $ 19,949,793
==============
</TABLE>
-----------------------------
(a) This security, sold within the terms of a private placement memorandum, 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.
Pursuant to procedures adopted by the Trust's Board of Trustees, this
security has been determined to be liquid by First Trust Advisors L.P.
Although market instability can result in periods of increased overall
market illiquidity, liquidity for each security is determined based on
security specific factors and assumptions, which require subjective
judgment. At August 31, 2021, securities noted as such amounted to
$9,274,700 or 46.5% of net assets.
(b) Step-up security. A security where the coupon increases or steps up at a
predetermined date.
(c) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(d) Floating or variable rate security.
(e) Fixed-to-floating or fixed-to-variable rate security. The interest rate
shown reflects the fixed rate in effect at August 31, 2021. At a
predetermined date, the fixed rate will change to a floating rate or a
variable rate.
(f) Rate shown reflects yield as of August 31, 2021.
Page 92 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW EMERGING MARKETS DEBT ETF (EFIX)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
(g) Aggregate cost for federal income tax purposes is $19,422,776. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$214,075 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$182,763. The net unrealized appreciation was $31,312.
Currency Abbreviations:
EUR - Euro
USD - United States Dollar
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
---------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Foreign Sovereign Bonds and Notes*.................... $ 12,017,067 $ -- $ 12,017,067 $ --
Foreign Corporate Bonds and Notes**................... 6,756,272 -- 6,756,272 --
Money Market Funds.................................... 680,749 680,749 -- --
---------------- --------------- ---------------- ----------------
Total Investments..................................... $ 19,454,088 $ 680,749 $ 18,773,339 $ --
================ =============== ================ ================
</TABLE>
* See Portfolio of Investments for country breakout.
** See Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 93
<PAGE>
FIRST TRUST TCW ESG PREMIER EQUITY ETF (EPRE)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
COMMON STOCKS -- 97.0%
<S> <C> <C>
AEROSPACE & DEFENSE -- 9.7%
968 HEICO Corp. ................................................................................... $ 122,762
141 TransDigm Group, Inc. (a)...................................................................... 85,653
--------------
208,415
--------------
BEVERAGES -- 4.5%
2,715 Keurig Dr Pepper, Inc. ........................................................................ 96,844
--------------
CAPITAL MARKETS -- 8.9%
347 Morningstar, Inc. ............................................................................. 92,992
155 MSCI, Inc. .................................................................................... 98,360
--------------
191,352
--------------
COMMERCIAL SERVICES & SUPPLIES -- 4.8%
710 Copart, Inc. (a)............................................................................... 102,467
--------------
ELECTRICAL EQUIPMENT -- 11.9%
605 AMETEK, Inc. .................................................................................. 82,262
6,181 Vertiv Holdings Co. ........................................................................... 174,119
--------------
256,381
--------------
HOUSEHOLD DURABLES -- 2.9%
2,237 Cricut, Inc., Class A (a)...................................................................... 62,412
--------------
IT SERVICES -- 4.6%
830 Fiserv, Inc. (a)............................................................................... 97,766
--------------
LIFE SCIENCES TOOLS & SERVICES -- 4.9%
68 Mettler-Toledo International, Inc. (a)......................................................... 105,593
--------------
PROFESSIONAL SERVICES -- 21.9%
8,593 Clarivate PLC (a).............................................................................. 216,458
1,043 CoStar Group, Inc. (a)......................................................................... 88,384
228 Equifax, Inc. ................................................................................. 62,075
856 IHS Markit Ltd. ............................................................................... 103,233
--------------
470,150
--------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 2.2%
768 Marvell Technology, Inc. ...................................................................... 46,994
--------------
SOFTWARE -- 20.7%
3,121 Dye & Durham Ltd. ............................................................................. 117,898
526 Manhattan Associates, Inc. (a)................................................................. 85,733
402 Microsoft Corp. ............................................................................... 121,356
517 Trade Desk (The), Inc., Class A (a)............................................................ 41,386
163 Tyler Technologies, Inc. (a)................................................................... 79,169
--------------
445,542
--------------
TOTAL COMMON STOCKS............................................................................ 2,083,916
(Cost $1,941,270) --------------
MONEY MARKET FUNDS -- 3.1%
66,576 Morgan Stanley Institutional Liquidity Funds - Treasury Portfolio - Institutional Class -
0.01% (b)................................................................................... 66,576
(Cost $66,576) --------------
TOTAL INVESTMENTS -- 100.1%.................................................................... 2,150,492
(Cost $2,007,846) (c)
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (1,303)
--------------
NET ASSETS -- 100.0%........................................................................... $ 2,149,189
==============
</TABLE>
Page 94 See Notes to Financial Statements
<PAGE>
FIRST TRUST TCW ESG PREMIER EQUITY ETF (EPRE)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
(a) Non-income producing security.
(b) Rate shown reflects yield as of August 31, 2021.
(c) Aggregate cost for federal income tax purposes is $2,008,373. As of August
31, 2021, the aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost was $191,758 and the
aggregate gross unrealized depreciation for all investments in which there
was an excess of tax cost over value was $49,639. The net unrealized
appreciation was $142,119.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
---------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Common Stocks*........................................ $ 2,083,916 $ 2,083,916 $ -- $ --
Money Market Funds.................................... 66,576 66,576 -- --
---------------- --------------- ---------------- ----------------
Total Investments..................................... $ 2,150,492 $ 2,150,492 $ -- $ --
================ =============== ================ ================
</TABLE>
* See Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 95
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 2021
<TABLE>
<CAPTION>
FIRST TRUST TCW FIRST TRUST TCW FIRST TRUST TCW
OPPORTUNISTIC FIXED UNCONSTRAINED SECURITIZED
INCOME ETF PLUS BOND ETF PLUS ETF
(FIXD) (UCON) (DEED)
------------------- ------------------- -------------------
ASSETS:
<S> <C> <C> <C>
ASSETS:
Investments, at value............................................ $ 6,516,091,175 $ 667,540,230 $ 341,990,236
Options contracts purchased, at value............................ 1,525,562 -- --
Swaptions contracts purchased, at value.......................... 527,389 -- --
Swap contracts, at value......................................... 39,708 4,165 --
Cash............................................................. 21,472,605 25 --
Cash segregated as collateral for open swap contracts............ 3,026,958 316,614 --
Cash segregated as collateral for open futures contracts......... -- 1,845,999 80,000
Unrealized appreciation on forward foreign currency contracts.... -- -- 1,014
Receivables:
Investment securities sold.................................... 1,159,079,937 60,032,712 113,651,159
Capital shares sold........................................... -- -- 2,604,605
Interest...................................................... 15,512,854 2,594,703 477,298
Dividends..................................................... 1,434 75 46
Variation margin.............................................. -- 200,601 8,070
Reclaims...................................................... -- -- 395
------------------- ------------------- -------------------
Total Assets............................................... 7,717,277,622 732,535,124 458,812,823
------------------- ------------------- -------------------
LIABILITIES:
Options contracts written, at value.............................. 871,750 -- --
Swap contracts, at value......................................... 344,609 36,054 --
Payables:
Investment securities purchased............................... 2,410,277,322 123,745,456 231,147,470
Distributions to shareholders................................. 5,632,125 -- --
Investment advisory fees...................................... 2,464,453 371,734 121,183
Variation margin.............................................. 19,891 -- --
Other liabilities................................................ -- 64,574 --
------------------- ------------------- -------------------
Total Liabilities.......................................... 2,419,610,150 124,217,818 231,268,653
------------------- ------------------- -------------------
NET ASSETS....................................................... $ 5,297,667,472 $ 608,317,306 $ 227,544,170
=================== =================== ===================
NET ASSETS CONSIST OF:
Paid-in capital.................................................. $ 5,272,599,521 $ 602,090,236 $ 225,634,180
Par value........................................................ 981,500 229,000 87,500
Accumulated distributable earnings (loss)........................ 24,086,451 5,998,070 1,822,490
------------------- ------------------- -------------------
NET ASSETS....................................................... $ 5,297,667,472 $ 608,317,306 $ 227,544,170
=================== =================== ===================
NET ASSET VALUE, per share....................................... $ 53.98 $ 26.56 $ 26.01
=================== =================== ===================
Number of shares outstanding (unlimited number of shares
authorized, par value $0.01 per share)........................ 98,150,002 22,900,002 8,750,002
=================== =================== ===================
Investments, at cost............................................. $ 6,458,981,728 $ 661,845,612 $ 341,091,626
=================== =================== ===================
Premiums paid on options contracts purchased..................... $ 1,391,414 $ -- $ --
=================== =================== ===================
Premiums paid on swaptions contracts purchased................... $ 571,710 $ -- $ --
=================== =================== ===================
Premiums received on options contracts written................... $ 894,422 $ -- $ --
=================== =================== ===================
</TABLE>
Page 96 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FIRST TRUST TCW FIRST TRUST TCW
EMERGING MARKETS ESG PREMIER
DEBT ETF EQUITY ETF
(EFIX) (EPRE)
------------------- -------------------
<S> <C>
$ 19,454,088 $ 2,150,492
-- --
-- --
-- --
431,396 --
-- --
-- --
-- --
335,445 --
-- --
230,818 --
4 226
-- --
-- --
------------------- -------------------
20,451,751 2,150,718
------------------- -------------------
-- --
-- --
487,657 --
-- --
14,301 1,529
-- --
-- --
------------------- -------------------
501,958 1,529
------------------- -------------------
$ 19,949,793 $ 2,149,189
=================== ===================
$ 20,024,040 $ 1,997,385
10,000 1,000
(84,247) 150,804
------------------- -------------------
$ 19,949,793 $ 2,149,189
=================== ===================
$ 19.95 $ 21.49
=================== ===================
1,000,002 100,002
=================== ===================
$ 19,393,028 $ 2,007,846
=================== ===================
$ -- $ --
=================== ===================
$ -- $ --
=================== ===================
$ -- $ --
=================== ===================
</TABLE>
See Notes to Financial Statements Page 97
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED AUGUST 31, 2021
<TABLE>
<CAPTION>
FIRST TRUST TCW FIRST TRUST TCW FIRST TRUST TCW
OPPORTUNISTIC FIXED UNCONSTRAINED SECURITIZED
INCOME ETF PLUS BOND ETF PLUS ETF
(FIXD) (UCON) (DEED)
------------------- ------------------- -------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest......................................................... $ 90,588,266 $ 8,720,478 $ 1,310,350
Dividends........................................................ 12,469 381 7,134
------------------- ------------------- -------------------
Total investment income....................................... 90,600,735 8,720,859 1,317,484
------------------- ------------------- -------------------
EXPENSES:
Investment advisory fees......................................... 31,100,419 2,795,947 607,453
Excise Tax....................................................... -- -- 509
------------------- ------------------- -------------------
Total expenses................................................ 31,100,419 2,795,947 607,962
Less fees waived by the investment advisor.................... (4,784,680) (328,935) (80,994)
------------------- ------------------- -------------------
Net expenses.................................................. 26,315,739 2,467,012 526,968
------------------- ------------------- -------------------
NET INVESTMENT INCOME (LOSS)..................................... 64,284,996 6,253,847 790,516
------------------- ------------------- -------------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments................................................... (25,295,104) 4,117,242 1,548,793
Futures contracts............................................. (85,949) 779,174 37,123
Forward foreign currency contracts............................ 6,971,474 350,472 (735)
Foreign currency transactions................................. 14,948 754 (501)
------------------- ------------------- -------------------
Net realized gain (loss)......................................... (18,394,631) 5,247,642 1,584,680
------------------- ------------------- -------------------
Net change in unrealized appreciation (depreciation) on:
Investments................................................... (9,786,304) (473,586) 214,761
Purchased swaptions contracts................................. (44,321) -- --
Purchased options contracts................................... 134,148 -- --
Written options contracts..................................... 22,672 -- --
Futures contracts............................................. 14,576 (311,725) (10,848)
Forward foreign currency contracts............................ -- -- 1,014
Swap contracts................................................ (304,901) (31,889) --
Foreign currency translations................................. -- -- 9
------------------- ------------------- -------------------
Net change in unrealized appreciation (depreciation)............. (9,964,130) (817,200) 204,936
------------------- ------------------- -------------------
NET REALIZED AND UNREALIZED GAIN (LOSS).......................... (28,358,761) 4,430,442 1,789,616
------------------- ------------------- -------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS..................................... $ 35,926,235 $ 10,684,289 $ 2,580,132
=================== =================== ===================
</TABLE>
(a) Inception date is February 17, 2021, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(b) Inception date is May 25, 2021, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
Page 98 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FIRST TRUST TCW FIRST TRUST TCW
EMERGING MARKETS ESG PREMIER
DEBT ETF EQUITY ETF
(EFIX) (a) (EPRE) (b)
------------------- -------------------
<S> <C>
$ 482,519 $ 1,527
21 (18)
------------------- -------------------
482,540 1,509
------------------- -------------------
99,628 4,769
-- --
------------------- -------------------
99,628 4,769
(10,487) --
------------------- -------------------
89,141 4,769
------------------- -------------------
393,399 (3,260)
------------------- -------------------
(108,492) 11,413
-- --
-- --
(2,573) 5
------------------- -------------------
(111,065) 11,418
------------------- -------------------
61,060 142,646
-- --
-- --
-- --
-- --
-- --
-- --
(140) --
------------------- -------------------
60,920 142,646
------------------- -------------------
(50,145) 154,064
------------------- -------------------
$ 343,254 $ 150,804
=================== ===================
</TABLE>
See Notes to Financial Statements Page 99
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FIRST TRUST TCW FIRST TRUST TCW
OPPORTUNISTIC FIXED UNCONSTRAINED
INCOME ETF PLUS BOND ETF
(FIXD) (UCON)
---------------------------------- ----------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
8/31/2021 8/31/2020 8/31/2021 8/31/2020
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).............................. $ 64,284,996 $ 29,119,269 $ 6,253,847 $ 5,880,143
Net realized gain (loss).................................. (18,394,631) 70,279,466 5,247,642 2,072,669
Net change in unrealized appreciation (depreciation)...... (9,964,130) 40,497,582 (817,200) (2,882,860)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets resulting
from operations........................................ 35,926,235 139,896,317 10,684,289 5,069,952
---------------- ---------------- ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations..................................... (135,544,495) (50,508,968) (8,311,326) (6,674,002)
Return of capital......................................... (3,126,328) -- -- --
---------------- ---------------- ---------------- ----------------
Total distributions to shareholders....................... (138,670,823) (50,508,968) (8,311,326) (6,674,002)
---------------- ---------------- ---------------- ----------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold................................. 1,797,708,750 2,802,717,770 401,649,334 80,410,130
Cost of shares redeemed................................... (37,801,569) (152,059,261) -- (82,116,874)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets resulting
from shareholder transactions.......................... 1,759,907,181 2,650,658,509 401,649,334 (1,706,744)
---------------- ---------------- ---------------- ----------------
Total increase (decrease) in net assets................... 1,657,162,593 2,740,045,858 404,022,297 (3,310,794)
NET ASSETS:
Beginning of period....................................... 3,640,504,879 900,459,021 204,295,009 207,605,803
---------------- ---------------- ---------------- ----------------
End of period............................................. $ 5,297,667,472 $ 3,640,504,879 $ 608,317,306 $ 204,295,009
================ ================ ================ ================
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period................... 66,000,002 17,000,002 7,800,002 8,050,002
Shares sold............................................... 32,850,000 51,950,000 15,100,000 3,100,000
Shares redeemed........................................... (700,000) (2,950,000) -- (3,350,000)
---------------- ---------------- ---------------- ----------------
Shares outstanding, end of period......................... 98,150,002 66,000,002 22,900,002 7,800,002
================ ================ ================ ================
</TABLE>
(a) Inception date is April 29, 2020, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(b) Inception date is February 17, 2021, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(c) Inception date is May 25, 2021, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
Page 100 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FIRST TRUST TCW FIRST TRUST TCW FIRST TRUST TCW
SECURITIZED EMERGING MARKETS ESG PREMIER
PLUS ETF DEBT ETF EQUITY ETF
(DEED) (EFIX) (EPRE)
---------------------------------- ---------------- ----------------
YEAR PERIOD PERIOD PERIOD
ENDED ENDED ENDED ENDED
8/31/2021 8/31/2020 (a) 8/31/2021 (b) 8/31/2021 (c)
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
$ 790,516 $ 81,001 $ 393,399 $ (3,260)
1,584,680 142,593 (111,065) 11,418
204,936 690,022 60,920 142,646
---------------- ---------------- ---------------- ----------------
2,580,132 913,616 343,254 150,804
---------------- ---------------- ---------------- ----------------
(1,603,367) (68,400) (427,501) --
-- -- -- --
---------------- ---------------- ---------------- ----------------
(1,603,367) (68,400) (427,501) --
---------------- ---------------- ---------------- ----------------
203,281,137 25,031,300 20,034,040 1,998,385
(2,590,248) -- -- --
---------------- ---------------- ---------------- ----------------
200,690,889 25,031,300 20,034,040 1,998,385
---------------- ---------------- ---------------- ----------------
201,667,654 25,876,516 19,949,793 2,149,189
25,876,516 -- -- --
---------------- ---------------- ---------------- ----------------
$ 227,544,170 $ 25,876,516 $ 19,949,793 $ 2,149,189
================ ================ ================ ================
1,000,002 -- -- --
7,850,000 1,000,002 1,000,002 100,002
(100,000) -- -- --
---------------- ---------------- ---------------- ----------------
8,750,002 1,000,002 1,000,002 100,002
================ ================ ================ ================
</TABLE>
See Notes to Financial Statements Page 101
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF (FIXD)
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, PERIOD
--------------------------------------------------------- ENDED
2021 2020 2019 2018 8/31/2017 (a)
------------ ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period................. $ 55.16 $ 52.97 $ 49.40 $ 51.01 $ 50.00
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)......................... 0.76 1.06 1.39 1.15 0.49
Net realized and unrealized gain (loss).............. (0.34) 2.85 3.63 (1.46) 1.12
---------- ---------- ---------- ---------- ----------
Total from investment operations..................... 0.42 3.91 5.02 (0.31) 1.61
---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income................................ (0.81) (1.12) (1.45) (1.30) (0.60)
Net realized gain.................................... (0.75) (0.60) -- (0.00) (b) --
Return of capital.................................... (0.04) -- -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions.................................. (1.60) (1.72) (1.45) (1.30) (0.60)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period....................... $ 53.98 $ 55.16 $ 52.97 $ 49.40 $ 51.01
========== ========== ========== ========== ==========
TOTAL RETURN (c)..................................... 0.77% 7.57% 10.33% (0.57)% 3.23%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)................. $5,297,667 $3,640,505 $ 900,459 $ 318,605 $ 51,011
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets........ 0.65% 0.65% 0.65% 0.65% 0.65% (d)
Ratio of net expenses to average net assets.......... 0.55% 0.55% 0.55% 0.55% 0.55% (d)
Ratio of net investment income (loss) to average
net assets ....................................... 1.34% 1.61% 2.69% 2.29% 1.81% (d)
Portfolio turnover rate (e) (f)...................... 497% 431% 246% 358% 231%
</TABLE>
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF (UCON)
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, PERIOD
------------------------------------------ ENDED
2021 2020 2019 8/31/2018 (a)
------------ ------------ ------------ --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period................. $ 26.19 $ 25.79 $ 25.12 $ 25.00
---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)......................... 0.53 0.75 0.77 0.17
Net realized and unrealized gain (loss).............. 0.52 0.50 0.75 0.10
---------- ---------- ---------- ----------
Total from investment operations..................... 1.05 1.25 1.52 0.27
---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income................................ (0.51) (0.85) (0.81) (0.15)
Net realized gain.................................... (0.17) -- (0.04) --
---------- ---------- ---------- ----------
Total distributions.................................. (0.68) (0.85) (0.85) (0.15)
---------- ---------- ---------- ----------
Net asset value, end of period....................... $ 26.56 $ 26.19 $ 25.79 $ 25.12
========== ========== ========== ==========
TOTAL RETURN (c)..................................... 4.04% 4.97% 6.15% 1.06%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)................. $ 608,317 $ 204,295 $ 207,606 $ 25,125
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets........ 0.85% 0.85% 0.85% 0.85% (d)
Ratio of net expenses to average net assets.......... 0.75% 0.75% 0.75% 0.75% (d)
Ratio of net investment income (loss) to average
net assets ....................................... 1.90% 2.88% 3.16% 2.68% (d)
Portfolio turnover rate (e).......................... 190% (g) 111% (g) 40% (g) 70%
</TABLE>
(a) Inception dates for FIXD and UCON are February 14, 2017 and June 4, 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) Amount is less than $0.01.
(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. The total returns would have been lower if certain
fees had not been waived by the investment advisor.
(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.
(f) The portfolio turnover rate not including mortgage dollar rolls was 282%,
270%, 223%, 241% and 158% for the periods ending August 31, 2021, August
31, 2020, August 31, 2019, August 31, 2018 and August 31, 2017,
respectively.
(g) The portfolio turnover rate not including mortgage dollar rolls was 40%,
67% and 39% for the periods ending August 31, 2021, August 31, 2020 and
August 31, 2019, respectively.
Page 102 See Notes to Financial Statements
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST TCW SECURITIZED PLUS ETF (DEED)
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
8/31/2021 8/31/2020 (a)
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period................. $ 25.88 $ 25.00
---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)......................... 0.28 0.08
Net realized and unrealized gain (loss).............. 0.47 0.87
---------- ----------
Total from investment operations..................... 0.75 0.95
---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income................................ (0.29) (0.07)
Net realized gain.................................... (0.33) --
---------- ----------
Total distributions.................................. (0.62) (0.07)
---------- ----------
Net asset value, end of period....................... $ 26.01 $ 25.88
========== ==========
TOTAL RETURN (b)..................................... 2.93% 3.80%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)................. $ 227,544 $ 25,877
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets........ 0.75% 0.75% (c)
Ratio of net expenses to average net assets.......... 0.65% 0.65% (c)
Ratio of net investment income (loss) to average
net assets ....................................... 0.98% 0.94% (c)
Portfolio turnover rate (d) (e)...................... 678% 186%
</TABLE>
FIRST TRUST TCW EMERGING MARKETS DEBT ETF (EFIX)
<TABLE>
<CAPTION>
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period................. $ 20.00
----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)......................... 0.40
Net realized and unrealized gain (loss).............. (0.02)
----------
Total from investment operations..................... 0.38
----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income................................ (0.43)
----------
Net asset value, end of period....................... $ 19.95
==========
TOTAL RETURN (b)..................................... 1.93%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)................. $ 19,950
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets........ 0.95% (c)
Ratio of net expenses to average net assets.......... 0.85% (c)
Ratio of net investment income (loss) to average
net assets........................................ 3.75% (c)
Portfolio turnover rate (d).......................... 100%
</TABLE>
(a) Inception dates for DEED and EFIX are April 29, 2020 and February 17,
2021, respectively, which are consistent with the respective Fund's
commencement of investment operations and are the dates the initial
creation units were established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year. The total returns would have been lower if certain
fees had not been waived by the investment advisor.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
(e) The portfolio turnover rate not including mortgage dollar rolls was 299%
and 21% for the periods ending August 31, 2021 and August 31, 2020,
respectively.
See Notes to Financial Statements Page 103
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST TCW ESG PREMIER EQUITY ETF (EPRE)
<TABLE>
<CAPTION>
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period................. $ 19.98
----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)......................... (0.03)
Net realized and unrealized gain (loss).............. 1.54
----------
Total from investment operations..................... 1.51
----------
Net asset value, end of period....................... $ 21.49
==========
TOTAL RETURN (b)..................................... 7.56%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)................. $ 2,149
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets........ 0.85% (c)
Ratio of net expenses to average net assets.......... 0.85% (c)
Ratio of net investment income (loss) to average
net assets........................................ (0.58)% (c)
Portfolio turnover rate (d).......................... 17%
</TABLE>
(a) Inception date is May 25, 2021, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The return presented does not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
Page 104 See Notes to Financial Statements
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
1. ORGANIZATION
First Trust Exchange-Traded Fund VIII (the "Trust") is an open-end management
investment company organized as a Massachusetts business trust on February 22,
2016, 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 forty-nine funds that are offering shares. This
report covers the five funds (each a "Fund" and collectively, the "Funds")
listed below:
First Trust TCW Opportunistic Fixed Income ETF - (The Nasdaq Stock Market
LLC ("Nasdaq") ticker "FIXD")
First Trust TCW Unconstrained Plus Bond ETF - (NYSE Arca, Inc. ("NYSE
Arca") ticker "UCON")
First Trust TCW Securitized Plus ETF - (NYSE Arca ticker "DEED")
First Trust TCW Emerging Markets Debt ETF - (NYSE Arca ticker "EFIX")(1)
First Trust TCW ESG Premier Equity ETF - (NYSE Arca ticker "EPRE")(2)
(1) Commenced investment operations on February 17, 2021.
(2) Commenced investment operations on May 25, 2021.
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."
Each Fund is an actively managed exchange-traded fund. FIXD's, UCON's, and
DEED's investment objective is to seek to maximize long-term total return.
EFIX's investment objective seeks to provide high total return from current
income and capital appreciation. EPRE's investment objective is to seek to
provide investors with long-term capital appreciation. Each of FIXD and UCON
seeks to achieve its investment objective by investing, under normal market
conditions, at least 80% of its net assets (including investment borrowings) in
fixed income securities. DEED seeks to achieve its investment objective by
investing, under normal market conditions, at least 80% of its net assets
(including investment borrowings) in securitized debt securities. EFIX seeks to
achieve its investment objective by investing, under normal market conditions,
at least 80% of its net assets (including investment borrowings) in securitized
debt securities issued or guaranteed in emerging market countries. EPRE seeks to
achieve its investment objective by investing at least 80% of its net assets
(plus any borrowings for investment purposes) in equity securities of U.S.
companies that meet the sub-advisor's environmental, social and governance (ESG)
criteria. Although EPRE emphasizes investments in equity securities of large
capitalization companies, it may invest in the equity securities of companies of
any size.
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. Domestic debt securities and 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 the Fund (including accrued interest and dividends), less
all liabilities (including accrued expenses and dividends declared but unpaid),
by the total number of shares outstanding.
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:
Page 105
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
Corporate bonds, corporate notes, U.S. government securities,
mortgage-backed securities, asset-backed securities, municipal securities,
capital preferred securities, and other debt securities are fair valued on
the basis of valuations provided by dealers who make markets in such
securities or by a third-party pricing service approved by the Trust's
Board of Trustees, which may use the following valuation inputs when
available:
1) benchmark yields;
2) reported trades;
3) broker/dealer quotes;
4) issuer spreads;
5) benchmark securities;
6) bids and offers; and
7) reference data including market research publications.
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 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.
Options on swaps ("swaptions") are valued by a third-party pricing service
using a mathematical model, which incorporates a number of market data
factors, such as the trades and prices of the underlying instruments.
Shares of open-end funds are valued at fair value which is based on NAV
per share.
Senior Floating-Rate Loan Interests ("Senior Loans")(1) are not listed on
any securities exchange or board of trade. Senior Loans are typically
bought and sold by institutional investors in individually negotiated
private transactions that function in many respects like an
over-the-counter secondary market, although typically no formal
market-makers exist. This market, while having grown substantially since
its inception, generally has fewer trades and less liquidity than the
secondary market for other types of securities. Some Senior Loans have few
or no trades, or trade infrequently, and information regarding a specific
Senior Loan may not be widely available or may be incomplete. Accordingly,
determinations of the market value of Senior Loans may be based on
infrequent and dated information. Because there is less reliable,
objective data available, elements of judgment may play a greater role in
valuation of Senior Loans than for other types of securities. Typically,
Senior Loans are valued using information provided by a third-party
pricing service. The third-party pricing service primarily uses
over-the-counter pricing from dealer runs and broker quotes from
indicative sheets to value the Senior Loans.
Forward foreign currency contracts are fair valued at the current day's
interpolated foreign exchange rate, as calculated using the current day's
spot rate, and the thirty, sixty, ninety, and one-hundred eighty day
forward rates provided by a third-party pricing service.
Exchange-traded futures contracts are valued at the closing price in the
market where such contracts are principally traded. If no closing price is
available, exchange-traded futures contracts are fair valued at the mean
of their most recent bid and asked price, if available, and otherwise at
their closing bid price.
Exchange-traded options contracts are valued at the closing price in the
market where such contracts are principally traded. If no closing price is
available, exchange-traded options contracts are fair valued at the mean
of their most recent bid and asked price, if available, and otherwise at
their closing bid price.
Swaps are fair valued utilizing quotations provided by a third-party
pricing service or, if the third-party pricing service does not provide a
value, by quotes provided by the selling dealer or financial institution.
Fixed income and other debt securities having a remaining maturity of
sixty days or less when purchased are fair valued at cost adjusted for
amortization of premiums and accretion of discounts (amortized cost),
provided the Advisor's Pricing Committee has determined that the use of
amortized cost is an appropriate reflection of fair value given market and
issuer-specific conditions existing at the time of the determination.
Factors that may be considered in determining the appropriateness of the
use of amortized cost include, but are not limited to, the following:
-----------------------------
(1) The terms "security" and "securities" used throughout the Notes to
Financial Statements include Senior Loans.
Page 106
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
1) the credit conditions in the relevant market and changes thereto;
2) the liquidity conditions in the relevant market and changes thereto;
3) the interest rate conditions in the relevant market and changes thereto
(such as significant changes in interest rates);
4) issuer-specific conditions (such as significant credit deterioration);
and
5) any other market-based data the Advisor's Pricing Committee considers
relevant. In this regard, the Advisor's Pricing Committee may use
last-obtained market-based data to assist it when valuing portfolio
securities using amortized cost.
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 (the "1933 Act")) 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 fundamental business data relating to the issuer;
2) an evaluation of the forces which influence the market in which these
securities are purchased and sold;
3) the type, size and cost of a security;
4) the financial statements of the issuer;
5) the credit quality and cash flow of the issuer, based on TCW
Investment Management Company LLC's ("TCW" or the "Sub-Advisor") or
external analysis;
6) the information as to any transactions in or offers for the security;
7) the price and extent of public trading in similar securities of the
issuer, or comparable companies;
8) the coupon payments;
9) the quality, value and salability of collateral, if any, securing the
security;
10) the business prospects of the issuer, including any ability to obtain
money or resources from a parent or affiliate and an assessment of the
issuer's management (for corporate debt only);
11) the economic, political and social prospects/developments of the
country of issue and the assessment of the country's government
leaders/officials (for sovereign debt only);
12) the prospects for the issuer's industry, and multiples (of earnings
and/or cash flows) being paid for similar businesses in that industry
(for corporate debt only); and
13) other relevant factors.
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 the 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.
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.
Page 107
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
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 August 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 is recorded
daily on the accrual basis. Amortization of premiums and accretion of discounts
are recorded using the effective interest method.
The United Kingdom's Financial Conduct Authority, which regulates the London
Interbank Offered Rates ("LIBOR"), announced on March 5, 2021 that all non-USD
LIBOR reference rates and the 1-week and 2-month USD LIBOR reference rates will
cease to be provided or no longer be representative immediately after December
31, 2021 and the remaining USD LIBOR settings will cease to be provided or no
longer be representative immediately after June 30, 2023. The International
Swaps and Derivatives Association, Inc. ("ISDA") confirmed that the March 5,
2021 announcement constituted an index cessation event under the Interbank
Offered Rates ("IBOR") Fallbacks Supplement and the ISDA 2020 IBOR Fallbacks
Protocol for all 35 LIBOR settings and confirmed that the spread adjustment to
be used in ISDA fallbacks was fixed as of the date of the announcement.
In the United States, the Alternative Reference Rates Committee (the "ARRC"), a
group of market participants convened by the Board of Governors of the Federal
Reserve System and the Federal Reserve Bank of New York in cooperation with
other federal and state government agencies, has since 2014 undertaken efforts
to identify U.S. dollar reference interest rates as alternatives to LIBOR and to
facilitate the mitigation of LIBOR-related risks. In June 2017, the ARRC
identified the Secured Overnight Financing Rate ("SOFR"), a broad measure of the
cost of cash overnight borrowing collateralized by U.S. Treasury securities, as
the preferred alternative for U.S. dollar LIBOR. The Federal Reserve Bank of New
York began daily publishing of SOFR in April 2018.
At this time, it is not possible to predict the full impact of the elimination
of LIBOR and the establishment of an alternative reference rate on the Funds or
their investments.
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.
Securities purchased or sold on a when-issued, delayed-delivery or forward
purchase commitment basis may have extended settlement periods. The value of the
security so purchased is subject to market fluctuations during this period. Each
Fund maintains liquid assets with a current value at least equal to the amount
of its when-issued, delayed-delivery or forward purchase commitments until
payment is made. At August 31, 2021, FIXD, UCON, and DEED held $11,206,754,
$2,978,109 and $752,954, respectively, of when-issued or delayed-delivery
securities. At August 31, 2021, FIXD, UCON, and DEED held $1,148,323,686,
$59,983,955 and $113,596,552, respectively, of forward purchase commitments. C.
RESTRICTED SECURITIES
FIXD, UCON, and DEED invest in restricted securities, which are securities that
may not be offered for public sale without first being registered under the 1933
Act. Prior to registration, restricted securities may only be resold in
transactions exempt from registration under Rule 144A under the 1933 Act,
normally to qualified institutional buyers. As of August 31, 2021, FIXD, UCON,
and DEED held restricted securities as shown in the following table that the
Advisor has deemed illiquid pursuant to procedures adopted by the Trust's Board
of Trustees. Although market instability can result in periods of increased
overall market illiquidity, liquidity for each security is determined based on
security-specific factors and assumptions, which require subjective judgment.
Each Fund does not have the right to demand that such securities be registered.
These securities are valued according to the valuation procedures as stated in
the Portfolio Valuation note (Note 2A) and are not expressed as a discount to
the carrying value of a comparable unrestricted security. There are no
unrestricted securities with the same maturity dates and yields for these
issuers.
Page 108
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
<TABLE>
<CAPTION>
ACQUISITION PRINCIPAL CURRENT CARRYING % OF
SECURITIES DATE VALUE PRICE COST VALUE NET ASSETS
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FIXD
Ruby Pipeline LLC, 8.00%,
04/01/22 12/08/2017 $ 329,909 $ 94.18 $ 348,942 $ 310,723 0.01%
=======================================
UCON
Ruby Pipeline LLC, 8.00%, 07/25/2018,
04/01/22 04/01/2021,
08/02/2021 $ 598,788 $ 94.18 $ 560,019 $ 563,965 0.09%
=======================================
DEED
GS Mortgage Securities Trust,
Series 2011-GC5, Class XA,
IO, 0.09%, 08/10/44 05/19/20 $ 2,116,657 $ 0.00 $ 0 $ 21 0.00%*
GS Mortgage Securities Trust,
Series 2012-GC6, Class XA,
IO, 1.91%, 01/10/45 03/15/21 8,476,732 0.00 14,809 85 0.00%*
---------------------------------------
$ 14,809 $ 106 0.00%*
=======================================
</TABLE>
* Amount is less than 0.01%.
D. FUTURES CONTRACTS
Each Fund, with the exception of EPRE, may purchase or sell (i.e., is long or
short) exchange-listed futures contracts to hedge against changes in interest
rates (interest rate risk). Futures contracts are agreements between a Fund and
a counterparty to buy or sell a specific quantity of an underlying instrument at
a specified price and at a specified date. Depending on the terms of the
contract, futures contracts are settled either through physical delivery of the
underlying instrument on the settlement date or by payment of a cash settlement
amount on the settlement date. Open futures contracts can also be closed out
prior to settlement by entering into an offsetting transaction in a matching
futures contract. If a Fund is not able to enter into an offsetting transaction,
the Fund will continue to be required to maintain margin deposits on the futures
contract. When the contract is closed or expires, a Fund records a realized gain
or loss equal to the difference between the value of the contract at the time it
was opened and the value at the time it was closed or expired. This gain or loss
is included in "Net realized gain (loss) on futures contracts" on the Statements
of Operations.
Upon entering into a futures contract, a Fund must deposit funds, called margin,
with its custodian in the name of the clearing broker equal to a specified
percentage of the current value of the contract. Open futures contacts are
marked-to-market daily with the change in value recognized as a component of
"Net change in unrealized appreciation (depreciation) on futures contracts" on
the Statements of Operations. Pursuant to the contract, a Fund agrees to receive
from or pay to the broker an amount of cash equal to the daily fluctuation in
value of the contract. Such receipts or payments are known as variation margin
and are included in "Variation margin" receivable or payable on the Statements
of Assets and Liabilities. If market conditions change unexpectedly, a Fund may
not achieve the anticipated benefits of the futures contract and may realize a
loss. The use of futures contracts involves the risk of imperfect correlation in
movements in the price of the futures contracts, interest rates and the
underlying instruments.
E. FORWARD FOREIGN CURRENCY CONTRACTS
Each Fund, with the exception of EPRE, is subject to foreign currency risk in
the normal course of pursuing its investment objective. Forward foreign currency
contracts are agreements between two parties ("Counterparties") to exchange one
currency for another at a future date and at a specified price. Each Fund, with
the exception of EPRE, uses forward foreign currency contracts to facilitate
transactions in foreign securities and to manage the Fund's foreign currency
exposure. These contracts are valued daily, and a Fund's net equity therein,
representing unrealized gain or loss on the contracts as measured by the
difference between the forward foreign exchange rates at the dates of entry into
the contracts and the forward rates at the reporting date, is included in
"Unrealized appreciation (depreciation) on forward foreign currency contracts"
on the Statements of Assets and Liabilities. The change in unrealized
appreciation/(depreciation) is included in "Net change in unrealized
appreciation (depreciation) on forward foreign currency contracts" on the
Statements of Operations. When the forward contract is closed, a Fund records a
realized gain or loss equal to the difference between the proceeds from (or the
cost of) the closing transaction and the Fund's basis in the contract. This
realized gain or loss is included in "Net realized gain (loss) on forward
foreign currency contracts" on the Statements of Operations. Risks arise from
the possible inability of Counterparties to meet the terms of their contracts
and from movement in currency and securities values and interest rates. Due to
the risks, a Fund could incur losses in excess of the net unrealized value shown
on the forward foreign currency contracts table in the Fund's Portfolio of
Investments. In the event of default by the Counterparty, a Fund will provide
notice to the Counterparty of the Fund's intent to convert the currency held by
the Fund into the currency that the Counterparty agreed to exchange with the
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
Fund. If a Counterparty becomes bankrupt or otherwise fails to perform its
obligations due to financial difficulties, a Fund may experience significant
delays in obtaining any recovery in a bankruptcy or other reorganization
proceeding. The Fund may obtain only limited recovery or may obtain no recovery
in such circumstances.
F. SWAP AGREEMENTS
Each Fund, with the exception of EPRE, may enter into swap agreements. A swap is
a financial instrument that typically involves the exchange of cash flows
between two parties on specified dates (settlement dates), where the cash flows
are based on agreed upon prices, rates, etc. Payment received or made by the
Fund for interest rate swaps, if any, are recorded on the Statements of
Operations as "Net realized gain (loss) on swap contracts." When an interest
rate swap is terminated, the Fund will record a realized gain or loss equal to
the difference between the proceeds from (or cost of) the closing transaction
and the Fund's basis in the contract, if any. Generally, the basis of the
contracts, if any, is the premium received or paid. Swap agreements are
individually negotiated and involve the risk of the potential inability of the
Counterparties to meet the terms of the agreement. In connection with these
agreements, cash and securities may be identified as collateral in accordance
with the terms of the respective swap agreements to provide assets of value and
recourse in the event of default under the swap agreement or
bankruptcy/insolvency of a party to the swap agreement. In the event of a
default by a Counterparty, the Fund will seek withdrawal of the collateral and
may incur certain costs exercising its rights with respect to the collateral. If
a Counterparty becomes bankrupt or otherwise fails to perform its obligations
due to financial difficulties, the Fund may experience significant delays in
obtaining any recovery in a bankruptcy or other reorganization proceeding. The
Fund may obtain only limited recovery or may obtain no recovery in such
circumstances.
Swap agreements may increase or decrease the overall volatility of the
investments of the Fund. The performance of swap agreements may be affected by
changes in the specific interest rate, security, currency, or other factors that
determine the amounts of payments due to and from the Fund. The Fund's maximum
interest rate risk to meet its future payments under swap agreements is equal to
the total notional amount as shown on the Portfolio of Investments. The notional
amount represents the U.S. dollar value of the contract as of the day of the
opening transaction or contract reset. When the Fund enters into a swap
agreement, any premium paid is included in "Swap contracts, at value" on the
Statements of Assets and Liabilities.
FIXD and UCON held interest rate swap agreements at August 31, 2021. An interest
rate swap agreement involves the Fund's agreement to exchange a stream of
interest payments for another party's stream of cash flows. Interest rate swaps
do not involve the delivery of securities or other underlying assets or
principal. Accordingly, the risk of loss with respect to interest rate swaps is
limited to the net amount of interest payments that the Fund is contractually
obligated to make.
G. OPTIONS AND SWAPTIONS
FIXD may invest in option contracts to adjust its exposure to interest rate
risk. The primary risk associated with purchasing options is that the value of
the underlying investments may move in such a way that the option is
out-of-the-money (the exercise price of the option exceeds the value of the
underlying investment), the position is worthless at expiration, and the Fund
loses the premium paid. The primary risk associated with selling options is that
the value of the underlying investments may move in such a way that the option
is in-the money (the exercise price of the option exceeds the value of the
underlying investment), the counterparty exercises the option, and the Fund
loses an amount equal to the market value of the option written less the premium
received.
FIXD invests in options on swaps (swaptions), which are transacted
over-the-counter ("OTC") and not on an exchange. The purchaser and writer of a
swaption is buying or granting the right to enter into a previously agreed upon
interest rate or credit default swap agreement (interest rate risk and/or credit
risk) at any time before the expiration of the option. Unlike exchange-traded
options, which are standardized with respect to the underlying instrument,
expiration date, contract size, and strike price, the terms of OTC options
generally are established through negotiation with the other party to the option
contract. Although this type of arrangement allows the purchaser or writer
greater flexibility to tailor an option to its needs, OTC options have the risk
of the potential inability of counterparties to meet the terms of their
contracts. The Fund's maximum equity price risk for purchased options is limited
to the premium initially paid.
FIXD may purchase or write (sell) put and call options on futures contracts and
enter into closing transactions with respect to such options to terminate an
existing position. A futures option gives the holder the right, in return for
the premium paid, to assume a long position (call) or short position (put) in a
futures contract at a specified exercise price prior to the expiration of the
option. Upon exercise of a call option, the holder acquires a long position in
the futures contract and the writer is assigned the opposite short position. In
the case of a put option, the opposite is true. Prior to exercise or expiration,
a futures contract may be closed out by an offsetting purchase or sale of a
futures option of the same series. Options are marked-to-market daily and their
value is affected by changes in the value of the underlying security, changes in
interest rates, changes in the actual or perceived volatility of the securities
markets and the underlying securities, and the remaining time to the option's
expiration. The value of options may also be adversely affected if the market
for the options becomes less liquid or the trading volume diminishes.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
When a Fund purchases a call or put option, the premium paid represents the cost
of the call or put option, which is included in "Options contracts purchased, at
value" on the Statements of Assets and Liabilities. When a Fund writes (sells)
an option, an amount equal to the premium received by the Fund is included in
"Options contracts written, at value" on the Statements of Assets and
Liabilities. Options are marked-to-market daily and their value will be affected
by changes in the value and dividend rates of the underlying equity securities,
changes in interest rates, changes in the actual or perceived volatility of the
securities markets and the underlying equity securities and the remaining time
to the options' expiration. The value of options may also be adversely affected
if the market for the options becomes less liquid or trading volume diminishes
When the Fund purchases a call or put swaption, the premium paid represents the
cost of the call or put swaption, which is included in "Swaptions contracts
purchased, at value" on the Statements of Assets and Liabilities and is
subsequently adjusted daily to the current market value of the option purchased.
Fluctuations in the value of the swaptions are recorded in the Statements of
Operations as unrealized appreciation (depreciation) until expired, closed, or
exercised, at which time realized gains (losses) are recognized. If the Fund
elects to allow a put swaption to expire, then the interest rate risk for
purchased swaptions is limited to the premium initially paid. Any gain or loss
on swaptions would be included in "Purchased swaptions contracts" on the
Statements of Operations.
H. 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.
For financial reporting purposes, the Funds do not offset financial assets and
financial liabilities that are subject to master netting arrangements ("MNAs")
or similar agreements on the Statements of Assets and Liabilities. MNAs provide
the right, in the event of default (including bankruptcy and insolvency) for the
non-defaulting Counterparty to liquidate the collateral and calculate the net
exposure to the defaulting party or request additional collateral.
The Funds do not have the right to offset financial assets and financial
liabilities related to options and swaptions contracts, forward foreign currency
contracts, futures contracts or swap contracts on the Statements of Assets and
Liabilities.
I. 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
fluctuation in exchange rates between the initial purchase settlement date and
subsequent sale trade date for fixed-income securities is included in "Net
realized gain (loss) on investments" on the Statements of Operations.
J. INTEREST-ONLY SECURITIES
An interest-only security ("IO Security") is the interest-only portion of a
mortgage-backed security that receives some or all of the interest portion of
the underlying mortgage-backed security and little or no principal. A reference
principal value called a notional value is used to calculate the amount of
interest due to the IO Security. IO Securities are sold at a deep discount to
their notional principal amount. Generally speaking, when interest rates are
falling and prepayment rates are increasing, the value of an IO Security will
fall. Conversely, when interest rates are rising and prepayment rates are
decreasing, generally the value of an IO Security will rise. These securities,
if any, are identified on each Fund's Portfolio of Investments.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
K. MORTGAGE DOLLAR ROLLS
Each Fund, with the exception of EPRE, may invest, without limitation, in
mortgage dollar rolls. The Funds intend to enter into mortgage dollar rolls only
with high quality securities dealers and banks, as determined by the Funds'
Sub-Advisor. In a mortgage dollar roll, a Fund will sell (or buy)
mortgage-backed securities for delivery on a specified date and simultaneously
contract to repurchase (or sell) substantially similar (same type, coupon and
maturity) securities on a future date. Mortgage dollar rolls are recorded as
separate purchases and sales in a Fund.
L. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income, if any, are declared and paid monthly for
FIXD, UCON, DEED, and EFIX and quarterly for EPRE, 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 in cash may be reinvested automatically in additional whole shares
only if the broker through whom the shares were purchased makes such option
available. Such shares will generally be reinvested by the broker based upon the
market price of those shares and investors may be subject to customary brokerage
commissions charged by the broker.
Distributions from net investment income and realized capital gains are
determined in accordance with federal income tax regulations, which may differ
from U.S. GAAP. Certain capital accounts in the financial statements are
periodically adjusted for permanent differences in order to reflect their tax
character. These permanent differences are primarily due to the varying
treatment of income and gain/loss on portfolio securities held by the Funds and
have no impact on net assets or NAV per share. Temporary differences, which
arise from recognizing certain items of income, expense and gain/loss in
different periods for financial statement and tax purposes, will reverse at some
time in the future.
The tax character of distributions paid by each Fund during the fiscal period
ended August 31, 2021 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 TCW Opportunistic Fixed Income ETF $ 122,548,756 $ 7,363,614 $ 3,126,328
First Trust TCW Unconstrained Plus Bond ETF 7,774,045 537,281 --
First Trust TCW Securitized Plus ETF 1,573,671 29,696 --
First Trust TCW Emerging Markets Debt ETF 427,501 -- --
First Trust TCW ESG Premier Equity ETF -- -- --
</TABLE>
The tax character of distributions paid by each Fund during the fiscal period
ended August 31, 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 TCW Opportunistic Fixed Income ETF $ 49,116,293 $ 1,392,675 $ --
First Trust TCW Unconstrained Plus Bond ETF 6,674,002 -- --
First Trust TCW Securitized Plus ETF 68,400 -- --
</TABLE>
As of August 31, 2021, 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 TCW Opportunistic Fixed Income ETF $ (5,632,125) $ (23,639,262) $ 53,357,838
First Trust TCW Unconstrained Plus Bond ETF -- 209,148 5,788,922
First Trust TCW Securitized Plus ETF 796,234 -- 1,026,256
First Trust TCW Emerging Markets Debt ETF 5,812 (121,232) 31,173
First Trust TCW ESG Premier Equity ETF 8,685 -- 142,119
</TABLE>
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
M. INCOME TAXES
Each Fund intends to qualify or continue to qualify as a regulated investment
company by complying with the requirements under Subchapter M of the Internal
Revenue Code of 1986, as amended, which includes distributing substantially all
of its net investment income and net realized gains to shareholders.
Accordingly, no provision has been made for federal and state income taxes.
However, due to the timing and amount of distributions, each Fund may be subject
to an excise tax of 4% of the amount by which approximately 98% of each Fund's
taxable income exceeds the distributions from such taxable income for the
calendar year.
The Funds are subject to accounting standards that establish a minimum threshold
for recognizing, and a system for measuring, the benefits of a tax position
taken or expected to be taken in a tax return. For FIXD and UCON, the taxable
years ended 2018, 2019, 2020, and 2021 remain open to federal and state audit.
For DEED, the taxable years ended 2020 and 2021 remain open to federal and state
audit. For EFIX and EPRE, the taxable year ended 2021 remains open to federal
and state audit. As of August 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 August 31, 2021, 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.
Non-Expiring
Capital Loss
Carryforward
-----------------
First Trust TCW Opportunistic Fixed Income ETF $ --
First Trust TCW Unconstrained Plus Bond ETF --
First Trust TCW Securitized Plus ETF --
First Trust TCW Emerging Markets Debt ETF 121,232
First Trust TCW ESG Premier Equity ETF --
Certain losses realized during the current fiscal year may be deferred and
treated as occurring on the first day of the following fiscal year for federal
income tax purposes. For the fiscal period ended August 31, 2021, the following
Fund listed below incurred and elected to defer net late year ordinary or
capital losses as follows:
<TABLE>
<CAPTION>
Qualified Late Year Losses
---------------------------------
Ordinary Losses Capital Losses
--------------- ---------------
<S> <C> <C>
First Trust TCW Opportunistic Fixed Income ETF $ -- $ 23,639,262
</TABLE>
In order to present paid-in capital and accumulated distributable earnings
(loss) (which consists of accumulated net investment income (loss), accumulated
net realized gain (loss) on investments and net unrealized appreciation
(depreciation) on investments) on the Statements of Assets and Liabilities that
more closely represent their tax character, certain adjustments have been made
to paid-in capital, accumulated net investment income (loss) and accumulated net
realized gain (loss) on investments. These adjustments are primarily due to the
difference between book and tax treatments of income and gains on various
investment securities held by the Funds. The results of operations and net
assets were not affected by these adjustments. For the fiscal period ended
August 31, 2021, the adjustments for each Fund were as follows:
<TABLE>
<CAPTION>
Accumulated
Accumulated Net Realized
Net Investment Gain (Loss) Paid-in
Income (Loss) on Investments Capital
-------------- -------------- -------------
<S> <C> <C> <C>
First Trust TCW Opportunistic Fixed Income ETF $ (1,867,205) $ 1,867,205 $ --
First Trust TCW Unconstrained Plus Bond ETF 703,331 (703,331) --
First Trust TCW Securitized Plus ETF 98,005 (97,496) (509)
First Trust TCW Emerging Markets Debt ETF 39,914 (39,914) --
First Trust TCW ESG Premier Equity ETF 3,260 (3,260) --
</TABLE>
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
N. EXPENSES
Expenses, other than the investment advisory fee and other excluded expenses,
are paid by the Advisor (see Note 3).
3. INVESTMENT ADVISORY FEE, AFFILIATED TRANSACTIONS AND OTHER FEE ARRANGEMENTS
First Trust, the investment advisor to the 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 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.
TCW serves as the Funds' sub-advisor and manages each Fund's portfolio subject
to First Trust's supervision. Pursuant to the Investment Management Agreement,
between the Trust, on behalf of the Funds, and the Advisor, and the Investment
Sub-Advisory Agreement among the Trust, on behalf of the Funds, the Advisor and
TCW, First Trust will supervise TCW and its management of the investment of each
Fund's assets and will pay TCW for its services as the Funds' sub-advisor. TCW
receives a sub-advisory fee equal to 50% of any remaining monthly unitary
management fee paid to the Advisor after the average Fund's expenses accrued
during the most recent twelve months are subtracted from the unitary management
fee for that month. First Trust will also be responsible for each Fund's
expenses, including the cost of transfer agency, sub-advisory, custody, fund
administration, legal, audit and other services, but excluding fee payments
under the Investment Management Agreement, interest, taxes, acquired fund fees
and expenses, if any, brokerage commissions and other expenses connected with
the execution of portfolio transactions, distribution and service fees payable
pursuant to a Rule 12b-1 plan, if any, and extraordinary expenses. FIXD, UCON,
DEED, EFIX, and EPRE have each agreed to pay First Trust an annual unitary
management fee equal to 0.65%, 0.85%, 0.75%, 0.95, and 0.85%, respectively, of
its average daily net assets. Pursuant to a contractual agreement, First Trust
has agreed to waive management fees of 0.10% of average daily net assets until
December 31, 2021 for FIXD and UCON, April 6, 2022 for DEED, and February 12,
2023 for EFIX. The waiver agreement may be terminated by action of the Trust's
Board of Trustees at any time upon 60 days' written notice by the Trust on
behalf of each Fund or by the Funds' investment advisor only after December 31,
2021 for FIXD and UCON, April 6, 2022 for DEED, and February 12, 2023 for EFIX.
During the fiscal period ended August 31, 2021, the Advisor waived fees of
$4,784,680, $328,935, $80,994, and $10,487, for FIXD, UCON, DEED, and EFIX,
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.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
4. PURCHASES AND SALES OF SECURITIES
For the fiscal period ended August 31, 2021, the cost of purchases and proceeds
from sales and paydowns of
U.S. Government securities and non-U.S. Government securities for each Fund,
excluding short-term investments and in-kind transactions, were as follows:
<TABLE>
<CAPTION>
Purchases Sales
--------------- ---------------
<S> <C> <C>
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF
U.S. Government securities $25,838,304,053 $24,480,407,057
Non-U.S. Government securities 1,738,764,945 831,382,349
FIRST TRUST TCW UNCONSTRAINED PLUS BOND ETF
U.S. Government securities 515,909,943 450,798,405
Non-U.S. Government securities 317,758,193 75,150,875
FIRST TRUST TCW SECURITIZED PLUS ETF
U.S. Government securities 793,636,665 644,628,874
Non-U.S. Government securities 101,874,706 8,428,754
FIRST TRUST TCW EMERGING MARKETS DEBT ETF
U.S. Government securities -- --
Non-U.S. Government securities 37,745,685 18,892,492
FIRST TRUST TCW ESG PREMIER EQUITY ETF
U.S. Government securities -- --
Non-U.S. Government securities 468,896 348,948
</TABLE>
For the fiscal period ended August 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 TCW Opportunistic Fixed Income ETF $ -- $ --
First Trust TCW Unconstrained Plus Bond ETF -- --
First Trust TCW Securitized Plus ETF -- --
First Trust TCW Emerging Markets Debt ETF -- --
First Trust TCW ESG Premier Equity ETF 1,809,909 --
</TABLE>
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<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
5. DERIVATIVE TRANSACTIONS
The following table presents the types of derivatives held by each Fund at
August 31, 2021, the primary underlying risk exposure and the location of these
instruments as presented on the Statements of Assets and Liabilities.
<TABLE>
<CAPTION>
ASSET DERIVATIVES LIABILITY DERIVATIVES
---------------------------------------- ----------------------------------------
DERIVATIVES STATEMENTS OF ASSETS AND STATEMENTS OF ASSETS AND
INSTRUMENT RISK EXPOSURE LIABILITIES LOCATION VALUE LIABILITIES LOCATION VALUE
------------------ ------------------ -------------------------- ----------- -------------------------- -----------
<S> <C> <C> <C> <C> <C>
FIXD
Options contracts Options contracts
Options contracts Interest Rate Risk purchased, at value $ 1,525,562 written, at value $ 871,750
Swaption contracts Swaption contracts
Swaption contracts Interest Rate Risk purchased, at value 527,389 written, at value --
Unrealized appreciation Unrealized depreciation
Futures contracts Interest Rate Risk on futures contracts * 15,378 on futures contracts* 8,742
Swap contracts, Swap contracts,
Swap contracts Interest Rate Risk at value 39,708 at value 344,609
UCON
Unrealized appreciation Unrealized depreciation
Futures contracts Interest Rate Risk on futures contracts* 74,240 on futures contracts* 101,187
Swap contracts, Swap contracts,
Swap contracts Interest Rate Risk at value 4,165 at value 36,054
DEED
Forward foreign Unrealized appreciation on Unrealized depreciation on
currency forward foreign currency forward foreign currency
contracts Currency Risk contracts 1,014 contracts --
Unrealized appreciation Unrealized depreciation
Futures contracts Interest Rate Risk on futures contracts* -- on futures contracts* 4,675
</TABLE>
* Includes cumulative appreciation/depreciation on futures contracts as
reported in each Fund's Portfolio of Investments. Only the current day's
variation margin is presented on the Statements of Assets and Liabilities.
The following table presents the amount of net realized gain (loss) and change
in net unrealized appreciation (depreciation) recognized for the fiscal period
ended August 31, 2021, on each Fund's derivative instruments, as well as the
primary underlying risk exposure associated with the instruments.
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS LOCATION FIXD UCON DEED
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CURRENCY RISK EXPOSURE
Net realized gain (loss) on forward foreign currency
contracts $ 6,971,474 $ 350,472 $ (735)
Net change in unrealized appreciation (depreciation) on
forward foreign currency contracts -- -- 1,014
INTEREST RATE RISK EXPOSURE
Net realized gain (loss) on futures contracts (85,949) 779,174 37,123
Net change in unrealized appreciation (depreciation) on:
Purchased swaptions contracts (44,321) -- --
Purchased options contracts 134,148 -- --
Written options contracts 22,672 -- --
Futures contracts 14,576 (311,725) (10,848)
Swap contracts (304,901) (31,889) --
</TABLE>
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<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
FIXD
During the fiscal year ended August 31, 2021, the premiums for purchased
swaptions contracts opened were $571,710 and the premiums for purchased
swaptions contracts closed, exercised and expired were $0.
During the fiscal year ended August 31, 2021, the premiums for purchased options
contracts opened were $1,391,414 and the premiums for purchased options
contracts closed, exercised and expired were $0.
During the fiscal year ended August 31, 2021, the premiums for written options
contracts opened were $894,422 and the premiums for written options contracts
closed, exercised and expired were $0.
During the fiscal year ended August 31, 2021, the notional value of forward
foreign currency contracts opened and closed were $139,727,415 and $139,727,415,
respectively.
During the fiscal year ended August 31, 2021, the notional value of futures
contracts opened and closed were $113,005,236 and $202,409,287, respectively.
The Fund entered into interest rate swap agreements on July 21, 2021. For the
period July 21, 2021 through August 31, 2021, the average volume of interest
rate swaps was $279,758,571.
UCON
During the fiscal year ended August 31, 2021, the notional value of forward
foreign currency contracts opened and closed were $7,024,904 and $7,024,904,
respectively.
During the fiscal year ended August 31, 2021, the notional value of futures
contracts opened and closed were $304,777,938 and $243,541,323, respectively.
The Fund entered into interest rate swap agreements on July 21, 2021. For the
period July 21, 2021 through August 31, 2021, the average volume of interest
rate swaps was $29,263,690.
DEED
During the fiscal year ended August 31, 2021, the notional value of forward
foreign currency contracts opened and closed were $1,702,408 and $850,373,
respectively.
During the fiscal year ended August 31, 2021, the notional value of futures
contracts opened and closed were $21,441,283 and $22,468,217, respectively.
6. 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, 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.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
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.
7. DISTRIBUTION PLAN
The Board of Trustees adopted a Distribution and Service Plan pursuant to Rule
12b-1 under the 1940 Act. In accordance with the Rule 12b-1 plan, the Funds are
authorized to pay an amount up to 0.25% of their average daily net assets each
year to reimburse First Trust Portfolios L.P. ("FTP"), the distributor of the
Funds, for amounts expended to finance activities primarily intended to result
in the sale of Creation Units or the provision of investor services. FTP may
also use this amount to compensate securities dealers or other persons that are
Authorized Participants for providing distribution assistance, including
broker-dealer and shareholder support and educational and promotional services.
No 12b-1 fees are currently paid by the Funds, and pursuant to a contractual
arrangement, no 12b-1 fees will be paid any time before December 31, 2022 for
FIXD, UCON, and DEED, February 10, 2023 for EFIX, and April 30, 2023 for EPRE.
8. INDEMNIFICATION
The Trust, on behalf of the Funds, has a variety of indemnification obligations
under contracts with its service providers. The Trust's maximum exposure under
these arrangements is unknown. However, the Trust has not had prior claims or
losses pursuant to these contracts and expects the risk of loss to be remote.
9. OTHER MATTERS
By operation of law, UCON now operates as a diversified open-end management
investment company as defined in Section 5(b) of the 1940 Act.
10. 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 September 20, 2021, FT Cboe Vest International Equity Buffer ETF - September
and FT Cboe Vest Nasdaq-100(R) Buffer ETF - September, each an additional series
of the Trust, began trading under the symbols "YSEP" and "QSPT," respectively,
on Cboe BZX Exchange, Inc.
On September 21, 2021, First Trust SkyBridge Crypto Industry and Digital Economy
ETF, an additional series of the Trust, began trading under the symbol "CRPT" on
NYSE Arca.
On October 14, 2021, First Trust Multi-Manager Small Cap Opportunities ETF, an
additional series of the Trust, began trading under the symbol "MMSC" on NYSE
Arca.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF FIRST TRUST EXCHANGE-TRADED FUND
VIII:
OPINION ON THE FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS
We have audited the accompanying statements of assets and liabilities of First
Trust TCW Opportunistic Fixed Income ETF, First Trust TCW Unconstrained Plus
Bond ETF, First Trust TCW Securitized Plus ETF, First Trust TCW Emerging Markets
Debt ETF and First Trust TCW ESG Premier Equity ETF (the "Funds"), each a series
of the First Trust Exchange-Traded Fund VIII, including the portfolios of
investments, as of August 31, 2021, the related statements of operations, the
changes in net assets, and the financial highlights for the periods indicated in
the table below, and the related notes. In our opinion, the financial statements
and financial highlights present fairly, in all material respects, the financial
position of the Funds as of August 31, 2021, and the results of their
operations, the changes in their net assets, and the financial highlights for
the periods listed in the table below, in conformity with accounting principles
generally accepted in the United States of America.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
INDIVIDUAL FUNDS INCLUDED STATEMENTS OF STATEMENTS OF CHANGES
IN THE TRUST OPERATIONS IN NET ASSETS FINANCIAL HIGHLIGHTS
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
First Trust TCW Opportunistic For the year ended For the years ended For the years ended
Fixed Income ETF August 31, 2021 August 31, 2021 and 2020 August 31, 2021, 2020, 2019,
2018, and the period from
February 14, 2017
(commencement of operations)
through August 31, 2017
-----------------------------------------------------------------------------------------------------------------------------
First Trust TCW Unconstrained For the year ended For the years ended For the years ended
Plus Bond ETF August 31, 2021 August 31, 2021 and 2020 August 31, 2021, 2020, 2019,
and the period from June 4,
2018 (commencement of
operations) through
August 31, 2018
-----------------------------------------------------------------------------------------------------------------------------
First Trust TCW Securitized Plus For the year ended For the year ended For the year ended
ETF August 31, 2021 August 31, 2021 and for August 31, 2021 and for
the period from April 29, the period from April 29,
2020 (commencement of 2020 (commencement of
operations) through operations) through
August 31, 2020 August 31, 2020
-----------------------------------------------------------------------------------------------------------------------------
First Trust TCW Emerging For the period from February 17, 2021 (commencement of operations) through
Markets Debt ETF August 31, 2021
-----------------------------------------------------------------------------------------------------------------------------
First Trust TCW ESG Premier For the period from May 25, 2021 (commencement of operations) through August 31, 2021
Equity ETF
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
BASIS FOR OPINION
These financial statements and financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an opinion on the Funds'
financial statements and financial highlights based on our audits. We are a
public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to
the Funds in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement, whether due to error or fraud. The Funds are not
required to have, nor were we engaged to perform, an audit of their internal
control over financial reporting. As part of our audits we are required to
obtain an understanding of internal control over financial reporting but not for
the purpose of expressing an opinion on the effectiveness of the Funds' internal
control over financial reporting. Accordingly, we express no such opinion.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (CONTINUED)
--------------------------------------------------------------------------------
Our audits included performing procedures to assess the risks of material
misstatement of the financial statements and financial highlights, whether due
to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the financial statements and financial highlights. Our audits
also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of August 31, 2021, by correspondence with
the custodian, agent banks, and brokers; when replies were not received from
brokers or agent banks, we performed other auditing procedures. We believe that
our audits provide a reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
Chicago, Illinois
October 26, 2021
We have served as the auditor of one or more First Trust investment companies
since 2001.
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--------------------------------------------------------------------------------
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 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.
FEDERAL TAX INFORMATION
Distributions paid to foreign shareholders for the taxable period ended August
31, 2021 that were properly designated by each Fund as "interest-related
dividends" or "short-term capital gain dividends," may not be subject to federal
income tax provided that the income was earned directly by such foreign
shareholders.
Of the ordinary income (including short-term capital gain) distribution made by
each Fund during the fiscal period ended August 31, 2021, none qualify for the
corporate dividends received deduction available to corporate shareholders or as
qualified dividend income.
Long-term capital gain distributions designated by the Funds are taxable at the
applicable capital gain tax rates for federal income tax purposes. For the
fiscal year ended August 31, 2021, the below Funds designated long-term capital
gain distributions in the following amounts.
Long-Term Capital
Gain Distributions
--------------------
First Trust TCW Opportunistic Fixed Income ETF $ 7,363,614
First Trust TCW Unconstrained Plus Bond ETF 537,281
First Trust TCW Securitized Plus ETF 29,696
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 significant
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
more broadly diversified.
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.
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ADDITIONAL INFORMATION (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
DEFINED OUTCOME FUNDS RISK. To the extent a fund's investment strategy is
designed to deliver returns tied to the price performance of an underlying ETF,
an investor may not realize the returns the fund seeks to achieve if that
investor does not hold shares for the entire target outcome period. In the event
an investor purchases shares after the first day of the target outcome period or
sells shares prior to the end of the target outcome period, the buffer that the
fund seeks to provide against a decline in the value of the underlying ETF may
not be available, the enhanced returns that the fund seeks to provide (if any)
may not be available and the investor may not participate in a gain in the value
of the underlying ETF up to the cap for the investor's investment period.
Additionally, the fund will not participate in gains of the underlying ETF above
the cap and a shareholder may lose their entire investment. If the fund seeks
enhanced returns, there are certain time periods when the value of the fund may
fall faster than the value of the underlying ETF, and it is very unlikely that,
on any given day during which the underlying ETF share price increases in value,
the fund's share price will increase at the same rate as the enhanced returns
sought by the fund, which is designed for an entire target outcome period.
Trading flexible exchange options involves risks different from, or possibly
greater than, the risks associated with investing directly in securities, such
as less liquidity and correlation and valuation risks. A fund may experience
substantial downside from specific flexible exchange option positions and
certain positions may expire worthless.
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
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 OR MODEL CONSTITUENT RISK. Certain funds may be a constituent of one or
more indices or ETF models. 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 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. In addition, index rebalances may potentially result in increased
trading activity in a fund's shares.
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
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ADDITIONAL INFORMATION (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
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. While the development of
vaccines has slowed the spread of the virus and allowed for the resumption of
"reasonably" normal business activity in the United States, many countries
continue to impose lockdown measures in an attempt to slow the spread.
Additionally, there is no guarantee that vaccines will be effective against
emerging variants of the disease.
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;
capital controls; lack of liquidity; currency exchange rates; excessive
taxation; government seizure of assets; the imposition of sanctions by foreign
governments; different legal or accounting standards; and less government
supervision and regulation of exchanges in foreign countries. Investments in
non-U.S. securities may involve higher costs than investments in U.S.
securities, including higher transaction and custody costs, as well as
additional taxes imposed by non-U.S. governments. These risks may be heightened
for securities of companies located, or with significant operations, in emerging
market countries.
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. Each fund relies on third-parties for a range of services, including
custody. Any delay or failure relating to engaging or maintaining such service
providers may affect a fund's ability to meet its investment objective. Although
the funds and the funds' investment 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 EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
ADVISORY AND SUB-ADVISORY AGREEMENTS
BOARD CONSIDERATIONS REGARDING APPROVAL OF INVESTMENT MANAGEMENT AND
SUB-ADVISORY AGREEMENTS
FIRST TRUST TCW EMERGING MARKETS DEBT ETF
The Board of Trustees of First Trust Exchange-Traded Fund VIII (the "Trust"),
including the Independent Trustees, approved the Investment Management Agreement
(the "Advisory Agreement") with First Trust Advisors L.P. (the "Advisor"), on
behalf of First Trust TCW Emerging Markets Debt ETF (the "Fund"), and the
Investment Sub-Advisory Agreement (the "Sub-Advisory Agreement" and together
with the Advisory Agreement, the "Agreements") among the Trust, on behalf of the
Fund, the Advisor and TCW Investment Management Company LLC (the "Sub-Advisor"),
for an initial two-year term at a meeting held on January 14, 2021. The Board
determined that the Agreements are in the best interests of the Fund in light of
the nature, extent and quality of the services expected to be provided and such
other matters as the Board considered to be relevant in the exercise of its
reasonable business judgment.
To reach this determination, the Board considered its duties under the
Investment Company Act of 1940, as amended (the "1940 Act"), as well as under
the general principles of state law, in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; the fiduciary duty
of investment advisors with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Board in voting
on such agreements. To assist the Board in its evaluation of the Agreements for
the Fund, the Independent Trustees received a separate report from each of the
Advisor and the Sub-Advisor in advance of the Board meeting responding to
requests for information from counsel to the Independent Trustees, submitted on
behalf of the Independent Trustees, that, among other things, outlined: the
services to be provided by the Advisor and the Sub-Advisor to the Fund
(including the relevant personnel responsible for these services and their
experience); the proposed unitary fee rate payable by the Fund as compared to
fees charged to a peer group of funds (the "Expense Group") and a broad peer
universe of funds (the "Expense Universe"), each assembled by Broadridge
Financial Solutions, Inc. ("Broadridge"), an independent source, and as compared
to fees charged to other exchange-traded funds ("ETFs") managed by the Advisor;
the proposed sub-advisory fee rate; the estimated expense ratio of the Fund as
compared to expense ratios of the funds in the Fund's Expense Group and Expense
Universe; the nature of expenses to be incurred in providing services to the
Fund and the potential for the Advisor and the Sub-Advisor to realize economies
of scale, if any; profitability and other financial data for the Advisor;
financial data for the Sub-Advisor; any fall-out benefits to the Advisor and its
affiliate, First Trust Portfolios L.P. ("FTP"), and the Sub-Advisor; and
information on the Advisor's and the Sub-Advisor's compliance programs. The
Independent Trustees and their counsel also met separately to discuss the
information provided by the Advisor and the Sub-Advisor. The Board applied its
business judgment to determine whether the arrangements between the Trust and
the Advisor and among the Trust, the Advisor and the Sub-Advisor are reasonable
business arrangements from the Fund's perspective.
In evaluating whether to approve the Agreements for the Fund, the Board
considered the nature, extent and quality of the services to be provided by the
Advisor and the Sub-Advisor under the Agreements. With respect to the Advisory
Agreement, the Board considered that the Advisor will be responsible for the
overall management and administration of the Fund and reviewed all of the
services to be provided by the Advisor to the Fund, including the oversight of
the Sub-Advisor, as well as the background and experience of the persons
responsible for such services. The Board considered that the Fund will be an
actively-managed ETF and will employ an advisor/sub-advisor management structure
and considered that the Advisor manages other ETFs with a similar structure in
the First Trust Fund Complex. The Board noted that the Advisor will oversee the
Sub-Advisor's day-to-day management of the Fund's investments, including
portfolio risk monitoring and performance review. In reviewing the services to
be provided, the Board noted the compliance program that had been developed by
the Advisor and considered that it includes a robust program for monitoring the
Advisor's, the Sub-Advisor's and the Fund's compliance with the 1940 Act, as
well as the Fund's compliance with its investment objective, policies and
restrictions. The Board noted that employees of the Advisor provide management
services to other ETFs and to other funds in the First Trust Fund Complex with
diligence and care. With respect to the Sub-Advisory Agreement, in addition to
the written materials provided by the Sub-Advisor, at the January 14, 2021
meeting, the Board also received a presentation from representatives of the
Sub-Advisor discussing the services that the Sub-Advisor will provide to the
Fund, and the Trustees were able to ask questions about the proposed investment
strategy for the Fund. The Board noted the background and experience of the
Sub-Advisor's portfolio management team and the Sub-Advisor's investment style.
The Board also noted that the Sub-Advisor sub-advises three other fixed-income
ETFs in the First Trust Fund Complex. Because the Fund had yet to commence
investment operations, the Board could not consider the historical investment
performance of the Fund. In light of the information presented and the
considerations made, the Board concluded that the nature, extent and quality of
the services to be provided to the Fund by the Advisor and the Sub-Advisor under
the Agreements are expected to be satisfactory.
The Board considered the proposed unitary fee rate payable by the Fund under the
Advisory Agreement for the services to be provided. The Board noted that, under
the unitary fee arrangement, the Fund would pay the Advisor a unitary fee equal
to an annual rate of 0.95% of its average daily net assets. The Board considered
that, from the unitary fee for the Fund, the Advisor would pay the Sub-Advisor a
sub-advisory fee equal to 50% of the Fund's unitary fee remaining after the
Fund's expenses are paid. The Board noted that the Advisor would be responsible
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
for the Fund's expenses, including the cost of sub-advisory, transfer agency,
custody, fund administration, legal, audit and other services and license fees,
if any, but excluding the fee payment under the Advisory Agreement and interest,
taxes, acquired fund fees and expenses, if any, brokerage commissions and other
expenses connected with the execution of portfolio transactions, distribution
and service fees pursuant to a Rule 12b-1 plan, if any, and extraordinary
expenses, if any. The Board noted that the Advisor would contractually agree to
waive fees in the amount of 0.10% of the Fund's average daily net assets for at
least a two-year period beginning upon the effectiveness of the Fund's
registration statement and also to reduce fees to the extent of acquired fund
fees and expenses of funds managed by the Advisor that are held by the Fund. The
Board received and reviewed information showing the advisory or unitary fee
rates and expense ratios of the peer funds in the Expense Group, as well as
advisory and unitary fee rates charged by the Advisor to other ETFs. Because the
Fund will pay a unitary fee, the Board determined that expense ratios were the
most relevant comparative data point. Based on the information provided, the
Board noted that the unitary fee rate for the Fund (after fee waivers) was above
the median total (net) expense ratio of the peer funds in the Expense Group.
With respect to the Expense Group, the Board discussed with representatives of
the Advisor how the Expense Group was assembled and how the Fund compared and
differed from the peer funds. The Board took this information into account in
considering the peer data. With respect to fees charged to other ETFs managed by
the Advisor, the Board considered the Advisor's statement that the Fund will be
unique to the First Trust Fund Complex given its focus on hard currency emerging
market debt, but will be most similar to two other fixed-income ETFs in the
First Trust Fund Complex managed by the Advisor that pay unitary fees equal to
annual rates of 0.85% or 0.95% of their respective average daily net assets. In
light of the information considered and the nature, extent and quality of the
services expected to be provided to the Fund under the Agreements, the Board
determined that the proposed unitary fee, including the sub-advisory fee to be
paid by the Advisor to the Sub-Advisor from the unitary fee, was fair and
reasonable.
The Board noted that the proposed unitary fee for the Fund was not structured to
pass on to shareholders the benefits of any economies of scale as the Fund's
assets grow. The Board noted that any reduction in fixed costs associated with
the management of the Fund would benefit the Advisor and the Sub-Advisor, but
that the unitary fee structure provides a level of certainty in expenses for the
Fund. The Board noted that the Advisor has continued to hire personnel and build
infrastructure, including technology, to improve the services to the funds in
the First Trust Fund Complex. The Board took into consideration the types of
costs to be borne by the Advisor in connection with its services to be performed
for the Fund under the Advisory Agreement. The Board considered the Advisor's
estimate of the asset level for the Fund at which the Advisor expects the
Advisory Agreement to be profitable to the Advisor and the Advisor's estimate of
the profitability of the Advisory Agreement if the Fund's assets reach $100
million. The Board noted the inherent limitations in the profitability analysis
and concluded that, based on the information provided, the Advisor's estimated
profitability level for the Fund was not unreasonable. The Board reviewed
financial information provided by the Sub-Advisor, but did not review any
potential profitability of the Sub-Advisory Agreement to the Sub-Advisor. The
Board considered that the Sub-Advisor would be paid by the Advisor from the
Fund's unitary fee and its understanding that the sub-advisory fee rate was the
product of an arm's length negotiation. In addition, the Board considered
fall-out benefits described by the Advisor that may be realized from its
relationship with the Fund. The Board considered that the Advisor had identified
as a fall-out benefit to the Advisor and FTP their exposure to investors and
brokers who, absent their exposure to the Fund, may have had no dealings with
the Advisor or FTP. The Board also considered fall-out benefits to the
Sub-Advisor that may be realized from its relationship with the Fund, noting the
Sub-Advisor's statements that it is not aware of any other benefits derived or
that may be derived by the Sub-Advisor or its affiliates from the Sub-Advisor's
relationship with the Advisor and the Fund and that the Sub-Advisor does not
enter into soft-dollar arrangements. The Board concluded that the character and
amount of potential fall-out benefits to the Advisor and the Sub-Advisor were
not unreasonable.
Based on all of the information considered and the conclusions reached, the
Board, including the Independent Trustees, determined that the terms of the
Agreements are fair and reasonable and that the approval of the Agreements is in
the best interests of the Fund. No single factor was determinative in the
Board's analysis.
BOARD CONSIDERATIONS REGARDING APPROVAL OF INVESTMENT MANAGEMENT AND
SUB-ADVISORY AGREEMENTS
FIRST TRUST TCW ESG PREMIER EQUITY ETF
The Board of Trustees of First Trust Exchange-Traded Fund VIII (the "Trust"),
including the Independent Trustees, approved the Investment Management Agreement
(the "Advisory Agreement") with First Trust Advisors L.P. (the "Advisor"), on
behalf of First Trust TCW ESG Premier Equity ETF (the "Fund"), and the
Investment Sub-Advisory Agreement (the "Sub-Advisory Agreement" and together
with the Advisory Agreement, the "Agreements") among the Trust, on behalf of the
Fund, the Advisor and TCW Investment Management Company LLC (the "Sub-Advisor"),
for an initial two-year term at a meeting held on April 26, 2021. The Board
determined that the Agreements are in the best interests of the Fund in light of
the nature, extent and quality of the services expected to be provided and such
other matters as the Board considered to be relevant in the exercise of its
business judgment.
To reach this determination, the Board considered its duties under the
Investment Company Act of 1940, as amended (the "1940 Act"), as well as under
the general principles of state law, in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; the fiduciary duty
of investment advisors with respect to advisory agreements and compensation; the
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Board in voting
on such agreements. To assist the Board in its evaluation of the Agreements for
the Fund, the Independent Trustees received a separate report from each of the
Advisor and the Sub-Advisor in advance of the Board meeting responding to
requests for information from counsel to the Independent Trustees, submitted on
behalf of the Independent Trustees, that, among other things, outlined: the
services to be provided by the Advisor and the Sub-Advisor to the Fund
(including the relevant personnel responsible for these services and their
experience); the proposed unitary fee rate payable by the Fund as compared to
fees charged to a peer group of funds (the "Expense Group") and a broad peer
universe of funds (the "Expense Universe"), each assembled by Broadridge
Financial Solutions, Inc. ("Broadridge"), an independent source, and as compared
to fees charged to other exchange-traded funds ("ETFs") managed by the Advisor;
the proposed sub-advisory fee rate as compared to fees charged to other clients
of the Sub-Advisor; the estimated expense ratio of the Fund as compared to
expense ratios of the funds in the Fund's Expense Group and Expense Universe;
the nature of expenses to be incurred in providing services to the Fund and the
potential for the Advisor and the Sub-Advisor to realize economies of scale, if
any; profitability and other financial data for the Advisor; financial data for
the Sub-Advisor; any fall-out benefits to the Advisor and its affiliate, First
Trust Portfolios L.P. ("FTP"), and the Sub-Advisor; and information on the
Advisor's and the Sub-Advisor's compliance programs. The Independent Trustees
and their counsel also met separately to discuss the information provided by the
Advisor and the Sub-Advisor. The Board applied its business judgment to
determine whether the arrangements between the Trust and the Advisor and among
the Trust, the Advisor and the Sub-Advisor are reasonable business arrangements
from the Fund's perspective.
In evaluating whether to approve the Agreements for the Fund, the Board
considered the nature, extent and quality of the services to be provided by the
Advisor and the Sub-Advisor under the Agreements. With respect to the Advisory
Agreement, the Board considered that the Advisor will be responsible for the
overall management and administration of the Fund and reviewed all of the
services to be provided by the Advisor to the Fund, including the oversight of
the Sub-Advisor, as well as the background and experience of the persons
responsible for such services. The Board considered that the Fund will be an
actively-managed ETF and will employ an advisor/sub-advisor management structure
and considered that the Advisor manages other ETFs with a similar structure in
the First Trust Fund Complex. The Board noted that the Advisor will oversee the
Sub-Advisor's day-to-day management of the Fund's investments, including
portfolio risk monitoring and performance review. In reviewing the services to
be provided, the Board noted the compliance program that had been developed by
the Advisor and considered that it includes a robust program for monitoring the
Advisor's, the Sub-Advisor's and the Fund's compliance with the 1940 Act, as
well as the Fund's compliance with its investment objective, policies and
restrictions. The Board noted that employees of the Advisor provide management
services to other ETFs and to other funds in the First Trust Fund Complex with
diligence and care. With respect to the Sub-Advisory Agreement, in addition to
the written materials provided by the Sub-Advisor, at the April 26, 2021
meeting, the Board also received a presentation from a representative of the
Sub-Advisor discussing the services that the Sub-Advisor will provide to the
Fund, and the Trustees were able to ask questions about the proposed investment
strategy for the Fund. The Board noted the background and experience of the
Sub-Advisor's portfolio management team and the Sub-Advisor's investment style.
The Board also noted that the Sub-Advisor sub-advises four other ETFs in the
First Trust Fund Complex. Because the Fund had yet to commence investment
operations, the Board could not consider the historical investment performance
of the Fund. In light of the information presented and the considerations made,
the Board concluded that the nature, extent and quality of the services to be
provided to the Fund by the Advisor and the Sub-Advisor under the Agreements are
expected to be satisfactory.
The Board considered the proposed unitary fee rate payable by the Fund under the
Advisory Agreement for the services to be provided. The Board noted that, under
the unitary fee arrangement, the Fund would pay the Advisor a unitary fee equal
to an annual rate of 0.85% of its average daily net assets. The Board considered
that, from the unitary fee for the Fund, the Advisor would pay the Sub-Advisor a
sub-advisory fee equal to 50% of the Fund's unitary fee remaining after the
Fund's expenses are paid. The Board noted that the Advisor would be responsible
for the Fund's expenses, including the cost of sub-advisory, transfer agency,
custody, fund administration, legal, audit and other services and license fees,
if any, but excluding the fee payment under the Advisory Agreement and interest,
taxes, acquired fund fees and expenses, if any, brokerage commissions and other
expenses connected with the execution of portfolio transactions, distribution
and service fees pursuant to a Rule 12b-1 plan, if any, and extraordinary
expenses, if any. The Board received and reviewed information showing the
advisory or unitary fee rates and expense ratios of the peer funds in the
Expense Group, as well as advisory and unitary fee rates charged by the Advisor
to other ETFs. Because the Fund will pay a unitary fee, the Board determined
that expense ratios were the most relevant comparative data point. Based on the
information provided, the Board noted that the unitary fee rate for the Fund was
above the median total (net) expense ratio of the peer funds in the Expense
Group. With respect to the Expense Group, the Board discussed with
representatives of the Advisor how the Expense Group was assembled and how the
Fund compared and differed from the peer funds. The Board took this information
into account in considering the peer data. With respect to fees charged to other
ETFs managed by the Advisor, the Board considered the Advisor's statement that
the Fund will be unique to the market and the First Trust Fund Complex as an ETF
with an actively-managed focus on ESG with strong enterprise valuations, but
will be most similar to three other actively-managed equity ETFs in the First
Trust Fund Complex managed by the Advisor that employ an advisor/sub-advisor
management structure and pay unitary fees at annual rates that range from 0.80%
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
to 0.95% of their respective average daily net assets. In light of the
information considered and the nature, extent and quality of the services
expected to be provided to the Fund under the Agreements, the Board determined
that the proposed unitary fee, including the sub-advisory fee to be paid by the
Advisor to the Sub-Advisor from the unitary fee, was fair and reasonable.
The Board noted that the proposed unitary fee for the Fund was not structured to
pass on to shareholders the benefits of any economies of scale as the Fund's
assets grow. The Board noted that any reduction in fixed costs associated with
the management of the Fund would benefit the Advisor and the Sub-Advisor, but
that the unitary fee structure provides a level of certainty in expenses for the
Fund. The Board noted that the Advisor has continued to hire personnel and build
infrastructure, including technology, to improve the services to the funds in
the First Trust Fund Complex. The Board took into consideration the types of
costs to be borne by the Advisor in connection with its services to be performed
for the Fund under the Advisory Agreement. The Board considered the Advisor's
estimate of the asset level for the Fund at which the Advisor expects the
Advisory Agreement to be profitable to the Advisor and the Advisor's estimate of
the profitability of the Advisory Agreement if the Fund's assets reach $100
million. The Board noted the inherent limitations in the profitability analysis
and concluded that, based on the information provided, the Advisor's estimated
profitability level for the Fund was not unreasonable. The Board reviewed
financial information provided by the Sub-Advisor, but did not review any
potential profitability of the Sub-Advisory Agreement to the Sub-Advisor. The
Board considered that the Sub-Advisor would be paid by the Advisor from the
Fund's unitary fee and its understanding that the sub-advisory fee rate was the
product of an arm's length negotiation. In addition, the Board considered
fall-out benefits described by the Advisor that may be realized from its
relationship with the Fund. The Board considered that the Advisor had identified
as a fall-out benefit to the Advisor and FTP their exposure to investors and
brokers who, absent their exposure to the Fund, may have had no dealings with
the Advisor or FTP. The Board also considered fall-out benefits to the
Sub-Advisor that may be realized from its relationship with the Fund. The Board
noted the Sub-Advisor's statement that it does not accrue scale-related,
ancillary or indirect benefits or achieve increased name recognition due to its
relationship with the Fund and considered the Sub-Advisor's description of its
soft-dollar policy. The Board concluded that the character and amount of
potential fall-out benefits to the Advisor and the Sub-Advisor were not
unreasonable.
Based on all of the information considered and the conclusions reached, the
Board, including the Independent Trustees, determined that the terms of the
Agreements are fair and reasonable and that the approval of the Agreements is in
the best interests of the Fund. No single factor was determinative in the
Board's analysis.
BOARD CONSIDERATIONS REGARDING APPROVAL OF CONTINUATION OF INVESTMENT MANAGEMENT
AND SUB-ADVISORY AGREEMENTS
FIRST TRUST TCW OPPORTUNISTIC FIXED INCOME ETF, FIRST TRUST TCW UNCONSTRAINED
PLUS BOND ETF AND FIRST TRUST TCW SECURITIZED PLUS ETF
The Board of Trustees of First Trust Exchange-Traded Fund VIII (the "Trust"),
including the Independent Trustees, unanimously approved the continuation of the
Investment Management Agreements (as applicable to a specific Fund, the
"Advisory Agreement" and collectively, the "Advisory Agreements") with First
Trust Advisors L.P. (the "Advisor") and the Investment Sub-Advisory Agreements
(as applicable to a specific Fund, the "Sub-Advisory Agreement" and
collectively, the "Sub-Advisory Agreements" and together with the Advisory
Agreements, the "Agreements") among the Trust, the Advisor and TCW Investment
Management Company LLC (the "Sub-Advisor") on behalf of the following three
series of the Trust (each a "Fund" and collectively, the "Funds"):
First Trust TCW Opportunistic Fixed Income ETF (FIXD)
First Trust TCW Unconstrained Plus Bond ETF (UCON)
First Trust TCW Securitized Plus ETF (DEED)
The Board approved the continuation of the applicable Agreements for each Fund
for a one-year period ending June 30, 2022 at a meeting held on June 6-7 2021.
The Board determined for each Fund that the continuation of the applicable
Agreements is in the best interests of the Fund in light of the nature, extent
and quality of the services provided and such other matters as the Board
considered to be relevant in the exercise of its business judgment.
To reach this determination for each Fund, the Board considered its duties under
the Investment Company Act of 1940, as amended (the "1940 Act"), as well as
under the general principles of state law, in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; the fiduciary duty
of investment advisors with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Board in voting
on such agreements. At meetings held on April 26, 2021 and June 6-7, 2021, the
Board, including the Independent Trustees, reviewed materials provided by the
Advisor and the Sub-Advisor responding to requests for information from counsel
to the Independent Trustees, submitted on behalf of the Independent Trustees,
that, among other things, outlined: the services provided by the Advisor and the
Sub-Advisor to each Fund (including the relevant personnel responsible for these
services and their experience); the unitary fee rate payable by each Fund as
compared to fees charged to a peer group of funds (the "Expense Group") and a
broad peer universe of funds (the "Expense Universe"), each assembled by
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AUGUST 31, 2021 (UNAUDITED)
Broadridge Financial Solutions, Inc. ("Broadridge"), an independent source, and
as compared to fees charged to other clients of the Advisor, including other
exchange-traded funds ("ETFs") managed by the Advisor; the sub-advisory fee rate
as compared to fees charged to other clients of the Sub-Advisor; the expense
ratio of each Fund as compared to expense ratios of the funds in the Fund's
Expense Group and Expense Universe; performance information for each Fund,
including comparisons of each Fund's performance to that of one or more relevant
benchmark indexes and to that of a performance group of funds and a broad
performance universe of funds (the "Performance Universe"), each assembled by
Broadridge; the nature of expenses incurred in providing services to each Fund
and the potential for the Advisor and the Sub-Advisor to realize economies of
scale, if any; profitability and other financial data for the Advisor; financial
data for the Sub-Advisor; any fall-out benefits to the Advisor and its
affiliate, First Trust Portfolios L.P. ("FTP"), and the Sub-Advisor; and
information on the Advisor's and the Sub-Advisor's compliance programs. The
Board reviewed initial materials with the Advisor at the meeting held on April
26, 2021, prior to which the Independent Trustees and their counsel met
separately to discuss the information provided by the Advisor and the
Sub-Advisor. Following the April meeting, counsel to the Independent Trustees,
on behalf of the Independent Trustees, requested certain clarifications and
supplements to the materials provided, and the information provided in response
to those requests was considered at an executive session of the Independent
Trustees and their counsel held prior to the June 6-7, 2021 meeting, as well as
at the June meeting. The Board applied its business judgment to determine
whether the arrangements between the Trust and the Advisor and among the Trust,
the Advisor and the Sub-Advisor continue to be reasonable business arrangements
from each Fund's perspective. The Board determined that, given the totality of
the information provided with respect to the Agreements, the Board had received
sufficient information to renew the Agreements. The Board considered that
shareholders chose to invest or remain invested in a Fund knowing that the
Advisor and the Sub-Advisor manage the Fund and knowing the Fund's unitary fee.
In reviewing the applicable Agreements for each Fund, the Board considered the
nature, extent and quality of the services provided by the Advisor and the
Sub-Advisor under the applicable Agreements. With respect to the Advisory
Agreements, the Board considered that the Advisor is responsible for the overall
management and administration of the Trust and each Fund and reviewed all of the
services provided by the Advisor to the Funds, including the oversight of the
Sub-Advisor, as well as the background and experience of the persons responsible
for such services. The Board noted that the Advisor oversees the Sub-Advisor's
day-to-day management of each Fund's investments, including portfolio risk
monitoring and performance review. In reviewing the services provided, the Board
noted the compliance program that had been developed by the Advisor and
considered that it includes a robust program for monitoring the Advisor's, the
Sub-Advisor's and each Fund's compliance with the 1940 Act, as well as each
Fund's compliance with its investment objective, policies and restrictions. The
Board also considered a report from the Advisor with respect to its risk
management functions related to the operation of the Funds. Finally, as part of
the Board's consideration of the Advisor's services, the Advisor, in its written
materials and at the April 26, 2021 meeting, described to the Board the scope of
its ongoing investment in additional personnel and infrastructure to maintain
and improve the quality of services provided to the Funds and the other funds in
the First Trust Fund Complex. With respect to the Sub-Advisory Agreements, the
Board noted that each Fund is an actively-managed ETF and the Sub-Advisor
actively manages the Fund's investments. The Board reviewed the materials
provided by the Sub-Advisor and considered the services that the Sub-Advisor
provides to each Fund, including the Sub-Advisor's day-to-day management of the
Funds' investments. In considering the Sub-Advisor's management of the Funds,
the Board noted the background and experience of the Sub-Advisor's portfolio
management teams, including the Board's prior meetings with members of the
portfolio management teams. In light of the information presented and the
considerations made, the Board concluded that the nature, extent and quality of
the services provided to the Trust and each Fund by the Advisor and the
Sub-Advisor under the Agreements have been and are expected to remain
satisfactory and that the Sub-Advisor, under the oversight of the Advisor, has
managed each Fund consistent with its investment objective, policies and
restrictions.
The Board considered the unitary fee rate payable by each Fund under the
applicable Advisory Agreement for the services provided. The Board noted that
the sub-advisory fee for each Fund is paid by the Advisor from the Fund's
unitary fee. The Board considered that as part of the unitary fee the Advisor is
responsible for each Fund's expenses, including the cost of sub-advisory,
transfer agency, custody, fund administration, legal, audit and other services
and license fees, if any, but excluding the fee payment under the applicable
Advisory Agreement and interest, taxes, brokerage commissions and other expenses
connected with the execution of portfolio transactions, distribution and service
fees pursuant to a Rule 12b-1 plan, if any, and extraordinary expenses, if any.
The Board noted that the Advisor had previously agreed to waive a portion of its
unitary fee for each Fund in an amount equal to 0.10% of the Fund's average
daily net assets until at least December 31, 2021 for FIXD and UCON and until at
least April 6, 2022 for DEED. The Board received and reviewed information
showing the advisory or unitary fee rates and expense ratios of the peer funds
in the Expense Groups, as well as advisory and unitary fee rates charged by the
Advisor and the Sub-Advisor to other fund (including ETFs) and non-fund clients,
as applicable. Because each Fund pays a unitary fee, the Board determined that
expense ratios were the most relevant comparative data point. Based on the
information provided, the Board noted that the unitary fee rate for FIXD, after
taking into account the contractual fee waiver, was equal to the median total
(net) expense ratio of the peer funds in its Expense Group and that the unitary
fee rate for each of UCON and DEED, after taking into account the contractual
fee waiver, was above the median total (net) expense ratio of the peer funds in
its respective Expense Group. With respect to the Expense Groups, the Board, at
the April 26, 2021 meeting, discussed with the Advisor limitations in creating
peer groups for actively-managed ETFs, including that the Expense Group for DEED
Page 128
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--------------------------------------------------------------------------------
ADDITIONAL INFORMATION (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
contained both actively-managed ETFs and open-end mutual funds, and different
business models that may affect the pricing of services among ETF sponsors. The
Board also noted that not all peer funds employ an advisor/sub-advisor
management structure. The Board took these limitations and differences into
account in considering the peer data. With respect to fees charged to other
non-ETF clients, the Board considered differences between the Funds and other
non-ETF clients that limited their comparability. In considering the unitary fee
rates overall, the Board also considered the Advisor's statement that it seeks
to meet investor needs through innovative and value-added investment solutions
and the Advisor's demonstrated long-term commitment to each Fund and the other
funds in the First Trust Fund Complex.
The Board considered performance information for each Fund. The Board noted the
process it has established for monitoring each Fund's performance and portfolio
risk on an ongoing basis, which includes quarterly performance reporting from
the Advisor and the Sub-Advisor for the Funds. The Board determined that this
process continues to be effective for reviewing each Fund's performance. The
Board received and reviewed information comparing FIXD's performance for the
one- and three-year periods ended December 31, 2020 to the performance of the
funds in its Performance Universe and a benchmark index and information
comparing UCON's performance for the one-year period ended December 31, 2020 to
the performance of the funds in its Performance Universe and a benchmark index.
Based on the information provided, the Board noted that FIXD outperformed its
Performance Universe median and benchmark index for the one- and three-year
periods ended December 31, 2020 and that UCON outperformed its Performance
Universe median and benchmark index for the one-year period ended December 31,
2020. Because DEED commenced operations on April 29, 2020 and therefore has a
limited performance history, comparative performance information for the Fund
was not considered.
On the basis of all the information provided on the unitary fee and performance,
as applicable, of each Fund and the ongoing oversight by the Board, the Board
concluded that the unitary fee for each Fund (out of which the Sub-Advisor is
compensated) continues to be reasonable and appropriate in light of the nature,
extent and quality of the services provided by the Advisor and the Sub-Advisor
to each Fund under the Agreements.
The Board considered information and discussed with the Advisor whether there
were any economies of scale in connection with providing advisory services to
the Funds and noted the Advisor's statement that it believes its expenses will
likely increase during the next twelve months as the Advisor continues to hire
personnel and build infrastructure, including technology, to improve the
services to the Funds. The Board noted that any reduction in fixed costs
associated with the management of the Funds would benefit the Advisor, but that
the unitary fee structure provides a level of certainty in expenses for the
Funds. The Board considered the revenues and allocated costs (including the
allocation methodology) of the Advisor in serving as investment advisor to each
of FIXD and UCON for the twelve months ended December 31, 2020 and to DEED for
the period from inception through December 31, 2020 and the estimated
profitability level for each Fund calculated by the Advisor based on such data,
as well as complex-wide and product-line profitability data, for the twelve
months ended December 31, 2020. The Board noted the inherent limitations in the
profitability analysis and concluded that, based on the information provided,
the Advisor's profitability level for each Fund was not unreasonable. In
addition, the Board considered fall-out benefits described by the Advisor that
may be realized from its relationship with the Funds. The Board considered that
the Advisor had identified as a fall-out benefit to the Advisor and FTP their
exposure to investors and brokers who, absent their exposure to the Funds, may
have had no dealings with the Advisor or FTP. The Board concluded that the
character and amount of potential fall-out benefits to the Advisor were not
unreasonable.
The Board considered the Sub-Advisor's statements that the Sub-Advisor believes
economies of scale in managing fixed-income portfolios are limited and that the
current sub-advisory fees appropriately reflect economies of scale, and that the
Sub-Advisor continues to add resources commensurate with and often ahead of the
demands of its business. The Board did not review the profitability of the
Sub-Advisor with respect to each Fund. The Board noted that the Advisor pays the
Sub-Advisor for each Fund from its unitary fee and its understanding that each
Fund's sub-advisory fee rate was the product of an arm's length negotiation. The
Board concluded that the profitability analysis for the Advisor was more
relevant. The Board considered the potential fall-out benefits to the
Sub-Advisor from being associated with the Advisor and the Funds, and noted the
Sub-Advisor's statements that the Sub-Advisor does not accrue scale-related,
ancillary or indirect benefits or achieve increased name recognition due to its
relationship with the Funds, and that the Sub-Advisor's Fixed Income Team does
not enter into soft dollar arrangements. The Board concluded that the character
and amount of potential fall-out benefits to the Sub-Advisor were not
unreasonable.
Based on all of the information considered and the conclusions reached, the
Board, including the Independent Trustees, unanimously determined that the terms
of the Agreements continue to be fair and reasonable and that the continuation
of the Agreements is in the best interests of each Fund. No single factor was
determinative in the Board's analysis.
Page 129
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ADDITIONAL INFORMATION (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
LIQUIDITY RISK MANAGEMENT PROGRAM
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as
amended (the "1940 Act"), the Funds and each other fund in the First Trust Fund
Complex, other than the closed-end funds, have adopted and implemented a
liquidity risk management program (the "Program") reasonably designed to assess
and manage the funds' liquidity risk, i.e., the risk that a fund could not meet
requests to redeem shares issued by the fund without significant dilution of
remaining investors' interests in the fund. The Board of Trustees of the First
Trust Funds has appointed First Trust Advisors, L.P. (the "Advisor") as the
person designated to administer the Program, and in this capacity the Advisor
performs its duties primarily through the activities and efforts of the First
Trust Liquidity Committee (the "Liquidity Committee").
Pursuant to the Program, the Liquidity Committee classifies the liquidity of
each fund's portfolio investments into one of the four liquidity categories
specified by Rule 22e-4: highly liquid investments, moderately liquid
investments, less liquid investments and illiquid investments. The Liquidity
Committee determines certain of the inputs for this classification process,
including reasonably anticipated trade sizes and significant investor dilution
thresholds. The Liquidity Committee also determines and periodically reviews a
highly liquid investment minimum for certain funds, monitors the funds' holdings
of assets classified as illiquid investments to seek to ensure they do not
exceed 15% of a fund's net assets and establishes policies and procedures
regarding redemptions in kind.
At the April 26, 2021 meeting of the Board of Trustees, as required by Rule
22e-4 and the Program, the Advisor provided the Board with a written report
prepared by the Advisor that addressed the operation of the Program during the
period from March 20, 2020 through the Liquidity Committee's annual meeting held
on March 16, 2021 and assessed the Program's adequacy and effectiveness of
implementation during this period, including the operation of the highly liquid
investment minimum for each fund that is required under the Program to have one,
and any material changes to the Program. Note that because the Funds primarily
hold assets that are highly liquid investments, the Funds have not adopted any
highly liquid investment minimums.
As stated in the written report, during the review period, no fund breached the
15% limitation on illiquid investments, no fund with a highly liquid investment
minimum breached that minimum and no fund filed a Form N-LIQUID. The Advisor
concluded that each fund's investment strategy is appropriate for an open-end
fund; that the Program operated effectively in all material respects during the
review period; and that the Program is reasonably designed to assess and manage
the liquidity risk of each fund and to maintain compliance with Rule 22e-4.
Page 130
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BOARD OF TRUSTEES AND OFFICERS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
The following tables identify the Trustees and Officers of the Trust. Unless
otherwise indicated, the address of all persons is 120 East Liberty Drive, Suite
400, Wheaton, IL 60187.
The Trust's statement of additional information includes additional information
about the Trustees and is available, without charge, upon request, by calling
(800) 988-5891.
<TABLE>
<CAPTION>
NUMBER OF OTHER
PORTFOLIOS IN TRUSTEESHIPS OR
TERM OF OFFICE THE FIRST TRUST DIRECTORSHIPS
NAME, AND YEAR FIRST FUND COMPLEX HELD BY TRUSTEE
YEAR OF BIRTH AND ELECTED OR PRINCIPAL OCCUPATIONS OVERSEEN BY DURING PAST
POSITION WITH THE TRUST APPOINTED DURING PAST 5 YEARS TRUSTEE 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard E. Erickson, Trustee o Indefinite Term Physician, Officer, Wheaton Orthopedics; 210 None
(1951) Limited Partner, Gundersen Real Estate
o Since Inception Limited Partnership (June 1992 to
December 2016)
Thomas R. Kadlec, Trustee o Indefinite Term President, ADM Investors Services, Inc. 210 Director of ADM
(1957) (Futures Commission Merchant) Investor Services,
o Since Inception Inc., ADM
Investor Services
International,
Futures Industry
Association, and
National Futures
Association
Robert F. Keith, Trustee o Indefinite Term President, Hibs Enterprises (Financial 210 Director of Trust
(1956) and Management Consulting) Company of
o Since Inception Illinois
Niel B. Nielson, Trustee o Indefinite Term Senior Advisor (August 2018 to Present), 210 None
(1954) Managing Director and Chief Operating
o Since Inception Officer (January 2015 to August 2018),
Pelita Harapan Educational Foundation
(Educational Products and Services)
------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
James A. Bowen(1), Trustee, o Indefinite Term Chief Executive Officer, First Trust 210 None
Chairman of the Board Advisors L.P. and First Trust
(1955) o Since Inception Portfolios L.P.; Chairman of the
Board of Directors, BondWave LLC
(Software Development Company)
and Stonebridge Advisors LLC
(Investment Advisor)
</TABLE>
-----------------------------
(1) Mr. Bowen is deemed an "interested person" of the Trust due to his
position as Chief Executive Officer of First Trust Advisors L.P.,
investment advisor of the Trust.
Page 131
<PAGE>
--------------------------------------------------------------------------------
BOARD OF TRUSTEES AND OFFICERS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
POSITION AND TERM OF OFFICE
NAME OFFICES AND LENGTH OF PRINCIPAL OCCUPATIONS
AND YEAR OF BIRTH WITH TRUST SERVICE DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS(2)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
James M. Dykas President and Chief o Indefinite Term Managing Director and Chief Financial Officer
(1966) Executive Officer (January 2016 to Present), Controller (January 2011
o Since Inception to January 2016), Senior Vice President (April 2007
to January 2016), First Trust Advisors L.P. and First
Trust Portfolios L.P.; Chief Financial Officer
(January 2016 to Present), BondWave LLC
(Software Development Company) and Stonebridge
Advisors LLC (Investment Advisor)
Donald P. Swade Treasurer, Chief Financial o Indefinite Term Senior Vice President (July 2016 to Present), Vice
(1972) Officer and Chief President (April 2012 to July 2016), First Trust
Accounting Officer o Since Inception Advisors L.P. and First Trust Portfolios L.P.
W. Scott Jardine Secretary and Chief o Indefinite Term General Counsel, First Trust Advisors L.P. and
(1960) Legal Officer First Trust Portfolios L.P.; Secretary and General
o Since Inception Counsel, BondWave LLC; Secretary, Stonebridge
Advisors LLC
Daniel J. Lindquist Vice President o Indefinite Term Managing Director, First Trust Advisors L.P. and
(1970) First Trust Portfolios L.P.
o Since Inception
Kristi A. Maher Chief Compliance Officer o Indefinite Term Deputy General Counsel, First Trust Advisors L.P.
(1966) and Assistant Secretary and First Trust Portfolios L.P.
o Since Inception
Roger F. Testin Vice President o Indefinite Term Senior Vice President, First Trust Advisors L.P.
(1966) and First Trust Portfolios L.P.
o Since Inception
Stan Ueland Vice President o Indefinite Term Senior Vice President, First Trust Advisors L.P.
(1970) and First Trust Portfolios L.P.
o Since Inception
</TABLE>
-----------------------------
(2) The term "officer" means the president, vice president, secretary,
treasurer, controller or any other officer who performs a policy making
function.
Page 132
<PAGE>
--------------------------------------------------------------------------------
PRIVACY POLICY
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
PRIVACY POLICY
First Trust values our relationship with you and considers your privacy an
important priority in maintaining that relationship. We are committed to
protecting the security and confidentiality of your personal information.
SOURCES OF INFORMATION
We collect nonpublic personal information about you from the following sources:
o Information we receive from you and your broker-dealer, investment
professional or financial representative through interviews,
applications, agreements or other forms;
o Information about your transactions with us, our affiliates or
others;
o Information we receive from your inquiries by mail, e-mail or
telephone; and
o Information we collect on our website through the use of "cookies".
For example, we may identify the pages on our website that your
browser requests or visits.
INFORMATION COLLECTED
The type of data we collect may include your name, address, social security
number, age, financial status, assets, income, tax information, retirement and
estate plan information, transaction history, account balance, payment history,
investment objectives, marital status, family relationships and other personal
information.
DISCLOSURE OF INFORMATION
We do not disclose any nonpublic personal information about our customers or
former customers to anyone, except as permitted by law. In addition to using
this information to verify your identity (as required under law), the permitted
uses may also include the disclosure of such information to unaffiliated
companies for the following reasons:
o In order to provide you with products and services and to effect
transactions that you request or authorize, we may disclose your
personal information as described above to unaffiliated financial
service providers and other companies that perform administrative or
other services on our behalf, such as transfer agents, custodians
and trustees, or that assist us in the distribution of investor
materials such as trustees, banks, financial representatives, proxy
services, solicitors and printers.
o We may release information we have about you if you direct us to do
so, if we are compelled by law to do so, or in other legally limited
circumstances (for example to protect your account from fraud).
In addition, in order to alert you to our other financial products and services,
we may share your personal information within First Trust.
USE OF WEBSITE ANALYTICS
We currently use third party analytics tools, Google Analytics and AddThis to
gather information for purposes of improving First Trust's website and marketing
our products and services to you. These tools employ cookies, which are small
pieces of text stored in a file by your web browser and sent to websites that
you visit, to collect information, track website usage and viewing trends such
as the number of hits, pages visited, videos and PDFs viewed and the length of
user sessions in order to evaluate website performance and enhance navigation of
the website. We may also collect other anonymous information, which is generally
limited to technical and web navigation information such as the IP address of
your device, internet browser type and operating system for purposes of
analyzing the data to make First Trust's website better and more useful to our
users. The information collected does not include any personal identifiable
information such as your name, address, phone number or email address unless you
provide that information through the website for us to contact you in order to
answer your questions or respond to your requests. To find out how to opt-out of
these services click on: Google Analytics and AddThis.
CONFIDENTIALITY AND SECURITY
With regard to our internal security procedures, First Trust restricts access to
your nonpublic personal information to those First Trust employees who need to
know that information to provide products or services to you. We maintain
physical, electronic and procedural safeguards to protect your nonpublic
personal information.
POLICY UPDATES AND INQUIRIES
As required by federal law, we will notify you of our privacy policy annually.
We reserve the right to modify this policy at any time, however, if we do change
it, we will tell you promptly. For questions about our policy, or for additional
copies of this notice, please go to www.ftportfolios.com, or contact us at
1-800-621-1675 (First Trust Portfolios) or 1-800-222-6822 (First Trust
Advisors).
March 2021
Page 133
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<PAGE>
FIRST TRUST
First Trust Exchange-Traded Fund VIII
INVESTMENT ADVISOR
First Trust Advisors L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
INVESTMENT SUB-ADVISOR
TCW Investment Management Company LLC
865 South Figueroa Street
Los Angeles, CA 90017
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 VIII
--------------------------------------------------------------------------------
EquityCompass Risk Manager ETF (ERM)
EquityCompass Tactical Risk Manager ETF (TERM)
-----------------------------
Annual Report
For the Year Ended
August 31, 2021
-----------------------------
<PAGE>
--------------------------------------------------------------------------------
TABLE OF CONTENTS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021
Shareholder Letter........................................................... 1
Fund Performance Overview
EquityCompass Risk Manager ETF (ERM)...................................... 2
EquityCompass Tactical Risk Manager ETF (TERM)............................ 4
Notes to Fund Performance Overview........................................... 6
Portfolio Commentary......................................................... 7
Understanding Your Fund Expenses............................................. 9
Portfolio of Investments
EquityCompass Risk Manager ETF (ERM)...................................... 10
EquityCompass Tactical Risk Manager ETF (TERM)............................ 13
Statements of Assets and Liabilities......................................... 16
Statements of Operations..................................................... 17
Statements of Changes in Net Assets.......................................... 18
Financial Highlights......................................................... 19
Notes to Financial Statements................................................ 20
Report of Independent Registered Public Accounting Firm...................... 26
Additional Information....................................................... 27
Board of Trustees and Officers............................................... 33
Privacy Policy............................................................... 35
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/or EquityCompass Investment Management, LLC (the
"Sub-Advisor") and their 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 VIII (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/or Sub-Advisor and their respective 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 objectives. 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 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 portfolio commentary from the portfolio management team of the
Funds, you may obtain an understanding of how the market environment affected
each Fund's performance. 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 and/or Sub-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>
--------------------------------------------------------------------------------
SHAREHOLDER LETTER
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL LETTER FROM THE CHAIRMAN AND CEO
AUGUST 31, 2021
Dear Shareholders:
First Trust is pleased to provide you with the annual report for the
EquityCompass Risk Manager ETF ("ERM") and the EquityCompass Tactical Risk
Manager ETF ("TERM" and together with ERM, the "Funds"), each a series of the
First Trust Exchange-Traded Fund VIII, which contains detailed information about
the Funds for the twelve months ended August 31, 2021.
The coronavirus ("COVID-19") pandemic has proven to be as stubborn as
advertised. We were warned by the scientific community early on that we would
have to coexist with this virus from here on out, and that appears to be the
case some 19 months after its onset. While the three main vaccines have proven
to be effective at keeping those people who have gotten all the required shots
out of the hospital, the U.S., unfortunately, had only achieved a 54% fully
vaccinated rate as of September 9, 2021, according to the Centers for Disease
Control and Prevention. If you add in the people ages 18 and older who have
received just one of the two-dose vaccines, it jumps to 75.3%. The U.S. and
global economies continue to underperform due to the pandemic. The U.S. alone
had a record high 10.9 million job openings at the end of July 2021, according
to the latest Job Openings and Labor Turnover Survey from the Department of
Labor. It appears that many people do not seem to want to work right now. An
estimated 7.5 million unemployment recipients in the U.S. were scheduled to lose
their benefits on September 6, 2021. Perhaps that will be enough to incentivize
people to go back to work.
The Federal Reserve (the "Fed") continues to play a major role in the U.S.
economy. It has kept short-term interest rates artificially low for the better
part of the past 13 years. The Federal Funds target rate (upper bound), while
held at 0.25% for roughly nine of those 13 years, reached as high as 2.50% in
the same 13-year period, but only for a few months and that was just prior to
the COVID-19 pandemic, according to data from the Fed. For comparative purposes,
the target rate averaged 2.56% for the 30-year period ended September 21, 2021.
It currently stands at 0.25%. In addition to keeping rates low, the Fed has been
buying assets, specifically Treasuries and mortgage-backed securities. It has
been buying a combined $120 billion of these securities every month. This has
helped keep bond yields artificially low as well. As of February 26, 2020, the
value of the assets on the Fed's balance sheet totaled $4.16 trillion, according
to its own data. As of September 15, 2021, the assets were valued at $8.45
trillion. Keep in mind, the balance sheet stood at $1 trillion on September 17,
2008. That was during the 2007-2008 Financial Crisis. Due to the reopening of
the U.S. economy and a bigger-than-expected rise in inflation this year, the Fed
has signaled that it could begin to taper its bond buying program by the end of
2021. With respect to the Federal Funds rate, the Fed continues to say it
intends to leave short-term rates where they are until 2023. In other words, the
Fed is poised to maintain its accommodative stance towards monetary policy. They
are not looking to get tight - just less loose. We will monitor this scenario
closely in the months ahead to see if the Fed's actions impact the direction of
interest rates and bond yields.
Overall, I am pleased to report that the securities markets have performed well
in this tumultuous climate. It appears, in our opinion, that the extremely low
interest rates offered on savings vehicles has motivated many investors to
assume more risk to potentially generate higher returns. The S&P 500(R) Index
(the "Index") posted a total return of 31.17% for the 12-month period ended
August 31, 2021, according to Bloomberg. For comparative purposes, from 1926
through 2020 (95 years), the Index returned an average of 10.28% per year on a
total return basis, according to Morningstar/Ibbotson Associates. Should
interest rates and bond yields eventually trend higher, investors should be
prepared for a bit of turbulence as stocks and bonds may be subjected to some
potential short-term profit taking, in my opinion. Having said that, I encourage
investors to stay the course. I remain optimistic due in large part to the
trillions of dollars in government stimulus money already circulating in the
economy as well as the potential for trillions of additional dollars from
President Joe Biden's infrastructure and "human infrastructure" bills still
weaving their way through Congress. It's hard to bet against growth in the
current climate.
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 1
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED)
--------------------------------------------------------------------------------
EQUITYCOMPASS RISK MANAGER ETF (ERM)
The EquityCompass Risk Manager ETF (the "Fund") seeks to provide long term
capital appreciation with capital preservation as a secondary objective. Under
normal market conditions, the Fund seeks to achieve its investment objectives by
investing in equity securities of companies domiciled in the U.S. or listed on a
U.S. exchange. During periods when the U.S. equity market is determined to be
unfavorable by the Fund's Sub-Advisor, the Fund may invest all or a portion of
its assets in cash, cash equivalents, money market funds and/or short-term fixed
income exchange-traded funds ("ETFs"), or the Fund may invest all or a portion
of its assets in a single short-term fixed income ETF, the First Trust Enhanced
Short Maturity ETF (FTSM). Certain of the ETFs in which the Fund invests may be
advised by First Trust. The Fund is classified as "diversified" under the
Investment Company Act of 1940, as amended. The shares of the Fund are listed
and traded on the NYSE Arca, Inc., under the ticker symbol "ERM."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
1 Year Ended Inception (4/10/17) Inception (4/10/17)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 41.52% 7.34% 36.47%
Market Price 41.78% 7.36% 36.58%
INDEX PERFORMANCE
S&P 500(R) Index 31.17% 18.18% 108.22%
Hedge Fund Research HFRI Equity Hedge Index(1) 26.92% 10.09% 51.84%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Cumulative total return for the period April 30, 2017 through August 31,
2021. Performance data is not available for the entire period shown in the
table for the index because performance data for the index is only
available on a month-end basis. Performance data for the index may be
updated on an ongoing basis and is subject to change.
(See Notes to Fund Performance Overview on page 6.)
----------------------------------------------------------
% OF TOTAL
LONG-TERM
SECTOR CLASSIFICATION INVESTMENTS
----------------------------------------------------------
Information Technology 21.2%
Health Care 13.1
Consumer Discretionary 12.5
Financials 11.8
Communication Services 11.6
Industrials 9.2
Consumer Staples 8.0
Energy 3.8
Utilities 3.4
Real Estate 2.7
Materials 2.7
--------
Total 100.0%
========
----------------------------------------------------------
% OF TOTAL
LONG-TERM
TOP TEN HOLDINGS INVESTMENTS
----------------------------------------------------------
American International Group, Inc. 0.8%
Norwegian Cruise Line Holdings Ltd. 0.8
NVIDIA Corp. 0.7
Netflix, Inc. 0.7
Booking Holdings, Inc. 0.7
NetApp, Inc. 0.7
Assurant, Inc. 0.7
salesforce.com, Inc. 0.7
Goldman Sachs Group (The), Inc. 0.7
Walgreens Boots Alliance, Inc. 0.7
--------
Total 7.2%
========
Page 2
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
EQUITYCOMPASS RISK MANAGER ETF (ERM) (CONTINUED)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
APRIL 10, 2017 - AUGUST 31, 2021
EquityCompass S&P 500(R)
Risk Manager ETF Index
<S> <C> <C>
4/10/17 $10,000 $10,000
8/31/17 10,244 10,571
2/28/18 11,107 11,716
8/31/18 11,804 12,649
2/28/19 10,382 12,264
8/31/19 10,190 13,019
2/29/20 10,171 13,269
8/31/20 9,644 15,875
2/28/21 11,883 17,421
8/31/21 13,647 20,822
</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 index does
not actually hold a portfolio of securities and therefore does 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 3
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
EQUITYCOMPASS TACTICAL RISK MANAGER ETF (TERM)
The EquityCompass Tactical Risk Manager ETF (the "Fund") seeks to provide long
term capital appreciation with capital preservation as a secondary objective.
Under normal market conditions, the Fund seeks to achieve its investment
objectives by investing in equity securities of companies domiciled in the U.S.
or listed on a U.S. exchange. During periods when the U.S. equity market is
determined to be unfavorable by the Fund's Sub-Advisor, the Fund may invest all
or a portion of its assets in cash, cash equivalents, money market funds and/or
short-term fixed income exchange-traded funds ("ETFs"), or the Fund may invest
all or a portion of its assets in a single short-term fixed income ETF, the
First Trust Enhanced Short Maturity ETF (FTSM). During such periods, the Fund
may also invest a significant portion of its assets in securities designed to
provide short exposure to broad U.S. market indices including by investing in
inverse ETFs. Certain of the ETFs in which the Fund invests may be advised by
First Trust. The Fund is classified as "diversified" under the Investment
Company Act of 1940, as amended. The shares of the Fund are listed and traded on
the NYSE Arca, Inc., under the ticker symbol "TERM."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
1 Year Ended Inception (4/10/17) Inception (4/10/17)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 41.54% 3.97% 18.63%
Market Price 41.43% 3.98% 18.69%
INDEX PERFORMANCE
S&P 500(R) Index 31.17% 18.18% 108.22%
Hedge Fund Research HFRI Equity Hedge Index(1) 26.92% 10.09% 51.84%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Cumulative total return for the period April 30, 2017 through August 31,
2021. Performance data is not available for the entire period shown in the
table for the index because performance data for the index is only
available on a month-end basis. Performance data for the index may be
updated on an ongoing basis and is subject to change.
(See Notes to Fund Performance Overview on page 6.)
----------------------------------------------------------
% OF TOTAL
LONG-TERM
SECTOR CLASSIFICATION INVESTMENTS
----------------------------------------------------------
Information Technology 21.2%
Health Care 13.1
Consumer Discretionary 12.5
Financials 11.8
Communication Services 11.6
Industrials 9.2
Consumer Staples 8.0
Energy 3.8
Utilities 3.4
Real Estate 2.7
Materials 2.7
--------
Total 100.0%
========
----------------------------------------------------------
% OF TOTAL
LONG-TERM
TOP TEN HOLDINGS INVESTMENTS
----------------------------------------------------------
American International Group, Inc. 0.8%
Norwegian Cruise Line Holdings Ltd. 0.8
Netflix, Inc. 0.7
NVIDIA Corp. 0.7
Assurant, Inc. 0.7
NetApp, Inc. 0.7
salesforce.com, Inc. 0.7
Walgreens Boots Alliance, Inc. 0.7
Booking Holdings, Inc. 0.7
Goldman Sachs Group (The), Inc. 0.7
--------
Total 7.2%
========
Page 4
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
EQUITYCOMPASS TACTICAL RISK MANAGER ETF (TERM) (CONTINUED)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
APRIL 10, 2017 - AUGUST 31, 2021
EquityCompass Tactical S&P 500(R)
Risk Manager ETF Index
<S> <C> <C>
4/10/17 $10,000 $10,000
8/31/17 10,244 10,571
2/28/18 11,107 11,716
8/31/18 11,805 12,649
2/28/19 9,102 12,264
8/31/19 8,856 13,019
2/29/20 8,835 13,269
8/31/20 8,382 15,875
2/28/21 10,328 17,421
8/31/21 11,863 20,822
</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 index does
not actually hold a portfolio of securities and therefore does 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>
--------------------------------------------------------------------------------
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. The total returns would have been lower if certain fees had not been
waived 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 6
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
INVESTMENT ADVISOR
First Trust Advisors L.P. ("First Trust" or the "Advisor") is the investment
advisor to EquityCompass Risk Manager ETF ("ERM") and EquityCompass Tactical
Risk Manager ETF ("TERM") (each a "Fund" and, collectively, the "Funds"). First
Trust is responsible for the selection and ongoing monitoring of the securities
in the Funds' portfolio and certain other services necessary for the management
of the portfolios.
SUB-ADVISOR
EquityCompass Investment Management, LLC ("EquityCompass Investment Management"
or the "Sub-Advisor") serves as the investment sub-advisor to the Funds.
PORTFOLIO MANAGEMENT
ADVISOR'S INVESTMENT COMMITTEE
The Advisor's Investment Committee (the "Investment Committee"), which manages
the Funds' investments, consists of:
DANIEL J. LINDQUIST, MANAGING DIRECTOR OF FIRST TRUST
JON C. ERICKSON, SENIOR VICE PRESIDENT OF FIRST TRUST
DAVID G. MCGAREL, CHIEF INVESTMENT OFFICER, CHIEF OPERATING OFFICER AND MANAGING
DIRECTOR OF FIRST TRUST
ROGER F. TESTIN, SENIOR VICE PRESIDENT OF FIRST TRUST
TODD LARSON, CFA, VICE PRESIDENT OF FIRST TRUST
CHRIS A. PETERSON, CFA, SENIOR VICE PRESIDENT OF FIRST TRUST
JOHN GAMBLA, SENIOR PORTFOLIO MANAGER, ALTERNATIVES INVESTMENT TEAM OF
FIRST TRUST
ROB A. GUTTSCHOW, CFA, SENIOR PORTFOLIO MANAGER, ALTERNATIVES INVESTMENT TEAM OF
FIRST TRUST
SUB-ADVISOR PORTFOLIO MANAGERS
The Sub-Advisor portfolio managers, as set forth below, provide
non-discretionary investment advice to the Investment Committee:
TIMOTHY M. MCCANN, SENIOR PORTFOLIO MANAGER, EQUITYCOMPASS INVESTMENT
MANAGEMENT, LLC
CHRISTOPHER M. MUTASCIO, SENIOR MANAGING DIRECTOR AND PORTFOLIO MANAGER,
EQUITYCOMPASS INVESTMENT MANAGEMENT, LLC
The Investment Committee members are primarily and jointly responsible for the
day-to-day management of the Funds, while the Sub-Advisor portfolio managers
provide non-discretionary investment advice to the Investment Committee. Timothy
M. McCann has served as part of the portfolio management team of the Funds since
2017 and Christopher M. Mutascio has served as part of the portfolio management
team of the Funds since 2020.
COMMENTARY
MARKET RECAP
In the fall of 2020, we suggested that the introduction of coronavirus
("COVID-19") vaccines would not only protect individuals from contracting
COVID-19 but would also work to help reopen our economy that had been shut down
as a result of the global pandemic. We were optimistic that after enough
vaccines were administered, economic growth would return most likely by the
spring of 2021, accompanied by a significant recovery in the earnings of
companies that had been shackled by the worst contraction to the U.S. gross
domestic product ("GDP") and corporate profitability since The Great Depression
100 years ago.
In addition, we believed the next pivot in the stock market would likely favor
value stocks over growth stocks. Although the outperformance of growth stocks
over value stocks in 2020 was perfectly sensible (growth stocks were able to
continue growing sales and earnings despite the recession) the reopening of the
economy would, in our opinion, soon benefit value stocks as these businesses
were strong beneficiaries of a rapidly expanding economy.
Specifically, we believed the most mispriced segment of the market in the fall
of 2020 would be high-quality, dividend-paying stocks within the value stock
camp. With dividend payments between 4%-6%, the yields of these value stocks
were at record levels compared to the sub 1% yield on the 10-Year U.S. Treasury
Note. We continued to reiterate our belief that stocks with above average income
yields might soon become an opportunistic segment of the stock market. To this
point, we also believed the significant lag in price performance among value
stocks relative to growth stocks that occurred in 2020 might soon reverse.
In 2020, the economic impact of COVID-19 caused U.S. real GDP growth to decline
2.4%--the first negative yearly reading in over 10 years. However, with the
introduction of vaccines beginning in November 2020, the U.S. economy began to
slowly reopen. In the first quarter of 2021, U.S. real GDP advanced 0.4%--a
small economic advance, but definitely in the right direction. With several
vaccines being administered and more doors of the U.S. economy starting to open,
the recovery was soon full speed ahead.
Page 7
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
For the 12-month period ended August 31, 2021, large cap stocks, as represented
by the S&P 500(R) Index, gained 31.17%, mid-cap stocks, represented by the S&P
MidCap 400(R) Index, returned 44.75% and small-cap stocks, represented by the
S&P SmallCap 600(R) Index, gained 53.91%. The disparity between the Russell
1000(R) Growth Index and the Russell 1000(R) Value Index was 7.90%, with growth
stocks returning 28.52% and the value stocks counterpart returning 36.42% over
the same period. The Financials, Energy, and Communication Services sectors were
the strongest advancing sectors while the Utilities, Consumer Discretionary, and
Consumer Staples sectors were the weakest, yet still earning positive returns,
during the same period. Bonds, as represented by the Bloomberg U.S. Aggregate
Bond Total Return Index, fell relatively flat at -0.08% for the same period.
Forward 12-month earnings estimates for the S&P 500(R) Index were $211.68 on
August 31, 2021.
PERFORMANCE REVIEW (ERM/TERM)
ERM and TERM were fully long equities throughout the 12-month period ended
August 31, 2021, with the exception of two brief periods where both Funds held a
partially defensive position (25% cash) during the periods of March 3, 2021
through March 17, 2021 and, again, on July 22, 2021 through August 2, 2021. On
both occasions, the criteria used to trigger the positioning was a sudden and
significant single day widening in credit spreads. The actions in the credit
markets appeared to be limited to just single daily events. Credit market
conditions on both occasions stabilized fairly quickly after each of these
signals. Therefore, the duration of both defensive positions was minimal.
For the twelve-month period ended August 31, 2021, ERM and TERM posted net asset
value ("NAV") returns of 41.52% and 41.54%, respectively. Market price returns
for ERM and TERM were 41.78% and 41.43%, respectively, for the same period. The
primary benchmark for the Funds is the S&P 500(R) Index (the "Benchmark"). For
the period, the S&P 500(R) Equal Weight Index was up 42.67% on a total return
basis. Both TERM and ERM outperformed their Benchmark.
The greatest contribution to the active return for the Funds relative to the
Benchmark was their exposure to equally weighted positions. Market breadth was
strong for the period, particularly during the reflationary period of September
2020 through March 2021 when the yield on the 10-Year U.S. Treasury Note rose
over 100 basis points ("bps"). For the 12-month period ended August 31, 2021,
the S&P market-cap weighted index advanced 31.17%, while its equal weighted
counterpart rose 42.67%. The Funds' disproportionate exposure to smaller
companies also provided a modest tailwind to performance as evidenced with the
S&P 100(R) Index advancing 28.77% while the S&P SmallCap 600(R) rose 53.91%. All
sector exposures provided a positive contribution to the Funds' active returns
for the period except for the Health Care sector. The sectors with the greatest
contribution to the Funds' active return were the stocks held in the Consumer
Discretionary and the Financials sectors.
Our selection process for the underlying 150 names--representing the long
component--tends to result in two distinct biases relative to the equal weight
S&P 500(R) Index. Roughly one-third of the portfolio will generally be comprised
of the smallest names in the S&P 500(R) Index across all major sectors. As a
result, they tend to have smaller capitalizations and value-like
characteristics.
Seven of the 11 Benchmark sectors produced positive returns during the 12-month
period ended August 31, 2021, with the Financials (+56.32%), Energy (+42.90%),
and Communication Services (+38.55%) sectors leading the advancers. The
Utilities, Consumer Discretionary, and Consumer Staples sectors were the
under-performing sectors for the same period, gaining 19.71%, 17.85%, and
14.44%, respectively.
MARKET AND FUND OUTLOOK
As of August 31, 2021, earnings expectations for the S&P 500(R) Index have
climbed steadily within the last year. For the full 12-month period ended August
31, 2021, earnings estimates have expanded at a rate of 24 cents (14 bps growth)
per day from a low of $152.08 to $211.68. The growth in corporate profitability
has seen a very steady incline that is broadly in line with the direction of the
S&P 500(R) Index. Earnings multiples on the S&P 500(R) Index have softened
slightly from 23.01x in August of 2020 to 20.9x in August of 2021. This multiple
compression comes as prices continue to chase expectations, with the direction
of both trending upward in tandem. Buoys to the financial market within the
period included improving business expectations, strong consumer spending, and
government aid to individuals and corporations. So long as expectations for
earnings continue to rise, and technical patterns remain favorable, we
anticipate both Funds to maintain full equity exposure. Looking forward, it is
clear, in our view, the U.S. economy is in the midst of its strongest recovery
since World War II. However, it is important to understand this flurry of
activity is a direct result of the reopening of our economy after spending
almost a year in lockdown because of the COVID-19 global pandemic. The
unleashing of pent-up demand, by both consumers and businesses, is
unprecedented. Once businesses renormalize their supply chains, employees return
back to the workforce, and consumer appetites have been satisfied, the U.S.
economy should reset to a slower and lower level of economic activity, in our
opinion.
The Equity Risk Management Strategy ("ERMS") is designed to remove emotional
decision making and react to, not anticipate, changes in fundamental and
technical conditions to adjust equity exposure accordingly. Currently, the ERMS
is fully invested as both fundamental and technical indicators signal favorable
near-term outcomes. Should either of these conditions deteriorate, the strategy
will move to a partially defensive position. However, if both signals
deteriorate concurrently the strategy will move to a more significant defensive
position.
Page 8
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
UNDERSTANDING YOUR FUND EXPENSES
AUGUST 31, 2021 (UNAUDITED)
As a shareholder of EquityCompass Risk Manager ETF or EquityCompass Tactical
Risk Manager 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 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 August 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 Fund 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
MARCH 1, 2021 AUGUST 31, 2021 PERIOD (a) PERIOD (a) (b)
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQUITYCOMPASS RISK MANAGER ETF (ERM)
Actual $1,000.00 $1,148.40 0.65% $3.52
Hypothetical (5% return before expenses) $1,000.00 $1,021.93 0.65% $3.31
EQUITYCOMPASS TACTICAL RISK MANAGER ETF (TERM)
Actual $1,000.00 $1,148.70 0.65% $3.52
Hypothetical (5% return before expenses) $1,000.00 $1,021.93 0.65% $3.31
</TABLE>
(a) Annualized expense ratio and expenses paid during the six-month period do
not include fees and expenses of the underlying funds in which each Fund
may invest.
(b) Expenses are equal to the annualized expense ratio as indicated in the
table multiplied by the average account value over the period (March 1,
2021 through August 31, 2021), multiplied by 184/365 (to reflect the
six-month period).
Page 9
<PAGE>
EQUITYCOMPASS RISK MANAGER ETF (ERM)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS -- 99.6%
AEROSPACE & DEFENSE -- 2.6%
332 Boeing (The) Co. (a) $ 72,874
383 General Dynamics Corp. 76,719
207 Lockheed Martin Corp. 74,479
873 Raytheon Technologies Corp. 73,995
-------------
298,067
-------------
AIR FREIGHT & LOGISTICS -- 1.3%
271 FedEx Corp. 72,002
391 United Parcel Service, Inc.,
Class B 76,491
-------------
148,493
-------------
AUTOMOBILES -- 1.9%
5,562 Ford Motor Co. (a) 72,473
1,420 General Motors Co. (a) 69,594
105 Tesla, Inc. (a) 77,251
-------------
219,318
-------------
BANKS -- 3.4%
1,951 Bank of America Corp. 81,454
1,091 Citigroup, Inc. 78,454
493 JPMorgan Chase & Co. 78,855
1,355 U.S. Bancorp 77,764
1,611 Wells Fargo & Co. 73,623
-------------
390,150
-------------
BEVERAGES -- 1.9%
1,339 Coca-Cola (The) Co. 75,399
1,547 Molson Coors Beverage Co.,
Class B 73,529
487 PepsiCo, Inc. 76,162
-------------
225,090
-------------
BIOTECHNOLOGY -- 2.7%
651 AbbVie, Inc. 78,628
329 Amgen, Inc. 74,199
222 Biogen, Inc. (a) 75,238
1,081 Gilead Sciences, Inc. 78,675
-------------
306,740
-------------
CAPITAL MARKETS -- 2.8%
1,445 Bank of New York Mellon (The)
Corp. 79,793
85 BlackRock, Inc. 80,180
198 Goldman Sachs Group (The), Inc. 81,875
777 Morgan Stanley 81,142
-------------
322,990
-------------
CHEMICALS -- 2.0%
1,658 CF Industries Holdings, Inc. 75,306
1,224 Dow, Inc. 76,990
1,004 DuPont de Nemours, Inc. 74,316
-------------
226,612
-------------
COMMUNICATIONS EQUIPMENT
-- 2.6%
198 Arista Networks, Inc. (a) 73,167
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT
(CONTINUED)
1,347 Cisco Systems, Inc. $ 79,500
352 F5 Networks, Inc. (a) 71,656
2,606 Juniper Networks, Inc. 75,522
-------------
299,845
-------------
CONSUMER FINANCE -- 1.3%
445 American Express Co. 73,852
461 Capital One Financial Corp. 76,512
-------------
150,364
-------------
CONTAINERS & PACKAGING -- 0.7%
1,290 Sealed Air Corp. 78,729
-------------
DIVERSIFIED FINANCIAL SERVICES
-- 0.7%
268 Berkshire Hathaway, Inc.,
Class B (a) 76,586
-------------
DIVERSIFIED TELECOMMUNICATION
SERVICES -- 2.0%
2,693 AT&T, Inc. 73,842
6,567 Lumen Technologies, Inc. 80,774
1,357 Verizon Communications, Inc. 74,635
-------------
229,251
-------------
ELECTRIC UTILITIES -- 3.3%
710 Duke Energy Corp. 74,309
1,615 Exelon Corp. 79,167
949 NextEra Energy, Inc. 79,707
969 Pinnacle West Capital Corp. 74,516
1,184 Southern (The) Co. 77,824
-------------
385,523
-------------
ELECTRICAL EQUIPMENT -- 0.7%
746 Emerson Electric Co. 78,703
-------------
ELECTRONIC EQUIPMENT, INSTRUMENTS
& COMPONENTS -- 0.6%
416 IPG Photonics Corp. (a) 71,003
-------------
ENERGY EQUIPMENT & SERVICES
-- 1.3%
2,700 Schlumberger N.V. 75,708
10,923 TechnipFMC PLC (a) 72,419
-------------
148,127
-------------
ENTERTAINMENT -- 2.8%
538 Electronic Arts, Inc. 78,123
936 Live Nation Entertainment,
Inc. (a) 81,151
146 Netflix, Inc. (a) 83,102
436 Walt Disney (The) Co. (a) 79,047
-------------
321,423
-------------
EQUITY REAL ESTATE INVESTMENT
TRUSTS -- 2.7%
265 American Tower Corp. 77,425
653 Federal Realty Investment Trust 79,516
Page 10 See Notes to Financial Statements
<PAGE>
EQUITYCOMPASS RISK MANAGER ETF (ERM)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
EQUITY REAL ESTATE INVESTMENT
TRUSTS (CONTINUED)
580 Simon Property Group, Inc. $ 77,981
1,060 SL Green Realty Corp. 74,285
-------------
309,207
-------------
FOOD & STAPLES RETAILING -- 2.1%
173 Costco Wholesale Corp. 78,800
1,610 Walgreens Boots Alliance, Inc. 81,708
525 Walmart, Inc. 77,752
-------------
238,260
-------------
FOOD PRODUCTS -- 1.3%
2,030 Kraft Heinz (The) Co. 73,060
1,213 Mondelez International, Inc.,
Class A 75,291
-------------
148,351
-------------
HEALTH CARE EQUIPMENT &
SUPPLIES -- 2.7%
616 Abbott Laboratories 77,844
246 Danaher Corp. 79,743
1,174 DENTSPLY SIRONA, Inc. 72,436
582 Medtronic PLC 77,685
-------------
307,708
-------------
HEALTH CARE PROVIDERS & SERVICES
-- 3.2%
919 CVS Health Corp. 79,392
561 DaVita, Inc. (a) 73,362
967 Henry Schein, Inc. (a) 73,096
178 UnitedHealth Group, Inc. 74,096
481 Universal Health Services, Inc.,
Class B 74,921
-------------
374,867
-------------
HOTELS, RESTAURANTS & LEISURE
-- 2.8%
36 Booking Holdings, Inc. (a) 82,788
320 McDonald's Corp. 75,987
3,335 Norwegian Cruise Line Holdings
Ltd. (a) 86,176
636 Starbucks Corp. 74,724
-------------
319,675
-------------
HOUSEHOLD DURABLES -- 1.3%
1,551 Leggett & Platt, Inc. 75,053
2,998 Newell Brands, Inc. 76,179
-------------
151,232
-------------
HOUSEHOLD PRODUCTS -- 1.3%
959 Colgate-Palmolive Co. 74,754
525 Procter & Gamble (The) Co. 74,755
-------------
149,509
-------------
INDUSTRIAL CONGLOMERATES -- 2.0%
380 3M Co. 74,001
736 General Electric Co. 77,582
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES
(CONTINUED)
327 Honeywell International, Inc. $ 75,835
-------------
227,418
-------------
INSURANCE -- 3.5%
578 Allstate (The) Corp. 78,192
1,589 American International Group,
Inc. 86,696
482 Assurant, Inc. 81,993
1,310 MetLife, Inc. 81,220
2,999 Unum Group 79,833
-------------
407,934
-------------
INTERACTIVE MEDIA & SERVICES -- 1.4%
28 Alphabet, Inc., Class A (a) 81,031
209 Facebook, Inc., Class A (a) 79,290
-------------
160,321
-------------
INTERNET & DIRECT MARKETING
RETAIL -- 0.7%
22 Amazon.com, Inc. (a) 76,357
-------------
IT SERVICES -- 6.5%
236 Accenture PLC, Class A 79,428
666 Akamai Technologies, Inc. (a) 75,424
431 Broadridge Financial Solutions,
Inc. 74,227
256 Gartner, Inc. (a) 79,037
525 International Business Machines
Corp. 73,679
431 Jack Henry & Associates, Inc. 76,020
204 Mastercard, Inc., Class A 70,631
274 PayPal Holdings, Inc. (a) 79,093
316 Visa, Inc., Class A 72,396
3,380 Western Union (The) Co. 73,143
-------------
753,078
-------------
LIFE SCIENCES TOOLS & SERVICES
-- 0.7%
139 Thermo Fisher Scientific, Inc. 77,138
-------------
MACHINERY -- 1.3%
365 Caterpillar, Inc. 76,967
1,757 Flowserve Corp. 68,295
-------------
145,262
-------------
MEDIA -- 5.4%
98 Charter Communications, Inc.,
Class A (a) 80,033
1,296 Comcast Corp., Class A 78,641
2,650 Discovery, Inc., Class A (a) 76,426
1,816 DISH Network Corp., Class A (a) 79,160
2,158 Fox Corp., Class A 80,796
2,109 Interpublic Group of Cos. (The),
Inc. 78,518
3,208 News Corp., Class B 70,672
1,047 Omnicom Group, Inc. 76,661
-------------
620,907
-------------
See Notes to Financial Statements Page 11
<PAGE>
EQUITYCOMPASS RISK MANAGER ETF (ERM)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
MULTILINE RETAIL -- 0.6%
287 Target Corp. $ 70,883
-------------
OIL, GAS & CONSUMABLE FUELS
-- 2.5%
749 Chevron Corp. 72,481
1,358 ConocoPhillips 75,410
1,316 Exxon Mobil Corp. 71,748
4,374 Kinder Morgan, Inc. 71,165
-------------
290,804
-------------
PHARMACEUTICALS -- 3.8%
1,093 Bristol-Myers Squibb Co. 73,078
282 Eli Lilly and Co. 72,838
431 Johnson & Johnson 74,619
991 Merck & Co., Inc. 75,603
1,563 Perrigo Co. PLC 64,005
1,648 Pfizer, Inc. 75,923
-------------
436,066
-------------
PROFESSIONAL SERVICES -- 0.7%
783 Leidos Holdings, Inc. 76,820
-------------
ROAD & RAIL -- 0.6%
344 Union Pacific Corp. 74,593
-------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 3.3%
1,392 Intel Corp. 75,251
372 NVIDIA Corp. 83,272
386 Qorvo, Inc. (a) 72,580
506 QUALCOMM, Inc. 74,225
390 Texas Instruments, Inc. 74,455
-------------
379,783
-------------
SOFTWARE -- 4.0%
120 Adobe, Inc. (a) 79,644
741 Citrix Systems, Inc. 76,227
262 Microsoft Corp. 79,093
835 Oracle Corp. 74,423
309 salesforce.com, Inc. (a) 81,968
153 Tyler Technologies, Inc. (a) 74,312
-------------
465,667
-------------
SPECIALTY RETAIL -- 2.0%
2,729 Gap (The), Inc. 72,946
227 Home Depot (The), Inc. 74,043
394 Lowe's Cos., Inc. 80,333
-------------
227,322
-------------
TECHNOLOGY HARDWARE, STORAGE
& PERIPHERALS -- 4.0%
511 Apple, Inc. 77,585
5,110 Hewlett Packard Enterprise Co. 79,001
922 NetApp, Inc. 81,993
838 Seagate Technology Holdings
PLC 73,400
1,143 Western Digital Corp. (a) 72,238
3,186 Xerox Holdings Corp. 71,717
-------------
455,934
-------------
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY
GOODS -- 3.2%
4,065 Hanesbrands, Inc. $ 75,934
437 NIKE, Inc., Class B 71,992
699 PVH Corp. (a) 73,248
600 Ralph Lauren Corp. 69,678
3,135 Under Armour, Inc., Class A (a) 72,544
-------------
363,396
-------------
TOBACCO -- 1.4%
1,602 Altria Group, Inc. 80,468
756 Philip Morris International, Inc. 77,868
-------------
158,336
-------------
TOTAL COMMON STOCKS -- 99.6% 11,443,842
(Cost $9,544,925) -------------
MONEY MARKET FUNDS -- 0.3%
26,222 Morgan Stanley Institutional Liquidity
Funds - Treasury Portfolio -
Institutional Class
0.01% (b) 26,222
(Cost $26,222) -------------
TOTAL INVESTMENTS -- 99.9% 11,470,064
(Cost $9,571,147) (c)
NET OTHER ASSETS AND
LIABILITIES -- 0.1% 16,912
-------------
NET ASSETS -- 100.0% $ 11,486,976
=============
(a) Non-income producing security.
(b) Rate shown reflects yield as of August 31, 2021.
(c) Aggregate cost for federal income tax purposes is $9,708,336. As of August
31, 2021, the aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost was $2,083,492 and the
aggregate gross unrealized depreciation for all investments in which there
was an excess of tax cost over value was $321,764. The net unrealized
appreciation was $1,761,728.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 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* $ 11,443,842 $ -- $ --
Money Market Funds 26,222 -- --
---------------------------------------------
Total Investments $ 11,470,064 $ -- $ --
=============================================
* See Portfolio of Investments for industry breakout.
Page 12 See Notes to Financial Statements
<PAGE>
EQUITYCOMPASS TACTICAL RISK MANAGER ETF (TERM)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS -- 99.7%
AEROSPACE & DEFENSE -- 2.6%
355 Boeing (The) Co. (a) $ 77,922
410 General Dynamics Corp. 82,127
221 Lockheed Martin Corp. 79,516
934 Raytheon Technologies Corp. 79,166
-------------
318,731
-------------
AIR FREIGHT & LOGISTICS -- 1.3%
289 FedEx Corp. 76,785
418 United Parcel Service, Inc.,
Class B 81,773
-------------
158,558
-------------
AUTOMOBILES -- 1.9%
5,959 Ford Motor Co. (a) 77,646
1,523 General Motors Co. (a) 74,642
113 Tesla, Inc. (a) 83,136
-------------
235,424
-------------
BANKS -- 3.4%
2,086 Bank of America Corp. 87,090
1,168 Citigroup, Inc. 83,991
528 JPMorgan Chase & Co. 84,454
1,451 U.S. Bancorp 83,273
1,725 Wells Fargo & Co. 78,832
-------------
417,640
-------------
BEVERAGES -- 1.9%
1,431 Coca-Cola (The) Co. 80,580
1,655 Molson Coors Beverage Co.,
Class B 78,662
521 PepsiCo, Inc. 81,479
-------------
240,721
-------------
BIOTECHNOLOGY -- 2.7%
695 AbbVie, Inc. 83,942
352 Amgen, Inc. 79,386
238 Biogen, Inc. (a) 80,661
1,155 Gilead Sciences, Inc. 84,061
-------------
328,050
-------------
CAPITAL MARKETS -- 2.8%
1,546 Bank of New York Mellon (The)
Corp. 85,370
90 BlackRock, Inc. 84,896
211 Goldman Sachs Group (The), Inc. 87,251
831 Morgan Stanley 86,781
-------------
344,298
-------------
CHEMICALS -- 2.0%
1,775 CF Industries Holdings, Inc. 80,621
1,310 Dow, Inc. 82,399
1,074 DuPont de Nemours, Inc. 79,497
-------------
242,517
-------------
COMMUNICATIONS EQUIPMENT
-- 2.6%
212 Arista Networks, Inc. (a) 78,340
1,440 Cisco Systems, Inc. 84,989
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT
(CONTINUED)
377 F5 Networks, Inc. (a) $ 76,746
2,788 Juniper Networks, Inc. 80,796
-------------
320,871
-------------
CONSUMER FINANCE -- 1.3%
476 American Express Co. 78,997
494 Capital One Financial Corp. 81,989
-------------
160,986
-------------
CONTAINERS & PACKAGING -- 0.7%
1,381 Sealed Air Corp. 84,282
-------------
DIVERSIFIED FINANCIAL SERVICES
-- 0.7%
287 Berkshire Hathaway, Inc.,
Class B (a) 82,016
-------------
DIVERSIFIED TELECOMMUNICATION
SERVICES -- 2.0%
2,883 AT&T, Inc. 79,052
7,056 Lumen Technologies, Inc. 86,789
1,451 Verizon Communications, Inc. 79,805
-------------
245,646
-------------
ELECTRIC UTILITIES -- 3.3%
758 Duke Energy Corp. 79,332
1,725 Exelon Corp. 84,560
1,014 NextEra Energy, Inc. 85,166
1,037 Pinnacle West Capital Corp. 79,745
1,265 Southern (The) Co. 83,148
-------------
411,951
-------------
ELECTRICAL EQUIPMENT -- 0.7%
797 Emerson Electric Co. 84,084
-------------
ELECTRONIC EQUIPMENT, INSTRUMENTS
& COMPONENTS -- 0.6%
447 IPG Photonics Corp. (a) 76,294
-------------
ENERGY EQUIPMENT & SERVICES
-- 1.3%
2,884 Schlumberger N.V. 80,868
11,683 TechnipFMC PLC (a) 77,458
-------------
158,326
-------------
ENTERTAINMENT -- 2.8%
575 Electronic Arts, Inc. 83,496
1,002 Live Nation Entertainment,
Inc. (a) 86,873
156 Netflix, Inc. (a) 88,794
466 Walt Disney (The) Co. (a) 84,486
-------------
343,649
-------------
EQUITY REAL ESTATE INVESTMENT
TRUSTS -- 2.7%
283 American Tower Corp. 82,684
698 Federal Realty Investment Trust 84,995
620 Simon Property Group, Inc. 83,359
1,136 SL Green Realty Corp. 79,611
-------------
330,649
-------------
See Notes to Financial Statements Page 13
<PAGE>
EQUITYCOMPASS TACTICAL RISK MANAGER ETF (TERM)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
FOOD & STAPLES RETAILING -- 2.1%
185 Costco Wholesale Corp. $ 84,266
1,723 Walgreens Boots Alliance, Inc. 87,442
561 Walmart, Inc. 83,084
-------------
254,792
-------------
FOOD PRODUCTS -- 1.3%
2,176 Kraft Heinz (The) Co. 78,314
1,296 Mondelez International, Inc.,
Class A 80,443
-------------
158,757
-------------
HEALTH CARE EQUIPMENT &
SUPPLIES -- 2.7%
658 Abbott Laboratories 83,151
262 Danaher Corp. 84,930
1,256 DENTSPLY SIRONA, Inc. 77,495
622 Medtronic PLC 83,025
-------------
328,601
-------------
HEALTH CARE PROVIDERS & SERVICES
-- 3.3%
983 CVS Health Corp. 84,921
599 DaVita, Inc. (a) 78,331
1,035 Henry Schein, Inc. (a) 78,236
190 UnitedHealth Group, Inc. 79,091
515 Universal Health Services, Inc.,
Class B 80,217
-------------
400,796
-------------
HOTELS, RESTAURANTS & LEISURE
-- 2.8%
38 Booking Holdings, Inc. (a) 87,388
342 McDonald's Corp. 81,211
3,589 Norwegian Cruise Line Holdings
Ltd. (a) 92,740
680 Starbucks Corp. 79,893
-------------
341,232
-------------
HOUSEHOLD DURABLES -- 1.3%
1,660 Leggett & Platt, Inc. 80,327
3,207 Newell Brands, Inc. 81,490
-------------
161,817
-------------
HOUSEHOLD PRODUCTS -- 1.3%
1,024 Colgate-Palmolive Co. 79,821
561 Procter & Gamble (The) Co. 79,881
-------------
159,702
-------------
INDUSTRIAL CONGLOMERATES -- 2.0%
406 3M Co. 79,064
787 General Electric Co. 82,958
349 Honeywell International, Inc. 80,937
-------------
242,959
-------------
INSURANCE -- 3.5%
618 Allstate (The) Corp. 83,603
1,701 American International Group,
Inc. 92,806
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
INSURANCE (CONTINUED)
515 Assurant, Inc. $ 87,607
1,402 MetLife, Inc. 86,924
3,206 Unum Group 85,344
-------------
436,284
-------------
INTERACTIVE MEDIA & SERVICES
-- 1.4%
30 Alphabet, Inc., Class A (a) 86,818
223 Facebook, Inc., Class A (a) 84,602
-------------
171,420
-------------
INTERNET & DIRECT MARKETING
RETAIL -- 0.7%
24 Amazon.com, Inc. (a) 83,299
-------------
IT SERVICES -- 6.5%
253 Accenture PLC, Class A 85,150
710 Akamai Technologies, Inc. (a) 80,407
461 Broadridge Financial Solutions,
Inc. 79,393
273 Gartner, Inc. (a) 84,286
562 International Business Machines
Corp. 78,871
461 Jack Henry & Associates, Inc. 81,311
218 Mastercard, Inc., Class A 75,478
292 PayPal Holdings, Inc. (a) 84,289
339 Visa, Inc., Class A 77,665
3,618 Western Union (The) Co. 78,294
-------------
805,144
-------------
LIFE SCIENCES TOOLS & SERVICES
-- 0.7%
149 Thermo Fisher Scientific, Inc. 82,688
-------------
MACHINERY -- 1.3%
390 Caterpillar, Inc. 82,239
1,881 Flowserve Corp. 73,115
-------------
155,354
-------------
MEDIA -- 5.4%
104 Charter Communications, Inc.,
Class A (a) 84,933
1,386 Comcast Corp., Class A 84,102
2,831 Discovery, Inc., Class A (a) 81,646
1,945 DISH Network Corp., Class A (a) 84,782
2,313 Fox Corp., Class A 86,599
2,256 Interpublic Group of (The) Cos.,
Inc. 83,991
3,433 News Corp., Class B 75,629
1,118 Omnicom Group, Inc. 81,860
-------------
663,542
-------------
MULTILINE RETAIL -- 0.6%
307 Target Corp. 75,823
-------------
OIL, GAS & CONSUMABLE FUELS
-- 2.5%
801 Chevron Corp. 77,513
1,452 ConocoPhillips 80,629
1,407 Exxon Mobil Corp. 76,710
Page 14 See Notes to Financial Statements
<PAGE>
EQUITYCOMPASS TACTICAL RISK MANAGER ETF (TERM)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
OIL, GAS & CONSUMABLE FUELS
(CONTINUED)
4,674 Kinder Morgan, Inc. $ 76,046
-------------
310,898
-------------
PHARMACEUTICALS -- 3.8%
1,168 Bristol-Myers Squibb Co. 78,093
301 Eli Lilly and Co. 77,745
461 Johnson & Johnson 79,813
1,059 Merck & Co., Inc. 80,791
1,670 Perrigo Co. PLC 68,387
1,762 Pfizer, Inc. 81,175
-------------
466,004
-------------
PROFESSIONAL SERVICES -- 0.7%
839 Leidos Holdings, Inc. 82,314
-------------
ROAD & RAIL -- 0.6%
368 Union Pacific Corp. 79,797
-------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 3.3%
1,489 Intel Corp. 80,495
396 NVIDIA Corp. 88,645
413 Qorvo, Inc. (a) 77,656
541 QUALCOMM, Inc. 79,359
416 Texas Instruments, Inc. 79,419
-------------
405,574
-------------
SOFTWARE -- 4.0%
129 Adobe, Inc. (a) 85,617
793 Citrix Systems, Inc. 81,576
280 Microsoft Corp. 84,526
892 Oracle Corp. 79,504
330 salesforce.com, Inc. (a) 87,539
164 Tyler Technologies, Inc. (a) 79,655
-------------
498,417
-------------
SPECIALTY RETAIL -- 2.0%
2,932 Gap (The), Inc. 78,372
243 Home Depot (The), Inc. 79,262
421 Lowe's Cos., Inc. 85,838
-------------
243,472
-------------
TECHNOLOGY HARDWARE, STORAGE
& PERIPHERALS -- 4.0%
545 Apple, Inc. 82,747
5,475 Hewlett Packard Enterprise Co. 84,644
985 NetApp, Inc. 87,596
897 Seagate Technology Holdings
PLC 78,568
1,223 Western Digital Corp. (a) 77,294
3,408 Xerox Holdings Corp. 76,714
-------------
487,563
-------------
TEXTILES, APPAREL & LUXURY GOODS
-- 3.2%
4,354 Hanesbrands, Inc. 81,333
468 NIKE, Inc., Class B 77,098
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS
(CONTINUED)
751 PVH Corp. (a) $ 78,697
644 Ralph Lauren Corp. 74,788
3,369 Under Armour, Inc., Class A (a) 77,959
-------------
389,875
-------------
TOBACCO -- 1.4%
1,713 Altria Group, Inc. 86,044
808 Philip Morris International, Inc. 83,224
-------------
169,268
-------------
TOTAL COMMON STOCKS -- 99.7% 12,240,085
(Cost $10,263,437) -------------
MONEY MARKET FUNDS -- 0.2%
18,654 Morgan Stanley Institutional Liquidity
Funds - Treasury Portfolio -
Institutional Class -
0.01% (b) 18,654
(Cost $18,654) -------------
TOTAL INVESTMENTS -- 99.9% 12,258,739
(Cost $10,282,091) (c)
NET OTHER ASSETS AND
LIABILITIES -- 0.1% 18,093
-------------
NET ASSETS -- 100.0% $ 12,276,832
=============
(a) Non-income producing security.
(b) Rate shown reflects yield as of August 31, 2021.
(c) Aggregate cost for federal income tax purposes is $10,429,641. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$2,188,384 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$359,286. The net unrealized appreciation was $1,829,098.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 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* $ 12,240,085 $ -- $ --
Money Market Funds 18,654 -- --
---------------------------------------------
Total Investments $ 12,258,739 $ -- $ --
=============================================
* See Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 15
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 2021
<TABLE>
<CAPTION>
EQUITYCOMPASS
EQUITYCOMPASS TACTICAL
RISK MANAGER ETF RISK MANAGER ETF
(ERM) (TERM)
---------------- ----------------
<S> <C> <C>
ASSETS:
Investments, at value.................................................. $ 11,470,064 $ 12,258,739
Dividends receivable................................................... 23,203 24,817
---------------- ----------------
Total Assets........................................................ 11,493,267 12,283,556
---------------- ----------------
LIABILITIES:
Investment advisory fees payable....................................... 6,291 6,724
---------------- ----------------
Total Liabilities................................................... 6,291 6,724
---------------- ----------------
NET ASSETS............................................................. $ 11,486,976 $ 12,276,832
================ ================
NET ASSETS CONSIST OF:
Paid-in capital........................................................ $ 14,383,484 $ 24,892,272
Par value.............................................................. 4,500 5,500
Accumulated distributable earnings (loss).............................. (2,901,008) (12,620,940)
---------------- ----------------
NET ASSETS............................................................. $ 11,486,976 $ 12,276,832
================ ================
NET ASSET VALUE, per share............................................. $ 25.53 $ 22.32
================ ================
Number of shares outstanding (unlimited number of shares
authorized, par value $0.01 per share).............................. 450,002 550,002
================ ================
Investments, at cost................................................... $ 9,571,147 $ 10,282,091
================ ================
</TABLE>
Page 16 See Notes to Financial Statements
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 2021
<TABLE>
<CAPTION>
EQUITYCOMPASS
EQUITYCOMPASS TACTICAL
RISK MANAGER ETF RISK MANAGER ETF
(ERM) (TERM)
---------------- ----------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............................................................. $ 218,133 $ 242,010
---------------- ----------------
Total investment income............................................. 218,133 242,010
---------------- ----------------
EXPENSES:
Investment advisory fees............................................... 73,669 82,246
---------------- ----------------
Total expenses...................................................... 73,669 82,246
---------------- ----------------
NET INVESTMENT INCOME (LOSS)........................................... 144,464 159,764
---------------- ----------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments......................................................... 1,221,451 1,390,226
In-kind redemptions................................................. 930,817 1,109,043
---------------- ----------------
Net realized gain (loss)............................................... 2,152,268 2,499,269
---------------- ----------------
Net change in unrealized appreciation (depreciation) on investments.... 1,638,311 1,805,285
---------------- ----------------
NET REALIZED AND UNREALIZED GAIN (LOSS)................................ 3,790,579 4,304,554
---------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS..................................................... $ 3,935,043 $ 4,464,318
================ ================
</TABLE>
See Notes to Financial Statements Page 17
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
EQUITYCOMPASS EQUITYCOMPASS
RISK MANAGER ETF TACTICAL RISK MANAGER ETF
(ERM) (TERM)
-------------------------------- --------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
8/31/2021 8/31/2020 8/31/2021 8/31/2020
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).............................. $ 144,464 $ 272,270 $ 159,764 $ 374,510
Net realized gain (loss).................................. 2,152,268 (1,969,777) 2,499,269 (3,816,922)
Net change in unrealized appreciation (depreciation)...... 1,638,311 1,007,138 1,805,285 1,457,681
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets resulting
from operations........................................ 3,935,043 (690,369) 4,464,318 (1,984,731)
--------------- --------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations..................................... (142,476) (352,901) (157,826) (499,661)
--------------- --------------- --------------- ---------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold................................. -- 1,596,480 -- --
Cost of shares redeemed................................... (4,180,754) (9,347,428) (4,809,293) (14,846,973)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets resulting
from shareholder transactions.......................... (4,180,754) (7,750,948) (4,809,293) (14,846,973)
--------------- --------------- --------------- ---------------
Total increase (decrease) in net assets................... (388,187) (8,794,218) (502,801) (17,331,365)
NET ASSETS:
Beginning of period....................................... 11,875,163 20,669,381 12,779,633 30,110,998
--------------- --------------- --------------- ---------------
End of period............................................. $ 11,486,976 $ 11,875,163 $ 12,276,832 $ 12,779,633
=============== =============== =============== ===============
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period................... 650,002 1,050,002 800,002 1,750,002
Shares sold............................................... -- 100,000 -- --
Shares redeemed........................................... (200,000) (500,000) (250,000) (950,000)
--------------- --------------- --------------- ---------------
Shares outstanding, end of period......................... 450,002 650,002 550,002 800,002
=============== =============== =============== ===============
</TABLE>
Page 18 See Notes to Financial Statements
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
EQUITYCOMPASS RISK MANAGER ETF (ERM)
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, PERIOD
---------------------------------------------- ENDED
2021 2020 2019 2018 8/31/2017 (a)
---------- ---------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................. $ 18.27 $ 19.69 $ 23.32 $ 20.50 $ 20.05
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss).......................... 0.29 0.33 0.39 0.30 0.10
Net realized and unrealized gain (loss)............... 7.24 (1.36) (3.56) 2.80 0.39
-------- -------- -------- -------- --------
Total from investment operations...................... 7.53 (1.03) (3.17) 3.10 0.49
-------- -------- -------- -------- --------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income................................. (0.27) (0.39) (0.46) (0.28) (0.04)
Net realized gain..................................... -- -- (0.00)(b) -- --
-------- -------- -------- -------- --------
Total distributions................................... (0.27) (0.39) (0.46) (0.28) (0.04)
-------- -------- -------- -------- --------
Net asset value, end of period........................ $ 25.53 $ 18.27 $ 19.69 $ 23.32 $ 20.50
======== ======== ======== ======== ========
TOTAL RETURN (c)...................................... 41.52% (5.36)% (13.68)% 15.23% 2.44%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's).................. $ 11,487 $ 11,875 $ 20,669 $ 27,988 $ 10,250
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets (d)..... 0.65% 0.65% 0.65% 0.65% 0.65% (e)
Ratio of net expenses to average net assets (d)....... 0.65% 0.65% 0.59% 0.64% 0.65% (e)
Ratio of net investment income (loss) to average net
assets............................................. 1.27% 1.61% 1.89% 1.52% 1.81% (e)
Portfolio turnover rate (f)........................... 79% 81% 207% 121% 8%
</TABLE>
EQUITYCOMPASS TACTICAL RISK MANAGER ETF (TERM)
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, PERIOD
---------------------------------------------- ENDED
2021 2020 2019 2018 8/31/2017 (a)
---------- ---------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................. $ 15.97 $ 17.21 $ 23.33 $ 20.50 $ 20.05
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss).......................... 0.26 0.29 0.34 0.29 0.09
Net realized and unrealized gain (loss)............... 6.33 (1.19) (6.13) 2.81 0.40
-------- -------- -------- -------- --------
Total from investment operations...................... 6.59 (0.90) (5.79) 3.10 0.49
-------- -------- -------- -------- --------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income................................. (0.24) (0.34) (0.33) (0.27) (0.04)
-------- -------- -------- -------- --------
Net asset value, end of period........................ $ 22.32 $ 15.97 $ 17.21 $ 23.33 $ 20.50
======== ======== ======== ======== ========
TOTAL RETURN (c)...................................... 41.54% (5.36)% (24.98)% 15.24% 2.44%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's).................. $ 12,277 $ 12,780 $ 30,111 $ 61,836 $ 22,551
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets (d)..... 0.65% 0.65% 0.65% 0.65% 0.65% (e)
Ratio of net expenses to average net assets (d)....... 0.65% 0.65% 0.59% 0.64% 0.65% (e)
Ratio of net investment income (loss) to average net
assets............................................. 1.26% 1.68% 1.65% 1.52% 1.85% (e)
Portfolio turnover rate (f)........................... 80% 74% 317% 120% 10%
</TABLE>
(a) Inception date is April 10, 2017, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(b) Amount is less than $0.01.
(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. The total returns would have been lower if certain
fees had not been waived by the Advisor.
(d) The Fund indirectly bears its proportionate share of fees and expenses
incurred by the underlying funds in which the Fund invests. This ratio
does not include these indirect fees and expenses.
(e) Annualized.
(f) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
See Notes to Financial Statements Page 19
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
1. ORGANIZATION
First Trust Exchange-Traded Fund VIII (the "Trust") is an open-end management
investment company organized as a Massachusetts business trust on February 22,
2016, 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 forty-nine funds that are offering shares. 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 NYSE Arca, Inc.
("NYSE Arca").
EquityCompass Risk Manager ETF - (ticker "ERM")
EquityCompass Tactical Risk Manager ETF - (ticker "TERM")
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."
Each Fund is an actively managed exchange-traded fund. ERM's and TERM's primary
investment objective is to seek to provide long term capital appreciation with
capital preservation as a secondary objective. Each Fund seeks to achieve its
investment objectives by investing, under normal market conditions, in equity
securities of companies domiciled in the U.S. or listed on a U.S. exchange.
During periods when the U.S. equity market is determined to be unfavorable by
the Funds' sub-advisor, EquityCompass Investment Management, LLC (the
"Sub-Advisor"), each Fund may invest all or a portion of its assets in cash,
cash equivalents, money market funds and/or short-term fixed income
exchange-traded funds ("ETFs"), or each Fund may invest all or a portion of its
assets in a single short-term fixed income ETF, the First Trust Enhanced Short
Maturity ETF ("FTSM"). Certain of the ETFs in which each Fund invests may be
advised by First Trust Advisors L.P. ("First Trust" or the "Advisor"). During
such periods, the Fund may also invest a significant portion of its assets in
securities designed to provide short exposure to broad U.S. market indices
including by investing in inverse ETFs.
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. Each Fund's NAV is calculated by dividing the
value of all assets of the Fund (including accrued interest and dividends), less
all liabilities (including accrued expenses and dividends declared but unpaid),
by the total number of shares outstanding.
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, 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 The Nasdaq Stock Market LLC ("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 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.
Shares of open-end funds are valued at fair value which is based on NAV
per share.
Page 20
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
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.
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 August 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.
C. 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 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.
Page 21
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
The tax character of distributions paid by each Fund during the fiscal year
ended August 31, 2021 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>
EquityCompass Risk Manager ETF $ 142,476 $ -- $ --
EquityCompass Tactical Risk Manager ETF 157,826 -- --
</TABLE>
The tax character of distributions paid by each Fund during the fiscal year
ended August 31, 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>
EquityCompass Risk Manager ETF $ 352,901 $ -- $ --
EquityCompass Tactical Risk Manager ETF 499,661 -- --
</TABLE>
As of August 31, 2021, 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>
EquityCompass Risk Manager ETF $ 27,748 $ (4,690,484) $ 1,761,728
EquityCompass Tactical Risk Manager ETF 29,592 (14,479,630) 1,829,098
</TABLE>
D. 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 2018, 2019,
2020, and 2021 remain open to federal and state audit. As of August 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 August 31, 2021, 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.
Non-Expiring Capital Loss
Carryforwards
-------------------------
EquityCompass Risk Manager ETF $ 4,690,484
EquityCompass Tactical Risk Manager ETF 14,479,630
Page 22
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
During the taxable year ended August 31, 2021, the following Funds utilized
non-expiring capital loss carryforwards in the following amounts:
Capital Loss Carryforwards
Utilized
-------------------------
EquityCompass Risk Manager ETF $ 1,347,231
EquityCompass Tactical Risk Manager ETF 1,532,772
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 August 31, 2021, the Funds had no
net late year ordinary or capital losses.
In order to present paid-in capital and accumulated distributable earnings
(loss) (which consists of accumulated net investment income (loss), accumulated
net realized gain (loss) on investments and net unrealized appreciation
(depreciation) on investments) on the Statements of Assets and Liabilities that
more closely represent their tax character, certain adjustments have been made
to paid-in capital, accumulated net investment income (loss) and accumulated net
realized gain (loss) on investments. These adjustments are primarily due to the
difference between book and tax treatments of income and gains on various
investment securities held by the Funds and in-kind transactions. The results of
operations and net assets were not affected by these adjustments. For the fiscal
year ended August 31, 2021, the adjustments for each Fund were as follows:
<TABLE>
<CAPTION>
Accumulated
Accumulated Net Realized
Net Investment Gain (Loss) Paid-in
Income (Loss) on Investments Capital
-------------- -------------- -------------
<S> <C> <C> <C>
EquityCompass Risk Manager ETF $ -- $ (922,613) $ 922,613
EquityCompass Tactical Risk Manager ETF -- (1,106,372) 1,106,372
</TABLE>
E. EXPENSES
Expenses, other than the investment advisory fee and other excluded expenses,
are paid by the Advisor (see Note 3).
3. INVESTMENT ADVISORY FEE, AFFILIATED TRANSACTIONS AND OTHER FEE ARRANGEMENTS
First Trust, the investment advisor to the 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 supervising 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 each Fund's assets and is
responsible for the expenses of each Fund including the cost of transfer agency,
sub-advisory, custody, fund administration, legal, audit, other services and
license fees, but excluding fee payments under the Investment Management
Agreement, interest, taxes, pro rata share of fees and expenses attributable to
investments in other investment companies ("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. The Funds have each agreed to
pay First Trust an annual unitary management fee equal to 0.65% of its average
daily net assets. In addition, each Fund incurs acquired fund fees and expenses.
The total of unitary management fee and acquired fund fees and expenses
represents each Fund's total annual operating expenses.
The Funds and First Trust have retained the Sub-Advisor to provide
recommendations to the Advisor regarding the selection and allocation of the
securities in each Fund's investment portfolio. Pursuant to the Sub-Advisory
Agreement, the Advisor has agreed to pay for the services and facilities
provided by the Sub-Advisor through sub-advisory fees. The Sub-Advisor's fees
are paid by the Advisor out of the Advisor's management fee. For each Fund, the
Sub-Advisor receives a sub-advisory fee equal to 0.25% of each Fund's average
daily net assets.
Pursuant to a contractual agreement between the Trust, on behalf of the Funds,
and First Trust, the management fees paid to First Trust will be reduced by the
proportional amount of the acquired fund fees and expenses of the shares of
investment companies held by the Funds so that the Funds would not bear the
indirect costs of holding them, provided that the investment companies are
advised by First Trust. This contractual agreement shall continue until the
earlier of (i) its termination at the direction of the Trust's Board of Trustees
or (ii) the termination of the Funds' management agreement with First Trust.
First Trust does not have the right to recover the waived fees on the shares of
investment companies advised by First Trust.
Page 23
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
The Trust has multiple service agreements with The Bank of New York Mellon
("BNYM"). Under the service agreements, BNYM performs custodial, fund
accounting, certain administrative services, and transfer agency services for
each Fund. As custodian, BNYM is responsible for custody of each Fund's assets.
As fund accountant and administrator, BNYM is responsible for maintaining the
books and records of each Fund's securities and cash. As transfer agent, BNYM is
responsible for maintaining shareholder records for each Fund. BNYM is a
subsidiary of The Bank of New York Mellon Corporation, a financial holding
company.
Each Trustee who is not an officer or employee of First Trust, any sub-advisor
or any of their affiliates ("Independent Trustees") is paid a fixed annual
retainer that is allocated equally among each fund in the First Trust Fund
Complex. Each Independent Trustee is also paid an annual per fund fee that
varies based on whether the fund is a closed-end or other actively managed fund,
a defined-outcome fund or is an index fund.
Additionally, the Lead Independent Trustee and the Chairmen of the Audit
Committee, Nominating and Governance Committee and Valuation Committee are paid
annual fees to serve in such capacities, with such compensation allocated pro
rata among each fund in the First Trust Fund Complex based on net assets.
Independent Trustees are reimbursed for travel and out-of-pocket expenses in
connection with all meetings. The Lead Independent Trustee and Committee
Chairmen rotate every three years. The officers and "Interested" Trustee receive
no compensation from the Trust for acting in such capacities.
4. PURCHASES AND SALES OF SECURITIES
For the fiscal year ended August 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>
EquityCompass Risk Manager ETF $ 8,772,609 $ 8,694,533
EquityCompass Tactical Risk Manager ETF 9,881,186 9,757,485
</TABLE>
For the fiscal year ended August 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>
EquityCompass Risk Manager ETF $ -- $ 4,152,021
EquityCompass Tactical Risk Manager ETF -- 4,783,796
</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
Page 24
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
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 December 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 September 20, 2021, FT Cboe Vest International Equity Buffer ETF - September
and FT Cboe Vest Nasdaq-100(R) Buffer ETF - September, each an additional series
of the Trust, began trading under the symbols "YSEP" and "QSPT," respectively,
on Cboe BZX Exchange, Inc.
On September 21, 2021, First Trust SkyBridge Crypto Industry and Digital Economy
ETF, an additional series of the Trust, began trading under the symbol "CRPT" on
NYSE Arca.
On October 14, 2021, First Trust Multi-Manager Small Cap Opportunities ETF, an
additional series of the Trust, began trading under the symbol "MMSC" on NYSE
Arca.
On October 18, 2021, First Trust announced that the reorganization of TERM into
ERM was completed prior to the open of the NYSE Arca on October 18, 2021. As
previously announced, the shareholders of TERM and ERM approved TERM's
reorganization into ERM at a Joint Special Meeting of Shareholders on September
13, 2021. The reorganization was previously approved by the Board of Trustees of
each of TERM and ERM. In the reorganization, the assets of TERM were transferred
to, and the liabilities of TERM were assumed by, ERM. The shareholders of TERM
received shares of ERM with a value equal to the aggregate net asset value of
the shares of TERM held by them. The exchange of shares took place based upon
TERM's and ERM's closing net asset values on October 15, 2021. The exchange
ratio at which shares of TERM were exchanged for shares of ERM is 0.870700.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF FIRST TRUST EXCHANGE-TRADED
FUND VIII:
OPINION ON THE FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS
We have audited the accompanying statements of assets and liabilities of
EquityCompass Risk Manager ETF and EquityCompass Tactical Risk Manager ETF (the
"Funds"), each a series of the First Trust Exchange-Traded Fund VIII, including
the portfolios of investments, as of August 31, 2021, the related statements of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, the financial highlights for
years ended August 31, 2021, 2020, 2019, and 2018, and the period from April 10,
2017 (commencement of operations) through August 31, 2017, and the related
notes. In our opinion, the financial statements and financial highlights present
fairly, in all material respects, the financial position of the Funds as of
August 31, 2021, and the results of their operations for the year then ended,
the changes in their net assets for each of the two years in the period then
ended, and the financial highlights for the years ended August 31, 2021, 2020,
2019, and 2018, and for the period from April 10, 2017 (commencement of
operations) through August 31, 2017, in conformity with accounting principles
generally accepted in the United States of America.
BASIS FOR OPINION
These financial statements and financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an opinion on the Funds'
financial statements and financial highlights based on our audits. We are a
public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to
the Funds in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement, whether due to error or fraud. The Funds are not
required to have, nor were we engaged to perform, an audit of their internal
control over financial reporting. As part of our audits we are required to
obtain an understanding of internal control over financial reporting but not for
the purpose of expressing an opinion on the effectiveness of the Funds' internal
control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material
misstatement of the financial statements and financial highlights, whether due
to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the financial statements and financial highlights. Our audits
also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of August 31, 2021, by correspondence with
the custodian and brokers. We believe that our audits provide a reasonable basis
for our opinion.
/s/ Deloitte & Touche LLP
Chicago, Illinois
October 22, 2021
We have served as the auditor of one or more First Trust investment companies
since 2001.
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ADDITIONAL INFORMATION
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 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.
FEDERAL TAX INFORMATION
For the taxable year ended August 31, 2021, the following percentages of income
dividend paid by the Funds qualify for the dividends received deduction
available to corporations:
Dividends Received Deduction
----------------------------
EquityCompass Risk Manager ETF 100.00%
EquityCompass Tactical Risk Manager ETF 100.00%
For the taxable year ended August 31, 2021, the following percentages of income
dividend paid by the Funds are hereby designated as qualified dividend income:
Qualified Dividend Income
----------------------------
EquityCompass Risk Manager ETF 100.00%
EquityCompass Tactical Risk Manager ETF 100.00%
A portion of each of the Funds' 2021 ordinary dividends (including short-term
capital gains) paid to its shareholders during the fiscal year ended August 31,
2021, may be eligible for the Qualified Business Income Deduction (QBI) under
Internal Revenue Code of 1986, as amended, Section 199A for the aggregate
dividends each Fund received from the underlying Real Estate Investment Trusts
(REITs) these Funds invest in.
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 significant
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
more broadly diversified.
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,
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AUGUST 31, 2021 (UNAUDITED)
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.
DEFINED OUTCOME FUNDS RISK. To the extent a fund's investment strategy is
designed to deliver returns tied to the price performance of an underlying ETF,
an investor may not realize the returns the fund seeks to achieve if that
investor does not hold shares for the entire target outcome period. In the event
an investor purchases shares after the first day of the target outcome period or
sells shares prior to the end of the target outcome period, the buffer that the
fund seeks to provide against a decline in the value of the underlying ETF may
not be available, the enhanced returns that the fund seeks to provide (if any)
may not be available and the investor may not participate in a gain in the value
of the underlying ETF up to the cap for the investor's investment period.
Additionally, the fund will not participate in gains of the underlying ETF above
the cap and a shareholder may lose their entire investment. If the fund seeks
enhanced returns, there are certain time periods when the value of the fund may
fall faster than the value of the underlying ETF, and it is very unlikely that,
on any given day during which the underlying ETF share price increases in value,
the fund's share price will increase at the same rate as the enhanced returns
sought by the fund, which is designed for an entire target outcome period.
Trading flexible exchange options involves risks different from, or possibly
greater than, the risks associated with investing directly in securities, such
as less liquidity and correlation and valuation risks. A fund may experience
substantial downside from specific flexible exchange option positions and
certain positions may expire worthless.
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
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 OR MODEL CONSTITUENT RISK. Certain funds may be a constituent of one or
more indices or ETF models. 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 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. In addition, index rebalances may potentially result in increased
trading activity in a fund's shares.
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
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
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. While the development of
vaccines has slowed the spread of the virus and allowed for the resumption of
"reasonably" normal business activity in the United States, many countries
continue to impose lockdown measures in an attempt to slow the spread.
Additionally, there is no guarantee that vaccines will be effective against
emerging variants of the disease.
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;
capital controls; lack of liquidity; currency exchange rates; excessive
taxation; government seizure of assets; the imposition of sanctions by foreign
governments; different legal or accounting standards; and less government
supervision and regulation of exchanges in foreign countries. Investments in
non-U.S. securities may involve higher costs than investments in U.S.
securities, including higher transaction and custody costs, as well as
additional taxes imposed by non-U.S. governments. These risks may be heightened
for securities of companies located, or with significant operations, in emerging
market countries.
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. Each fund relies on third-parties for a range of services, including
custody. Any delay or failure relating to engaging or maintaining such service
providers may affect a fund's ability to meet its investment objective. Although
the funds and the funds' investment 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 EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
ADVISORY AND SUB-ADVISORY AGREEMENTS
BOARD CONSIDERATIONS REGARDING CONTINUATION OF INVESTMENT MANAGEMENT AND
SUB-ADVISORY AGREEMENTS
The Board of Trustees of First Trust Exchange-Traded Fund VIII (the "Trust"),
including the Independent Trustees, unanimously approved the continuation of the
Investment Management Agreement (the "Advisory Agreement") with First Trust
Advisors L.P. (the "Advisor") and the Investment Sub-Advisory Agreement (the
"Sub-Advisory Agreement" and together with the Advisory Agreement, the
"Agreements") among the Trust, the Advisor and EquityCompass Investment
Management, LLC (the "Sub-Advisor") on behalf of the following two series of the
Trust (each a "Fund" and collectively, the "Funds"):
EquityCompass Equity Risk Manager ETF (ERM)
EquityCompass Tactical Equity Risk Manager ETF (TERM)
The Board approved the continuation of the Agreements for each Fund for a
one-year period ending June 30, 2022 at a meeting held on June 6-7, 2021. The
Board determined for each Fund that the continuation of the Agreements is in the
best interests of the Fund in light of the nature, extent and quality of the
services provided and such other matters as the Board considered to be relevant
in the exercise of its business judgment.
To reach this determination for each Fund, the Board considered its duties under
the Investment Company Act of 1940, as amended (the "1940 Act"), as well as
under the general principles of state law, in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; the fiduciary duty
of investment advisors with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Board in voting
on such agreements. At meetings held on April 26, 2021 and June 6-7, 2021, the
Board, including the Independent Trustees, reviewed materials provided by the
Advisor and the Sub-Advisor responding to requests for information from counsel
to the Independent Trustees, submitted on behalf of the Independent Trustees,
that, among other things, outlined: the services provided by the Advisor and the
Sub-Advisor to each Fund (including the relevant personnel responsible for these
services and their experience); the unitary fee rate payable by each Fund as
compared to fees charged to a peer group of funds (the "Expense Group") and a
broad peer universe of funds (the "Expense Universe"), each assembled by
Broadridge Financial Solutions, Inc. ("Broadridge"), an independent source, and
as compared to fees charged to other clients of the Advisor, including other
exchange-traded funds ("ETFs") managed by the Advisor; the sub-advisory fee rate
as compared to fees charged to other clients of the Sub-Advisor; the expense
ratio of each Fund as compared to expense ratios of the funds in the Fund's
Expense Group and Expense Universe; performance information for each Fund,
including comparisons of each Fund's performance to that of one or more relevant
benchmark indexes and to that of a performance group of funds and a broad
performance universe of funds (the "Performance Universe"), each assembled by
Broadridge; the nature of expenses incurred in providing services to each Fund
and the potential for the Advisor and the Sub-Advisor to realize economies of
scale, if any; profitability and other financial data for the Advisor; financial
data for the Sub-Advisor; any fall-out benefits to the Advisor and its
affiliate, First Trust Portfolios L.P. ("FTP"), and the Sub-Advisor; and
information on the Advisor's and the Sub-Advisor's compliance programs. The
Board reviewed initial materials with the Advisor at the meeting held on April
26, 2021, prior to which the Independent Trustees and their counsel met
separately to discuss the information provided by the Advisor and the
Sub-Advisor. Following the April meeting, counsel to the Independent Trustees,
on behalf of the Independent Trustees, requested certain clarifications and
supplements to the materials provided, and the information provided in response
to those requests was considered at an executive session of the Independent
Trustees and their counsel held prior to the June 6-7, 2021 meeting, as well as
at the June meeting. The Board applied its business judgment to determine
whether the arrangements between the Trust and the Advisor and among the Trust,
the Advisor and the Sub-Advisor continue to be reasonable business arrangements
from each Fund's perspective. The Board determined that, given the totality of
the information provided with respect to the Agreements, the Board had received
sufficient information to renew the Agreements. The Board considered that
shareholders chose to invest or remain invested in a Fund knowing that the
Advisor and the Sub-Advisor manage the Fund and knowing the Fund's unitary fee.
In reviewing the Agreements for each Fund, the Board considered the nature,
extent and quality of the services provided by the Advisor and the Sub-Advisor
under the Agreements. With respect to the Advisory Agreement, the Board
considered that the Advisor is responsible for the overall management and
administration of the Trust and each Fund and reviewed all of the services
provided by the Advisor to the Funds, including the oversight of the
Sub-Advisor, as well as the background and experience of the persons responsible
for such services. The Board noted that the Advisor oversees the Sub-Advisor's
day-to-day management of each Fund's investments, including portfolio risk
monitoring and performance review. The Board considered that the Sub-Advisor is
responsible for the selection and ongoing monitoring of the securities in the
Funds' investment portfolios, but that the Advisor executes each Fund's
portfolio trades. In reviewing the services provided, the Board noted the
compliance program that had been developed by the Advisor and considered that it
includes a robust program for monitoring the Advisor's, the Sub-Advisor's and
each Fund's compliance with the 1940 Act, as well as each Fund's compliance with
its investment objective, policies and restrictions. The Board also considered a
report from the Advisor with respect to its risk management functions related to
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the operation of the Funds. Finally, as part of the Board's consideration of the
Advisor's services, the Advisor, in its written materials and at the April 26,
2021 meeting, described to the Board the scope of its ongoing investment in
additional personnel and infrastructure to maintain and improve the quality of
services provided to the Funds and the other funds in the First Trust Fund
Complex. With respect to the Sub-Advisory Agreement, the Board noted that each
Fund is an actively-managed ETF and the Sub-Advisor actively manages the Fund's
investments. The Board reviewed the materials provided by the Sub-Advisor and
considered the services that the Sub-Advisor provides to each Fund, including
the Sub-Advisor's day-to-day management of the Funds' investments. In
considering the Sub-Advisor's management of the Funds, the Board noted the
background and experience of the Sub-Advisor's portfolio management team,
including the Board's prior meetings with members of the portfolio management
team. In light of the information presented and the considerations made, the
Board concluded that the nature, extent and quality of the services provided to
the Trust and each Fund by the Advisor and the Sub-Advisor under the Agreements
have been and are expected to remain satisfactory and that the Sub-Advisor,
under the oversight of the Advisor, has managed each Fund consistent with its
investment objective, policies and restrictions.
The Board considered the unitary fee rate payable by each Fund under the
Advisory Agreement for the services provided. The Board noted that the
sub-advisory fee for each Fund is paid by the Advisor from the Fund's unitary
fee. The Board considered that as part of the unitary fee the Advisor is
responsible for each Fund's expenses, including the cost of sub-advisory,
transfer agency, custody, fund administration, legal, audit and other services
and license fees, if any, but excluding the fee payment under the Advisory
Agreement and interest, taxes, acquired fund fees and expenses, brokerage
commissions and other expenses connected with the execution of portfolio
transactions, distribution and service fees pursuant to a Rule 12b 1 plan, if
any, and extraordinary expenses, if any. The Board noted that the Advisor had
previously agreed to waive its unitary fee to the extent of acquired fund fees
and expenses of shares of investment companies advised by the Advisor that are
held by the Fund. The Board received and reviewed information showing the
advisory fee rates and expense ratios of the peer funds in the Expense Groups,
as well as advisory and unitary fee rates charged by the Advisor and the
Sub-Advisor to other fund (including ETFs) and non-fund clients, as applicable.
Because each Fund pays a unitary fee, the Board determined that expense ratios
were the most relevant comparative data point. Based on the information
provided, the Board noted that the unitary fee rate for each Fund was above the
median total (net) expense ratio of the peer funds in its respective Expense
Group. With respect to the Expense Groups, the Board, at the April 26, 2021
meeting, discussed with the Advisor limitations in creating peer groups for
actively-managed ETFs, including that the Funds' Expense Groups contained
actively-managed and passively-managed ETFs and open-end mutual funds, and
different business models that may affect the pricing of services among ETF
sponsors. The Board also noted that not all peer funds employ an
advisor/sub-advisor management structure. The Board took these limitations and
differences into account in considering the peer data. With respect to fees
charged to other non-ETF clients, the Board considered differences between the
Funds and other non-ETF clients that limited their comparability. In considering
the unitary fee rates overall, the Board also considered the Advisor's statement
that it seeks to meet investor needs through innovative and value-added
investment solutions and the Advisor's demonstrated long-term commitment to each
Fund and the other funds in the First Trust Fund Complex.
The Board considered performance information for each Fund. The Board noted the
process it has established for monitoring each Fund's performance and portfolio
risk on an ongoing basis, which includes quarterly performance reporting from
the Advisor and the Sub-Advisor for the Funds. The Board determined that this
process continues to be effective for reviewing each Fund's performance. The
Board received and reviewed information comparing each Fund's performance for
periods ended December 31, 2020 to the performance of the funds in its
Performance Universe and a benchmark index. Based on the information provided,
the Board noted that each Fund underperformed its Performance Universe median
and benchmark index for the one- and three-year periods ended December 31, 2020.
On the basis of all the information provided on the unitary fee and performance
of each Fund and the ongoing oversight by the Board, the Board concluded that
the unitary fee for each Fund (out of which the Sub-Advisor is compensated)
continues to be reasonable and appropriate in light of the nature, extent and
quality of the services provided by the Advisor and the Sub-Advisor to each Fund
under the Agreements.
The Board considered information and discussed with the Advisor whether there
were any economies of scale in connection with providing advisory services to
the Funds and noted the Advisor's statement that it believes its expenses will
likely increase during the next twelve months as the Advisor continues to hire
personnel and build infrastructure, including technology, to improve the
services to the Funds. The Board noted that any reduction in fixed costs
associated with the management of the Funds would benefit the Advisor, but that
the unitary fee structure provides a level of certainty in expenses for the
Funds. The Board considered the revenues and allocated costs (including the
allocation methodology) of the Advisor in serving as investment advisor to each
Fund for the twelve months ended December 31, 2020 and the estimated
profitability level for each Fund calculated by the Advisor based on such data,
as well as complex-wide and product-line profitability data, for the same
period. The Board noted the inherent limitations in the profitability analysis
and concluded that, based on the information provided, the Advisor's
profitability level for each Fund was not unreasonable. In addition, the Board
considered fall-out benefits described by the Advisor that may be realized from
its relationship with the Funds. The Board considered that the Advisor had
identified as a fall-out benefit to the Advisor and FTP their exposure to
Page 31
<PAGE>
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
investors and brokers who, absent their exposure to the Funds, may have had no
dealings with the Advisor or FTP, and noted that the Advisor does not utilize
soft dollars in connection with the Funds. The Board concluded that the
character and amount of potential fall-out benefits to the Advisor were not
unreasonable.
The Board considered the Sub-Advisor's statements to the effect that it does not
believe there are any economies of scale to be achieved in connection with
providing sub-advisory services to the Funds and that the Sub-Advisor does not
expect that its expenses relating to providing services to the Funds to change
in the next twelve months. The Board did not review the profitability of the
Sub-Advisor with respect to each Fund. The Board noted that the Advisor pays the
Sub-Advisor for each Fund from its unitary fee and its understanding that each
Fund's sub-advisory fee rate was the product of an arm's length negotiation. The
Board concluded that the profitability analysis for the Advisor was more
relevant. The Board considered the potential fall-out benefits to the
Sub-Advisor from being associated with the Advisor and the Funds, and noted the
Sub-Advisor's statements to the effect that it does not believe there will be
any fall-out benefits to the Sub-Advisor from its relationship with the Advisor
and the Funds. The Board concluded that the character and amount of potential
fall-out benefits to the Sub-Advisor were not unreasonable.
Based on all of the information considered and the conclusions reached, the
Board, including the Independent Trustees, unanimously determined that the terms
of the Agreements continue to be fair and reasonable and that the continuation
of the Agreements is in the best interests of each Fund. No single factor was
determinative in the Board's analysis. With regard to TERM, the Board noted that
it had previously approved the reorganization of the Fund into ERM, subject to
shareholder approval, and determined that the continuation of the Agreements for
the Fund would allow the Fund to operate until completion of the reorganization
and would provide for continuous operation of the Fund going forward in the
event shareholders do not approve the reorganization.
LIQUIDITY RISK MANAGEMENT PROGRAM
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as
amended (the "1940 Act"), the Funds and each other fund in the First Trust Fund
Complex, other than the closed-end funds, have adopted and implemented a
liquidity risk management program (the "Program") reasonably designed to assess
and manage the funds' liquidity risk, i.e., the risk that a fund could not meet
requests to redeem shares issued by the fund without significant dilution of
remaining investors' interests in the fund. The Board of Trustees of the First
Trust Funds has appointed First Trust Advisors, L.P. (the "Advisor") as the
person designated to administer the Program, and in this capacity the Advisor
performs its duties primarily through the activities and efforts of the First
Trust Liquidity Committee (the "Liquidity Committee").
Pursuant to the Program, the Liquidity Committee classifies the liquidity of
each fund's portfolio investments into one of the four liquidity categories
specified by Rule 22e-4: highly liquid investments, moderately liquid
investments, less liquid investments and illiquid investments. The Liquidity
Committee determines certain of the inputs for this classification process,
including reasonably anticipated trade sizes and significant investor dilution
thresholds. The Liquidity Committee also determines and periodically reviews a
highly liquid investment minimum for certain funds, monitors the funds' holdings
of assets classified as illiquid investments to seek to ensure they do not
exceed 15% of a fund's net assets and establishes policies and procedures
regarding redemptions in kind.
At the April 26, 2021 meeting of the Board of Trustees, as required by Rule
22e-4 and the Program, the Advisor provided the Board with a written report
prepared by the Advisor that addressed the operation of the Program during the
period from March 20, 2020 through the Liquidity Committee's annual meeting held
on March 16, 2021 and assessed the Program's adequacy and effectiveness of
implementation during this period, including the operation of the highly liquid
investment minimum for each fund that is required under the Program to have one,
and any material changes to the Program. Note that because the Funds primarily
hold assets that are highly liquid investments, the Funds have not adopted any
highly liquid investment minimums.
As stated in the written report, during the review period, no fund breached the
15% limitation on illiquid investments, no fund with a highly liquid investment
minimum breached that minimum and no fund filed a Form N-LIQUID. The Advisor
concluded that each fund's investment strategy is appropriate for an open-end
fund; that the Program operated effectively in all material respects during the
review period; and that the Program is reasonably designed to assess and manage
the liquidity risk of each fund and to maintain compliance with Rule 22e-4.
Page 32
<PAGE>
--------------------------------------------------------------------------------
BOARD OF TRUSTEES AND OFFICERS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
The following tables identify the Trustees and Officers of the Trust. Unless
otherwise indicated, the address of all persons is 120 East Liberty Drive, Suite
400, Wheaton, IL 60187.
The Trust's statement of additional information includes additional information
about the Trustees and is available, without charge, upon request, by calling
(800) 988-5891.
<TABLE>
<CAPTION>
NUMBER OF OTHER
PORTFOLIOS IN TRUSTEESHIPS OR
TERM OF OFFICE THE FIRST TRUST DIRECTORSHIPS
NAME, AND YEAR FIRST FUND COMPLEX HELD BY TRUSTEE
YEAR OF BIRTH AND ELECTED OR PRINCIPAL OCCUPATIONS OVERSEEN BY DURING PAST
POSITION WITH THE TRUST APPOINTED DURING PAST 5 YEARS TRUSTEE 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard E. Erickson, Trustee o Indefinite Term Physician, Officer, Wheaton Orthopedics; 210 None
(1951) Limited Partner, Gundersen Real Estate
o Since Inception Limited Partnership (June 1992 to
December 2016)
Thomas R. Kadlec, Trustee o Indefinite Term President, ADM Investors Services, Inc. 210 Director of ADM
(1957) (Futures Commission Merchant) Investor Services,
o Since Inception Inc., ADM
Investor Services
International,
Futures Industry
Association, and
National Futures
Association
Robert F. Keith, Trustee o Indefinite Term President, Hibs Enterprises (Financial 210 Director of Trust
(1956) and Management Consulting) Company of
o Since Inception Illinois
Niel B. Nielson, Trustee o Indefinite Term Senior Advisor (August 2018 to Present), 210 None
(1954) Managing Director and Chief Operating
o Since Inception Officer (January 2015 to August 2018),
Pelita Harapan Educational Foundation
(Educational Products and Services)
------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
James A. Bowen(1), Trustee, o Indefinite Term Chief Executive Officer, First Trust 210 None
Chairman of the Board Advisors L.P. and First Trust
(1955) o Since Inception Portfolios L.P.; Chairman of the
Board of Directors, BondWave LLC
(Software Development Company)
and Stonebridge Advisors LLC
(Investment Advisor)
</TABLE>
-----------------------------
(1) Mr. Bowen is deemed an "interested person" of the Trust due to his
position as Chief Executive Officer of First Trust Advisors L.P.,
investment advisor of the Trust.
Page 33
<PAGE>
--------------------------------------------------------------------------------
BOARD OF TRUSTEES AND OFFICERS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
POSITION AND TERM OF OFFICE
NAME OFFICES AND LENGTH OF PRINCIPAL OCCUPATIONS
AND YEAR OF BIRTH WITH TRUST SERVICE DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS(2)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
James M. Dykas President and Chief o Indefinite Term Managing Director and Chief Financial Officer
(1966) Executive Officer (January 2016 to Present), Controller (January 2011
o Since Inception to January 2016), Senior Vice President (April 2007
to January 2016), First Trust Advisors L.P. and First
Trust Portfolios L.P.; Chief Financial Officer
(January 2016 to Present), BondWave LLC
(Software Development Company) and Stonebridge
Advisors LLC (Investment Advisor)
Donald P. Swade Treasurer, Chief Financial o Indefinite Term Senior Vice President (July 2016 to Present), Vice
(1972) Officer and Chief President (April 2012 to July 2016), First Trust
Accounting Officer o Since Inception Advisors L.P. and First Trust Portfolios L.P.
W. Scott Jardine Secretary and Chief o Indefinite Term General Counsel, First Trust Advisors L.P. and
(1960) Legal Officer First Trust Portfolios L.P.; Secretary and General
o Since Inception Counsel, BondWave LLC; Secretary, Stonebridge
Advisors LLC
Daniel J. Lindquist Vice President o Indefinite Term Managing Director, First Trust Advisors L.P. and
(1970) First Trust Portfolios L.P.
o Since Inception
Kristi A. Maher Chief Compliance Officer o Indefinite Term Deputy General Counsel, First Trust Advisors L.P.
(1966) and Assistant Secretary and First Trust Portfolios L.P.
o Since Inception
Roger F. Testin Vice President o Indefinite Term Senior Vice President, First Trust Advisors L.P.
(1966) and First Trust Portfolios L.P.
o Since Inception
Stan Ueland Vice President o Indefinite Term Senior Vice President, First Trust Advisors L.P.
(1970) and First Trust Portfolios L.P.
o Since Inception
</TABLE>
-----------------------------
(2) The term "officer" means the president, vice president, secretary,
treasurer, controller or any other officer who performs a policy making
function.
Page 34
<PAGE>
--------------------------------------------------------------------------------
PRIVACY POLICY
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
PRIVACY POLICY
First Trust values our relationship with you and considers your privacy an
important priority in maintaining that relationship. We are committed to
protecting the security and confidentiality of your personal information.
SOURCES OF INFORMATION
We collect nonpublic personal information about you from the following sources:
o Information we receive from you and your broker-dealer, investment
professional or financial representative through interviews,
applications, agreements or other forms;
o Information about your transactions with us, our affiliates or
others;
o Information we receive from your inquiries by mail, e-mail or
telephone; and
o Information we collect on our website through the use of "cookies".
For example, we may identify the pages on our website that your
browser requests or visits.
INFORMATION COLLECTED
The type of data we collect may include your name, address, social security
number, age, financial status, assets, income, tax information, retirement and
estate plan information, transaction history, account balance, payment history,
investment objectives, marital status, family relationships and other personal
information.
DISCLOSURE OF INFORMATION
We do not disclose any nonpublic personal information about our customers or
former customers to anyone, except as permitted by law. In addition to using
this information to verify your identity (as required under law), the permitted
uses may also include the disclosure of such information to unaffiliated
companies for the following reasons:
o In order to provide you with products and services and to effect
transactions that you request or authorize, we may disclose your
personal information as described above to unaffiliated financial
service providers and other companies that perform administrative or
other services on our behalf, such as transfer agents, custodians
and trustees, or that assist us in the distribution of investor
materials such as trustees, banks, financial representatives, proxy
services, solicitors and printers.
o We may release information we have about you if you direct us to do
so, if we are compelled by law to do so, or in other legally limited
circumstances (for example to protect your account from fraud).
In addition, in order to alert you to our other financial products and services,
we may share your personal information within First Trust.
USE OF WEBSITE ANALYTICS
We currently use third party analytics tools, Google Analytics and AddThis to
gather information for purposes of improving First Trust's website and marketing
our products and services to you. These tools employ cookies, which are small
pieces of text stored in a file by your web browser and sent to websites that
you visit, to collect information, track website usage and viewing trends such
as the number of hits, pages visited, videos and PDFs viewed and the length of
user sessions in order to evaluate website performance and enhance navigation of
the website. We may also collect other anonymous information, which is generally
limited to technical and web navigation information such as the IP address of
your device, internet browser type and operating system for purposes of
analyzing the data to make First Trust's website better and more useful to our
users. The information collected does not include any personal identifiable
information such as your name, address, phone number or email address unless you
provide that information through the website for us to contact you in order to
answer your questions or respond to your requests. To find out how to opt-out of
these services click on: Google Analytics and AddThis.
CONFIDENTIALITY AND SECURITY
With regard to our internal security procedures, First Trust restricts access to
your nonpublic personal information to those First Trust employees who need to
know that information to provide products or services to you. We maintain
physical, electronic and procedural safeguards to protect your nonpublic
personal information.
POLICY UPDATES AND INQUIRIES
As required by federal law, we will notify you of our privacy policy annually.
We reserve the right to modify this policy at any time, however, if we do change
it, we will tell you promptly. For questions about our policy, or for additional
copies of this notice, please go to www.ftportfolios.com, or contact us at
1-800-621-1675 (First Trust Portfolios) or 1-800-222-6822 (First Trust
Advisors).
March 2021
Page 35
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<PAGE>
FIRST TRUST
First Trust Exchange-Traded Fund VIII
INVESTMENT ADVISOR
First Trust Advisors L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
INVESTMENT SUB-ADVISOR
EquityCompass Investment Management, LLC
1 South Street, 16th Floor
Baltimore, Maryland 21202
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 VIII
--------------------------------------------------------------------------------
FT Cboe Vest U.S. Equity Buffer ETF - January (FJAN)
FT Cboe Vest U.S. Equity Deep Buffer ETF - January (DJAN)
FT Cboe Vest U.S. Equity Buffer ETF - February (FFEB)
FT Cboe Vest U.S. Equity Deep Buffer ETF - February (DFEB)
FT Cboe Vest U.S. Equity Buffer ETF - March (FMAR)
FT Cboe Vest U.S. Equity Deep Buffer ETF - March (DMAR)
FT Cboe Vest U.S. Equity Buffer ETF - April (FAPR)
FT Cboe Vest U.S. Equity Deep Buffer ETF - April (DAPR)
FT Cboe Vest U.S. Equity Buffer ETF - May (FMAY)
FT Cboe Vest U.S. Equity Deep Buffer ETF - May (DMAY)
FT Cboe Vest U.S. Equity Buffer ETF - June (FJUN)
FT Cboe Vest U.S. Equity Deep Buffer ETF - June (DJUN)
FT Cboe Vest U.S. Equity Buffer ETF - July (FJUL)
FT Cboe Vest U.S. Equity Deep Buffer ETF - July (DJUL)
FT Cboe Vest U.S. Equity Buffer ETF - August (FAUG)
FT Cboe Vest U.S. Equity Deep Buffer ETF - August (DAUG)
FT Cboe Vest U.S. Equity Buffer ETF - September (FSEP)
FT Cboe Vest U.S. Equity Deep Buffer ETF - September (DSEP)
FT Cboe Vest U.S. Equity Buffer ETF - October (FOCT)
FT Cboe Vest U.S. Equity Deep Buffer ETF - October (DOCT)
FT Cboe Vest U.S. Equity Buffer ETF - November (FNOV)
FT Cboe Vest U.S. Equity Deep Buffer ETF - November (DNOV)
FT Cboe Vest U.S. Equity Buffer ETF - December (FDEC)
FT Cboe Vest U.S. Equity Deep Buffer ETF - December (DDEC)
FT Cboe Vest Fund of Buffer ETFs (BUFR)
FT Cboe Vest Fund of Deep Buffer ETFs (BUFD)
----------------------------
Annual Report
For the Period Ended
August 31, 2021
----------------------------
<PAGE>
--------------------------------------------------------------------------------
TABLE OF CONTENTS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021
Shareholder Letter.......................................................... 2
Fund Performance Overview:
FT Cboe Vest U.S. Equity Buffer ETF - January (FJAN).................... 3
FT Cboe Vest U.S. Equity Deep Buffer ETF - January (DJAN)............... 4
FT Cboe Vest U.S. Equity Buffer ETF - February (FFEB)................... 5
FT Cboe Vest U.S. Equity Deep Buffer ETF - February (DFEB).............. 6
FT Cboe Vest U.S. Equity Buffer ETF - February (FMAR)................... 7
FT Cboe Vest U.S. Equity Deep Buffer ETF - February (DMAR).............. 8
FT Cboe Vest U.S. Equity Buffer ETF - February (FAPR)................... 9
FT Cboe Vest U.S. Equity Deep Buffer ETF - February (DAPR).............. 10
FT Cboe Vest U.S. Equity Buffer ETF - May (FMAY)........................ 11
FT Cboe Vest U.S. Equity Deep Buffer ETF - May (DMAY)................... 12
FT Cboe Vest U.S. Equity Buffer ETF - June (FJUN)....................... 13
FT Cboe Vest U.S. Equity Deep Buffer ETF - June (DJUN).................. 14
FT Cboe Vest U.S. Equity Buffer ETF - July (FJUL)....................... 15
FT Cboe Vest U.S. Equity Deep Buffer ETF - July (DJUL).................. 16
FT Cboe Vest U.S. Equity Buffer ETF - August (FAUG)..................... 17
FT Cboe Vest U.S. Equity Deep Buffer ETF - August (DAUG)................ 18
FT Cboe Vest U.S. Equity Buffer ETF - September (FSEP).................. 19
FT Cboe Vest U.S. Equity Deep Buffer ETF - September (DSEP)............. 20
FT Cboe Vest U.S. Equity Buffer ETF - October (FOCT).................... 21
FT Cboe Vest U.S. Equity Deep Buffer ETF - October (DOCT)............... 22
FT Cboe Vest U.S. Equity Buffer ETF - November (FNOV)................... 23
FT Cboe Vest U.S. Equity Deep Buffer ETF - November (DNOV).............. 24
FT Cboe Vest U.S. Equity Buffer ETF - December (FDEC)................... 25
FT Cboe Vest U.S. Equity Deep Buffer ETF - December (DDEC).............. 26
FT Cboe Vest Fund of Buffer ETFs (BUFR)................................. 27
FT Cboe Vest Fund of Deep Buffer ETFs (BUFD)............................ 28
Notes to Fund Performance Overview.......................................... 29
Portfolio Commentary........................................................ 30
Understanding Your Fund Expenses............................................ 35
Portfolio of Investments:
FT Cboe Vest U.S. Equity Buffer ETF - January (FJAN).................... 38
FT Cboe Vest U.S. Equity Deep Buffer ETF - January (DJAN)............... 40
FT Cboe Vest U.S. Equity Buffer ETF - February (FFEB)................... 42
FT Cboe Vest U.S. Equity Deep Buffer ETF - February (DFEB).............. 44
FT Cboe Vest U.S. Equity Buffer ETF - February (FMAR)................... 46
FT Cboe Vest U.S. Equity Deep Buffer ETF - February (DMAR).............. 48
FT Cboe Vest U.S. Equity Buffer ETF - February (FAPR)................... 50
FT Cboe Vest U.S. Equity Deep Buffer ETF - February (DAPR).............. 52
FT Cboe Vest U.S. Equity Buffer ETF - May (FMAY)........................ 54
FT Cboe Vest U.S. Equity Deep Buffer ETF - May (DMAY)................... 56
FT Cboe Vest U.S. Equity Buffer ETF - June (FJUN)....................... 58
FT Cboe Vest U.S. Equity Deep Buffer ETF - June (DJUN).................. 60
FT Cboe Vest U.S. Equity Buffer ETF - July (FJUL)....................... 62
FT Cboe Vest U.S. Equity Deep Buffer ETF - July (DJUL).................. 64
FT Cboe Vest U.S. Equity Buffer ETF - August (FAUG)..................... 66
FT Cboe Vest U.S. Equity Deep Buffer ETF - August (DAUG)................ 68
FT Cboe Vest U.S. Equity Buffer ETF - September (FSEP).................. 70
FT Cboe Vest U.S. Equity Deep Buffer ETF - September (DSEP)............. 72
FT Cboe Vest U.S. Equity Buffer ETF - October (FOCT).................... 74
FT Cboe Vest U.S. Equity Deep Buffer ETF - October (DOCT)............... 76
FT Cboe Vest U.S. Equity Buffer ETF - November (FNOV)................... 78
FT Cboe Vest U.S. Equity Deep Buffer ETF - November (DNOV).............. 80
FT Cboe Vest U.S. Equity Buffer ETF - December (FDEC)................... 82
FT Cboe Vest U.S. Equity Deep Buffer ETF - December (DDEC).............. 84
FT Cboe Vest Fund of Buffer ETFs (BUFR)................................. 86
FT Cboe Vest Fund of Deep Buffer ETFs (BUFD)............................ 87
<PAGE>
--------------------------------------------------------------------------------
TABLE OF CONTENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021
Statements of Assets and Liabilities........................................ 88
Statements of Operations.................................................... 94
Statements of Changes in Net Assets......................................... 100
Financial Highlights........................................................ 108
Notes to Financial Statements............................................... 121
Report of Independent Registered Public Accounting Firm .................... 140
Additional Information...................................................... 143
Board of Trustees and Officers ............................................. 151
Privacy Policy.............................................................. 153
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/or Cboe Vest(SM) Financial LLC ("Cboe Vest" or the
"Sub-Advisor") and their respective 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
the series of First Trust Exchange-Traded Fund VIII (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/or Sub-Advisor and their respective 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 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 portfolio commentary from the portfolio management team of the
Funds, you may obtain an understanding of how the market environment affected
each Fund's performance. The statistical information that follows may help you
understand each Fund's performance compared to that of a relevant market
benchmark.
It is important to keep in mind that the opinions expressed by personnel of the
Advisor and/or Sub-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 the prospectus, statement of
additional information, and other Fund regulatory filings.
Page 1
<PAGE>
--------------------------------------------------------------------------------
SHAREHOLDER LETTER
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL LETTER FROM THE CHAIRMAN AND CEO
AUGUST 31, 2021
Dear Shareholders:
First Trust is pleased to provide you with the annual report for certain series
of the First Trust Exchange-Traded Fund VIII (the "Funds"), which contains
detailed information about the Funds for the twelve months ended August 31,
2021. Please note that some of the Funds were incepted after September 1, 2020,
the start of the reporting period, so information in this letter and the report
prior to those inception dates will not apply to all Funds.
The coronavirus ("COVID-19") pandemic has proven to be as stubborn as
advertised. We were warned by the scientific community early on that we would
have to coexist with this virus from here on out, and that appears to be the
case some 19 months after its onset. While the three main vaccines have proven
to be effective at keeping those people who have gotten all the required shots
out of the hospital, the U.S., unfortunately, had only achieved a 54% fully
vaccinated rate as of September 9, 2021, according to the Centers for Disease
Control and Prevention. If you add in the people ages 18 and older who have
received just one of the two-dose vaccines, it jumps to 75.3%. The U.S. and
global economies continue to underperform due to the pandemic. The U.S. alone
had a record high 10.9 million job openings at the end of July 2021, according
to the latest Job Openings and Labor Turnover Survey from the Department of
Labor. It appears that many people do not seem to want to work right now. An
estimated 7.5 million unemployment recipients in the U.S. were scheduled to lose
their benefits on September 6, 2021. Perhaps that will be enough to incentivize
people to go back to work.
The Federal Reserve (the "Fed") continues to play a major role in the U.S.
economy. It has kept short-term interest rates artificially low for the better
part of the past 13 years. The Federal Funds target rate (upper bound), while
held at 0.25% for roughly nine of those 13 years, reached as high as 2.50% in
the same 13-year period, but only for a few months and that was just prior to
the COVID-19 pandemic, according to data from the Fed. For comparative purposes,
the target rate averaged 2.56% for the 30-year period ended September 21, 2021.
It currently stands at 0.25%. In addition to keeping rates low, the Fed has been
buying assets, specifically Treasuries and mortgage-backed securities. It has
been buying a combined $120 billion of these securities every month. This has
helped keep bond yields artificially low as well. As of February 26, 2020, the
value of the assets on the Fed's balance sheet totaled $4.16 trillion, according
to its own data. As of September 15, 2021, the assets were valued at $8.45
trillion. Keep in mind, the balance sheet stood at $1 trillion on September 17,
2008. That was during the 2007-2008 Financial Crisis. Due to the reopening of
the U.S. economy and a bigger-than-expected rise in inflation this year, the Fed
has signaled that it could begin to taper its bond buying program by the end of
2021. With respect to the Federal Funds rate, the Fed continues to say it
intends to leave short-term rates where they are until 2023. In other words, the
Fed is poised to maintain its accommodative stance towards monetary policy. They
are not looking to get tight - just less loose. We will monitor this scenario
closely in the months ahead to see if the Fed's actions impact the direction of
interest rates and bond yields.
Overall, I am pleased to report that the securities markets have performed well
in this tumultuous climate. It appears, in our opinion, that the extremely low
interest rates offered on savings vehicles has motivated many investors to
assume more risk to potentially generate higher returns. The S&P 500(R) Index
(the "Index") posted a total return of 31.17% for the 12-month period ended
August 31, 2021, according to Bloomberg. For comparative purposes, from 1926
through 2020 (95 years), the Index returned an average of 10.28% per year on a
total return basis, according to Morningstar/Ibbotson Associates. Should
interest rates and bond yields eventually trend higher, investors should be
prepared for a bit of turbulence as stocks and bonds may be subjected to some
potential short-term profit taking, in my opinion. Having said that, I encourage
investors to stay the course. I remain optimistic due in large part to the
trillions of dollars in government stimulus money already circulating in the
economy as well as the potential for trillions of additional dollars from
President Joe Biden's infrastructure and "human infrastructure" bills still
weaving their way through Congress. It's hard to bet against growth in the
current climate.
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
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY BUFFER ETF - JANUARY (FJAN)
The investment objective of the FT Cboe Vest U.S. Equity Buffer ETF - January
(the "Fund") is to seek to provide investors with returns (before fees, expenses
and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF Trust (the
"Underlying ETF"), up to a predetermined upside cap of 14.50% (before fees,
expenses and taxes) and 13.64% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against the first 10% (before
fees, expenses and taxes) of Underlying ETF losses, over the period from January
19, 2021 to January 21, 2022 (the "Outcome Period"). Under normal market
conditions, the Fund will invest substantially all of its assets in FLexible
EXchange(R) Options ("FLEX Options") that reference the price performance of the
Underlying ETF. Subsequent Outcome Periods will begin on the day the prior
Outcome Period ends and will end on the approximate one-year anniversary of that
new Outcome Period. On the first day of each new Outcome Period, the Fund resets
by investing in a new set of FLEX Options that will provide a new cap for the
new Outcome Period. This means that the cap will change for each Outcome Period
based upon prevailing market conditions at the beginning of each Outcome Period.
The Fund will be perpetually offered and not terminate after the initial or any
subsequent Outcome Period. An investor that purchases Fund shares other than on
the first day of an Outcome Period and/or sells Fund shares prior to the end of
an Outcome Period may experience results that are very different from the target
outcomes sought by the Fund for that Outcome Period. The Fund is classified as
non-diversified under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on the Cboe BZX Exchange, Inc., under the
ticker symbol "FJAN."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(1/15/21)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 11.01%
Market Price 11.08%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 20.02%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
JANUARY 15, 2021 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Buffer ETF - January Price Return
<S> <C> <C>
1/15/21 $10,000 $10,000
2/28/21 10,053 10,114
8/31/21 11,101 12,002
</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 index does
not actually hold a portfolio of securities and therefore does 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 3
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - JANUARY (DJAN)
The investment objective of the FT Cboe Vest U.S. Equity Deep Buffer ETF -
January (the "Fund") is to seek to provide investors with returns (before fees,
expenses and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF
Trust (the "Underlying ETF"), up to a predetermined upside cap of 8.20% (before
fees, expenses and taxes) and 7.34% (after fees and expenses, excluding
brokerage commissions, trading fees, taxes and extraordinary expenses not
included in the Fund's management fee), while providing a buffer against
Underlying ETF losses between -5% and -30% (before fees, expenses and taxes),
over the period from January 19, 2021 to January 21, 2022 (the "Outcome
Period"). Under normal market conditions, the Fund will invest substantially all
of its assets in FLexible EXchange(R) Options ("FLEX Options") that reference
the price performance of the Underlying ETF. Subsequent Outcome Periods will
begin on the day the prior Outcome Period ends and will end on the approximate
one-year anniversary of that new Outcome Period. On the first day of each new
Outcome Period, the Fund resets by investing in a new set of FLEX Options that
will provide a new cap for the new Outcome Period. This means that the cap will
change for each Outcome Period based upon prevailing market conditions at the
beginning of each Outcome Period. The Fund will be perpetually offered and not
terminate after the initial or any subsequent Outcome Period. An investor that
purchases Fund shares other than on the first day of an Outcome Period and/or
sells Fund shares prior to the end of an Outcome Period may experience results
that are very different from the target outcomes sought by the Fund for that
Outcome Period. The Fund is classified as non-diversified under the Investment
Company Act of 1940, as amended. The shares of the Fund are listed and traded on
the Cboe BZX Exchange, Inc., under the ticker symbol "DJAN."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(1/15/21)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 6.25%
Market Price 6.05%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 20.02%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
JANUARY 15, 2021 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Deep Buffer ETF - January Price Return
<S> <C> <C>
1/15/21 $10,000 $10,000
2/28/21 10,033 10,114
8/31/21 10,625 12,002
</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 index does
not actually hold a portfolio of securities and therefore does 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 4
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY BUFFER ETF - FEBRUARY (FFEB)
The investment objective of the FT Cboe Vest U.S. Equity Buffer ETF - February
(the "Fund") is to seek to provide investors with returns (before fees, expenses
and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF Trust (the
"Underlying ETF"), up to a predetermined upside cap of 15.85% (before fees,
expenses and taxes) and 15.00% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against the first 10% (before
fees, expenses and taxes) of Underlying ETF losses, over the period from
February 22, 2021 to February 18, 2022 (the "Outcome Period")*. Under normal
market conditions, the Fund will invest substantially all of its assets in
FLexible EXchange(R) Options ("FLEX Options") that reference the price
performance of the Underlying ETF. Subsequent Outcome Periods will begin on the
day the prior Outcome Period ends and will end on the approximate one-year
anniversary of that new Outcome Period. On the first day of each new Outcome
Period, the Fund resets by investing in a new set of FLEX Options that will
provide a new cap for the new Outcome Period. This means that the cap will
change for each Outcome Period based upon prevailing market conditions at the
beginning of each Outcome Period. The Fund will be perpetually offered and not
terminate after the initial or any subsequent Outcome Period. An investor that
purchases Fund shares other than on the first day of an Outcome Period and/or
sells Fund shares prior to the end of an Outcome Period may experience results
that are very different from the target outcomes sought by the Fund for that
Outcome Period. The Fund is classified as non-diversified under the Investment
Company Act of 1940, as amended. The shares of the Fund are listed and traded on
the Cboe BZX Exchange, Inc., under the ticker symbol "FFEB."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
1 Year Ended (2/21/20) (2/21/20)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 19.00% 13.98% 22.10%
Market Price 18.49% 13.78% 21.77%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 29.21% 22.07% 35.50%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
FEBRUARY 21, 2020 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Buffer ETF - February Price Return
<S> <C> <C>
2/21/20 $10,000 $10,000
2/29/20 9,214 8,851
8/31/20 10,260 10,488
2/28/21 10,825 11,418
8/31/21 12,210 13,550
</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 index does
not actually hold a portfolio of securities and therefore does 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.
-----------------------------
* Prior to February 22, 2021, the Fund's investment objective included an
upside cap of 10.75% (before fees, expenses and taxes) and 9.90% (after
fees and expenses, excluding brokerage commissions, trading fees, taxes
and extraordinary expenses not included in the Fund's management fee) and
an Outcome Period of February 24, 2020 to February 19, 2021.
Page 5
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - FEBRUARY (DFEB)
The investment objective of the FT Cboe Vest U.S. Equity Deep Buffer ETF -
February (the "Fund") is to seek to provide investors with returns (before fees,
expenses and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF
Trust (the "Underlying ETF"), up to a predetermined upside cap of 8.85% (before
fees, expenses and taxes) and 8.00% (after fees and expenses, excluding
brokerage commissions, trading fees, taxes and extraordinary expenses not
included in the Fund's management fee), while providing a buffer against
Underlying ETF losses between -5% and -30% (before fees, expenses and taxes),
over the period from February 22, 2021 to February 18, 2022 (the "Outcome
Period")*. Under normal market conditions, the Fund will invest substantially
all of its assets in FLexible EXchange(R) Options ("FLEX Options") that
reference the price performance of the Underlying ETF. Subsequent Outcome
Periods will begin on the day the prior Outcome Period ends and will end on the
approximate one-year anniversary of that new Outcome Period. On the first day of
each new Outcome Period, the Fund resets by investing in a new set of FLEX
Options that will provide a new cap for the new Outcome Period. This means that
the cap will change for each Outcome Period based upon prevailing market
conditions at the beginning of each Outcome Period. The Fund will be perpetually
offered and not terminate after the initial or any subsequent Outcome Period. An
investor that purchases Fund shares other than on the first day of an Outcome
Period and/or sells Fund shares prior to the end of an Outcome Period may
experience results that are very different from the target outcomes sought by
the Fund for that Outcome Period. The Fund is classified as non-diversified
under the Investment Company Act of 1940, as amended. The shares of the Fund are
listed and traded on the Cboe BZX Exchange, Inc., under the ticker symbol
"DFEB."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
1 Year Ended (2/21/20) (2/21/20)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 11.01% 8.36% 13.04%
Market Price 10.73% 8.36% 13.04%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 29.21% 22.07% 35.50%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
FEBRUARY 21, 2020 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Deep Buffer ETF - February Price Return
<S> <C> <C>
2/21/20 $10,000 $10,000
2/29/20 9,462 8,851
8/31/20 10,182 10,488
2/28/21 10,600 11,418
8/31/21 11,304 13,550
</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 index does
not actually hold a portfolio of securities and therefore does 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.
-----------------------------
* Prior to February 22, 2021, the Fund's investment objective included an
upside cap of 7.50% (before fees, expenses and taxes) and 6.65% (after
fees and expenses, excluding brokerage commissions, trading fees, taxes
and extraordinary expenses not included in the Fund's management fee) and
an Outcome Period of February 24, 2020 to February 19, 2021.
Page 6
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY BUFFER ETF - MARCH (FMAR)
The investment objective of the FT Cboe Vest U.S. Equity Buffer ETF - March (the
"Fund") is to seek to provide investors with returns (before fees, expenses and
taxes) that match the price return of the SPDR(R) S&P 500(R) ETF Trust (the
"Underlying ETF"), up to a predetermined upside cap of 14.20% (before fees,
expenses and taxes) and 13.35% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against the first 10% (before
fees, expenses and taxes) of Underlying ETF losses, over the period from March
22, 2021 to March 18, 2022 (the "Outcome Period"). Under normal market
conditions, the Fund will invest substantially all of its assets in FLexible
EXchange(R) Options ("FLEX Options") that reference the price performance of the
Underlying ETF. Subsequent Outcome Periods will begin on the day the prior
Outcome Period ends and will end on the approximate one-year anniversary of that
new Outcome Period. On the first day of each new Outcome Period, the Fund resets
by investing in a new set of FLEX Options that will provide a new cap for the
new Outcome Period. This means that the cap will change for each Outcome Period
based upon prevailing market conditions at the beginning of each Outcome Period.
The Fund will be perpetually offered and not terminate after the initial or any
subsequent Outcome Period. An investor that purchases Fund shares other than on
the first day of an Outcome Period and/or sells Fund shares prior to the end of
an Outcome Period may experience results that are very different from the target
outcomes sought by the Fund for that Outcome Period. The Fund is classified as
non-diversified under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on the Cboe BZX Exchange, Inc., under the
ticker symbol "FMAR."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(3/19/21)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 9.46%
Market Price 9.22%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 15.58%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
MARCH 19, 2021 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Buffer ETF - March Price Return
<S> <C> <C>
3/19/21 $10,000 $10,000
8/31/21 10,946 11,558
</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 index does
not actually hold a portfolio of securities and therefore does 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)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - MARCH (DMAR)
The investment objective of the FT Cboe Vest U.S. Equity Deep Buffer ETF - March
(the "Fund") is to seek to provide investors with returns (before fees, expenses
and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF Trust (the
"Underlying ETF"), up to a predetermined upside cap of 9.30% (before fees,
expenses and taxes) and 8.45% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against Underlying ETF losses
between -5% and -30% (before fees, expenses and taxes), over the period from
March 22, 2021 to March 18, 2022 (the "Outcome Period"). Under normal market
conditions, the Fund will invest substantially all of its assets in FLexible
EXchange(R) Options ("FLEX Options") that reference the price performance of the
Underlying ETF. Subsequent Outcome Periods will begin on the day the prior
Outcome Period ends and will end on the approximate one-year anniversary of that
new Outcome Period. On the first day of each new Outcome Period, the Fund resets
by investing in a new set of FLEX Options that will provide a new cap for the
new Outcome Period. This means that the cap will change for each Outcome Period
based upon prevailing market conditions at the beginning of each Outcome Period.
The Fund will be perpetually offered and not terminate after the initial or any
subsequent Outcome Period. An investor that purchases Fund shares other than on
the first day of an Outcome Period and/or sells Fund shares prior to the end of
an Outcome Period may experience results that are very different from the target
outcomes sought by the Fund for that Outcome Period. The Fund is classified as
non-diversified under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on the Cboe BZX Exchange, Inc., under the
ticker symbol "DMAR."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(3/19/21)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 6.25%
Market Price 6.01%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 15.58%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
MARCH 19, 2021 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Deep Buffer ETF - March Price Return
<S> <C> <C>
3/19/21 $10,000 $10,000
8/31/21 10,625 11,558
</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 index does
not actually hold a portfolio of securities and therefore does 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 8
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY BUFFER ETF - APRIL (FAPR)
The investment objective of the FT Cboe Vest U.S. Equity Buffer ETF - April (the
"Fund") is to seek to provide investors with returns (before fees, expenses and
taxes) that match the price return of the SPDR(R) S&P 500(R) ETF Trust (the
"Underlying ETF"), up to a predetermined upside cap of 12.00% (before fees,
expenses and taxes) and 11.15% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against the first 10% (before
fees, expenses and taxes) of Underlying ETF losses, over the period from April
19, 2021 to April 14, 2022 (the "Outcome Period"). Under normal market
conditions, the Fund will invest substantially all of its assets in FLexible
EXchange(R) Options ("FLEX Options") that reference the price performance of the
Underlying ETF. Subsequent Outcome Periods will begin on the day the prior
Outcome Period ends and will end on the approximate one-year anniversary of that
new Outcome Period. On the first day of each new Outcome Period, the Fund resets
by investing in a new set of FLEX Options that will provide a new cap for the
new Outcome Period. This means that the cap will change for each Outcome Period
based upon prevailing market conditions at the beginning of each Outcome Period.
The Fund will be perpetually offered and not terminate after the initial or any
subsequent Outcome Period. An investor that purchases Fund shares other than on
the first day of an Outcome Period and/or sells Fund shares prior to the end of
an Outcome Period may experience results that are very different from the target
outcomes sought by the Fund for that Outcome Period. The Fund is classified as
non-diversified under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on the Cboe BZX Exchange, Inc., under the
ticker symbol "FAPR."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(4/16/21)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 5.56%
Market Price 5.26%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 8.06%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
APRIL 16, 2021 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Buffer ETF - April Price Return
<S> <C> <C>
4/16/21 $10,000 $10,000
8/31/21 10,556 10,806
</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 index does
not actually hold a portfolio of securities and therefore does 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)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - APRIL (DAPR)
The investment objective of the FT Cboe Vest U.S. Equity Deep Buffer ETF - April
(the "Fund") is to seek to provide investors with returns (before fees, expenses
and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF Trust (the
"Underlying ETF"), up to a predetermined upside cap of 7.50% (before fees,
expenses and taxes) and 6.65% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against Underlying ETF losses
between -5% and -30% (before fees, expenses and taxes), over the period from
April 19, 2021 to April 14, 2022 (the "Outcome Period"). Under normal market
conditions, the Fund will invest substantially all of its assets in FLexible
EXchange(R) Options ("FLEX Options") that reference the price performance of the
Underlying ETF. Subsequent Outcome Periods will begin on the day the prior
Outcome Period ends and will end on the approximate one-year anniversary of that
new Outcome Period. On the first day of each new Outcome Period, the Fund resets
by investing in a new set of FLEX Options that will provide a new cap for the
new Outcome Period. This means that the cap will change for each Outcome Period
based upon prevailing market conditions at the beginning of each Outcome Period.
The Fund will be perpetually offered and not terminate after the initial or any
subsequent Outcome Period. An investor that purchases Fund shares other than on
the first day of an Outcome Period and/or sells Fund shares prior to the end of
an Outcome Period may experience results that are very different from the target
outcomes sought by the Fund for that Outcome Period. The Fund is classified as
non-diversified under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on the Cboe BZX Exchange, Inc., under the
ticker symbol "DAPR."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(4/16/21)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 3.46%
Market Price 3.23%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 8.06%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
APRIL 16, 2021 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Deep Buffer ETF - February Price Return
<S> <C> <C>
4/16/21 $10,000 $10,000
8/31/21 10,346 10,806
</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 index does
not actually hold a portfolio of securities and therefore does 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 10
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY BUFFER ETF - MAY (FMAY)
The investment objective of the FT Cboe Vest U.S. Equity Buffer ETF - May (the
"Fund") is to seek to provide investors with returns (before fees, expenses and
taxes) that match the price return of the SPDR(R) S&P 500(R) ETF Trust (the
"Underlying ETF"), up to a predetermined upside cap of 12.50% (before fees,
expenses and taxes) and 11.65% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against the first 10% (before
fees, expenses and taxes) of Underlying ETF losses, over the period from May 24,
2021 to May 20, 2022 (the "Outcome Period")*. Under normal market conditions,
the Fund will invest substantially all of its assets in FLexible EXchange(R)
Options ("FLEX Options") that reference the price performance of the Underlying
ETF. Subsequent Outcome Periods will begin on the day the prior Outcome Period
ends and will end on the approximate one-year anniversary of that new Outcome
Period. On the first day of each new Outcome Period, the Fund resets by
investing in a new set of FLEX Options that will provide a new cap for the new
Outcome Period. This means that the cap will change for each Outcome Period
based upon prevailing market conditions at the beginning of each Outcome Period.
The Fund will be perpetually offered and not terminate after the initial or any
subsequent Outcome Period. An investor that purchases Fund shares other than on
the first day of an Outcome Period and/or sells Fund shares prior to the end of
an Outcome Period may experience results that are very different from the target
outcomes sought by the Fund for that Outcome Period. The Fund is classified as
non-diversified under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on the Cboe BZX Exchange, Inc., under the
ticker symbol "FMAY."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
1 Year Ended (5/15/20) (5/15/20)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 11.41% 17.25% 22.91%
Market Price 11.61% 17.06% 22.64%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 29.21% 42.28% 57.93%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
MAY 15, 2020 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Buffer ETF - May Price Return
<S> <C> <C>
5/15/20 $10,000 $10,000
8/31/20 11,032 12,223
2/28/21 11,454 13,308
8/31/21 12,291 15,793
</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 index does
not actually hold a portfolio of securities and therefore does 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.
-----------------------------
* Prior to May 24, 2021, the Fund's investment objective included an upside
cap of 17.07% (before fees, expenses and taxes) and 16.21% (after fees and
expenses, excluding brokerage commissions, trading fees, taxes and
extraordinary expenses not included in the Fund's management fee) and an
Outcome Period of May 18, 2020 to May 21, 2021.
Page 11
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - MAY (DMAY)
The investment objective of the FT Cboe Vest U.S. Equity Deep Buffer ETF - May
(the "Fund") is to seek to provide investors with returns (before fees, expenses
and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF Trust (the
"Underlying ETF"), up to a predetermined upside cap of 7.60% (before fees,
expenses and taxes) and 6.75% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against Underlying ETF losses
between -5% and -30% (before fees, expenses and taxes), over the period from May
24, 2021 to May 20, 2022 (the "Outcome Period")*. Under normal market
conditions, the Fund will invest substantially all of its assets in FLexible
EXchange(R) Options ("FLEX Options") that reference the price performance of the
Underlying ETF. Subsequent Outcome Periods will begin on the day the prior
Outcome Period ends and will end on the approximate one-year anniversary of that
new Outcome Period. On the first day of each new Outcome Period, the Fund resets
by investing in a new set of FLEX Options that will provide a new cap for the
new Outcome Period. This means that the cap will change for each Outcome Period
based upon prevailing market conditions at the beginning of each Outcome Period.
The Fund will be perpetually offered and not terminate after the initial or any
subsequent Outcome Period. An investor that purchases Fund shares other than on
the first day of an Outcome Period and/or sells Fund shares prior to the end of
an Outcome Period may experience results that are very different from the target
outcomes sought by the Fund for that Outcome Period. The Fund is classified as
non-diversified under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on the Cboe BZX Exchange, Inc., under the
ticker symbol "DMAY."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
1 Year Ended (5/15/20) (5/15/20)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 6.50% 9.78% 12.85%
Market Price 6.65% 9.53% 12.52%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 29.21% 42.28% 57.93%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
MAY 15, 2020 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Deep Buffer ETF - May Price Return
<S> <C> <C>
5/15/20 $10,000 $10,000
8/31/20 10,596 12,223
2/28/21 10,843 13,308
8/31/21 11,284 15,793
</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 index does
not actually hold a portfolio of securities and therefore does 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.
-----------------------------
* Prior to May 24, 2021, the Fund's investment objective included an upside
cap of 9.95% (before fees, expenses and taxes) and 9.09% (after fees and
expenses, excluding brokerage commissions, trading fees, taxes and
extraordinary expenses not included in the Fund's management fee) and an
Outcome Period of May 18, 2020 to May 21, 2021.
Page 12
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY BUFFER ETF - JUNE (FJUN)
The investment objective of the FT Cboe Vest U.S. Equity Buffer ETF - June (the
"Fund") is to seek to provide investors with returns (before fees, expenses and
taxes) that match the price return of the SPDR(R) S&P 500(R) ETF Trust (the
"Underlying ETF"), up to a predetermined upside cap of 11.70% (before fees,
expenses and taxes) and 10.85% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against the first 10% (before
fees, expenses and taxes) of Underlying ETF losses, over the period from June
21, 2021 to June 17, 2022 (the "Outcome Period")*. Under normal market
conditions, the Fund will invest substantially all of its assets in FLexible
EXchange(R) Options ("FLEX Options") that reference the price performance of the
Underlying ETF. Subsequent Outcome Periods will begin on the day the prior
Outcome Period ends and will end on the approximate one-year anniversary of that
new Outcome Period. On the first day of each new Outcome Period, the Fund resets
by investing in a new set of FLEX Options that will provide a new cap for the
new Outcome Period. This means that the cap will change for each Outcome Period
based upon prevailing market conditions at the beginning of each Outcome Period.
The Fund will be perpetually offered and not terminate after the initial or any
subsequent Outcome Period. An investor that purchases Fund shares other than on
the first day of an Outcome Period and/or sells Fund shares prior to the end of
an Outcome Period may experience results that are very different from the target
outcomes sought by the Fund for that Outcome Period. The Fund is classified as
non-diversified under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on the Cboe BZX Exchange, Inc., under the
ticker symbol "FJUN."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
1 Year Ended (6/19/20) (6/19/20)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 13.85% 18.46% 22.55%
Market Price 13.82% 18.25% 22.28%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 29.21% 37.08% 46.00%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
JUNE 19, 2020 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Buffer ETF - June Price Return
<S> <C> <C>
5/19/20 $10,000 $10,000
8/31/20 10,764 11,300
2/28/21 11,342 12,303
8/31/21 12,255 14,600
</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 index does
not actually hold a portfolio of securities and therefore does 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.
-----------------------------
* Prior to June 21, 2021, the Fund's investment objective included an upside
cap of 17.72% (before fees, expenses and taxes) and 16.87% (after fees and
expenses, excluding brokerage commissions, trading fees, taxes and
extraordinary expenses not included in the Fund's management fee) and an
Outcome Period of June 22, 2020 to June 18, 2021.
Page 13
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - JUNE (DJUN)
The investment objective of the FT Cboe Vest U.S. Equity Deep Buffer ETF - June
(the "Fund") is to seek to provide investors with returns (before fees, expenses
and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF Trust (the
"Underlying ETF"), up to a predetermined upside cap of 7.06% (before fees,
expenses and taxes) and 6.21% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against Underlying ETF losses
between -5% and -30% (before fees, expenses and taxes), over the period from
June 21, 2021 to June 17, 2022 (the "Outcome Period")*. Under normal market
conditions, the Fund will invest substantially all of its assets in FLexible
EXchange(R) Options ("FLEX Options") that reference the price performance of the
Underlying ETF. Subsequent Outcome Periods will begin on the day the prior
Outcome Period ends and will end on the approximate one-year anniversary of that
new Outcome Period. On the first day of each new Outcome Period, the Fund resets
by investing in a new set of FLEX Options that will provide a new cap for the
new Outcome Period. This means that the cap will change for each Outcome Period
based upon prevailing market conditions at the beginning of each Outcome Period.
The Fund will be perpetually offered and not terminate after the initial or any
subsequent Outcome Period. An investor that purchases Fund shares other than on
the first day of an Outcome Period and/or sells Fund shares prior to the end of
an Outcome Period may experience results that are very different from the target
outcomes sought by the Fund for that Outcome Period. The Fund is classified as
non-diversified under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on the Cboe BZX Exchange, Inc., under the
ticker symbol "DJUN."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
1 Year Ended (6/19/20) (6/19/20)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 7.65% 10.34% 12.53%
Market Price 7.64% 10.15% 12.30%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 29.21% 37.08% 46.00%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
JUNE 19, 2020 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Deep Buffer ETF - June Price Return
<S> <C> <C>
6/19/20 $10,000 $10,000
8/31/20 10,453 11,300
2/28/21 10,750 12,303
8/31/21 11,253 14,600
</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 index does
not actually hold a portfolio of securities and therefore does 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.
-----------------------------
* Prior to June 21, 2021, the Fund's investment objective included an upside
cap of 10.28% (before fees, expenses and taxes) and 9.43% (after fees and
expenses, excluding brokerage commissions, trading fees, taxes and
extraordinary expenses not included in the Fund's management fee) and an
Outcome Period of June 22, 2020 to June 18, 2021.
Page 14
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY BUFFER ETF - JULY (FJUL)
The investment objective of the FT Cboe Vest U.S. Equity Buffer ETF - July (the
"Fund") is to seek to provide investors with returns (before fees, expenses and
taxes) that match the price return of the SPDR(R) S&P 500(R) ETF Trust (the
"Underlying ETF"), up to a predetermined upside cap of 11.70% (before fees,
expenses and taxes) and 10.85% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against the first 10% (before
fees, expenses and taxes) of Underlying ETF losses, over the period from July
19, 2021 to July 15, 2022 (the "Outcome Period")*. Under normal market
conditions, the Fund will invest substantially all of its assets in FLexible
EXchange(R) Options ("FLEX Options") that reference the price performance of the
Underlying ETF. Subsequent Outcome Periods will begin on the day the prior
Outcome Period ends and will end on the approximate one-year anniversary of that
new Outcome Period. On the first day of each new Outcome Period, the Fund resets
by investing in a new set of FLEX Options that will provide a new cap for the
new Outcome Period. This means that the cap will change for each Outcome Period
based upon prevailing market conditions at the beginning of each Outcome Period.
The Fund will be perpetually offered and not terminate after the initial or any
subsequent Outcome Period. An investor that purchases Fund shares other than on
the first day of an Outcome Period and/or sells Fund shares prior to the end of
an Outcome Period may experience results that are very different from the target
outcomes sought by the Fund for that Outcome Period. The Fund is classified as
non-diversified under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on the Cboe BZX Exchange, Inc., under the
ticker symbol "FJUL."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
1 Year Ended (7/17/20) (7/17/20)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 12.72% 15.72% 17.82%
Market Price 12.69% 15.40% 17.46%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 29.21% 35.14% 40.25%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
JULY 17, 2020 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Buffer ETF - July Price Return
<S> <C> <C>
7/17/20 $10,000 $10,000
8/31/20 10,453 10,855
2/28/21 10,992 11,819
8/31/21 11,782 14,025
</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 index does
not actually hold a portfolio of securities and therefore does 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.
-----------------------------
* Prior to July 19, 2021, the Fund's investment objective included an upside
cap of 14.95% (before fees, expenses and taxes) and 14.10% (after fees and
expenses, excluding brokerage commissions, trading fees, taxes and
extraordinary expenses not included in the Fund's management fee) and an
Outcome Period of July 20, 2020 to July 16, 2021.
Page 15
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - JULY (DJUL)
The investment objective of the FT Cboe Vest U.S. Equity Deep Buffer ETF - July
(the "Fund") is to seek to provide investors with returns (before fees, expenses
and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF Trust (the
"Underlying ETF"), up to a predetermined upside cap of 7.30% (before fees,
expenses and taxes) and 6.45% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against Underlying ETF losses
between -5% and -30% (before fees, expenses and taxes), over the period from
July 19, 2021 to July 15, 2022 (the "Outcome Period")*. Under normal market
conditions, the Fund will invest substantially all of its assets in FLexible
EXchange(R) Options ("FLEX Options") that reference the price performance of the
Underlying ETF. Subsequent Outcome Periods will begin on the day the prior
Outcome Period ends and will end on the approximate one-year anniversary of that
new Outcome Period. On the first day of each new Outcome Period, the Fund resets
by investing in a new set of FLEX Options that will provide a new cap for the
new Outcome Period. This means that the cap will change for each Outcome Period
based upon prevailing market conditions at the beginning of each Outcome Period.
The Fund will be perpetually offered and not terminate after the initial or any
subsequent Outcome Period. An investor that purchases Fund shares other than on
the first day of an Outcome Period and/or sells Fund shares prior to the end of
an Outcome Period may experience results that are very different from the target
outcomes sought by the Fund for that Outcome Period. The Fund is classified as
non-diversified under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on the Cboe BZX Exchange, Inc., under the
ticker symbol "DJUL."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
1 Year Ended (7/17/20) (7/17/20)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 7.14% 8.58% 9.69%
Market Price 7.12% 8.44% 9.52%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 29.21% 35.14% 40.25%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
JULY 17, 2020 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Deep Buffer ETF - July Price Return
<S> <C> <C>
7/17/20 $10,000 $10,000
8/31/20 10,238 10,855
2/28/21 10,546 11,819
8/31/21 10,969 14,025
</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 index does
not actually hold a portfolio of securities and therefore does 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.
-----------------------------
* Prior to July 19, 2021, the Fund's investment objective included an upside
cap of 8.40% (before fees, expenses and taxes) and 7.55% (after fees and
expenses, excluding brokerage commissions, trading fees, taxes and
extraordinary expenses not included in the Fund's management fee) and an
Outcome Period of July 20, 2020 to July 16, 2021.
Page 16
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY BUFFER ETF - AUGUST (FAUG)
The investment objective of the FT Cboe Vest U.S. Equity Buffer ETF - August
(the "Fund") is to seek to provide investors with returns (before fees, expenses
and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF Trust (the
"Underlying ETF"), up to a predetermined upside cap of 11.64% (before fees,
expenses and taxes) and 10.79% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against the first 10% (before
fees, expenses and taxes) of Underlying ETF losses, over the period from August
23, 2021 to August 19, 2022 (the "Outcome Period")*. Under normal market
conditions, the Fund will invest substantially all of its assets in FLexible
EXchange(R) Options ("FLEX Options") that reference the price performance of the
Underlying ETF. Subsequent Outcome Periods will begin on the day the prior
Outcome Period ends and will end on the approximate one-year anniversary of that
new Outcome Period. On the first day of each new Outcome Period, the Fund resets
by investing in a new set of FLEX Options that will provide a new cap for the
new Outcome Period. This means that the cap will change for each Outcome Period
based upon prevailing market conditions at the beginning of each Outcome Period.
The Fund will be perpetually offered and not terminate after the initial or any
subsequent Outcome Period. An investor that purchases Fund shares other than on
the first day of an Outcome Period and/or sells Fund shares prior to the end of
an Outcome Period may experience results that are very different from the target
outcomes sought by the Fund for that Outcome Period. The Fund is classified as
non-diversified under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on the Cboe BZX Exchange, Inc., under the
ticker symbol "FAUG."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
1 Year Ended (11/6/19) (11/6/19)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 13.81% 12.84% 24.58%
Market Price 13.70% 12.86% 24.62%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 29.21% 23.62% 46.99%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
NOVEMBER 6, 2019 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Buffer ETF - August Price Return
<S> <C> <C>
11/6/19 $10,000 $10,000
2/29/20 9,764 9,602
8/31/20 10,947 11,377
2/28/21 11,615 12,387
8/31/21 12,458 14,699
</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 index does
not actually hold a portfolio of securities and therefore does 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.
-----------------------------
* Prior to August 24, 2020, the Fund's investment objective included an
upside cap of 8.60% (before fees, expenses and taxes) and 7.93% (after
fees and expenses, excluding brokerage commissions, trading fees, taxes
and extraordinary expenses not including the Fund's management fee) and an
Outcome Period of November 7, 2019 to August 21, 2020.
Page 17
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - AUGUST (DAUG)
The investment objective of the FT Cboe Vest U.S. Equity Deep Buffer ETF -
August (the "Fund") is to seek to provide investors with returns (before fees,
expenses and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF
Trust (the "Underlying ETF"), up to a predetermined upside cap of 7.37% (before
fees, expenses and taxes) and 6.52% (after fees and expenses, excluding
brokerage commissions, trading fees, taxes and extraordinary expenses not
included in the Fund's management fee), while providing a buffer against
Underlying ETF losses between -5% and -30% (before fees, expenses and taxes),
over the period from August 23, 2021 to August 19, 2022 (the "Outcome Period")*.
Under normal market conditions, the Fund will invest substantially all of its
assets in FLexible EXchange(R) Options ("FLEX Options") that reference the price
performance of the Underlying ETF. Subsequent Outcome Periods will begin on the
day the prior Outcome Period ends and will end on the approximate one-year
anniversary of that new Outcome Period. On the first day of each new Outcome
Period, the Fund resets by investing in a new set of FLEX Options that will
provide a new cap for the new Outcome Period. This means that the cap will
change for each Outcome Period based upon prevailing market conditions at the
beginning of each Outcome Period. The Fund will be perpetually offered and not
terminate after the initial or any subsequent Outcome Period. An investor that
purchases Fund shares other than on the first day of an Outcome Period and/or
sells Fund shares prior to the end of an Outcome Period may experience results
that are very different from the target outcomes sought by the Fund for that
Outcome Period. The Fund is classified as non-diversified under the Investment
Company Act of 1940, as amended. The shares of the Fund are listed and traded on
the Cboe BZX Exchange, Inc., under the ticker symbol "DAUG."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
1 Year Ended (11/6/19) (11/6/19)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 8.12% 8.23% 15.48%
Market Price 7.93% 8.13% 15.28%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 29.21% 23.62% 46.99%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
NOVEMBER 6, 2019 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Deep Buffer ETF - August Price Return
<S> <C> <C>
11/6/19 $10,000 $10,000
2/29/20 9,804 9,602
8/31/20 10,681 11,377
2/28/21 11,056 12,387
8/31/21 11,548 14,699
</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 index does
not actually hold a portfolio of securities and therefore does 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.
-----------------------------
* Prior to August 24, 2020, the Fund's investment objective included an
upside cap of 6.58% (before fees, expenses and taxes) and 5.91% (after
fees and expenses, excluding brokerage commissions, trading fees, taxes
and extraordinary expenses not including the Fund's management fee) and an
Outcome Period of November 7, 2019 to August 21, 2020.
Page 18
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY BUFFER ETF - SEPTEMBER (FSEP)
The investment objective of the FT Cboe Vest U.S. Equity Buffer ETF - September
(the "Fund") is to seek to provide investors with returns (before fees, expenses
and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF Trust (the
"Underlying ETF"), up to a predetermined upside cap of 12.20% (before fees,
expenses and taxes) and 11.35% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against the first 10% (before
fees, expenses and taxes) of Underlying ETF losses, over the period from
September 20, 2021 to September 16, 2022 (the "Outcome Period"). Under normal
market conditions, the Fund will invest substantially all of its assets in
FLexible EXchange(R) Options ("FLEX Options") that reference the price
performance of the Underlying ETF. Subsequent Outcome Periods will begin on the
day the prior Outcome Period ends and will end on the approximate one-year
anniversary of that new Outcome Period. On the first day of each new Outcome
Period, the Fund resets by investing in a new set of FLEX Options that will
provide a new cap for the new Outcome Period. This means that the cap will
change for each Outcome Period based upon prevailing market conditions at the
beginning of each Outcome Period. The Fund will be perpetually offered and not
terminate after the initial or any subsequent Outcome Period. An investor that
purchases Fund shares other than on the first day of an Outcome Period and/or
sells Fund shares prior to the end of an Outcome Period may experience results
that are very different from the target outcomes sought by the Fund for that
Outcome Period. The Fund is classified as non-diversified under the Investment
Company Act of 1940, as amended. The shares of the Fund are listed and traded on
the Cboe BZX Exchange, Inc., under the ticker symbol "FSEP."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(9/18/20)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 15.76%
Market Price 15.69%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 36.25%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 18, 2020 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Buffer ETF - September Price Return
<S> <C> <C>
9/18/20 $10,000 $10,000
2/28/21 10,887 11,481
8/31/21 11,576 13,625
</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 index does
not actually hold a portfolio of securities and therefore does 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)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - SEPTEMBER (DSEP)
The investment objective of the FT Cboe Vest U.S. Equity Deep Buffer ETF -
September (the "Fund") is to seek to provide investors with returns (before
fees, expenses and taxes) that match the price return of the SPDR(R) S&P 500(R)
ETF Trust (the "Underlying ETF"), up to a predetermined upside cap of 7.43%
(before fees, expenses and taxes) and 6.58% (after fees and expenses, excluding
brokerage commissions, trading fees, taxes and extraordinary expenses not
included in the Fund's management fee), while providing a buffer against
Underlying ETF losses between -5% and -30% (before fees, expenses and taxes),
over the period from September 20, 2021 to September 16, 2022 (the "Outcome
Period"). Under normal market conditions, the Fund will invest substantially all
of its assets in FLexible EXchange(R) Options ("FLEX Options") that reference
the price performance of the Underlying ETF. Subsequent Outcome Periods will
begin on the day the prior Outcome Period ends and will end on the approximate
one-year anniversary of that new Outcome Period. On the first day of each new
Outcome Period, the Fund resets by investing in a new set of FLEX Options that
will provide a new cap for the new Outcome Period. This means that the cap will
change for each Outcome Period based upon prevailing market conditions at the
beginning of each Outcome Period. The Fund will be perpetually offered and not
terminate after the initial or any subsequent Outcome Period. An investor that
purchases Fund shares other than on the first day of an Outcome Period and/or
sells Fund shares prior to the end of an Outcome Period may experience results
that are very different from the target outcomes sought by the Fund for that
Outcome Period. The Fund is classified as non-diversified under the Investment
Company Act of 1940, as amended. The shares of the Fund are listed and traded on
the Cboe BZX Exchange, Inc., under the ticker symbol "DSEP."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(9/18/20)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 8.53%
Market Price 8.80%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 36.25%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 18, 2020 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Deep Buffer ETF - September Price Return
<S> <C> <C>
9/18/20 $10,000 $10,000
2/28/21 10,494 11,481
8/31/21 10,853 13,625
</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 index does
not actually hold a portfolio of securities and therefore does 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 20
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY BUFFER ETF - OCTOBER (FOCT)
The investment objective of the FT Cboe Vest U.S. Equity Buffer ETF - October
(the "Fund") is to seek to provide investors with returns (before fees, expenses
and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF Trust (the
"Underlying ETF"), up to a predetermined upside cap of 16.22% (before fees,
expenses and taxes) and 15.37% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against the first 10% (before
fees, expenses and taxes) of Underlying ETF losses, over the period from October
19, 2020 to October 15, 2021 (the "Outcome Period"). Under normal market
conditions, the Fund will invest substantially all of its assets in FLexible
EXchange(R) Options ("FLEX Options") that reference the price performance of the
Underlying ETF. Subsequent Outcome Periods will begin on the day the prior
Outcome Period ends and will end on the approximate one-year anniversary of that
new Outcome Period. On the first day of each new Outcome Period, the Fund resets
by investing in a new set of FLEX Options that will provide a new cap for the
new Outcome Period. This means that the cap will change for each Outcome Period
based upon prevailing market conditions at the beginning of each Outcome Period.
The Fund will be perpetually offered and not terminate after the initial or any
subsequent Outcome Period. An investor that purchases Fund shares other than on
the first day of an Outcome Period and/or sells Fund shares prior to the end of
an Outcome Period may experience results that are very different from the target
outcomes sought by the Fund for that Outcome Period. The Fund is classified as
non-diversified under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on the Cboe BZX Exchange, Inc., under the
ticker symbol "FOCT."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(10/16/20)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 15.17%
Market Price 15.10%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 29.82%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
OCTOBER 16, 2020 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Buffer ETF - October Price Return
<S> <C> <C>
10/16/20 $10,000 $10,000
2/28/21 10,639 10,940
8/31/21 11,517 12,982
</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 index does
not actually hold a portfolio of securities and therefore does 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)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - OCTOBER (DOCT)
The investment objective of the FT Cboe Vest U.S. Equity Deep Buffer ETF -
October (the "Fund") is to seek to provide investors with returns (before fees,
expenses and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF
Trust (the "Underlying ETF"), up to a predetermined upside cap of 9.34% (before
fees, expenses and taxes) and 8.49% (after fees and expenses, excluding
brokerage commissions, trading fees, taxes and extraordinary expenses not
included in the Fund's management fee), while providing a buffer against
Underlying ETF losses between -5% and -30% (before fees, expenses and taxes),
over the period from October 19, 2020 to October 15, 2021 (the "Outcome
Period"). Under normal market conditions, the Fund will invest substantially all
of its assets in FLexible EXchange(R) Options ("FLEX Options") that reference
the price performance of the Underlying ETF. Subsequent Outcome Periods will
begin on the day the prior Outcome Period ends and will end on the approximate
one-year anniversary of that new Outcome Period. On the first day of each new
Outcome Period, the Fund resets by investing in a new set of FLEX Options that
will provide a new cap for the new Outcome Period. This means that the cap will
change for each Outcome Period based upon prevailing market conditions at the
beginning of each Outcome Period. The Fund will be perpetually offered and not
terminate after the initial or any subsequent Outcome Period. An investor that
purchases Fund shares other than on the first day of an Outcome Period and/or
sells Fund shares prior to the end of an Outcome Period may experience results
that are very different from the target outcomes sought by the Fund for that
Outcome Period. The Fund is classified as non-diversified under the Investment
Company Act of 1940, as amended. The shares of the Fund are listed and traded on
the Cboe BZX Exchange, Inc., under the ticker symbol "DOCT."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(10/16/20)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 8.50%
Market Price 8.50%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 29.82%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
OCTOBER 16, 2020 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Deep Buffer ETF - October Price Return
<S> <C> <C>
10/16/20 $10,000 $10,000
2/28/21 10,372 10,940
8/31/21 10,850 12,982
</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 index does
not actually hold a portfolio of securities and therefore does 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 22
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY BUFFER ETF - NOVEMBER (FNOV)
The investment objective of the FT Cboe Vest U.S. Equity Buffer ETF - November
(the "Fund") is to seek to provide investors with returns (before fees, expenses
and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF Trust (the
"Underlying ETF"), up to a predetermined upside cap of 13.72% (before fees,
expenses and taxes) and 12.87% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against the first 10% (before
fees, expenses and taxes) of Underlying ETF losses, over the period from
November 23, 2020 to November 19, 2021 (the "Outcome Period")*. Under normal
market conditions, the Fund will invest substantially all of its assets in
FLexible EXchange(R) Options ("FLEX Options") that reference the price
performance of the Underlying ETF. Subsequent Outcome Periods will begin on the
day the prior Outcome Period ends and will end on the approximate one-year
anniversary of that new Outcome Period. On the first day of each new Outcome
Period, the Fund resets by investing in a new set of FLEX Options that will
provide a new cap for the new Outcome Period. This means that the cap will
change for each Outcome Period based upon prevailing market conditions at the
beginning of each Outcome Period. The Fund will be perpetually offered and not
terminate after the initial or any subsequent Outcome Period. An investor that
purchases Fund shares other than on the first day of an Outcome Period and/or
sells Fund shares prior to the end of an Outcome Period may experience results
that are very different from the target outcomes sought by the Fund for that
Outcome Period. The Fund is classified as non-diversified under the Investment
Company Act of 1940, as amended. The shares of the Fund are listed and traded on
the Cboe BZX Exchange, Inc., under the ticker symbol "FNOV."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
1 Year Ended (11/15/19) (11/15/19)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 16.45% 13.41% 25.33%
Market Price 16.12% 13.32% 25.16%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 29.21% 23.01% 44.94%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
NOVEMBER 15, 2019 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Buffer ETF - November Price Return
<S> <C> <C>
11/15/19 $10,000 $10,000
2/29/20 9,705 9,467
8/31/20 10,762 11,217
2/28/21 11,603 12,213
8/31/21 12,533 14,494
</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 index does
not actually hold a portfolio of securities and therefore does 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.
-----------------------------
* Prior to November 23, 2020, the Fund's investment objective included an
upside cap of 12.36% (before fees, expenses and taxes) and 11.50% (after
fees and expenses, excluding brokerage commissions, trading fees, taxes
and extraordinary expenses not included in the Fund's management fee) and
an Outcome Period of November 18, 2019 to November 20, 2020.
Page 23
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - NOVEMBER (DNOV)
The investment objective of the FT Cboe Vest U.S. Equity Deep Buffer ETF -
November (the "Fund") is to seek to provide investors with returns (before fees,
expenses and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF
Trust (the "Underlying ETF"), up to a predetermined upside cap of 7.75% (before
fees, expenses and taxes) and 6.90% (after fees and expenses, excluding
brokerage commissions, trading fees, taxes and extraordinary expenses not
included in the Fund's management fee), while providing a buffer against
Underlying ETF losses between -5% and -30% (before fees, expenses and taxes),
over the period from November 23, 2020 to November 19, 2021 (the "Outcome
Period")*. Under normal market conditions, the Fund will invest substantially
all of its assets in FLexible EXchange(R) Options ("FLEX Options") that
reference the price performance of the Underlying ETF. Subsequent Outcome
Periods will begin on the day the prior Outcome Period ends and will end on the
approximate one-year anniversary of that new Outcome Period. On the first day of
each new Outcome Period, the Fund resets by investing in a new set of FLEX
Options that will provide a new cap for the new Outcome Period. This means that
the cap will change for each Outcome Period based upon prevailing market
conditions at the beginning of each Outcome Period. The Fund will be perpetually
offered and not terminate after the initial or any subsequent Outcome Period. An
investor that purchases Fund shares other than on the first day of an Outcome
Period and/or sells Fund shares prior to the end of an Outcome Period may
experience results that are very different from the target outcomes sought by
the Fund for that Outcome Period. The Fund is classified as non-diversified
under the Investment Company Act of 1940, as amended. The shares of the Fund are
listed and traded on the Cboe BZX Exchange, Inc., under the ticker symbol
"DNOV."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
1 Year Ended (11/15/19) (11/15/19)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 9.04% 7.86% 14.53%
Market Price 9.11% 7.86% 14.53%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 29.21% 23.01% 44.94%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
NOVEMBER 15, 2019 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Deep Buffer ETF - November Price Return
<S> <C> <C>
11/15/19 $10,000 $10,000
2/29/20 9,705 9,467
8/31/20 10,504 11,217
2/28/21 10,949 12,213
8/31/21 11,453 14,494
</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 index does
not actually hold a portfolio of securities and therefore does 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.
-----------------------------
* Prior to November 23, 2020, the Fund's investment objective included an
upside cap of 8.12% (before fees, expenses and taxes) and 7.26% (after
fees and expenses, excluding brokerage commissions, trading fees, taxes
and extraordinary expenses not included in the Fund's management fee) and
an Outcome Period of November 18, 2019 to November 20, 2020.
Page 24
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY BUFFER ETF - DECEMBER (FDEC)
The investment objective of the FT Cboe Vest U.S. Equity Buffer ETF - December
(the "Fund") is to seek to provide investors with returns (before fees, expenses
and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF Trust (the
"Underlying ETF"), up to a predetermined upside cap of 14.00% (before fees,
expenses and taxes) and 13.15% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against the first 10% (before
fees, expenses and taxes) of Underlying ETF losses, over the period from
December 21, 2020 to December 17, 2021 (the "Outcome Period"). Under normal
market conditions, the Fund will invest substantially all of its assets in
FLexible EXchange(R) Options ("FLEX Options") that reference the price
performance of the Underlying ETF. Subsequent Outcome Periods will begin on the
day the prior Outcome Period ends and will end on the approximate one-year
anniversary of that new Outcome Period. On the first day of each new Outcome
Period, the Fund resets by investing in a new set of FLEX Options that will
provide a new cap for the new Outcome Period. This means that the cap will
change for each Outcome Period based upon prevailing market conditions at the
beginning of each Outcome Period. The Fund will be perpetually offered and not
terminate after the initial or any subsequent Outcome Period. An investor that
purchases Fund shares other than on the first day of an Outcome Period and/or
sells Fund shares prior to the end of an Outcome Period may experience results
that are very different from the target outcomes sought by the Fund for that
Outcome Period. The Fund is classified as non-diversified under the Investment
Company Act of 1940, as amended. The shares of the Fund are listed and traded on
the Cboe BZX Exchange, Inc., under the ticker symbol "FDEC."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(12/18/20)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 11.60%
Market Price 11.53%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 21.92%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
DECEMBER 18, 2020 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Buffer ETF - December Price Return
<S> <C> <C>
12/18/20 $10,000 $10,000
2/28/21 10,195 10,274
8/31/21 11,160 12,192
</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 index does
not actually hold a portfolio of securities and therefore does 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)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - DECEMBER (DDEC)
The investment objective of the FT Cboe Vest U.S. Equity Deep Buffer ETF -
December (the "Fund") is to seek to provide investors with returns (before fees,
expenses and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF
Trust (the "Underlying ETF"), up to a predetermined upside cap of 8.00% (before
fees, expenses and taxes) and 7.15% (after fees and expenses, excluding
brokerage commissions, trading fees, taxes and extraordinary expenses not
included in the Fund's management fee), while providing a buffer against
Underlying ETF losses between -5% and -30% (before fees, expenses and taxes),
over the period from December 21, 2020 to December 17, 2021 (the "Outcome
Period"). Under normal market conditions, the Fund will invest substantially all
of its assets in FLexible EXchange(R) Options ("FLEX Options") that reference
the price performance of the Underlying ETF. Subsequent Outcome Periods will
begin on the day the prior Outcome Period ends and will end on the approximate
one-year anniversary of that new Outcome Period. On the first day of each new
Outcome Period, the Fund resets by investing in a new set of FLEX Options that
will provide a new cap for the new Outcome Period. This means that the cap will
change for each Outcome Period based upon prevailing market conditions at the
beginning of each Outcome Period. The Fund will be perpetually offered and not
terminate after the initial or any subsequent Outcome Period. An investor that
purchases Fund shares other than on the first day of an Outcome Period and/or
sells Fund shares prior to the end of an Outcome Period may experience results
that are very different from the target outcomes sought by the Fund for that
Outcome Period. The Fund is classified as non-diversified under the Investment
Company Act of 1940, as amended. The shares of the Fund are listed and traded on
the Cboe BZX Exchange, Inc., under the ticker symbol "DDEC."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(12/18/20)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 6.34%
Market Price 6.41%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 21.92%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
DECEMBER 18, 2020 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Deep Buffer ETF - December Price Return
<S> <C> <C>
12/18/20 $10,000 $10,000
2/28/21 10,089 10,274
8/31/21 10,634 12,192
</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 index does
not actually hold a portfolio of securities and therefore does 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 26
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST FUND OF BUFFER ETFS (BUFR)
The investment objective of the FT Cboe Vest Fund of Buffer ETFs (the "Fund") is
to seek to provide investors with capital appreciation. The Fund seeks to
achieve its investment objective by providing investors with US large-cap equity
market exposure while limiting downside risk through a laddered portfolio of
twelve FT Cboe Vest U.S. Equity Buffer ETFs ("Underlying ETFs"). Under normal
market conditions the Fund will invest substantially all of its assets in the
Underlying ETFs, which seek to provide investors with returns (before fees,
expenses and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF
Trust ("SPY"), up to a predetermined upside cap, while providing a buffer
against the first 10% (before fees, expenses and taxes) of SPY losses, over a
defined one-year period. The Fund itself does not provide any buffer against
losses. The Fund simply seeks to provide diversified exposure to the Underlying
ETFs in a single investment. The Fund is classified as non-diversified under the
Investment Company Act of 1940, as amended. The shares of the Fund are listed
and traded on the Cboe BZX Exchange, Inc., under the ticker symbol "BUFR."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
1 Year Ended (8/10/20) (8/10/20)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 14.16% 15.26% 16.21%
Market Price 14.63% 15.50% 16.46%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 29.21% 32.43% 34.58%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
AUGUST 10, 2020 - AUGUST 31, 2021
FT Cboe Vest Fund S&P 500(R) Index -
of Buffer ETFs Price Return
<S> <C> <C>
8/10/20 $10,000 $10,000
8/31/20 10,180 10,416
2/28/21 10,773 11,341
8/31/21 11,621 13,458
</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 index does
not actually hold a portfolio of securities and therefore does 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)
--------------------------------------------------------------------------------
FT CBOE VEST FUND OF DEEP BUFFER ETFS (BUFD)
The investment objective of the FT Cboe Vest Fund of Deep Buffer ETFs (the
"Fund") seeks to provide investors with capital appreciation. The Fund seeks to
achieve its investment objective by providing investors with US large-cap equity
market exposure while limiting downside risk through a laddered portfolio of
twelve FT Cboe Vest U.S. Equity Deep Buffer ETFs ("Underlying ETFs"). Under
normal market conditions the Fund will invest substantially all of its assets in
the Underlying ETFs, which seek to provide investors with returns (before fees,
expenses and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF
Trust ("SPY"), up to a predetermined upside cap, while providing a buffer
against losses between -5% and -30% (before fees, expenses and taxes) of SPY,
over a defined one-year period. The Fund itself does not provide any buffer
against losses. The Fund simply seeks to provide diversified exposure to the
Underlying ETFs in a single investment. The Fund is classified as
non-diversified under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on the Cboe BZX Exchange, Inc., under the
ticker symbol "BUFD."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(1/20/21)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 4.24%
Market Price 4.48%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 17.42%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 29.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
JANUARY 20, 2021 - AUGUST 31, 2021
FT Cboe Vest Fund S&P 500(R) Index -
of Deep Buffer ETFs Price Return
<S> <C> <C>
1/20/21 $10,000 $10,000
2/28/21 9,980 9,894
8/31/21 10,424 11,742
</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 index does
not actually hold a portfolio of securities and therefore does 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 28
<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. 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 29
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
ADVISOR
First Trust Advisors L.P. ("First Trust" or the "Advisor") is the investment
advisor to FT Cboe Vest U.S. Equity Buffer ETF - January ("FJAN"), FT Cboe Vest
U.S. Equity Deep Buffer ETF - January ("DJAN"), FT Cboe Vest U.S. Equity Buffer
ETF - February ("FFEB"), FT Cboe Vest U.S. Equity Deep Buffer ETF - February
("DFEB"), FT Cboe Vest U.S. Equity Buffer ETF - March ("FMAR"), FT Cboe Vest
U.S. Equity Deep Buffer ETF - March ("DMAR"), FT Cboe Vest U.S. Equity Buffer
ETF - April ("FAPR"), FT Cboe Vest U.S. Equity Deep Buffer ETF - April ("DAPR"),
FT Cboe Vest U.S. Equity Buffer ETF - May ("FMAY"), FT Cboe Vest U.S. Equity
Deep Buffer ETF - May ("DMAY"), FT Cboe Vest U.S. Equity Buffer ETF - June
("FJUN"), FT Cboe Vest U.S. Equity Deep Buffer ETF - June ("DJUN"), FT Cboe Vest
U.S. Equity Buffer ETF - July ("FJUL"), FT Cboe Vest U.S. Equity Deep Buffer ETF
- July ("DJUL"), FT Cboe Vest U.S. Equity Buffer ETF - August ("FAUG"), FT Cboe
Vest U.S. Equity Deep Buffer ETF - August ("DAUG"), FT Cboe Vest U.S. Equity
Buffer ETF - September ("FSEP"), FT Cboe Vest U.S. Equity Deep Buffer ETF -
September ("DSEP"), FT Cboe Vest U.S. Equity Buffer ETF - October ("FOCT"), FT
Cboe Vest U.S. Equity Deep Buffer ETF - October ("DOCT"), FT Cboe Vest U.S.
Equity Buffer ETF - November ("FNOV"), FT Cboe Vest U.S. Equity Deep Buffer ETF
- November ("DNOV"), FT Cboe Vest U.S. Equity Buffer ETF - December ("FDEC"), FT
Cboe Vest U.S. Equity Deep Buffer ETF - December ("DDEC"), FT Cboe Vest Fund of
Buffer ETFs ("BUFR"), and FT Cboe Vest Fund of Deep Buffer ETFs ("BUFD"), (each
a "Fund" and collectively, the "Funds"). First Trust is responsible for the
ongoing monitoring of each Fund's investment portfolio, managing each Fund's
business affairs and providing certain administrative services necessary for the
management of each Fund.
SUB-ADVISOR
Cboe VestSM Financial LLC ("Cboe Vest" or the "Sub-Advisor") serves as the
sub-advisor to the Funds. In this capacity, Cboe Vest is responsible for the
selection and ongoing monitoring of the securities in each Fund's investment
portfolio. Cboe Vest, with principal offices at 1765 Greensboro Station Pl., 9th
Floor, McLean, Virginia 22102, was founded in 2012. Cboe Vest had approximately
$3.9 billion under management or committed to management as of August 31, 2021.
PORTFOLIO MANAGEMENT TEAM
KARAN SOOD, MANAGING DIRECTOR OF CBOE VEST
HOWARD RUBIN, MANAGING DIRECTOR OF CBOE VEST
COMMENTARY
MARKET RECAP
Each of the monthly FT Cboe Vest Funds has an investment objective that seeks to
provide investors with returns (before fees, expenses, and taxes) that match
those of the SPDR(R) S&P 500(R) ETF Trust (the "Underlying ETF" or "Reference
ETF"), up to a predetermined upside cap (after fees and expenses, excluding
brokerage commissions, trading fees, taxes and extraordinary expenses not
included in the Fund's management fee), while providing a buffer against a
specific level (before fees, expenses and taxes) of losses in the Reference ETF,
over a specified time period.
Both the FT Cboe Vest Fund of Buffer ETFs and the FT Cboe Vest Fund of Deep
Buffer ETFs are each designed to hold approximately equal weights of twelve
month FT Cboe Vest Funds and thus targets to provide investors with returns
(before fees, expenses, and taxes) that approximately averages the returns of
its twelve monthly ETF holdings.
During the 12-month period ended August 31, 2021, stock markets continued to
soar extending the massive rally from the March 2020 lows brought on by the
coronavirus ("COVID-19") pandemic. Governments across the globe continue to
support their economies with extensive fiscal and monetary programs. These
efforts, combined with extraordinarily strong corporate earnings, have fueled
equity markets across the globe. Markets moved persistently higher during the
period, with intermittent pull backs being both small and infrequent.
The S&P 500(R) Index, the well-known measure of U.S. large-cap stocks, ended the
same period up 31.17%. Mid- and small-cap stocks, as measured by the S&P MidCap
400(R) Index and the Russell 2000(R) Small Cap Index, rose even more, gaining
44.8% and 47.1%, respectively. The Nasdaq 100 Index, a tech-heavy market
measure, gained 29.6% during the same period. International markets fared well,
too, albeit not to the same extent as the U.S. markets, with broad foreign
market indices such as MSCI EAFE and MSCI Emerging Markets gaining 26.8% and
21.5%, respectively, during the same period.
Page 30
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
Within the S&P 500(R) Index, the market continued to see significant variation
in returns across the various sectors of the economy for the 12-month period
ended August 31, 2021. While the variation was not as dramatic as in the prior
twelve months, sector performances still saw an approximately 42 percentage
point differential from top to bottom: the top performing sector was the
Financials sector, up 56.5%, while the worst performing sector was the Consumer
Staples sector, up 14.4%, during the same period.
U.S. economic data printed in the period all pointed to a rapidly recovering
economy. Gross domestic product ("GDP") growth in the most recent four quarterly
reports (the third quarter of 2020 through the second quarter of 2021) came in
at seasonally adjusted annualized rates of +33.8%, +4.5%, +6.3%, and 6.6%,
sequentially. This recent growth has brought the U.S. GDP back to 0.8% above the
level it was at in the fourth quarter of 2019, just prior to the pandemic. A
current Bloomberg survey of economists shows a consensus projection of 4.4% GDP
growth over the coming four quarters.
The U.S. unemployment rate, which had been sitting at a 50-year low of 3.5% in
February of 2020, shot up to 14.7% just two months later, at the height of the
pandemic frenzy. This rate had fallen to 8.4% in August of 2020, as the 12-month
period ended August 31, 2021 began. Throughout the same period, unemployment
continued to move sharply lower, ending the period at 5.2%, well below the
50-year average of 6.3%.
U.S. inflation levels accelerated dramatically over the 12-month period ended
August 31, 2021, as the Federal Reserve (the "Fed") kept short-term interest
rates near zero throughout the period. The most recent (July 2021) Consumer
Price Index report shows year-over-year inflation running at a 5.4% rate, up
from just 1.0% from the report twelve months earlier. One particular component
of the economy that is clearly overheating, in our view, is the housing market.
Housing prices in the U.S. increased by 18.6% over the last twelve months,
according to the most recent (June 2021) S&P Case-Shiller U.S. National Home
Price Index.
The Fed has made comments that they see this increase in inflation as transitory
and expect it to cool off as the economy stabilizes after the sharp growth of
the last year. That said, the Fed has said they will continue to monitor signs
of persistent inflation and will be prepared to taper back on their easy money
policies as needed.
MARKET AND FUND OUTLOOK
Over the 12-month period ended August 31, 2021, implied volatilities in U.S.
equity markets fell sharply. We expect to see implied volatilities continue to
decline over the coming year. Buffer strategies, such as those used in the FT
Cboe Vest Funds, generally benefit from declining implied volatilities. The CBOE
S&P 500 1-Year Volatility Index, which is derived from option prices, estimates
the market's expectation of S&P 500 volatility for the next twelve months. This
index, which peaked during the period at about 41% on September 3, 2020, was
down, though still at an elevated level of 25%, as of August 31, 2021. For
comparison purposes, the historical volatility of the S&P 500 since its
inception in 1937 has been about 15.7%.
From short-term Treasuries to High Yield Bonds, fixed income investments
continue to linger at or around all-time lows in nominal yield. Combined with
the elevated inflation levels seen in the last half year, almost all fixed
income investments currently have negative real yields (i.e., nominal yield less
inflation.) This bodes quite poorly for future fixed income returns. For this
reason, many market analysts are claiming the traditional "60/40 stock/bond
allocation" strategy is dead. Investors are looking to reallocate away from
fixed income.
The FT Cboe Vest Funds are an alternative that these investors should consider.
The FT Cboe Vest Funds are designed to protect investors against varying levels
of downside movements in their Reference ETF (e.g., SPY), while limiting the
investor's participation in larger upside moves in the Reference ETF. In the
current negative real yield environment, such Funds, in appropriate allocations,
can be suitable alternatives to fixed investments.
PERFORMANCE ANALYSIS
The following table provides information pertaining to recent caps and
performance for the 12-month period ended August 31, 2021 for each FT Cboe Vest
Fund, as well as an attribution analysis that estimates the impact of various
factors on each Fund's performance.
Page 31
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
Each Fund's cap is reset at the Fund's annual reset date. The table shows the
caps that were in effect both at the beginning of the period and after the
annual reset date if it occurred within the period. Both of these caps are shown
pre and post expenses. Funds that were launched within the period do not yet
have new caps, as they have not yet reached their first annual reset date.
Each Fund's performance may be impacted by a number of factors. These factors
include changes in each of: the level of the Reference ETF, the Reference ETF's
dividends, interest rates, implied volatility, and time to option expiration.
Generally, changes in the level of the Reference ETF is the primary factor, but
the other factors can also contribute significantly to Fund performance.
Additionally, expenses will impact Fund performance.
The impact from these factors for the period are shown in the table under
"Estimated Performance Attribution."
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FUND TICKER FJAN DJAN FFEB DFEB FMAR DMAR FAPR
Annual Expense Ratio 0.85% 0.85% 0.85% 0.85% 0.85% 0.85% 0.85%
Reporting Period Start Date (close of Seed Date) 1/15/21 1/15/21 8/31/20 8/31/20 3/19/21 3/19/21 4/16/21
Reporting Period End Date (close of Period) 8/31/21 8/31/21 8/31/21 8/31/21 8/31/21 8/31/21 8/31/21
CAP INFORMATION:
Cap Prior to Annual Reset (pre-expenses) 14.50% 8.20% 10.75% 7.50% 14.20% 9.30% 12.00%
Cap Prior to Annual Reset (post-expenses) 13.64% 7.34% 9.90% 6.65% 13.35% 8.45% 11.15%
Reset Date (prior to 8/31/21) None None 2/19/21 2/19/21 None None None
New Cap on Annual Reset Date (pre-expenses) None None 15.85% 8.85% None None None
New Cap on Annual Reset Date (post-expenses) None None 15.00% 8.00% None None None
PERFORMANCE (LATER OF 8/31/20 OR SEED DATE, TO 8/31/21):
Fund Performance (using NAVs) 11.01% 6.25% 19.00% 11.01% 9.46% 6.25% 5.56%
Fund Performance (using Market Price) 11.08% 6.05% 18.49% 10.73% 9.22% 6.01% 5.26%
Reference Asset Price Return 20.19% 20.19% 29.27% 29.27% 15.94% 15.94% 8.22%
ESTIMATED PERFORMANCE ATTRIBUTION
Fund NAV Performance Attributed to:
a) Changes in Reference Asset 9.25% 5.36% 14.17% 8.84% 7.70% 4.99% 4.51%
b) Changes in other Variables* 2.29% 1.42% 5.68% 3.02% 2.14% 1.64% 1.37%
c) Expenses (pro-rated annual expense ratio) -0.53% -0.53% -0.85% -0.85% -0.38% -0.38% -0.32%
Attribution TOTAL 11.01% 6.25% 19.00% 11.01% 9.46% 6.25% 5.56%
</TABLE>
* Includes changes in a) SPY dividends, b) interest rates, c) implied
volatility, and d) time to option expiration.
Page 32
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FUND TICKER DAPR FMAY DMAY FJUN DJUN FJUL DJUL
Annual Expense Ratio 0.85% 0.85% 0.85% 0.85% 0.85% 0.85% 0.85%
Reporting Period Start Date (close of Seed Date) 4/16/21 8/31/20 8/31/20 8/31/20 8/31/20 8/31/20 8/31/20
Reporting Period End Date (close of Period) 8/31/21 8/31/21 8/31/21 8/31/21 8/31/21 8/31/21 8/31/21
CAP INFORMATION:
Cap Prior to Annual Reset (pre-expenses) 7.50% 17.07% 9.95% 17.72% 10.28% 14.95% 8.40%
Cap Prior to Annual Reset (post-expenses) 6.65% 16.21% 9.09% 16.87% 9.43% 14.10% 7.55%
Reset Date (prior to 8/31/21) None 5/21/21 5/21/21 6/18/21 6/18/21 7/16/21 7/16/21
New Cap on Annual Reset Date (pre-expenses) None 12.50% 7.60% 11.70% 7.06% 11.70% 7.30%
New Cap on Annual Reset Date (post-expenses) None 11.65% 6.75% 10.85% 6.21% 10.85% 6.45%
PERFORMANCE (LATER OF 8/31/20 OR SEED DATE, TO 8/31/21):
Fund Performance (using NAVs) 3.46% 11.41% 6.50% 13.85% 7.65% 12.72% 7.14%
Fund Performance (using Market Price) 3.23% 11.61% 6.65% 13.82% 7.64% 12.69% 7.12%
Reference Asset Price Return 8.22% 29.27% 29.27% 29.27% 29.27% 29.27% 29.27%
ESTIMATED PERFORMANCE ATTRIBUTION
Fund NAV Performance Attributed to:
a) Changes in Reference Asset 2.96% 8.35% 4.99% 9.70% 5.58% 9.59% 5.59%
b) Changes in other Variables* 0.82% 3.91% 2.36% 5.00% 2.92% 3.98% 2.40%
c) Expenses (pro-rated annual expense ratio) -0.32% -0.85% -0.85% -0.85% -0.85% -0.85% -0.85%
Attribution TOTAL 3.46% 11.41% 6.50% 13.85% 7.65% 12.72% 7.14%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FUND TICKER FAUG DAUG FSEP DSEP FOCT DOCT FNOV
Annual Expense Ratio 0.85% 0.85% 0.85% 0.85% 0.85% 0.85% 0.85%
Reporting Period Start Date (close of Seed Date) 8/31/20 8/31/20 9/18/20 9/18/20 10/16/20 10/16/20 8/31/20
Reporting Period End Date (close of Period) 8/31/21 8/31/21 8/31/21 8/31/21 8/31/21 8/31/21 8/31/21
CAP INFORMATION:
Cap Prior to Annual Reset (pre-expenses) 14.71% 8.63% 12.20% 7.43% 16.22% 9.34% 12.36%
Cap Prior to Annual Reset (post-expenses) 13.86% 7.78% 11.35% 6.58% 15.37% 8.49% 11.50%
Reset Date (prior to 8/31/21) 8/20/21 8/20/21 None None None None 11/20/20
New Cap on Annual Reset Date (pre-expenses) 11.64% 7.37% None None None None 13.72%
New Cap on Annual Reset Date (post-expenses) 10.79% 6.52% None None None None 12.87%
PERFORMANCE (LATER OF 8/31/20 OR SEED DATE, TO 8/31/21):
Fund Performance (using NAVs) 13.81% 8.12% 15.76% 8.53% 15.17% 8.50% 16.45%
Fund Performance (using Market Price) 13.70% 7.93% 15.69% 8.80% 15.10% 8.50% 16.12%
Reference Asset Price Return 29.27% 29.27% 36.57% 36.57% 30.02% 30.02% 29.27%
ESTIMATED PERFORMANCE ATTRIBUTION
Fund NAV Performance Attributed to:
a) Changes in Reference Asset 10.54% 6.21% 12.06% 6.71% 11.90% 6.75% 11.22%
b) Changes in other Variables* 4.12% 2.76% 4.51% 2.63% 4.01% 2.49% 6.08%
c) Expenses (pro-rated annual expense ratio) -0.85% -0.85% -0.81% -0.81% -0.74% -0.74% -0.85%
Attribution TOTAL 13.81% 8.12% 15.76% 8.53% 15.17% 8.50% 16.45%
</TABLE>
* Includes changes in a) SPY dividends, b) interest rates, c) implied
volatility, and d) time to option expiration.
Page 33
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FUND TICKER DNOV FDEC DDEC BUFR BUFD
Annual Expense Ratio (includes any Acquired
Fund Fees and Expenses) 0.85% 0.85% 0.85% 1.05% 1.05%
Reporting Period Start Date (close of Seed Date) 8/31/20 12/18/20 12/18/20 8/31/20 1/20/21
Reporting Period End Date (close of Period) 8/31/21 8/31/21 8/31/21 8/31/21 8/31/21
CAP INFORMATION:
Cap Prior to Annual Reset (pre-expenses) 8.12% 14.00% 8.00% N/A N/A
Cap Prior to Annual Reset (post-expenses) 7.26% 13.15% 7.15% N/A N/A
Reset Date (prior to 8/31/21) 11/20/20 None None N/A N/A
New Cap on Annual Reset Date (pre-expenses) 7.75% None None N/A N/A
New Cap on Annual Reset Date (post-expenses) 6.90% None None N/A N/A
PERFORMANCE (LATER OF 8/31/20 OR SEED DATE, TO 8/31/21):
Fund Performance (using NAVs) 9.04% 11.60% 6.34% 14.16% 4.24%
Fund Performance (using Market Price) 9.11% 11.53% 6.41% 14.63% 4.48%
Reference Asset Price Return 29.27% 22.31% 22.31% 29.27% 17.63%
ESTIMATED PERFORMANCE ATTRIBUTION
Fund NAV Performance Attributed to:
a) Changes in Reference Asset 6.69% 9.65% 5.63% 11.76% 4.25%
b) Changes in other Variables* 3.20% 2.55% 1.31% 3.45% 0.63%
c) Expenses (pro-rated annual expense ratio) -0.85% -0.60% -0.60% -1.05% -0.64%
Attribution TOTAL 9.04% 11.60% 6.34% 14.16% 4.24%
</TABLE>
* Includes changes in a) SPY dividends, b) interest rates, c) implied
volatility, and d) time to option expiration.
Page 34
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
UNDERSTANDING YOUR FUND EXPENSES
AUGUST 31, 2021 (UNAUDITED)
As a shareholder of FT Cboe Vest U.S. Equity Buffer ETF - January, FT Cboe Vest
U.S. Equity Deep Buffer ETF - January, FT Cboe Vest U.S. Equity Buffer ETF -
February, FT Cboe Vest U.S. Equity Deep Buffer ETF - February, FT Cboe Vest U.S.
Equity Buffer ETF - March, FT Cboe Vest U.S. Equity Deep Buffer ETF - March, FT
Cboe Vest U.S. Equity Buffer ETF - April, FT Cboe Vest U.S. Equity Deep Buffer
ETF - April, FT Cboe Vest U.S. Equity Buffer ETF - May, FT Cboe Vest U.S. Equity
Deep Buffer ETF - May, FT Cboe Vest U.S. Equity Buffer ETF - June, FT Cboe Vest
U.S. Equity Deep Buffer ETF - June, FT Cboe Vest U.S. Equity Buffer ETF - July,
FT Cboe Vest U.S. Equity Deep Buffer ETF - July, FT Cboe Vest U.S. Equity Buffer
ETF - August, FT Cboe Vest U.S. Equity Deep Buffer ETF - August, FT Cboe Vest
U.S. Equity Buffer ETF - September, FT Cboe Vest U.S. Equity Deep Buffer ETF -
September, FT Cboe Vest U.S. Equity Buffer ETF - October, FT Cboe Vest U.S.
Equity Deep Buffer ETF - October, FT Cboe Vest U.S. Equity Buffer ETF -
November, FT Cboe Vest U.S. Equity Deep Buffer ETF - November, FT Cboe Vest U.S.
Equity Buffer ETF - December, FT Cboe Vest U.S. Equity Deep Buffer ETF -
December, FT Cboe Vest Fund of Buffer ETFs or FT Cboe Vest Fund of Deep Buffer
ETFs (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 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 (or since inception) and held through the six-month (or shorter) period
ended August 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 Period"
to estimate the expenses you paid on your account during this six-month (or
shorter) 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
MARCH 1, 2021 AUGUST 31, 2021 PERIOD PERIOD (a)
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FT CBOE VEST U.S. EQUITY BUFFER ETF - JANUARY (FJAN)
Actual $1,000.00 $1,104.20 0.85% $4.51
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - JANUARY (DJAN)
Actual $1,000.00 $1,059.00 0.85% $4.41
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FT CBOE VEST U.S. EQUITY BUFFER ETF - FEBRUARY (FFEB)
Actual $1,000.00 $1,128.00 0.85% $4.56
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - FEBRUARY (DFEB)
Actual $1,000.00 $1,066.40 0.85% $4.43
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
</TABLE>
Page 35
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
UNDERSTANDING YOUR FUND EXPENSES (CONTINUED)
AUGUST 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
MARCH 1, 2021 AUGUST 31, 2021 PERIOD PERIOD (a)
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FT CBOE VEST U.S. EQUITY BUFFER ETF - MAY (FMAY)
Actual $1,000.00 $1,073.10 0.85% $4.44
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - MAY (DMAY)
Actual $1,000.00 $1,040.70 0.85% $4.37
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FT CBOE VEST U.S. EQUITY BUFFER ETF - JUNE (FJUN)
Actual $1,000.00 $1,080.40 0.85% $4.46
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - JUNE (DJUN)
Actual $1,000.00 $1,046.70 0.85% $4.38
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FT CBOE VEST U.S. EQUITY BUFFER ETF - JULY (FJUL)
Actual $1,000.00 $1,071.90 0.85% $4.44
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - JULY (DJUL)
Actual $1,000.00 $1,040.10 0.85% $4.37
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FT CBOE VEST U.S. EQUITY BUFFER ETF - AUGUST (FAUG)
Actual $1,000.00 $1,072.20 0.85% $4.44
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - AUGUST (DAUG)
Actual $1,000.00 $1,044.50 0.85% $4.38
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FT CBOE VEST U.S. EQUITY BUFFER ETF - SEPTEMBER (FSEP)
Actual $1,000.00 $1,063.30 0.85% $4.42
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - SEPTEMBER (DSEP)
Actual $1,000.00 $1,034.30 0.85% $4.36
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FT CBOE VEST U.S. EQUITY BUFFER ETF - OCTOBER (FOCT)
Actual $1,000.00 $1,082.40 0.85% $4.46
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - OCTOBER (DOCT)
Actual $1,000.00 $1,046.20 0.85% $4.38
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FT CBOE VEST U.S. EQUITY BUFFER ETF - NOVEMBER (FNOV)
Actual $1,000.00 $1,080.10 0.85% $4.46
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - NOVEMBER (DNOV)
Actual $1,000.00 $1,046.00 0.85% $4.38
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
</TABLE>
Page 36
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
UNDERSTANDING YOUR FUND EXPENSES (CONTINUED)
AUGUST 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
MARCH 1, 2021 AUGUST 31, 2021 PERIOD PERIOD (a)
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FT CBOE VEST U.S. EQUITY BUFFER ETF - DECEMBER (FDEC)
Actual $1,000.00 $1,094.60 0.85% $4.49
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - DECEMBER (DDEC)
Actual $1,000.00 $1,054.00 0.85% $4.40
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FT CBOE VEST U.S. FUND OF BUFFER ETFS (BUFR) (b)
Actual $1,000.00 $1,078.70 0.20% $1.05
Hypothetical (5% return before expenses) $1,000.00 $1,024.20 0.20% $1.02
FT CBOE VEST FUND OF DEEP BUFFER ETFS (BUFD) (b)
Actual $1,000.00 $1,044.40 0.20% $1.03
Hypothetical (5% return before expenses) $1,000.00 $1,024.20 0.20% $1.02
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED EXPENSES PAID
EXPENSE RATIO DURING THE PERIOD
BEGINNING ENDING BASED ON THE MARCH 19, 2021 (c)
ACCOUNT VALUE ACCOUNT VALUE NUMBER OF DAYS TO
MARCH 19, 2021 (c) AUGUST 31, 2021 IN THE PERIOD AUGUST 31, 2021 (d)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FT CBOE VEST U.S. EQUITY BUFFER ETF - MARCH (FMAR)
Actual $1,000.00 $1,094.60 0.85% $4.05
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - MARCH (DMAR)
Actual $1,000.00 $1,062.50 0.85% $3.99
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED EXPENSES PAID
EXPENSE RATIO DURING THE PERIOD
BEGINNING ENDING BASED ON THE APRIL 16, 2021 (c)
ACCOUNT VALUE ACCOUNT VALUE NUMBER OF DAYS TO
APRIL 16, 2021 (c) AUGUST 31, 2021 IN THE PERIOD AUGUST 31, 2021 (e)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FT CBOE VEST U.S. EQUITY BUFFER ETF - APRIL (FAPR)
Actual $1,000.00 $1,055.60 0.85% $3.30
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - APRIL (DAPR)
Actual $1,000.00 $1,034.60 0.85% $3.27
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
</TABLE>
(a) Expenses are equal to the annualized expense ratio as indicated in the
table multiplied by the average account value over the period (March 1,
2021 through August 31, 2021), multiplied by 184/365 (to reflect the
six-month period).
(b) Annualized expense ratio and expenses paid during the six-month period do
not include fees and expenses of the underlying funds in which the Fund
invests.
(c) Inception date.
(d) Actual expenses are equal to the annualized expense ratio as indicated in
the table multiplied by the average account value over the period (March
19, 2021 through August 31, 2021), multiplied by 166/365. Hypothetical
expenses are assumed for the most recent six-month period.
(e) Actual expenses are equal to the annualized expense ratio as indicated in
the table multiplied by the average account value over the period (April
16, 2021 through August 31, 2021), multiplied by 138/365. Hypothetical
expenses are assumed for the most recent six-month period.
Page 37
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - JANUARY (FJAN)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.6%
<S> <C> <C>
760,729 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 760,729
(Cost $760,729) --------------
TOTAL INVESTMENTS -- 0.6%...................................................................... 760,729
(Cost $760,729) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 107.8%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 106.6%
3,040 SPDR(R) S&P 500(R) ETF Trust....................... $ 137,274,240 $ 3.76 01/21/22 135,146,240
(Cost $116,967,012) --------------
PUT OPTIONS PURCHASED -- 1.2%
3,040 SPDR(R) S&P 500(R) ETF Trust....................... 137,274,240 375.70 01/21/22 1,562,560
(Cost $8,199,509) --------------
TOTAL PURCHASED OPTIONS........................................................................ 136,708,800
(Cost $125,166,521) (b) --------------
WRITTEN OPTIONS -- (8.3)%
CALL OPTIONS WRITTEN -- (7.6)%
(3,040) SPDR(R) S&P 500(R) ETF Trust....................... (137,274,240) 430.18 01/21/22 (9,694,560)
(Premiums received $3,646,289) --------------
PUT OPTIONS WRITTEN -- (0.7)%
(3,040) SPDR(R) S&P 500(R) ETF Trust....................... (137,274,240) 338.13 01/21/22 (857,280)
(Premiums received $5,165,257) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (10,551,840)
(Premiums received $8,811,546) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (106,450)
--------------
NET ASSETS -- 100.0%........................................................................... $ 126,811,239
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $117,146,678. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$22,471,718 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$12,700,707. The net unrealized appreciation was $9,771,011. The amounts
presented are inclusive of derivative contracts.
Page 38 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - JANUARY (FJAN)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 760,729 $ 760,729 $ -- $ --
Call Options Purchased............................... 135,146,240 -- 135,146,240 --
Put Options Purchased................................ 1,562,560 -- 1,562,560 --
-------------- -------------- -------------- --------------
Total................................................ $ 137,469,529 $ 760,729 $ 136,708,800 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (9,694,560) $ -- $ (9,694,560) $ --
Put Options Written.................................. (857,280) -- (857,280) --
-------------- -------------- -------------- --------------
Total................................................ $ (10,551,840) $ -- $ (10,551,840) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 39
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - JANUARY (DJAN)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.6%
<S> <C> <C>
295,639 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 295,639
(Cost $295,639) --------------
TOTAL INVESTMENTS -- 0.6%...................................................................... 295,639
(Cost $295,639) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 112.8%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 111.8%
1,240 SPDR(R) S&P 500(R) ETF Trust....................... $ 55,993,440 $ 3.75 01/21/22 55,368,892
(Cost $48,421,113) --------------
PUT OPTIONS PURCHASED -- 1.0%
1,240 SPDR(R) S&P 500(R) ETF Trust....................... 55,993,440 356.92 01/21/22 489,446
(Cost $2,700,803) --------------
TOTAL PURCHASED OPTIONS........................................................................ 55,858,338
(Cost $51,121,916) (b) --------------
WRITTEN OPTIONS -- (13.3)%
CALL OPTIONS WRITTEN -- (13.0)%
(1,240) SPDR(R) S&P 500(R) ETF Trust....................... (55,993,440) 406.51 01/21/22 (6,469,240)
(Premiums received $2,668,485) --------------
PUT OPTIONS WRITTEN -- (0.3)%
(1,240) SPDR(R) S&P 500(R) ETF Trust....................... (55,993,440) 262.99 01/21/22 (138,350)
(Premiums received $644,946) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (6,607,590)
(Premiums received $3,313,431) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (35,775)
--------------
NET ASSETS -- 100.0%........................................................................... $ 49,510,612
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $48,104,124. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$7,455,150 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$6,012,887. The net unrealized appreciation was $1,442,263. The amounts
presented are inclusive of derivative contracts.
Page 40 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - JANUARY (DJAN)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 295,639 $ 295,639 $ -- $ --
Call Options Purchased............................... 55,368,892 -- 55,368,892 --
Put Options Purchased................................ 489,446 -- 489,446 --
-------------- -------------- -------------- --------------
Total................................................ $ 56,153,977 $ 295,639 $ 55,858,338 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (6,469,240) $ -- $ (6,469,240) $ --
Put Options Written.................................. (138,350) -- (138,350) --
-------------- -------------- -------------- --------------
Total................................................ $ (6,607,590) $ -- $ (6,607,590) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 41
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - FEBRUARY (FFEB)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.7%
<S> <C> <C>
1,712,690 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 1,712,690
(Cost $1,712,690) --------------
TOTAL INVESTMENTS -- 0.7%...................................................................... 1,712,690
(Cost $1,712,690) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 105.0%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 103.2%
5,973 SPDR(R) S&P 500(R) ETF Trust....................... $ 269,716,788 $ 3.90 02/18/22 266,743,192
(Cost $228,823,427) --------------
PUT OPTIONS PURCHASED -- 1.8%
5,973 SPDR(R) S&P 500(R) ETF Trust....................... 269,716,788 390.03 02/18/22 4,744,899
(Cost $22,442,191) --------------
TOTAL PURCHASED OPTIONS........................................................................ 271,488,091
(Cost $251,265,618) (b) --------------
WRITTEN OPTIONS -- (5.6)%
CALL OPTIONS WRITTEN -- (4.5)%
(5,973) SPDR(R) S&P 500(R) ETF Trust....................... (269,716,788) 451.85 02/18/22 (11,759,462)
(Premiums received $3,312,185) --------------
PUT OPTIONS WRITTEN -- (1.1)%
(5,973) SPDR(R) S&P 500(R) ETF Trust........................ (269,716,788) 351.03 02/18/22 (2,802,873)
(Premiums received $14,107,361) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (14,562,335)
(Premiums received $17,419,546) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (185,496)
--------------
NET ASSETS -- 100.0%........................................................................... $ 258,452,950
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $235,558,837. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$49,224,180 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$26,144,571. The net unrealized appreciation was $23,079,609. The amounts
presented are inclusive of derivative contracts.
Page 42 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - FEBRUARY (FFEB)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 1,712,690 $ 1,712,690 $ -- $ --
Call Options Purchased............................... 266,743,192 -- 266,743,192 --
Put Options Purchased................................ 4,744,899 -- 4,744,899 --
-------------- -------------- -------------- --------------
Total................................................ $ 273,200,781 $ 1,712,690 $ 271,488,091 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (11,759,462) $ -- $ (11,759,462) $ --
Put Options Written.................................. (2,802,873) -- (2,802,873) --
-------------- -------------- -------------- --------------
Total................................................ $ (14,562,335) $ -- $ (14,562,335) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 43
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - FEBRUARY (DFEB)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.7%
<S> <C> <C>
1,944,693 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 1,944,693
(Cost $1,944,693) --------------
TOTAL INVESTMENTS -- 0.7%...................................................................... 1,944,693
(Cost $1,944,693) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 109.1%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 107.6%
6,844 SPDR(R) S&P 500(R) ETF Trust....................... $ 309,047,664 $ 3.89 02/18/22 304,202,112
(Cost $259,821,077) --------------
PUT OPTIONS PURCHASED -- 1.5%
6,844 SPDR(R) S&P 500(R) ETF Trust....................... 309,047,664 370.53 02/18/22 4,167,996
(Cost $20,895,704) --------------
TOTAL PURCHASED OPTIONS........................................................................ 308,370,108
(Cost $280,716,781) (b) --------------
WRITTEN OPTIONS -- (9.7)%
CALL OPTIONS WRITTEN -- (9.4)%
(6,844) SPDR(R) S&P 500(R) ETF Trust....................... (309,047,664) 424.55 02/18/22 (26,499,968)
(Premiums received $9,059,437) --------------
PUT OPTIONS WRITTEN -- (0.3)%
(6,844) SPDR(R) S&P 500(R) ETF Trust....................... (309,047,664) 273.02 02/18/22 (971,848)
(Premiums received $7,715,597) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (27,471,816)
(Premiums received $16,775,034) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (209,086)
--------------
NET ASSETS -- 100.0%........................................................................... $ 282,633,899
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $266,268,885. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$50,742,339 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$34,168,239. The net unrealized appreciation was $16,574,100. The amounts
presented are inclusive of derivative contracts.
Page 44 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - FEBRUARY (DFEB)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 1,944,693 $ 1,944,693 $ -- $ --
Call Options Purchased............................... 304,202,112 -- 304,202,112 --
Put Options Purchased................................ 4,167,996 -- 4,167,996 --
-------------- -------------- -------------- --------------
Total................................................ $ 310,314,801 $ 1,944,693 $ 308,370,108 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (26,499,968) $ -- $ (26,499,968) $ --
Put Options Written.................................. (971,848) -- (971,848) --
-------------- -------------- -------------- --------------
Total................................................ $ (27,471,816) $ -- $ (27,471,816) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 45
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - MARCH (FMAR)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.7%
<S> <C> <C>
615,119 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 615,119
(Cost $615,119) --------------
TOTAL INVESTMENTS -- 0.7%...................................................................... 615,119
(Cost $615,119) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 106.7%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 104.6%
1,938 SPDR(R) S&P 500(R) ETF Trust....................... $ 87,512,328 $ 3.89 03/18/22 86,385,893
(Cost $76,562,745) --------------
PUT OPTIONS PURCHASED -- 2.1%
1,938 SPDR(R) S&P 500(R) ETF Trust....................... 87,512,328 389.48 03/18/22 1,755,284
(Cost $5,070,263) --------------
TOTAL PURCHASED OPTIONS........................................................................ 88,141,177
(Cost $81,633,008) (b) --------------
WRITTEN OPTIONS -- (7.3)%
CALL OPTIONS WRITTEN -- (6.1)%
(1,938) SPDR(R) S&P 500(R) ETF Trust....................... (87,512,328) 444.79 03/18/22 (5,082,632)
(Premiums received $1,856,247) --------------
PUT OPTIONS WRITTEN -- (1.2)%
(1,938) SPDR(R) S&P 500(R) ETF Trust....................... (87,512,328) 350.53 03/18/22 (1,006,517)
(Premiums received $3,079,309) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (6,089,149)
(Premiums received $4,935,556) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (57,765)
--------------
NET ASSETS -- 100.0%........................................................................... $ 82,609,382
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $77,320,149. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$11,892,151 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$6,545,153. The net unrealized appreciation was $5,346,998. The amounts
presented are inclusive of derivative contracts.
Page 46 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - MARCH (FMAR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 615,119 $ 615,119 $ -- $ --
Call Options Purchased............................... 86,385,893 -- 86,385,893 --
Put Options Purchased................................ 1,755,284 -- 1,755,284 --
-------------- -------------- -------------- --------------
Total................................................ $ 88,756,296 $ 615,119 $ 88,141,177 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (5,082,632) $ -- $ (5,082,632) $ --
Put Options Written.................................. (1,006,517) -- (1,006,517) --
-------------- -------------- -------------- --------------
Total................................................ $ (6,089,149) $ -- $ (6,089,149) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 47
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - MARCH (DMAR)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.7%
<S> <C> <C>
491,884 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 491,884
(Cost $491,884) --------------
TOTAL INVESTMENTS -- 0.7%...................................................................... 491,884
(Cost $491,884) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 109.4%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 107.7%
1,596 SPDR(R) S&P 500(R) ETF Trust....................... $ 72,068,976 $ 3.88 03/18/22 71,142,919
(Cost $64,894,360) --------------
PUT OPTIONS PURCHASED -- 1.7%
1,596 SPDR(R) S&P 500(R) ETF Trust....................... 72,068,976 370.01 03/18/22 1,091,535
(Cost $3,541,552) --------------
TOTAL PURCHASED OPTIONS........................................................................ 72,234,454
(Cost $68,435,912) (b) --------------
WRITTEN OPTIONS -- (10.0)%
CALL OPTIONS WRITTEN -- (9.6)%
(1,596) SPDR(R) S&P 500(R) ETF Trust....................... (72,068,976) 425.70 03/18/22 (6,345,213)
(Premiums received $2,455,106) --------------
PUT OPTIONS WRITTEN -- (0.4)%
(1,596) SPDR(R) S&P 500(R) ETF Trust....................... (72,068,976) 272.64 03/18/22 (280,909)
(Premiums received $712,324) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (6,626,122)
(Premiums received $3,167,430) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (47,245)
--------------
NET ASSETS -- 100.0%........................................................................... $ 66,052,971
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $65,760,366. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$6,679,972 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$6,340,122. The net unrealized appreciation was $339,850. The amounts
presented are inclusive of derivative contracts.
Page 48 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - MARCH (DMAR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 491,884 $ 491,884 $ -- $ --
Call Options Purchased............................... 71,142,919 -- 71,142,919 --
Put Options Purchased................................ 1,091,535 -- 1,091,535 --
-------------- -------------- -------------- --------------
Total................................................ $ 72,726,338 $ 491,884 $ 72,234,454 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (6,345,213) $ -- $ (6,345,213) $ --
Put Options Written.................................. (280,909) -- (280,909) --
-------------- -------------- -------------- --------------
Total................................................ $ (6,626,122) $ -- $ (6,626,122) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 49
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - APRIL (FAPR)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 104.6%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 101.1%
3,060 SPDR(R) S&P 500(R) ETF Trust....................... $ 138,177,360 $ 4.17 04/14/22 $ 136,263,913
(Cost $124,961,055) --------------
PUT OPTIONS PURCHASED -- 3.5%
3,060 SPDR(R) S&P 500(R) ETF Trust....................... 138,177,360 417.26 04/14/22 4,713,609
(Cost $9,461,985) --------------
TOTAL PURCHASED OPTIONS........................................................................ 140,977,522
(Cost $134,423,040) (a) --------------
WRITTEN OPTIONS -- (5.4)%
CALL OPTIONS WRITTEN -- (3.4)%
(3,060) SPDR(R) S&P 500(R) ETF Trust....................... (138,177,360) 467.33 04/14/22 (4,616,068)
(Premiums received $2,101,321) --------------
PUT OPTIONS WRITTEN -- (2.0)%
(3,060) SPDR(R) S&P 500(R) ETF Trust....................... (138,177,360) 375.53 04/14/22 (2,629,688)
(Premiums received $5,575,935) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (7,245,756)
(Premiums received $7,677,256) (a) --------------
NET OTHER ASSETS AND LIABILITIES -- 0.8%....................................................... 1,019,544
--------------
NET ASSETS -- 100.0%........................................................................... $ 134,751,310
==============
</TABLE>
-----------------------------
(a) Aggregate cost for federal income tax purposes is $126,765,148. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$14,239,423 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$7,272,805. The net unrealized appreciation was $6,966,618. The amounts
presented are inclusive of derivative contracts.
Page 50 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - APRIL (FAPR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Call Options Purchased............................... $ 136,263,913 $ -- $ 136,263,913 $ --
Put Options Purchased................................ 4,713,609 -- 4,713,609 --
-------------- -------------- -------------- --------------
Total................................................ $ 140,977,522 $ -- $ 140,977,522 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (4,616,068) $ -- $ (4,616,068) $ --
Put Options Written.................................. (2,629,688) -- (2,629,688) --
-------------- -------------- -------------- --------------
Total................................................ $ (7,245,756) $ -- $ (7,245,756) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 51
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - APRIL (DAPR)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.8%
<S> <C> <C>
771,222 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 771,222
(Cost $771,222) --------------
TOTAL INVESTMENTS -- 0.8%...................................................................... 771,222
(Cost $771,222) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 105.9%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 103.2%
2,160 SPDR(R) S&P 500(R) ETF Trust....................... $ 97,536,960 $ 4.16 04/14/22 96,188,450
(Cost $88,683,865) --------------
PUT OPTIONS PURCHASED -- 2.7%
2,160 SPDR(R) S&P 500(R) ETF Trust....................... 97,536,960 396.40 04/14/22 2,475,583
(Cost $5,453,247) --------------
TOTAL PURCHASED OPTIONS........................................................................ 98,664,033
(Cost $94,137,112) (b) --------------
WRITTEN OPTIONS -- (6.6)%
CALL OPTIONS WRITTEN -- (5.9)%
(2,160) SPDR(R) S&P 500(R) ETF Trust....................... (97,536,960) 448.55 04/14/22 (5,535,261)
(Premiums received $2,577,499) --------------
PUT OPTIONS WRITTEN -- (0.7)%
(2,160) SPDR(R) S&P 500(R) ETF Trust....................... (97,536,960) 292.08 04/14/22 (607,604)
(Premiums received $1,227,786) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (6,142,865)
(Premiums received $3,805,285) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (66,828)
--------------
NET ASSETS -- 100.0%........................................................................... $ 93,225,562
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $91,103,401. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$8,124,590 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$5,935,601. The net unrealized appreciation was $2,188,989. The amounts
presented are inclusive of derivative contracts.
Page 52 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - APRIL (DAPR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 771,222 $ 771,222 $ -- $ --
Call Options Purchased............................... 96,188,450 -- 96,188,450 --
Put Options Purchased................................ 2,475,583 -- 2,475,583 --
-------------- -------------- -------------- --------------
Total................................................ $ 99,435,255 $ 771,222 $ 98,664,033 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (5,535,261) $ -- $ (5,535,261) $ --
Put Options Written.................................. (607,604) -- (607,604) --
-------------- -------------- -------------- --------------
Total................................................ $ (6,142,865) $ -- $ (6,142,865) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 53
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER - MAY (FMAY)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 2.6%
<S> <C> <C>
2,854,296 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 2,854,296
(Cost $2,854,296) --------------
TOTAL INVESTMENTS -- 2.6%...................................................................... 2,854,296
(Cost $2,854,296) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 105.4%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 101.6%
2,552 SPDR(R) S&P 500(R) ETF Trust....................... $ 115,238,112 $ 4.15 05/20/22 113,700,063
(Cost $104,396,235) --------------
PUT OPTIONS PURCHASED -- 3.8%
2,552 SPDR(R) S&P 500(R) ETF Trust....................... 115,238,112 414.94 05/20/22 4,311,852
(Cost $7,930,181) --------------
TOTAL PURCHASED OPTIONS........................................................................ 118,011,915
(Cost $112,326,416) (b) --------------
WRITTEN OPTIONS -- (6.3)%
CALL OPTIONS WRITTEN -- (4.1)%
(2,552) SPDR(R) S&P 500(R) ETF Trust....................... (115,238,112) 466.81 05/20/22 (4,550,950)
(Premiums received $1,935,228) --------------
PUT OPTIONS WRITTEN -- (2.2)%
(2,552) SPDR(R) S&P 500(R) ETF Trust....................... (115,238,112) 373.45 05/20/22 (2,498,953)
(Premiums received $4,694,079) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (7,049,903)
(Premiums received $6,629,307) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (1.7)%..................................................... (1,940,462)
--------------
NET ASSETS -- 100.0%........................................................................... $ 111,875,846
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $108,556,103. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$11,498,787 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$6,238,582. The net unrealized appreciation was $5,260,205. The amounts
presented are inclusive of derivative contracts.
Page 54 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER - MAY (FMAY)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 2,854,296 $ 2,854,296 $ -- $ --
Call Options Purchased............................... 113,700,063 -- 113,700,063 --
Put Options Purchased................................ 4,311,852 -- 4,311,852 --
-------------- -------------- -------------- --------------
Total................................................ $ 120,866,211 $ 2,854,296 $ 118,011,915 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (4,550,950) $ -- $ (4,550,950) $ --
Put Options Written.................................. (2,498,953) -- (2,498,953) --
-------------- -------------- -------------- --------------
Total................................................ $ (7,049,903) $ -- $ (7,049,903) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 55
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - MAY (DMAY)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.9%
<S> <C> <C>
569,198 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 569,198
(Cost $569,198) --------------
TOTAL INVESTMENTS -- 0.9%...................................................................... 569,198
(Cost $569,198) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 106.8%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 103.8%
1,477 SPDR(R) S&P 500(R) ETF Trust....................... $ 66,695,412 $ 4.14 05/20/22 65,806,724
(Cost $60,341,426) --------------
PUT OPTIONS PURCHASED -- 3.0%
1,477 SPDR(R) S&P 500(R) ETF Trust....................... 66,695,412 394.19 05/20/22 1,894,808
(Cost $3,588,443) --------------
TOTAL PURCHASED OPTIONS........................................................................ 67,701,532
(Cost $63,929,869) (b) --------------
WRITTEN OPTIONS -- (7.6)%
CALL OPTIONS WRITTEN -- (6.8)%
(1,477) SPDR(R) S&P 500(R) ETF Trust....................... (66,695,412) 446.48 05/20/22 (4,354,969)
(Premiums received $2,045,906) --------------
PUT OPTIONS WRITTEN -- (0.8)%
(1,477) SPDR(R) S&P 500(R) ETF Trust....................... (66,695,412) 290.46 05/20/22 (498,982)
(Premiums received $909,682) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (4,853,951)
(Premiums received $2,955,588) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (46,164)
--------------
NET ASSETS -- 100.0%........................................................................... $ 63,370,615
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $61,546,399. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$5,874,539 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$4,004,159. The net unrealized appreciation was $1,870,380. The amounts
presented are inclusive of derivative contracts.
Page 56 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - MAY (DMAY)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 569,198 $ 569,198 $ -- $ --
Call Options Purchased............................... 65,806,724 -- 65,806,724 --
Put Options Purchased................................ 1,894,808 -- 1,894,808 --
-------------- -------------- -------------- --------------
Total................................................ $ 68,270,730 $ 569,198 $ 67,701,532 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (4,354,969) $ -- $ (4,354,969) $ --
Put Options Written.................................. (498,982) -- (498,982) --
-------------- -------------- -------------- --------------
Total................................................ $ (4,853,951) $ -- $ (4,853,951) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 57
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - JUNE (FJUN)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.9%
<S> <C> <C>
1,069,034 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 1,069,034
(Cost $1,069,034) --------------
TOTAL INVESTMENTS -- 0.9%...................................................................... 1,069,034
(Cost $1,069,034) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 106.5%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 102.1%
2,601 SPDR(R) S&P 500(R) ETF Trust....................... $ 117,450,756 $ 4.15 06/17/22 115,445,510
(Cost $106,655,154) --------------
PUT OPTIONS PURCHASED -- 4.4%
2,601 SPDR(R) S&P 500(R) ETF Trust....................... 117,450,756 414.92 06/17/22 4,925,028
(Cost $7,843,906) --------------
TOTAL PURCHASED OPTIONS........................................................................ 120,370,538
(Cost $114,499,060) (b) --------------
WRITTEN OPTIONS -- (7.3)%
CALL OPTIONS WRITTEN -- (4.7)%
(2,601) SPDR(R) S&P 500(R) ETF Trust....................... (117,450,756) 463.47 06/17/22 (5,380,881)
(Premiums received $2,212,113) --------------
PUT OPTIONS WRITTEN -- (2.6)%
(2,601) SPDR(R) S&P 500(R) ETF Trust....................... (117,450,756) 373.43 06/17/22 (2,904,334)
(Premiums received $4,733,383) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (8,285,215)
(Premiums received $6,945,496) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (79,592)
--------------
NET ASSETS -- 100.0%........................................................................... $ 113,074,765
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $108,626,818. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$10,618,510 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$6,090,971. The net unrealized appreciation was $4,527,539. The amounts
presented are inclusive of derivative contracts.
Page 58 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - JUNE (FJUN)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 1,069,034 $ 1,069,034 $ -- $ --
Call Options Purchased............................... 115,445,510 -- 115,445,510 --
Put Options Purchased................................ 4,925,028 -- 4,925,028 --
-------------- -------------- -------------- --------------
Total................................................ $ 121,439,572 $ 1,069,034 $ 120,370,538 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (5,380,881) $ -- $ (5,380,881) $ --
Put Options Written.................................. (2,904,334) -- (2,904,334) --
-------------- -------------- -------------- --------------
Total................................................ $ (8,285,215) $ -- $ (8,285,215) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 59
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - JUNE (DJUN)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.9%
<S> <C> <C>
425,466 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 425,466
(Cost $425,466) --------------
TOTAL INVESTMENTS -- 0.9%...................................................................... 425,466
(Cost $425,466) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 107.5%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 104.1%
1,078 SPDR(R) S&P 500(R) ETF Trust....................... $ 48,678,168 $ 4.14 06/17/22 47,848,159
(Cost $44,473,039) --------------
PUT OPTIONS PURCHASED -- 3.4%
1,078 SPDR(R) S&P 500(R) ETF Trust....................... 48,678,168 394.17 06/17/22 1,564,903
(Cost $2,450,550) --------------
TOTAL PURCHASED OPTIONS........................................................................ 49,413,062
(Cost $46,923,589) (b) --------------
WRITTEN OPTIONS -- (8.3)%
CALL OPTIONS WRITTEN -- (7.4)%
(1,078) SPDR(R) S&P 500(R) ETF Trust....................... (48,678,168) 444.21 06/17/22 (3,431,904)
(Premiums received $1,769,811) --------------
PUT OPTIONS WRITTEN -- (0.9)%
(1,078) SPDR(R) S&P 500(R) ETF Trust....................... (48,678,168) 290.44 06/17/22 (422,855)
(Premiums received $586,072) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (3,854,759)
(Premiums received $2,355,883) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (32,841)
--------------
NET ASSETS -- 100.0%........................................................................... $ 45,950,928
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $45,002,423. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$3,533,195 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$2,551,849. The net unrealized appreciation was $981,346. The amounts
presented are inclusive of derivative contracts.
Page 60 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - JUNE (DJUN)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 425,466 $ 425,466 $ -- $ --
Call Options Purchased............................... 47,848,159 -- 47,848,159 --
Put Options Purchased................................ 1,564,903 -- 1,564,903 --
-------------- -------------- -------------- --------------
Total................................................ $ 49,838,528 $ 425,466 $ 49,413,062 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (3,431,904) $ -- $ (3,431,904) $ --
Put Options Written.................................. (422,855) -- (422,855) --
-------------- -------------- -------------- --------------
Total................................................ $ (3,854,759) $ -- $ (3,854,759) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 61
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - JULY (FJUL)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 1.0%
<S> <C> <C>
1,287,837 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 1,287,837
(Cost $1,287,837) --------------
TOTAL INVESTMENTS -- 1.0%...................................................................... 1,287,837
(Cost $1,287,837) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 105.4%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 99.9%
2,803 SPDR(R) S&P 500(R) ETF Trust....................... $ 126,572,268 $ 4.31 07/15/22 124,574,123
(Cost $119,515,993) --------------
PUT OPTIONS PURCHASED -- 5.5%
2,803 SPDR(R) S&P 500(R) ETF Trust....................... 126,572,268 431.34 07/15/22 6,903,547
(Cost $8,812,129) --------------
TOTAL PURCHASED OPTIONS........................................................................ 131,477,670
(Cost $128,328,122) (b) --------------
WRITTEN OPTIONS -- (6.4)%
CALL OPTIONS WRITTEN -- (3.1)%
(2,803) SPDR(R) S&P 500(R) ETF Trust....................... (126,572,268) 481.81 07/15/22 (3,903,953)
(Premiums received $3,039,643) --------------
PUT OPTIONS WRITTEN -- (3.3)%
(2,803) SPDR(R) S&P 500(R) ETF Trust....................... (126,572,268) 388.21 07/15/22 (4,060,745)
(Premiums received $4,706,285) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (7,964,698)
(Premiums received $7,745,928) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.0)%..................................................... (78,581)
--------------
NET ASSETS -- 100.0%........................................................................... $ 124,722,228
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $121,870,031. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$5,703,670 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$2,772,892. The net unrealized appreciation was $2,930,778. The amounts
presented are inclusive of derivative contracts.
Page 62 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - JULY (FJUL)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 1,287,837 $ 1,287,837 $ -- $ --
Call Options Purchased............................... 124,574,123 -- 124,574,123 --
Put Options Purchased................................ 6,903,547 -- 6,903,547 --
-------------- -------------- -------------- --------------
Total................................................ $ 132,765,507 $ 1,287,837 $ 131,477,670 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (3,903,953) $ -- $ (3,903,953) $ --
Put Options Written.................................. (4,060,745) -- (4,060,745) --
-------------- -------------- -------------- --------------
Total................................................ $ (7,964,698) $ -- $ (7,964,698) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 63
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - JULY (DJUL)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 1.1%
<S> <C> <C>
572,972 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 572,972
(Cost $572,972) --------------
TOTAL INVESTMENTS -- 1.1%...................................................................... 572,972
(Cost $572,972) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 105.4%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 101.1%
1,245 SPDR(R) S&P 500(R) ETF Trust....................... $ 56,219,220 $ 4.30 07/15/22 55,332,954
(Cost $52,837,771) --------------
PUT OPTIONS PURCHASED -- 4.3%
1,245 SPDR(R) S&P 500(R) ETF Trust....................... 56,219,220 409.77 07/15/22 2,347,582
(Cost $3,122,057) --------------
TOTAL PURCHASED OPTIONS........................................................................ 57,680,536
(Cost $55,959,828) (b) --------------
WRITTEN OPTIONS -- (6.4)%
CALL OPTIONS WRITTEN -- (5.2)%
(1,245) SPDR(R) S&P 500(R) ETF Trust....................... (56,219,220) 462.83 07/15/22 (2,848,698)
(Premiums received $1,869,855) --------------
PUT OPTIONS WRITTEN -- (1.2)%
(1,245) SPDR(R) S&P 500(R) ETF Trust....................... (56,219,220) 301.94 07/15/22 (632,923)
(Premiums received $786,188) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (3,481,621)
(Premiums received $2,656,043) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (37,170)
--------------
NET ASSETS -- 100.0%........................................................................... $ 54,734,717
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $53,887,575. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$2,637,671 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$1,753,359. The net unrealized appreciation was $884,312. The amounts
presented are inclusive of derivative contracts.
Page 64 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - JULY (DJUL)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 572,972 $ 572,972 $ -- $ --
Call Options Purchased............................... 55,332,954 -- 55,332,954 --
Put Options Purchased................................ 2,347,582 -- 2,347,582 --
-------------- -------------- -------------- --------------
Total................................................ $ 58,253,508 $ 572,972 $ 57,680,536 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (2,848,698) $ -- $ (2,848,698) $ --
Put Options Written.................................. (632,923) -- (632,923) --
-------------- -------------- -------------- --------------
Total................................................ $ (3,481,621) $ -- $ (3,481,621) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 65
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - AUGUST (FAUG)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 1.1%
<S> <C> <C>
1,672,022 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 1,672,022
(Cost $1,672,022) --------------
TOTAL INVESTMENTS -- 1.1%...................................................................... 1,672,022
(Cost $1,672,022) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 105.3%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 98.4%
3,469 SPDR(R) S&P 500(R) ETF Trust....................... $ 156,646,164 $ 4.43 08/19/22 153,149,412
(Cost $150,402,784) --------------
PUT OPTIONS PURCHASED -- 6.9%
3,469 SPDR(R) S&P 500(R) ETF Trust....................... 156,646,164 443.36 08/19/22 10,746,962
(Cost $13,806,884) --------------
TOTAL PURCHASED OPTIONS........................................................................ 163,896,374
(Cost $164,209,668) (b) --------------
WRITTEN OPTIONS -- (6.4)%
CALL OPTIONS WRITTEN -- (2.1)%
(3,469) SPDR(R) S&P 500(R) ETF Trust....................... (156,646,164) 494.97 08/19/22 (3,326,771)
(Premiums received $3,560,757) --------------
PUT OPTIONS WRITTEN -- (4.3)%
(3,469) SPDR(R) S&P 500(R) ETF Trust....................... (156,646,164) 399.02 08/19/22 (6,598,038)
(Premiums received $8,242,352) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (9,924,809)
(Premiums received $11,803,109) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.0)%..................................................... (1,936)
--------------
NET ASSETS -- 100.0%........................................................................... $ 155,641,651
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $154,078,581. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$4,700,804 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$3,135,798. The net unrealized appreciation was $1,565,006. The amounts
presented are inclusive of derivative contracts.
Page 66 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - AUGUST (FAUG)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 1,672,022 $ 1,672,022 $ -- $ --
Call Options Purchased............................... 153,149,412 -- 153,149,412 --
Put Options Purchased................................ 10,746,962 -- 10,746,962 --
-------------- -------------- -------------- --------------
Total................................................ $ 165,568,396 $ 1,672,022 $ 163,896,374 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (3,326,771) $ -- $ (3,326,771) $ --
Put Options Written.................................. (6,598,038) -- (6,598,038) --
-------------- -------------- -------------- --------------
Total................................................ $ (9,924,809) $ -- $ (9,924,809) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 67
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - AUGUST (DAUG)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 1.1%
<S> <C> <C>
984,044 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 984,044
(Cost $984,044) --------------
TOTAL INVESTMENTS -- 1.1%...................................................................... 984,044
(Cost $984,044) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 104.5%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 99.3%
2,018 SPDR(R) S&P 500(R) ETF Trust....................... $ 91,124,808 $ 4.42 08/19/22 89,699,105
(Cost $87,303,226) --------------
PUT OPTIONS PURCHASED -- 5.2%
2,018 SPDR(R) S&P 500(R) ETF Trust....................... 91,124,808 421.19 08/19/22 4,710,322
(Cost $5,967,522) --------------
TOTAL PURCHASED OPTIONS........................................................................ 94,409,427
(Cost $93,270,748) (b) --------------
WRITTEN OPTIONS -- (5.5)%
CALL OPTIONS WRITTEN -- (4.1)%
(2,018) SPDR(R) S&P 500(R) ETF Trust....................... (91,124,808) 476.04 08/19/22 (3,676,066)
(Premiums received $3,046,480) --------------
PUT OPTIONS WRITTEN -- (1.4)%
(2,018) SPDR(R) S&P 500(R) ETF Trust....................... (91,124,808) 310.35 08/19/22 (1,287,599)
(Premiums received $1,656,488) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (4,963,665)
(Premiums received $4,702,968) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (59,811)
--------------
NET ASSETS -- 100.0%........................................................................... $ 90,369,995
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $89,551,824. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$2,764,769 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$1,886,787. The net unrealized appreciation was $877,982. The amounts
presented are inclusive of derivative contracts.
Page 68 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - AUGUST (DAUG)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 984,044 $ 984,044 $ -- $ --
Call Options Purchased............................... 89,699,105 -- 89,699,105 --
Put Options Purchased................................ 4,710,322 -- 4,710,322 --
-------------- -------------- -------------- --------------
Total................................................ $ 95,393,471 $ 984,044 $ 94,409,427 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (3,676,066) $ -- $ (3,676,066) $ --
Put Options Written.................................. (1,287,599) -- (1,287,599) --
-------------- -------------- -------------- --------------
Total................................................ $ (4,963,665) $ -- $ (4,963,665) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 69
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - SEPTEMBER (FSEP)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.4%
<S> <C> <C>
154,011 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 154,011
(Cost $154,011) --------------
TOTAL INVESTMENTS -- 0.4%...................................................................... 154,011
(Cost $154,011) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 116.7%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 116.7%
1,080 SPDR(R) S&P 500(R) ETF Trust....................... $ 48,768,480 $ 3.31 09/17/21 48,227,024
(Cost $44,593,089) --------------
PUT OPTIONS PURCHASED -- 0.0%
1,080 SPDR(R) S&P 500(R) ETF Trust....................... 48,768,480 330.65 09/17/21 6,574
(Cost $1,624,888) --------------
TOTAL PURCHASED OPTIONS........................................................................ 48,233,598
(Cost $46,217,977) (b) --------------
WRITTEN OPTIONS -- (17.0)%
CALL OPTIONS WRITTEN -- (17.0)%
(1,080) SPDR(R) S&P 500(R) ETF Trust....................... (48,768,480) 385.21 09/17/21 (7,009,980)
(Premiums received $2,955,417) --------------
PUT OPTIONS WRITTEN -- (0.0)%
(1,080) SPDR(R) S&P 500(R) ETF Trust....................... (48,768,480) 297.59 09/17/21 (3,222)
(Premiums received $177,353) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (7,013,202)
(Premiums received $3,132,770) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (30,311)
--------------
NET ASSETS -- 100.0%........................................................................... $ 41,344,096
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $43,239,218. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$3,808,066 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$5,672,877. The net unrealized depreciation was $1,864,811. The amounts
presented are inclusive of derivative contracts.
Page 70 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - SEPTEMBER (FSEP)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 154,011 $ 154,011 $ -- $ --
Call Options Purchased............................... 48,227,024 -- 48,227,024 --
Put Options Purchased................................ 6,574 -- 6,574 --
-------------- -------------- -------------- --------------
Total................................................ $ 48,387,609 $ 154,011 $ 48,233,598 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (7,009,980) $ -- $ (7,009,980) $ --
Put Options Written.................................. (3,222) -- (3,222) --
-------------- -------------- -------------- --------------
Total................................................ $ (7,013,202) $ -- $ (7,013,202) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 71
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - SEPTEMBER (DSEP)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.4%
<S> <C> <C>
95,244 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 95,244
(Cost $95,244) --------------
TOTAL INVESTMENTS -- 0.4%...................................................................... 95,244
(Cost $95,244) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 124.4%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 124.4%
720 SPDR(R) S&P 500(R) ETF Trust....................... $ 32,512,320 $ 3.30 09/17/21 32,152,069
(Cost $28,709,797) --------------
PUT OPTIONS PURCHASED -- 0.0%
720 SPDR(R) S&P 500(R) ETF Trust....................... 32,512,320 314.12 09/17/21 3,046
(Cost $1,163,843) --------------
TOTAL PURCHASED OPTIONS........................................................................ 32,155,115
(Cost $29,873,640) (b) --------------
WRITTEN OPTIONS -- (24.7)%
CALL OPTIONS WRITTEN -- (24.7)%
(720) SPDR(R) S&P 500(R) ETF Trust....................... (32,512,320) 361.24 09/17/21 (6,390,679)
(Premiums received $2,660,904) --------------
PUT OPTIONS WRITTEN -- (0.0)%
(720) SPDR(R) S&P 500(R) ETF Trust....................... (32,512,320) 231.46 09/17/21 (574)
(Premiums received $76,338) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (6,391,253)
(Premiums received $2,737,242) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (18,196)
--------------
NET ASSETS -- 100.0%........................................................................... $ 25,840,910
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $27,231,642. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$3,518,036 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$4,890,572. The net unrealized depreciation was $1,372,536. The amounts
presented are inclusive of derivative contracts.
Page 72 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - SEPTEMBER (DSEP)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 95,244 $ 95,244 $ -- $ --
Call Options Purchased............................... 32,152,069 -- 32,152,069 --
Put Options Purchased................................ 3,046 -- 3,046 --
-------------- -------------- -------------- --------------
Total................................................ $ 32,250,359 $ 95,244 $ 32,155,115 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (6,390,679) $ -- $ (6,390,679) $ --
Put Options Written.................................. (574) -- (574) --
-------------- -------------- -------------- --------------
Total................................................ $ (6,391,253) $ -- $ (6,391,253) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 73
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - OCTOBER (FOCT)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.4%
<S> <C> <C>
300,535 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 300,535
(Cost $300,535) --------------
TOTAL INVESTMENTS -- 0.4%...................................................................... 300,535
(Cost $300,535) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 112.0%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 111.9%
1,763 SPDR(R) S&P 500(R) ETF Trust....................... $ 79,610,028 $ 3.47 10/15/21 78,879,558
(Cost $63,548,266) --------------
PUT OPTIONS PURCHASED -- 0.1%
1,763 SPDR(R) S&P 500(R) ETF Trust....................... 79,610,028 347.29 10/15/21 85,483
(Cost $4,681,394) --------------
TOTAL PURCHASED OPTIONS........................................................................ 78,965,041
(Cost $68,229,660) (b) --------------
WRITTEN OPTIONS -- (12.3)%
CALL OPTIONS WRITTEN -- (12.2)%
(1,763) SPDR(R) S&P 500(R) ETF Trust....................... (79,610,028) 403.62 10/15/21 (8,639,954)
(Premiums received $1,891,203) --------------
PUT OPTIONS WRITTEN -- (0.1)%
(1,763) SPDR(R) S&P 500(R) ETF Trust....................... (79,610,028) 312.56 10/15/21 (44,265)
(Premiums received $2,735,465) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (8,684,219)
(Premiums received $4,626,668) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (51,946)
--------------
NET ASSETS -- 100.0%........................................................................... $ 70,529,411
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $63,903,527. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$18,022,492 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$11,344,662. The net unrealized appreciation was $6,677,830. The amounts
presented are inclusive of derivative contracts.
Page 74 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - OCTOBER (FOCT)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 300,535 $ 300,535 $ -- $ --
Call Options Purchased............................... 78,879,558 -- 78,879,558 --
Put Options Purchased................................ 85,483 -- 85,483 --
-------------- -------------- -------------- --------------
Total................................................ $ 79,265,576 $ 300,535 $ 78,965,041 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (8,639,954) $ -- $ (8,639,954) $ --
Put Options Written.................................. (44,265) -- (44,265) --
-------------- -------------- -------------- --------------
Total................................................ $ (8,684,219) $ -- $ (8,684,219) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 75
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - OCTOBER (DOCT)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.4%
<S> <C> <C>
168,311 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 168,311
(Cost $168,311) --------------
TOTAL INVESTMENTS -- 0.4%...................................................................... 168,311
(Cost $168,311) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 118.8%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 118.7%
1,075 SPDR(R) S&P 500(R) ETF Trust....................... $ 48,542,700 $ 3.46 10/15/21 48,098,367
(Cost $37,754,277) --------------
PUT OPTIONS PURCHASED -- 0.1%
1,075 SPDR(R) S&P 500(R) ETF Trust....................... 48,542,700 329.93 10/15/21 37,264
(Cost $2,521,613) --------------
TOTAL PURCHASED OPTIONS........................................................................ 48,135,631
(Cost $40,275,890) (b) --------------
WRITTEN OPTIONS -- (19.1)%
CALL OPTIONS WRITTEN -- (19.1)%
(1,075) SPDR(R) S&P 500(R) ETF Trust....................... (48,542,700) 379.73 10/15/21 (7,756,611)
(Premiums received $2,168,202) --------------
PUT OPTIONS WRITTEN -- (0.0)%
(1,075) SPDR(R) S&P 500(R) ETF Trust....................... (48,542,700) 243.10 10/15/21 (7,937)
(Premiums received $695,552) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (7,764,548)
(Premiums received $2,863,754) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%.................................................... (28,710)
--------------
NET ASSETS -- 100.0%.......................................................................... $ 40,510,684
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $37,580,447. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$11,031,893 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$8,072,946. The net unrealized appreciation was $2,958,947. The amounts
presented are inclusive of derivative contracts.
Page 76 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - OCTOBER (DOCT)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 168,311 $ 168,311 $ -- $ --
Call Options Purchased............................... 48,098,367 -- 48,098,367 --
Put Options Purchased................................ 37,264 -- 37,264 --
-------------- -------------- -------------- --------------
Total................................................ $ 48,303,942 $ 168,311 $ 48,135,631 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (7,756,611) $ -- $ (7,756,611) $ --
Put Options Written.................................. (7,937) -- (7,937) --
-------------- -------------- -------------- --------------
Total................................................ $ (7,764,548) $ -- $ (7,764,548) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 77
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - NOVEMBER (FNOV)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 1.8%
<S> <C> <C>
2,623,885 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 2,623,885
(Cost $2,623,885) --------------
TOTAL INVESTMENTS -- 1.8%...................................................................... 2,623,885
(Cost $2,623,885) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 112.6%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 112.2%
3,600 SPDR(R) S&P 500(R) ETF Trust....................... $ 162,561,600 $ 3.55 11/19/21 161,122,043
(Cost $127,863,142) --------------
PUT OPTIONS PURCHASED -- 0.4%
3,600 SPDR(R) S&P 500(R) ETF Trust....................... 162,561,600 355.33 1/19/21 563,256
(Cost $11,035,267) --------------
TOTAL PURCHASED OPTIONS........................................................................ 161,685,299
(Cost $138,898,409) (b) --------------
WRITTEN OPTIONS -- (13.0)%
CALL OPTIONS WRITTEN -- (12.8)%
(3,600) SPDR(R) S&P 500(R) ETF Trust....................... (162,561,600) 404.08 11/19/21 (18,362,173)
(Premiums received $2,632,649) --------------
PUT OPTIONS WRITTEN -- (0.2)%
(3,600) SPDR(R) S&P 500(R) ETF Trust....................... (162,561,600) 319.80 11/19/21 (311,382)
(Premiums received $6,317,295) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (18,673,555)
(Premiums received $8,949,944) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (1.4)%..................................................... (2,019,966)
--------------
NET ASSETS -- 100.0%........................................................................... $ 143,615,663
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $132,731,545. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$39,105,619 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$26,201,535. The net unrealized appreciation was $12,904,084. The amounts
presented are inclusive of derivative contracts.
Page 78 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - NOVEMBER (FNOV)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 2,623,885 $ 2,623,885 $ -- $ --
Call Options Purchased............................... 161,122,043 -- 161,122,043 --
Put Options Purchased................................ 563,256 -- 563,256 --
-------------- -------------- -------------- --------------
Total................................................ $ 164,309,184 $ 2,623,885 $ 161,685,299 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (18,362,173) $ -- $ (18,362,173) $ --
Put Options Written.................................. (311,382) -- (311,382) --
-------------- -------------- -------------- --------------
Total................................................ $ (18,673,555) $ -- $ (18,673,555) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 79
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - NOVEMBER (DNOV)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.5%
<S> <C> <C>
456,878 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 456,878
(Cost $456,878) --------------
TOTAL INVESTMENTS -- 0.5%...................................................................... 456,878
(Cost $456,878) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 118.4%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 118.1%
2,399 SPDR(R) S&P 500(R) ETF Trust....................... $ 108,329,244 $ 3.54 11/19/21 107,372,337
(Cost $85,419,835) --------------
PUT OPTIONS PURCHASED -- 0.3%
2,399 SPDR(R) S&P 500(R) ETF Trust....................... 108,329,244 337.56 11/19/21 277,671
(Cost $5,951,360) --------------
TOTAL PURCHASED OPTIONS........................................................................ 107,650,008
(Cost $91,371,195) (b) --------------
WRITTEN OPTIONS -- (18.8)%
CALL OPTIONS WRITTEN -- (18.7)%
(2,399) SPDR(R) S&P 500(R) ETF Trust....................... (108,329,244) 382.87 11/19/21 (17,004,055)
(Premiums received $3,256,382) --------------
PUT OPTIONS WRITTEN -- (0.1)%
(2,399) SPDR(R) S&P 500(R) ETF Trust....................... (108,329,244) 248.73 11/19/21 (67,659)
(Premiums received $1,395,230) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (17,071,714)
(Premiums received $4,651,612) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (67,613)
--------------
NET ASSETS -- 100.0%........................................................................... $ 90,967,559
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $87,247,630. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$23,219,289 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$19,431,747. The net unrealized appreciation was $3,787,542. The amounts
presented are inclusive of derivative contracts.
Page 80 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - NOVEMBER (DNOV)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 456,878 $ 456,878 $ -- $ --
Call Options Purchased............................... 107,372,337 -- 107,372,337 --
Put Options Purchased................................ 277,671 -- 277,671 --
-------------- -------------- -------------- --------------
Total................................................ $ 108,106,886 $ 456,878 $ 107,650,008 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (17,004,055) $ -- $ (17,004,055) $ --
Put Options Written.................................. (67,659) -- (67,659) --
-------------- -------------- -------------- --------------
Total................................................ $ (17,071,714) $ -- $ (17,071,714) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 81
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - DECEMBER (FDEC)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.5%
<S> <C> <C>
374,673 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 374,673
(Cost $374,673) --------------
TOTAL INVESTMENTS -- 0.5%...................................................................... 374,673
(Cost $374,673) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 108.9%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 108.1%
1,722 SPDR(R) S&P 500(R) ETF Trust....................... $ 77,758,632 $ 3.69 12/17/21 76,649,834
(Cost $64,800,503) --------------
PUT OPTIONS PURCHASED -- 0.8%
1,722 SPDR(R) S&P 500(R) ETF Trust....................... 77,758,632 369.18 12/17/21 578,782
(Cost $4,347,326) --------------
TOTAL PURCHASED OPTIONS........................................................................ 77,228,616
(Cost $69,147,829) (b) --------------
WRITTEN OPTIONS -- (9.3)%
CALL OPTIONS WRITTEN -- (8.9)%
(1,722) SPDR(R) S&P 500(R) ETF Trust....................... (77,758,632) 420.87 12/17/21 (6,288,177)
(Premiums received $2,092,453) --------------
PUT OPTIONS WRITTEN -- (0.4)%
(1,722) SPDR(R) S&P 500(R) ETF Trust....................... (77,758,632) 332.26 12/17/21 (322,417)
(Premiums received $2,976,220) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (6,610,594)
(Premiums received $5,068,673) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (49,660)
--------------
NET ASSETS -- 100.0%........................................................................... $ 70,943,035
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $65,250,855. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$13,796,031 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$8,054,191. The net unrealized appreciation was $5,741,840. The amounts
presented are inclusive of derivative contracts.
Page 82 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY BUFFER ETF - DECEMBER (FDEC)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 374,673 $ 374,673 $ -- $ --
Call Options Purchased............................... 76,649,834 -- 76,649,834 --
Put Options Purchased................................ 578,782 -- 578,782 --
-------------- -------------- -------------- --------------
Total................................................ $ 77,603,289 $ 374,673 $ 77,228,616 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (6,288,177) $ -- $ (6,288,177) $ --
Put Options Written.................................. (322,417) -- (322,417) --
-------------- -------------- -------------- --------------
Total................................................ $ (6,610,594) $ -- $ (6,610,594) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 83
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - DECEMBER (DDEC)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.6%
<S> <C> <C>
331,253 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 331,253
(Cost $331,253) --------------
TOTAL INVESTMENTS -- 0.6%...................................................................... 331,253
(Cost $331,253) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 113.8%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 113.2%
1,517 SPDR(R) S&P 500(R) ETF Trust....................... $ 68,501,652 $ 3.68 12/17/21 67,432,167
(Cost $56,627,373) --------------
PUT OPTIONS PURCHASED -- 0.6%
1,517 SPDR(R) S&P 500(R) ETF Trust....................... 68,501,652 350.72 12/17/21 358,012
(Cost $3,216,954) --------------
TOTAL PURCHASED OPTIONS........................................................................ 67,790,179
(Cost $59,844,327) (b) --------------
WRITTEN OPTIONS -- (14.3)%
CALL OPTIONS WRITTEN -- (14.2)%
(1,517) SPDR(R) S&P 500(R) ETF Trust....................... (68,501,652) 398.71 12/17/21 (8,443,622)
(Premiums received $2,830,231) --------------
PUT OPTIONS WRITTEN -- (0.1)%
(1,517) SPDR(R) S&P 500(R) ETF Trust....................... (68,501,652) 258.43 12/17/21 (78,884)
(Premiums received $908,474) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (8,522,506)
(Premiums received $3,738,705) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (53,419)
--------------
NET ASSETS -- 100.0%........................................................................... $ 59,545,507
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $56,436,875. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$11,634,384 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$8,472,333. The net unrealized appreciation was $3,162,051. The amounts
presented are inclusive of derivative contracts.
Page 84 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - DECEMBER (DDEC)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 331,253 $ 331,253 $ -- $ --
Call Options Purchased............................... 67,432,167 -- 67,432,167 --
Put Options Purchased................................ 358,012 -- 358,012 --
-------------- -------------- -------------- --------------
Total................................................ $ 68,121,432 $ 331,253 $ 67,790,179 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (8,443,622) $ -- $ (8,443,622) $ --
Put Options Written.................................. (78,884) -- (78,884) --
-------------- -------------- -------------- --------------
Total................................................ $ (8,522,506) $ -- $ (8,522,506) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 85
<PAGE>
FT CBOE VEST FUND OF BUFFER ETFS (BUFR)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
-------------- --------------------------------- --------------
EXCHANGE-TRADED FUNDS -- 100.0%
CAPITAL MARKETS -- 100.0%
752,957 FT Cboe Vest U.S. Equity Buffer
ETF - January (a) (b) $ 25,142,439
680,850 FT Cboe Vest U.S. Equity Buffer
ETF - February (a) (b) 25,402,513
779,899 FT Cboe Vest U.S. Equity Buffer
ETF - March (a) (b) 25,206,024
798,404 FT Cboe Vest U.S. Equity Buffer
ETF - April (a) (b) 25,234,357
678,065 FT Cboe Vest U.S. Equity Buffer
ETF - May (a) (b) 25,232,697
680,941 FT Cboe Vest U.S. Equity Buffer
ETF - June (a) (b) 25,188,007
710,605 FT Cboe Vest U.S. Equity Buffer
ETF - July (a) (b) 25,254,902
671,296 FT Cboe Vest U.S. Equity Buffer
ETF - August (a) (b) 25,175,010
721,527 FT Cboe Vest U.S. Equity Buffer
ETF - September (a) (b) 24,842,175
724,890 FT Cboe Vest U.S. Equity Buffer
ETF - October (a) (b) 24,921,718
655,012 FT Cboe Vest U.S. Equity Buffer
ETF - November (a) (b) 25,053,554
740,753 FT Cboe Vest U.S. Equity Buffer
ETF - December (a) (b) 24,997,377
--------------
TOTAL EXCHANGE-TRADED FUNDS
-- 100.0% 301,650,773
(Cost $293,607,600) --------------
MONEY MARKET FUNDS -- 0.0%
160,876 Morgan Stanley Institutional
Liquidity Funds - Treasury
Portfolio - Institutional
Class - 0.01% (c) 160,876
(Cost $160,876) --------------
TOTAL INVESTMENTS -- 100.0% 301,811,649
(Cost $293,768,476) (d)
NET OTHER ASSETS AND
LIABILITIES -- (0.0)% (49,202)
--------------
NET ASSETS -- 100.0% $ 301,762,447
==============
(a) Investment in an affiliated fund.
(b) Non-income producing security.
(c) Rate shown reflects yield as of August 31, 2021.
(d) Aggregate cost for federal income tax purposes is $293,769,923. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$8,042,008 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was $282.
The net unrealized appreciation was $8,041,726.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 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
-------------------------------------------
Exchange-Traded
Funds* $ 301,650,773 $ -- $ --
Money Market
Funds 160,876 -- --
-------------------------------------------
Total Investments $ 301,811,649 $ -- $ --
===========================================
* See Portfolio of Investments for industry breakout.
Page 86 See Notes to Financial Statements
<PAGE>
FT CBOE VEST FUND OF DEEP BUFFER ETFS (BUFD)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
-------------- --------------------------------- --------------
EXCHANGE-TRADED FUNDS -- 99.9%
CAPITAL MARKETS -- 99.9%
420,388 FT Cboe Vest U.S. Equity Deep
Buffer ETF - January (a) (b) $ 13,402,138
387,555 FT Cboe Vest U.S. Equity Deep
Buffer ETF - February (a) (b) 13,421,030
428,762 FT Cboe Vest U.S. Equity Deep
Buffer ETF - March (a) (b) 13,452,408
434,206 FT Cboe Vest U.S. Equity Deep
Buffer ETF - April (a) (b) 13,464,511
394,276 FT Cboe Vest U.S. Equity Deep
Buffer ETF - May (a) (b) 13,465,196
394,415 FT Cboe Vest U.S. Equity Deep
Buffer ETF - June (a) (b) 13,396,029
405,935 FT Cboe Vest U.S. Equity Deep
Buffer ETF - July (a) (b) 13,441,726
387,204 FT Cboe Vest U.S. Equity Deep
Buffer ETF - August (a) (b) 13,434,043
412,331 FT Cboe Vest U.S. Equity Deep
Buffer ETF - September (a) (b) 13,351,278
413,354 FT Cboe Vest U.S. Equity Deep
Buffer ETF - October (a) (b) 13,394,736
383,972 FT Cboe Vest U.S. Equity Deep
Buffer ETF - November (a) (b) 13,392,943
416,711 FT Cboe Vest U.S. Equity Deep
Buffer ETF - December (a) (b) 13,422,261
--------------
TOTAL EXCHANGE-TRADED FUNDS
-- 99.9% 161,038,299
(Cost $158,772,529) --------------
MONEY MARKET FUNDS -- 0.1%
96,620 Morgan Stanley Institutional
Liquidity Funds - Treasury
Portfolio - Institutional
Class - 0.01% (c) 96,620
(Cost $96,620) --------------
TOTAL INVESTMENTS -- 100.0% 161,134,919
(Cost $158,869,149) (d)
NET OTHER ASSETS AND
LIABILITIES -- (0.0)% (25,943)
--------------
NET ASSETS -- 100.0% $ 161,108,976
==============
(a) Investment in an affiliated fund.
(b) Non-income producing security.
(c) Rate shown reflects yield as of August 31, 2021.
(d) Aggregate cost for federal income tax purposes is $158,876,352. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$2,258,851 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was $284.
The net unrealized appreciation was $2,258,567.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 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
-------------------------------------------
Exchange-Traded
Funds* $ 161,038,299 $ -- $ --
Money Market
Funds 96,620 -- --
-------------------------------------------
Total Investments $ 161,134,919 $ -- $ --
===========================================
* See Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 87
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 2021
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST
U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY
BUFFER ETF - DEEP BUFFER ETF - BUFFER ETF - DEEP BUFFER ETF -
JANUARY JANUARY FEBRUARY FEBRUARY
(FJAN) (DJAN) (FFEB) (DFEB)
---------------- ----------------- ----------------- -----------------
ASSETS:
<S> <C> <C> <C> <C>
Investments, at value - Unaffiliated............ $ 760,729 $ 295,639 $ 1,712,690 $ 1,944,693
Investments, at value - Affiliated.............. -- -- -- --
---------------- ----------------- ----------------- -----------------
Total investments, at value.................. 760,729 295,639 1,712,690 1,944,693
Options contracts purchased, at value........... 136,708,800 55,858,338 271,488,091 308,370,108
Cash............................................ 4 41 -- 6,893
Receivables:
Investment securities sold................... 3,597,293 -- -- 1,892,232
Capital shares sold.......................... 596 -- -- 313
Dividends.................................... 18 11 49 55
---------------- ----------------- ----------------- -----------------
Total Assets................................. 141,067,440 56,154,029 273,200,830 312,214,294
---------------- ----------------- ----------------- -----------------
LIABILITIES:
Options contracts written, at value............. 10,551,840 6,607,590 14,562,335 27,471,816
Due to custodian................................ -- -- 163 --
Payables:
Capital shares purchased..................... 3,337,136 -- -- 1,733,950
Investment securities purchased.............. 277,969 -- -- 168,740
Investment advisory fees..................... 89,256 35,827 185,382 205,889
---------------- ----------------- ----------------- -----------------
Total Liabilities............................ 14,256,201 6,643,417 14,747,880 29,580,395
---------------- ----------------- ----------------- -----------------
NET ASSETS...................................... $ 126,811,239 $ 49,510,612 $ 258,452,950 $ 282,633,899
================ ================= ================= =================
NET ASSETS CONSIST OF:
Paid-in capital................................. $ 117,263,320 $ 45,381,116 $ 251,181,508 $ 308,088,163
Par value....................................... 38,000 15,500 69,000 81,500
Accumulated distributable earnings (loss)....... 9,509,919 4,113,996 7,202,442 (25,535,764)
---------------- ----------------- ----------------- -----------------
NET ASSETS...................................... $ 126,811,239 $ 49,510,612 $ 258,452,950 $ 282,633,899
================ ================= ================= =================
NET ASSET VALUE, per share...................... $ 33.37 $ 31.94 $ 37.46 $ 34.68
================ ================= ================= =================
Number of shares outstanding (unlimited number
of shares authorized, par value
$0.01 per share)............................. 3,800,002 1,550,002 6,900,002 8,150,002
================ ================= ================= =================
Investments, at cost - Unaffiliated............. $ 760,729 $ 295,639 $ 1,712,690 $ 1,944,693
================ ================= ================= =================
Investments, at cost - Affiliated............... $ -- $ -- $ -- $ --
================ ================= ================= =================
Total investments, at cost...................... $ 760,729 $ 295,639 $ 1,712,690 $ 1,944,693
================ ================= ================= =================
Premiums paid on options contracts purchased.... $ 125,166,521 $ 51,121,916 $ 251,265,618 $ 280,716,781
================ ================= ================= =================
Premiums received on options contracts written.. $ 8,811,546 $ 3,313,431 $ 17,419,546 $ 16,775,034
================ ================= ================= =================
</TABLE>
Page 88 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST
U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY
BUFFER ETF - DEEP BUFFER ETF - BUFFER ETF - DEEP BUFFER ETF - BUFFER ETF - DEEP BUFFER ETF -
MARCH MARCH APRIL APRIL MAY MAY
(FMAR) (DMAR) (FAPR) (DAPR) (FMAY) (DMAY)
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
$ 615,119 $ 491,884 $ -- $ 771,222 $ 2,854,296 $ 569,198
-- -- -- -- -- --
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
615,119 491,884 -- 771,222 2,854,296 569,198
88,141,177 72,234,454 140,977,522 98,664,033 118,011,915 67,701,532
-- 8 -- 11 -- --
-- -- -- -- -- --
-- -- 3,159,833 -- 313 --
16 13 28 20 28 16
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
88,756,312 72,726,359 144,137,383 99,435,286 120,866,552 68,270,746
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
6,089,149 6,626,122 7,245,756 6,142,865 7,049,903 4,853,951
-- -- 2,046,356 -- 132 335
-- -- -- -- 1,860,413 --
-- -- -- -- -- --
57,781 47,266 93,961 66,859 80,258 45,845
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
6,146,930 6,673,388 9,386,073 6,209,724 8,990,706 4,900,131
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
$ 82,609,382 $ 66,052,971 $ 134,751,310 $ 93,225,562 $ 111,875,846 $ 63,370,615
================= ================= ================= ================= ================= =================
$ 77,482,535 $ 63,058,197 $ 128,045,616 $ 89,398,132 $ 121,182,359 $ 64,380,657
25,500 21,000 42,500 30,000 30,000 18,500
5,101,347 2,973,774 6,663,194 3,797,430 (9,336,513) (1,028,542)
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
$ 82,609,382 $ 66,052,971 $ 134,751,310 $ 93,225,562 $ 111,875,846 $ 63,370,615
================= ================= ================= ================= ================= =================
$ 32.40 $ 31.45 $ 31.71 $ 31.08 $ 37.29 $ 34.25
================= ================= ================= ================= ================= =================
2,550,002 2,100,002 4,250,002 3,000,002 3,000,002 1,850,002
================= ================= ================= ================= ================= =================
$ 615,119 $ 491,884 $ -- $ 771,222 $ 2,854,296 $ 569,198
================= ================= ================= ================= ================= =================
$ -- $ -- $ -- $ -- $ -- $ --
================= ================= ================= ================= ================= =================
$ 615,119 $ 491,884 $ -- $ 771,222 $ 2,854,296 $ 569,198
================= ================= ================= ================= ================= =================
$ 81,633,008 $ 68,435,912 $ 134,423,040 $ 94,137,112 $ 112,326,416 $ 63,929,869
================= ================= ================= ================= ================= =================
$ 4,935,556 $ 3,167,430 $ 7,677,256 $ 3,805,285 $ 6,629,307 $ 2,955,588
================= ================= ================= ================= ================= =================
</TABLE>
See Notes to Financial Statements Page 89
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST
U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY
BUFFER ETF - DEEP BUFFER ETF - BUFFER ETF - DEEP BUFFER ETF -
JUNE JUNE JULY JULY
(FJUN) (DJUN) (FJUL) (DJUL)
---------------- ----------------- ----------------- -----------------
ASSETS:
<S> <C> <C> <C> <C>
Investments, at value - Unaffiliated............ $ 1,069,034 $ 425,466 $ 1,287,837 $ 572,972
Investments, at value - Affiliated.............. -- -- -- --
---------------- ----------------- ----------------- -----------------
Total investments, at value.................. 1,069,034 425,466 1,287,837 572,972
Options contracts purchased, at value........... 120,370,538 49,413,062 131,477,670 57,680,536
Cash............................................ 145 155 -- --
Receivables:
Investment securities sold................... -- -- -- --
Capital shares sold.......................... -- -- -- --
Dividends.................................... 27 11 29 18
---------------- ----------------- ----------------- -----------------
Total Assets................................. 121,439,744 49,838,694 132,765,536 58,253,526
---------------- ----------------- ----------------- -----------------
LIABILITIES:
Options contracts written, at value............. 8,285,215 3,854,759 7,964,698 3,481,621
Due to custodian................................ -- -- 1,263 658
Payables:
Capital shares purchased..................... -- -- -- --
Investment securities purchased.............. -- -- -- --
Investment advisory fees..................... 79,764 33,007 77,347 36,530
---------------- ----------------- ----------------- -----------------
Total Liabilities............................ 8,364,979 3,887,766 8,043,308 3,518,809
---------------- ----------------- ----------------- -----------------
NET ASSETS...................................... $ 113,074,765 $ 45,950,928 $ 124,722,228 $ 54,734,717
================ ================= ================= =================
NET ASSETS CONSIST OF:
Paid-in capital................................. $ 120,916,200 $ 47,597,525 $ 123,429,058 $ 55,916,929
Par value....................................... 30,500 13,500 35,000 16,500
Accumulated distributable earnings (loss)....... (7,871,935) (1,660,097) 1,258,170 (1,198,712)
---------------- ----------------- ----------------- -----------------
NET ASSETS...................................... $ 113,074,765 $ 45,950,928 $ 124,722,228 $ 54,734,717
================ ================= ================= =================
NET ASSET VALUE, per share...................... $ 37.07 $ 34.04 $ 35.63 $ 33.17
================ ================= ================= =================
Number of shares outstanding (unlimited number
of shares authorized, par value
$0.01 per share)............................. 3,050,002 1,350,002 3,500,002 1,650,002
================ ================= ================= =================
Investments, at cost - Unaffiliated............. $ 1,069,034 $ 425,466 $ 1,287,837 $ 572,972
================ ================= ================= =================
Investments, at cost - Affiliated............... $ -- $ -- $ -- $ --
================ ================= ================= =================
Total investments, at cost...................... $ 1,069,034 $ 425,466 $ 1,287,837 $ 572,972
================ ================= ================= =================
Premiums paid on options contracts purchased.... $ 114,499,060 $ 46,923,589 $ 128,328,122 $ 55,959,828
================ ================= ================= =================
Premiums received on options contracts written.. $ 6,945,496 $ 2,355,883 $ 7,745,928 $ 2,656,043
================ ================= ================= =================
</TABLE>
Page 90 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST
U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY
BUFFER ETF - DEEP BUFFER ETF - BUFFER ETF - DEEP BUFFER ETF - BUFFER ETF - DEEP BUFFER ETF -
AUGUST AUGUST SEPTEMBER SEPTEMBER OCTOBER OCTOBER
(FAUG) (DAUG) (FSEP) (DSEP) (FOCT) (DOCT)
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
$ 1,672,022 $ 984,044 $ 154,011 $ 95,244 $ 300,535 $ 168,311
-- -- -- -- -- --
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
1,672,022 984,044 154,011 95,244 300,535 168,311
163,896,374 94,409,427 48,233,598 32,155,115 78,965,041 48,135,631
-- -- 452 447 5 23
357,172 -- -- -- -- --
5,626,503 -- -- -- -- --
20 14 5 2 9 7
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
171,552,091 95,393,485 48,388,066 32,250,808 79,265,590 48,303,972
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
9,924,809 4,963,665 7,013,202 6,391,253 8,684,219 7,764,548
1,334 2,243 -- -- -- --
-- -- -- -- -- --
5,906,201 -- -- -- -- --
78,096 57,582 30,768 18,645 51,960 28,740
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
15,910,440 5,023,490 7,043,970 6,409,898 8,736,179 7,793,288
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
$ 155,641,651 $ 90,369,995 $ 41,344,096 $ 25,840,910 $ 70,529,411 $ 40,510,684
================= ================= ================= ================= ================= =================
$ 170,169,891 $ 104,620,267 $ 38,140,080 $ 23,689,467 $ 62,433,270 $ 37,509,053
41,500 26,000 12,000 8,000 20,500 12,500
(14,569,740) (14,276,272) 3,192,016 2,143,443 8,075,641 2,989,131
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
$ 155,641,651 $ 90,369,995 $ 41,344,096 $ 25,840,910 $ 70,529,411 $ 40,510,684
================= ================= ================= ================= ================= =================
$ 37.50 $ 34.76 $ 34.45 $ 32.30 $ 34.40 $ 32.41
================= ================= ================= ================= ================= =================
4,150,002 2,600,002 1,200,002 800,002 2,050,002 1,250,002
================= ================= ================= ================= ================= =================
$ 1,672,022 $ 984,044 $ 154,011 $ 95,244 $ 300,535 $ 168,311
================= ================= ================= ================= ================= =================
$ -- $ -- $ -- $ -- $ -- $ --
================= ================= ================= ================= ================= =================
$ 1,672,022 $ 984,044 $ 154,011 $ 95,244 $ 300,535 $ 168,311
================= ================= ================= ================= ================= =================
$ 164,209,668 $ 93,270,748 $ 46,217,977 $ 29,873,640 $ 68,229,660 $ 40,275,890
================= ================= ================= ================= ================= =================
$ 11,803,109 $ 4,702,968 $ 3,132,770 $ 2,737,242 $ 4,626,668 $ 2,863,754
================= ================= ================= ================= ================= =================
</TABLE>
See Notes to Financial Statements Page 91
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
AUGUST 31, 2021
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST
U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY
BUFFER ETF - DEEP BUFFER ETF - BUFFER ETF - DEEP BUFFER ETF -
NOVEMBER NOVEMBER DECEMBER DECEMBER
(FNOV) (DNOV) (FDEC) (DDEC)
---------------- ----------------- ----------------- -----------------
ASSETS:
<S> <C> <C> <C> <C>
Investments, at value - Unaffiliated............ $ 2,623,885 $ 456,878 $ 374,673 $ 331,253
Investments, at value - Affiliated.............. -- -- -- --
---------------- ----------------- ----------------- -----------------
Total investments, at value.................. 2,623,885 456,878 374,673 331,253
Options contracts purchased, at value........... 161,685,299 107,650,008 77,228,616 67,790,179
Cash............................................ -- -- 5 --
Receivables:
Investment securities sold................... -- -- -- 1,832,010
Capital shares sold.......................... 358 -- -- 305
Dividends.................................... 69 13 11 10
---------------- ----------------- ----------------- -----------------
Total Assets................................. 164,309,611 108,106,899 77,603,305 69,953,757
---------------- ----------------- ----------------- -----------------
LIABILITIES:
Options contracts written, at value............. 18,673,555 17,071,714 6,610,594 8,522,506
Due to custodian................................ 186 323 -- 950
Payables:
Capital shares purchased..................... 1,912,354 -- -- 1,609,337
Investment securities purchased.............. -- -- -- 230,486
Investment advisory fees..................... 107,853 67,303 49,676 44,971
---------------- ----------------- ----------------- -----------------
Total Liabilities............................ 20,693,948 17,139,340 6,660,270 10,408,250
---------------- ----------------- ----------------- -----------------
NET ASSETS...................................... $ 143,615,663 $ 90,967,559 $ 70,943,035 $ 59,545,507
================ ================= ================= =================
NET ASSETS CONSIST OF:
Paid-in capital................................. $ 130,501,410 $ 93,565,913 $ 64,173,856 $ 56,159,869
Par value....................................... 37,500 26,000 21,000 18,500
Accumulated distributable earnings (loss)....... 13,076,753 (2,624,354) 6,748,179 3,367,138
---------------- ----------------- ----------------- -----------------
NET ASSETS...................................... $ 143,615,663 $ 90,967,559 $ 70,943,035 $ 59,545,507
================ ================= ================= =================
NET ASSET VALUE, per share...................... $ 38.30 $ 34.99 $ 33.78 $ 32.19
================ ================= ================= =================
Number of shares outstanding (unlimited number
of shares authorized, par value
$0.01 per share) 3,750,002 2,600,002 2,100,002 1,850,002
================ ================= ================= =================
Investments, at cost - Unaffiliated............. $ 2,623,885 $ 456,878 $ 374,673 $ 331,253
================ ================= ================= =================
Investments, at cost - Affiliated............... $ -- $ -- $ -- $ --
================ ================= ================= =================
Total investments, at cost...................... $ 2,623,885 $ 456,878 $ 374,673 $ 331,253
================ ================= ================= =================
Premiums paid on options contracts purchased.... $ 138,898,409 $ 91,371,195 $ 69,147,829 $ 59,844,327
================ ================= ================= =================
Premiums received on options contracts written.. $ 8,949,944 $ 4,651,612 $ 5,068,673 $ 3,738,705
================ ================= ================= =================
</TABLE>
Page 92 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST
FUND OF FUND OF
BUFFER ETFS DEEP BUFFER ETFS
(BUFR) (BUFD)
----------------- -----------------
<S> <C>
$ 160,876 $ 96,620
301,650,773 161,038,299
----------------- -----------------
301,811,649 161,134,919
-- --
-- --
-- --
-- --
-- --
----------------- -----------------
301,811,649 161,134,919
----------------- -----------------
-- --
-- --
-- --
-- --
49,202 25,943
----------------- -----------------
49,202 25,943
----------------- -----------------
$ 301,762,447 $ 161,108,976
================= =================
$ 293,820,212 $ 158,773,409
129,500 77,000
7,812,735 2,258,567
----------------- -----------------
$ 301,762,447 $ 161,108,976
================= =================
$ 23.30 $ 20.92
================= =================
12,950,002 7,700,002
================= =================
$ 160,876 $ 96,620
================= =================
$ 293,607,600 $ 158,772,529
================= =================
$ 293,768,476 $ 158,869,149
================= =================
$ -- $ --
================= =================
$ -- $ --
================= =================
</TABLE>
See Notes to Financial Statements Page 93
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED AUGUST 31, 2021
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST
U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY
BUFFER ETF - DEEP BUFFER ETF - BUFFER ETF - DEEP BUFFER ETF -
JANUARY JANUARY FEBRUARY FEBRUARY
(FJAN) (a) (DJAN) (a) (FFEB) (DFEB)
---------------- ----------------- ----------------- -----------------
INVESTMENT INCOME:
<S> <C> <C> <C> <C>
Dividends (d)................................... $ 171 $ 157 $ 254 $ 1,108
---------------- ----------------- ----------------- -----------------
Total investment income...................... 171 157 254 1,108
---------------- ----------------- ----------------- -----------------
EXPENSES:
Investment advisory fees........................ 517,619 337,344 2,051,337 3,283,073
---------------- ----------------- ----------------- -----------------
Total expenses............................... 517,619 337,344 2,051,337 3,283,073
---------------- ----------------- ----------------- -----------------
NET INVESTMENT INCOME (LOSS).................... (517,448) (337,187) (2,051,083) (3,281,965)
---------------- ----------------- ----------------- -----------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments - Affiliated..................... -- -- -- --
In-kind redemptions - Affiliated............. -- -- -- --
Purchased options contracts.................. 119,420 1,173,658 (7,155,942) (3,385,759)
Written options contracts.................... 101,827 (1,156,674) (8,315,006) (33,647,827)
In-kind redemptions - Purchased options
contracts................................. -- 2,615,057 43,658,311 95,066,182
In-kind redemptions - Written options
contracts................................. -- 371,863 11,493,831 22,744,549
---------------- ----------------- ----------------- -----------------
Net realized gain (loss)........................ 221,247 3,003,904 39,681,194 80,777,145
---------------- ----------------- ----------------- -----------------
Net change in unrealized appreciation
(depreciation) on:
Investments - Affiliated..................... -- -- -- --
Purchased options contracts.................. 11,542,279 4,736,422 5,787,852 (35,768,308)
Written options contracts.................... (1,740,294) (3,294,159) 1,452,318 (1,466,254)
---------------- ----------------- ----------------- -----------------
Net change in unrealized appreciation
(depreciation)............................... 9,801,985 1,442,263 7,240,170 (37,234,562)
---------------- ----------------- ----------------- -----------------
NET REALIZED AND UNREALIZED
GAIN (LOSS).................................. 10,023,232 4,446,167 46,921,364 43,542,583
---------------- ----------------- ----------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS.................... $ 9,505,784 $ 4,108,980 $ 44,870,281 $ 40,260,618
================ ================= ================= =================
</TABLE>
(a) Inception date is January 15, 2021, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(b) Inception date is March 19, 2021, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(c) Inception date is April 16, 2021, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(d) Negative dividend amount represents charges by broker on excess cash held
in the account.
Page 94 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST
U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY
BUFFER ETF - DEEP BUFFER ETF - BUFFER ETF - DEEP BUFFER ETF - BUFFER ETF - DEEP BUFFER ETF -
MARCH MARCH APRIL APRIL MAY MAY
(FMAR) (b) (DMAR) (b) (FAPR) (c) (DAPR) (c) (FMAY) (DMAY)
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
$ 85 $ 78 $ (301) $ 108 $ 41 $ (263)
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
85 78 (301) 108 41 (263)
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
248,293 214,731 333,879 294,064 603,282 242,767
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
248,293 214,731 333,879 294,064 603,282 242,767
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(248,208) (214,653) (334,180) (293,956) (603,241) (243,030)
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
-- -- -- -- -- --
-- -- -- -- -- --
(6,025) (4,186) 20,166 783,015 (3,091,702) 1,534,494
(5,348) 7,344 (16,682) (227,001) (11,749,235) (4,337,535)
-- 2,708,604 -- 1,272,752 18,357,075 3,842,633
-- 128,543 -- 64,422 3,303,486 119,864
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(11,373) 2,840,305 3,484 1,893,188 6,819,624 1,159,456
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
-- -- -- -- -- --
6,508,169 3,798,542 6,554,482 4,526,921 1,051,073 2,228,178
(1,153,593) (3,458,692) 431,500 (2,337,580) 1,489,751 (855,180)
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
5,354,576 339,850 6,985,982 2,189,341 2,540,824 1,372,998
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
5,343,203 3,180,155 6,989,466 4,082,529 9,360,448 2,532,454
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
$ 5,094,995 $ 2,965,502 $ 6,655,286 $ 3,788,573 $ 8,757,207 $ 2,289,424
================= ================= ================= ================= ================= =================
</TABLE>
See Notes to Financial Statements Page 95
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE PERIOD ENDED AUGUST 31, 2021
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST
U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY
BUFFER ETF - DEEP BUFFER ETF - BUFFER ETF - DEEP BUFFER ETF -
JUNE JUNE JULY JULY
(FJUN) (DJUN) (FJUL) (DJUL)
---------------- ----------------- ----------------- -----------------
INVESTMENT INCOME:
<S> <C> <C> <C> <C>
Dividends (d)................................... $ 292 $ 214 $ (1,155) $ (605)
---------------- ----------------- ----------------- -----------------
Total investment income...................... 292 214 (1,155) (605)
---------------- ----------------- ----------------- -----------------
EXPENSES:
Investment advisory fees........................ 536,029 199,946 350,039 172,064
---------------- ----------------- ----------------- -----------------
Total expenses............................... 536,029 199,946 350,039 172,064
---------------- ----------------- ----------------- -----------------
NET INVESTMENT INCOME (LOSS).................... (535,737) (199,732) (351,194) (172,669)
---------------- ----------------- ----------------- -----------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments - Affiliated..................... -- -- -- --
In-kind redemptions - Affiliated............. -- -- -- --
Purchased options contracts.................. (5,511,905) (38,278) 2,728,156 1,158,551
Written options contracts.................... (6,502,878) (2,480,803) (4,361,899) (3,129,188)
In-kind redemptions - Purchased options
contracts................................. 17,223,216 4,849,251 5,042,955 2,845,660
In-kind redemptions - Written options
contracts................................. 2,996,172 (448,696) 1,010,342 332,159
---------------- ----------------- ----------------- -----------------
Net realized gain (loss)........................ 8,204,605 1,881,474 4,419,554 1,207,182
---------------- ----------------- ----------------- -----------------
Net change in unrealized appreciation
(depreciation) on:
Investments - Affiliated..................... -- -- -- --
Purchased options contracts.................. 1,892,918 634,386 1,613,933 1,053,464
Written options contracts.................... (688,036) (440,149) 389,836 (373,086)
---------------- ----------------- ----------------- -----------------
Net change in unrealized appreciation
(depreciation)............................... 1,204,882 194,237 2,003,769 680,378
---------------- ----------------- ----------------- -----------------
NET REALIZED AND UNREALIZED
GAIN (LOSS).................................. 9,409,487 2,075,711 6,423,323 1,887,560
---------------- ----------------- ----------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS.................... $ 8,873,750 $ 1,875,979 $ 6,072,129 $ 1,714,891
================ ================= ================= =================
</TABLE>
(d) Negative dividend amount represents charges by broker on excess cash held
in the account.
(e) Inception date is September 18, 2020, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(f) Inception date is October 16, 2020, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
Page 96 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST
U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY
BUFFER ETF - DEEP BUFFER ETF - BUFFER ETF - DEEP BUFFER ETF - BUFFER ETF - DEEP BUFFER ETF -
AUGUST AUGUST SEPTEMBER SEPTEMBER OCTOBER OCTOBER
(FAUG) (DAUG) (FSEP) (e) (DSEP) (e) (FOCT) (f) (DOCT) (f)
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
$ (2,756) $ (1,865) $ 499 $ 511 $ 132 $ 98
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(2,756) (1,865) 499 511 132 98
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
794,751 965,418 198,442 200,785 426,506 257,129
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
794,751 965,418 198,442 200,785 426,506 257,129
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(797,507) (967,283) (197,943) (200,274) (426,374) (257,031)
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
-- -- -- -- -- --
-- -- -- -- -- --
(4,908,707) 10,656,439 286,014 1,724,791 804,359 686,298
(10,357,289) (14,891,124) (78,352) (862,553) (166,539) (401,944)
25,015,698 14,892,368 4,414,842 2,689,239 942,650 --
4,090,237 (89,104) 631,124 161,423 237,828 --
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
13,839,939 10,568,579 5,253,628 3,712,900 1,818,298 284,354
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
-- -- -- -- -- --
(891,390) (1,382,735) 2,015,621 2,281,475 10,735,381 7,859,741
2,075,585 1,213,639 (3,880,432) (3,654,011) (4,057,551) (4,900,794)
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
1,184,195 (169,096) (1,864,811) (1,372,536) 6,677,830 2,958,947
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
15,024,134 10,399,483 3,388,817 2,340,364 8,496,128 3,243,301
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
$ 14,226,627 $ 9,432,200 $ 3,190,874 $ 2,140,090 $ 8,069,754 $ 2,986,270
================= ================= ================= ================= ================= =================
</TABLE>
See Notes to Financial Statements Page 97
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE PERIOD ENDED AUGUST 31, 2021
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST
U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY
BUFFER ETF - DEEP BUFFER ETF - BUFFER ETF - DEEP BUFFER ETF -
NOVEMBER NOVEMBER DECEMBER DECEMBER
(FNOV) (DNOV) (FDEC) (g) (DDEC) (g)
---------------- ----------------- ----------------- -----------------
INVESTMENT INCOME:
<S> <C> <C> <C> <C>
Dividends (d)................................... $ 366 $ (69) $ 143 $ (840)
---------------- ----------------- ----------------- -----------------
Total investment income...................... 366 (69) 143 (840)
---------------- ----------------- ----------------- -----------------
EXPENSES:
Investment advisory fees........................ 1,453,239 920,664 362,481 327,494
---------------- ----------------- ----------------- -----------------
Total expenses............................... 1,453,239 920,664 362,481 327,494
---------------- ----------------- ----------------- -----------------
NET INVESTMENT INCOME (LOSS).................... (1,452,873) (920,733) (362,338) (328,334)
---------------- ----------------- ----------------- -----------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments - Affiliated..................... -- -- -- --
In-kind redemptions - Affiliated............. -- -- -- --
Purchased options contracts.................. (75,172) 26,225 658,927 980,610
Written options contracts.................... (2,344,401) (6,081,606) (91,440) (449,835)
In-kind redemptions - Purchased options
contracts................................. 23,581,145 26,226,361 -- --
In-kind redemptions - Written options
contracts................................. 5,673,088 4,336,344 -- --
---------------- ----------------- ----------------- -----------------
Net realized gain (loss)........................ 26,834,660 24,507,324 567,487 530,775
---------------- ----------------- ----------------- -----------------
Net change in unrealized appreciation
(depreciation) on:
Investments - Affiliated..................... -- -- -- --
Purchased options contracts.................. 10,279,695 (4,882,295) 8,080,787 7,945,852
Written options contracts.................... (10,136,007) (9,482,076) (1,541,921) (4,783,801)
---------------- ----------------- ----------------- -----------------
Net change in unrealized appreciation
(depreciation)............................... 143,688 (14,364,371) 6,538,866 3,162,051
---------------- ----------------- ----------------- -----------------
NET REALIZED AND UNREALIZED
GAIN (LOSS).................................. 26,978,348 10,142,953 7,106,353 3,692,826
---------------- ----------------- ----------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS.................... $ 25,525,475 $ 9,222,220 $ 6,744,015 $ 3,364,492
================ ================= ================= =================
</TABLE>
(d) Negative dividend amount represents charges by broker on excess cash held
in the account.
(g) Inception date is December 18, 2020, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(h) Inception date is January 20, 2021, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
Page 98 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST
FUND OF FUND OF
BUFFER ETFS DEEP BUFFER ETFS
(BUFR) (BUFD) (h)
----------------- -----------------
<S> <C>
$ 2 $ --
----------------- -----------------
2 --
----------------- -----------------
250,044 90,593
----------------- -----------------
250,044 90,593
----------------- -----------------
(250,042) (90,593)
----------------- -----------------
(3,528) (7,210)
8,724,457 824,444
-- --
-- --
-- --
-- --
----------------- -----------------
8,720,929 817,234
----------------- -----------------
7,988,398 2,265,770
-- --
-- --
----------------- -----------------
7,988,398 2,265,770
----------------- -----------------
16,709,327 3,083,004
----------------- -----------------
$ 16,459,285 $ 2,992,411
================= =================
</TABLE>
See Notes to Financial Statements Page 99
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST FT CBOE VEST
U.S. EQUITY U.S. EQUITY U.S. EQUITY
BUFFER ETF - DEEP BUFFER ETF - BUFFER ETF -
JANUARY JANUARY FEBRUARY
(FJAN) (DJAN) (FFEB)
--------------- ----------------- ---------------------------------
PERIOD ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
8/31/2021 (a) 8/31/2021 (a) 8/31/21 8/31/20 (b)
--------------- ----------------- --------------- --------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income (loss).................... $ (517,448) $ (337,187) $ (2,051,083) $ (526,567)
Net realized gain (loss)........................ 221,247 3,003,904 39,681,194 (4,157,790)
Net change in unrealized appreciation
(depreciation)............................... 9,801,985 1,442,263 7,240,170 15,839,514
--------------- ----------------- --------------- --------------
Net increase (decrease) in net assets resulting
from operations.............................. 9,505,784 4,108,980 44,870,281 11,155,157
--------------- ----------------- --------------- --------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold....................... 133,165,845 134,581,825 373,472,561 216,560,571
Cost of shares redeemed......................... (15,860,390) (89,180,193) (370,815,309) (16,790,311)
--------------- ----------------- --------------- --------------
Net increase (decrease) in net assets resulting
from shareholder transactions................ 117,305,455 45,401,632 2,657,252 199,770,260
--------------- ----------------- --------------- --------------
Total increase (decrease) in net assets......... 126,811,239 49,510,612 47,527,533 210,925,417
NET ASSETS:
Beginning of period............................. -- -- 210,925,417 --
--------------- ----------------- --------------- --------------
End of period................................... $ 126,811,239 $ 49,510,612 $ 258,452,950 $ 210,925,417
=============== ================= =============== ==============
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period......... -- -- 6,700,002 --
Shares sold..................................... 4,300,002 4,400,002 11,200,000 7,350,002
Shares redeemed................................. (500,000) (2,850,000) (11,000,000) (650,000)
--------------- ----------------- --------------- --------------
Shares outstanding, end of period............... 3,800,002 1,550,002 6,900,002 6,700,002
=============== ================= =============== ==============
</TABLE>
(a) Inception date is January 15, 2021, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(b) Inception date is February 21, 2020, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(c) Inception date is March 19, 2021, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(d) Inception date is April 16, 2021, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
Page 100 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST
U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY
DEEP BUFFER ETF - BUFFER ETF- DEEP BUFFER ETF - BUFFER ETF - DEEP BUFFER ETF -
FEBRUARY MARCH MARCH APRIL APRIL
(DFEB) (FMAR) (DMAR) (FAPR) (DAPR)
--------------------------------- --------------- ----------------- --------------- -----------------
YEAR ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED
8/31/2021 8/31/2020 (b) 8/31/2021 (c) 8/31/2021 (c) 8/31/2021 (d) 8/31/2021 (d)
--------------- -------------- --------------- ----------------- --------------- -----------------
<S> <C> <C> <C> <C> <C>
$ (3,281,965) $ (1,896,397) $ (248,208) $ (214,653) $ (334,180) $ (293,956)
80,777,145 (13,250,436) (11,373) 2,840,305 3,484 1,893,188
(37,234,562) 54,191,107 5,354,576 339,850 6,985,982 2,189,341
--------------- -------------- --------------- ----------------- --------------- -----------------
40,260,618 39,044,274 5,094,995 2,965,502 6,655,286 3,788,573
--------------- -------------- --------------- ----------------- --------------- -----------------
471,709,089 596,427,291 85,226,492 91,038,951 141,902,180 146,182,323
(763,611,447) (101,195,926) (7,712,105) (27,951,482) (13,806,156) (56,745,334)
--------------- -------------- --------------- ----------------- --------------- -----------------
(291,902,358) 495,231,365 77,514,387 63,087,469 128,096,024 89,436,989
--------------- -------------- --------------- ----------------- --------------- -----------------
(251,641,740) 534,275,639 82,609,382 66,052,971 134,751,310 93,225,562
534,275,639 -- -- -- -- --
--------------- -------------- --------------- ----------------- --------------- -----------------
$ 282,633,899 $ 534,275,639 $ 82,609,382 $ 66,052,971 $ 134,751,310 $ 93,225,562
=============== ============== =============== ================= =============== =================
17,100,002 -- -- -- -- --
14,700,000 20,550,002 2,800,002 3,000,002 4,700,002 4,850,002
(23,650,000) (3,450,000) (250,000) (900,000) (450,000) (1,850,000)
--------------- -------------- --------------- ----------------- --------------- -----------------
8,150,002 17,100,002 2,550,002 2,100,002 4,250,002 3,000,002
=============== ============== =============== ================= =============== =================
</TABLE>
See Notes to Financial Statements Page 101
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST
U.S. EQUITY U.S. EQUITY
BUFFER ETF - DEEP BUFFER ETF -
MAY MAY
(FMAY) (DMAY)
------------------------------------ ---------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
8/31/21 8/31/20 (e) 8/31/21 8/31/20 (e)
--------------- ----------------- --------------- --------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income (loss).................... $ (603,241) $ (77,759) $ (243,030) $ (25,922)
Net realized gain (loss)........................ 6,819,624 (25,003) 1,159,456 116,130
Net change in unrealized appreciation
(depreciation)............................... 2,540,824 2,724,079 1,372,998 500,302
--------------- ----------------- --------------- --------------
Net increase (decrease) in net assets resulting
from operations.............................. 8,757,207 2,621,317 2,289,424 590,510
--------------- ----------------- --------------- --------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold....................... 182,819,078 39,122,756 77,943,486 15,326,498
Cost of shares redeemed......................... (118,187,369) (3,257,143) (28,116,886) (4,662,417)
--------------- ----------------- --------------- --------------
Net increase (decrease) in net assets resulting
from shareholder transactions................ 64,631,709 35,865,613 49,826,600 10,664,081
--------------- ----------------- --------------- --------------
Total increase (decrease) in net assets......... 73,388,916 38,486,930 52,116,024 11,254,591
NET ASSETS:
Beginning of period............................. 38,486,930 -- 11,254,591 --
--------------- ----------------- --------------- --------------
End of period................................... $ 111,875,846 $ 38,486,930 $ 63,370,615 $ 11,254,591
=============== ================= =============== ==============
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period......... 1,150,002 -- 350,002 --
Shares sold..................................... 5,200,000 1,250,002 2,350,000 500,002
Shares redeemed................................. (3,350,000) (100,000) (850,000) (150,000)
--------------- ----------------- --------------- --------------
Shares outstanding, end of period............... 3,000,002 1,150,002 1,850,002 350,002
=============== ================= =============== ==============
</TABLE>
(e) Inception date is May 15, 2020, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
(f) Inception date is June 19, 2020, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
(g) Inception date is July 17, 2020, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
Page 102 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST FT CBOE VEST
U.S. EQUITY U.S. EQUITY U.S. EQUITY
BUFFER ETF - DEEP BUFFER ETF - BUFFER ETF-
JUNE JUNE JULY
(FJUN) (DJUN) (FJUL)
--------------------------------- ------------------------------------ ------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
8/31/2021 8/31/2020 (f) 8/31/2021 8/31/2020 (f) 8/31/2021 8/31/2020 (g)
--------------- -------------- --------------- ----------------- --------------- -----------------
<S> <C> <C> <C> <C> <C>
$ (535,737) $ (68,187) $ (199,732) $ (27,075) $ (351,194) $ (19,771)
8,204,605 -- 1,881,474 -- 4,419,554 --
1,204,882 3,326,877 194,237 796,360 2,003,769 927,009
--------------- -------------- --------------- ----------------- --------------- -----------------
8,873,750 3,258,690 1,875,979 769,285 6,072,129 907,238
--------------- -------------- --------------- ----------------- --------------- -----------------
137,956,049 45,586,017 57,855,267 19,781,395 140,264,490 32,287,201
(82,599,741) -- (34,330,998) -- (54,808,830) --
--------------- -------------- --------------- ----------------- --------------- -----------------
55,356,308 45,586,017 23,524,269 19,781,395 85,455,660 32,287,201
--------------- -------------- --------------- ----------------- --------------- -----------------
64,230,058 48,844,707 25,400,248 20,550,680 91,527,789 33,194,439
48,844,707 -- 20,550,680 -- 33,194,439 --
--------------- -------------- --------------- ----------------- --------------- -----------------
$ 113,074,765 $ 48,844,707 $ 45,950,928 $ 20,550,680 $ 124,722,228 $ 33,194,439
=============== ============== =============== ================= =============== =================
1,500,002 -- 650,002 -- 1,050,002 --
3,900,000 1,500,002 1,750,000 650,002 4,100,000 1,050,002
(2,350,000) -- (1,050,000) -- (1,650,000) --
--------------- -------------- --------------- ----------------- --------------- -----------------
3,050,002 1,500,002 1,350,002 650,002 3,500,002 1,050,002
=============== ============== =============== ================= =============== =================
</TABLE>
See Notes to Financial Statements Page 103
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST
U.S. EQUITY U.S. EQUITY
DEEP BUFFER ETF - BUFFER ETF -
JULY AUGUST
(DJUL) (FAUG)
------------------------------------ ---------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
8/31/21 8/31/20 (g) 8/31/21 8/31/20 (h)
--------------- ----------------- --------------- --------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income (loss).................... $ (172,669) $ (8,896) $ (797,507) $ (93,207)
Net realized gain (loss)........................ 1,207,182 -- 13,839,939 2,863,477
Net change in unrealized appreciation
(depreciation)............................... 680,378 214,752 1,184,195 380,811
--------------- ----------------- --------------- --------------
Net increase (decrease) in net assets resulting
from operations.............................. 1,714,891 205,856 14,226,627 3,151,081
--------------- ----------------- --------------- --------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold....................... 64,560,989 12,178,388 255,932,223 72,344,580
Cost of shares redeemed......................... (23,925,407) -- (150,763,677) (39,249,183)
--------------- ----------------- --------------- --------------
Net increase (decrease) in net assets resulting
from shareholder transactions................ 40,635,582 12,178,388 105,168,546 33,095,397
--------------- ----------------- --------------- --------------
Total increase (decrease) in net assets......... 42,350,473 12,384,244 119,395,173 36,246,478
NET ASSETS:
Beginning of period............................. 12,384,244 -- 36,246,478 --
--------------- ----------------- --------------- --------------
End of period................................... $ 54,734,717 $ 12,384,244 $ 155,641,651 $ 36,246,478
=============== ================= =============== ==============
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period......... 400,002 -- 1,100,002 --
Shares sold..................................... 2,000,000 400,002 7,200,000 2,350,002
Shares redeemed................................. (750,000) -- (4,150,000) (1,250,000)
--------------- ----------------- --------------- --------------
Shares outstanding, end of period............... 1,650,002 400,002 4,150,002 1,100,002
=============== ================= =============== ==============
</TABLE>
(g) Inception date is July 17, 2020, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
(h) Inception date is November 6, 2019, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(i) Inception date is September 18, 2020, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(j) Inception date is October 16, 2020, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
Page 104 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST
U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY U.S. EQUITY
DEEP BUFFER ETF - BUFFER ETF - DEEP BUFFER ETF - BUFFER ETF - DEEP BUFFER ETF -
AUGUST SEPTEMBER SEPTEMBER OCTOBER OCTOBER
(DAUG) (FSEP) (DSEP) (FOCT) (DOCT)
--------------------------------- --------------- ----------------- --------------- -----------------
YEAR ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED
8/31/2021 8/31/2020 (h) 8/31/2021 (i) 8/31/2021 (i) 8/31/2021 (j) 8/31/2021 (j)
--------------- -------------- --------------- ----------------- --------------- -----------------
<S> <C> <C> <C> <C> <C>
$ (967,283) $ (806,973) $ (197,943) $ (200,274) $ (426,374) $ (257,031)
10,568,579 31,520,418 5,253,628 3,712,900 1,818,298 284,354
(169,096) 1,047,078 (1,864,811) (1,372,536) 6,677,830 2,958,947
--------------- -------------- --------------- ----------------- --------------- -----------------
9,432,200 31,760,523 3,190,874 2,140,090 8,069,754 2,986,270
--------------- -------------- --------------- ----------------- --------------- -----------------
110,399,422 390,554,446 70,091,179 61,367,325 80,609,489 55,024,234
(162,893,118) (288,883,478) (31,937,957) (37,666,505) (18,149,832) (17,499,820)
--------------- -------------- --------------- ----------------- --------------- -----------------
(52,493,696) 101,670,968 38,153,222 23,700,820 62,459,657 37,524,414
--------------- -------------- --------------- ----------------- --------------- -----------------
(43,061,496) 133,431,491 41,344,096 25,840,910 70,529,411 40,510,684
133,431,491 -- -- -- -- --
--------------- -------------- --------------- ----------------- --------------- -----------------
$ 90,369,995 $ 133,431,491 $ 41,344,096 $ 25,840,910 $ 70,529,411 $ 40,510,684
=============== ============== =============== ================= =============== =================
4,150,002 -- -- -- -- --
3,300,000 13,350,002 2,150,002 2,000,002 2,600,002 1,800,002
(4,850,000) (9,200,000) (950,000) (1,200,000) (550,000) (550,000)
--------------- -------------- --------------- ----------------- --------------- -----------------
2,600,002 4,150,002 1,200,002 800,002 2,050,002 1,250,002
=============== ============== =============== ================= =============== =================
</TABLE>
See Notes to Financial Statements Page 105
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST
U.S. EQUITY U.S. EQUITY
BUFFER ETF - DEEP BUFFER ETF -
NOVEMBER NOVEMBER
(FNOV) (DNOV)
------------------------------------ ---------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
8/31/21 8/31/20 (k) 8/31/21 8/31/20 (k)
--------------- ----------------- --------------- --------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income (loss).................... $ (1,452,873) $ (438,557) $ (920,733) $ (475,040)
Net realized gain (loss)........................ 26,834,660 (3,456,276) 24,507,324 (4,406,583)
Net change in unrealized appreciation
(depreciation)............................... 143,688 12,919,591 (14,364,371) 18,223,082
--------------- ----------------- --------------- --------------
Net increase (decrease) in net assets resulting
from operations.............................. 25,525,475 9,024,758 9,222,220 13,341,459
--------------- ----------------- --------------- --------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold....................... 268,015,815 138,591,713 110,679,599 154,588,117
Cost of shares redeemed......................... (288,058,581) (9,483,517) (174,946,705) (21,917,131)
--------------- ----------------- --------------- --------------
Net increase (decrease) in net assets resulting
from shareholder transactions................ (20,042,766) 129,108,196 (64,267,106) 132,670,986
--------------- ----------------- --------------- --------------
Total increase (decrease) in net assets......... 5,482,709 138,132,954 (55,044,886) 146,012,445
NET ASSETS:
Beginning of period............................. 138,132,954 -- 146,012,445 --
--------------- ----------------- --------------- --------------
End of period................................... $ 143,615,663 $ 138,132,954 $ 90,967,559 $ 146,012,445
=============== ================= =============== ==============
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period......... 4,200,002 -- 4,550,002 --
Shares sold..................................... 7,800,000 4,550,002 3,400,000 5,300,002
Shares redeemed................................. (8,250,000) (350,000) (5,350,000) (750,000)
--------------- ----------------- --------------- --------------
Shares outstanding, end of period............... 3,750,002 4,200,002 2,600,002 4,550,002
=============== ================= =============== ==============
</TABLE>
(k) Inception date is November 15, 2019, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(l) Inception date is December 18, 2020, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(m) Inception date is August 10, 2020, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(n) Inception date is January 20, 2021, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
Page 106 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST
U.S. EQUITY U.S. EQUITY FT CBOE VEST FT CBOE VEST
BUFFER ETF - DEEP BUFFER ETF - FUND OF FUND OF
DECEMBER DECEMBER BUFFER ETFS DEEP BUFFER ETFS
(FDEC) (DDEC) (BUFR) (BUFD)
--------------- ----------------- --------------------------------- ----------------
PERIOD ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED PERIOD ENDED
8/31/2021 (l) 8/31/2021 (l) 8/31/2021 8/31/2020 (m) 8/31/2021 (n)
--------------- ----------------- ------------- ---------------- ----------------
<S> <C> <C> <C> <C>
$ (362,338) $ (328,334) $ (250,042) $ (398) $ (90,593)
567,487 530,775 8,720,929 -- 817,234
6,538,866 3,162,051 7,988,398 54,775 2,265,770
--------------- ----------------- ------------- ---------------- ----------------
6,744,015 3,364,492 16,459,285 54,377 2,992,411
--------------- ----------------- ------------- ---------------- ----------------
112,246,925 101,213,467 417,166,735 6,069,512 216,796,683
(48,047,905) (45,032,452) (137,987,462) -- (58,680,118)
--------------- ----------------- ------------- ---------------- ----------------
64,199,020 56,181,015 279,179,273 6,069,512 158,116,565
--------------- ----------------- ------------- ---------------- ----------------
70,943,035 59,545,507 295,638,558 6,123,889 161,108,976
-- -- 6,123,889 -- --
--------------- ----------------- ------------- ---------------- ----------------
$ 70,943,035 $ 59,545,507 $ 301,762,447 $ 6,123,889 $ 161,108,976
=============== ================= ============= ================ ================
-- -- 300,002 -- --
3,600,002 3,300,002 18,750,000 300,002 10,550,002
(1,500,000) (1,450,000) (6,100,000) -- (2,850,000)
--------------- ----------------- ------------- ---------------- ----------------
2,100,002 1,850,002 12,950,002 300,002 7,700,002
=============== ================= ============= ================ ================
</TABLE>
See Notes to Financial Statements Page 107
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
FT CBOE VEST U.S. EQUITY BUFFER ETF - JANUARY (FJAN)
<TABLE>
<CAPTION>
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 30.06
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.14)
Net realized and unrealized gain (loss)........................ 3.45
--------
Total from investment operations............................... 3.31
--------
Net asset value, end of period................................. $ 33.37
========
TOTAL RETURN (b)............................................... 11.01%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $126,811
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (c)
Portfolio turnover rate (d).................................... 0%
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - JANUARY (DJAN)
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 30.06
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.22)
Net realized and unrealized gain (loss)........................ 2.10
--------
Total from investment operations............................... 1.88
--------
Net asset value, end of period................................. $ 31.94
========
TOTAL RETURN (b)............................................... 6.25%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 49,511
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (c)
Portfolio turnover rate (d).................................... 0%
</TABLE>
(a) Inception date is January 15, 2021, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The return presented does not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions,
derivatives and in-kind transactions.
Page 108 See Notes to Financial Statements
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FT CBOE VEST U.S. EQUITY BUFFER ETF - FEBRUARY (FFEB)
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
8/31/21 8/31/2020 (a)
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period........................... $ 31.48 $ 30.68
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.30) (0.08)
Net realized and unrealized gain (loss)........................ 6.28 0.88
-------- --------
Total from investment operations............................... 5.98 0.80
-------- --------
Net asset value, end of period................................. $ 37.46 $ 31.48
======== ========
TOTAL RETURN (b)............................................... 19.00% 2.61%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $258,453 $210,925
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (0.85)% (c)
Portfolio turnover rate (d).................................... 0% 0%
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - FEBRUARY (DFEB)
YEAR PERIOD
ENDED ENDED
8/31/21 8/31/2020 (a)
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period........................... $ 31.24 $ 30.68
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.52) (0.11)
Net realized and unrealized gain (loss)........................ 3.96 0.67
-------- --------
Total from investment operations............................... 3.44 0.56
-------- --------
Net asset value, end of period................................. $ 34.68 $ 31.24
======== ========
TOTAL RETURN (b)............................................... 11.01% 1.83%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $282,634 $534,276
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (0.85)% (c)
Portfolio turnover rate (d).................................... 0% 0%
</TABLE>
(a) Inception date is February 21, 2020, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions,
derivatives and in-kind transactions.
See Notes to Financial Statements Page 109
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
FT CBOE VEST U.S. EQUITY BUFFER ETF - MARCH (FMAR)
<TABLE>
<CAPTION>
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 29.60
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.10)
Net realized and unrealized gain (loss)........................ 2.90
--------
Total from investment operations............................... 2.80
--------
Net asset value, end of period................................. $ 32.40
========
TOTAL RETURN (b)............................................... 9.46%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 82,609
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (c)
Portfolio turnover rate (d).................................... 0%
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - MARCH (DMAR)
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 29.60
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.10)
Net realized and unrealized gain (loss)........................ 1.95
--------
Total from investment operations............................... 1.85
--------
Net asset value, end of period................................. $ 31.45
========
TOTAL RETURN (b)............................................... 6.25%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 66,053
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (c)
Portfolio turnover rate (d).................................... 0%
</TABLE>
(a) Inception date is March 19, 2021, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The return presented does not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions,
derivatives and in-kind transactions.
Page 110 See Notes to Financial Statements
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
FT CBOE VEST U.S. EQUITY BUFFER ETF - APRIL (FAPR)
<TABLE>
<CAPTION>
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 30.04
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.08)
Net realized and unrealized gain (loss)........................ 1.75
--------
Total from investment operations............................... 1.67
--------
Net asset value, end of period................................. $ 31.71
========
TOTAL RETURN (b)............................................... 5.56%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $134,751
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (c)
Portfolio turnover rate (d).................................... 0%
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - APRIL (DAPR)
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 30.04
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.10)
Net realized and unrealized gain (loss)........................ 1.14
--------
Total from investment operations............................... 1.04
--------
Net asset value, end of period................................. $ 31.08
========
TOTAL RETURN (b)............................................... 3.46%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 93,226
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (c)
Portfolio turnover rate (d).................................... 0%
</TABLE>
(a) Inception date is April 16, 2021, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The return presented does not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions,
derivatives and in-kind transactions.
See Notes to Financial Statements Page 111
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FT CBOE VEST U.S. EQUITY BUFFER ETF - MAY (FMAY)
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
8/31/21 8/31/2020 (a)
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period........................... $ 33.47 $ 30.34
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.16) (0.07)
Net realized and unrealized gain (loss)........................ 3.98 3.20
-------- --------
Total from investment operations............................... 3.82 3.13
-------- --------
Net asset value, end of period................................. $ 37.29 $ 33.47
======== ========
TOTAL RETURN (b)............................................... 11.41% 10.32%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $111,876 $ 38,487
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (0.85)% (c)
Portfolio turnover rate (d).................................... 0% 0%
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - MAY (DMAY)
YEAR PERIOD
ENDED ENDED
8/31/21 8/31/2020 (a)
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period........................... $ 32.16 $ 30.35
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.08) (0.07)
Net realized and unrealized gain (loss)........................ 2.17 1.88
-------- --------
Total from investment operations............................... 2.09 1.81
-------- --------
Net asset value, end of period................................. $ 34.25 $ 32.16
======== ========
TOTAL RETURN (b)............................................... 6.50% 5.96%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 63,371 $ 11,255
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (0.85)% (c)
Portfolio turnover rate (d).................................... 0% 0%
</TABLE>
(a) Inception date is May 15, 2020, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions,
derivatives and in-kind transactions.
Page 112 See Notes to Financial Statements
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FT CBOE VEST U.S. EQUITY BUFFER ETF - JUNE (FJUN)
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
8/31/21 8/31/2020 (a)
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period........................... $ 32.56 $ 30.25
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.15) (0.05)
Net realized and unrealized gain (loss)........................ 4.66 2.36
-------- --------
Total from investment operations............................... 4.51 2.31
-------- --------
Net asset value, end of period................................. $ 37.07 $ 32.56
======== ========
TOTAL RETURN (b)............................................... 13.85% 7.64%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $113,075 $ 48,845
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (0.85)% (c)
Portfolio turnover rate (d).................................... 0% 0%
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - JUNE (DJUN)
YEAR PERIOD
ENDED ENDED
8/31/21 8/31/2020 (a)
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period........................... $ 31.62 $ 30.25
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.13) (0.04)
Net realized and unrealized gain (loss)........................ 2.55 1.41
-------- --------
Total from investment operations............................... 2.42 1.37
-------- --------
Net asset value, end of period................................. $ 34.04 $ 31.62
======== ========
TOTAL RETURN (b)............................................... 7.65% 4.53%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 45,951 $ 20,551
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (0.85)% (c)
Portfolio turnover rate (d).................................... 0% 0%
</TABLE>
(a) Inception date is June 19, 2020, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions,
derivatives and in-kind transactions.
See Notes to Financial Statements Page 113
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FT CBOE VEST U.S. EQUITY BUFFER ETF - JULY (FJUL)
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
8/31/21 8/31/2020 (a)
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period........................... $ 31.61 $ 30.24
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.09) (0.02)
Net realized and unrealized gain (loss)........................ 4.11 1.39
-------- --------
Total from investment operations............................... 4.02 1.37
-------- --------
Net asset value, end of period................................. $ 35.63 $ 31.61
======== ========
TOTAL RETURN (b)............................................... 12.72% 4.53%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $124,722 $ 33,194
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (0.85)% (c)
Portfolio turnover rate (d).................................... 0% 0%
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - JULY (DJUL)
YEAR PERIOD
ENDED ENDED
8/31/21 8/31/2020 (a)
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period........................... $ 30.96 $ 30.24
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.09) (0.02)
Net realized and unrealized gain (loss)........................ 2.30 0.74
-------- --------
Total from investment operations............................... 2.21 0.72
-------- --------
Net asset value, end of period................................. $ 33.17 $ 30.96
======== ========
TOTAL RETURN (b)............................................... 7.14% 2.38%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 54,735 $ 12,384
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (0.85)% (c)
Portfolio turnover rate (d).................................... 0% 0%
</TABLE>
(a) Inception date is July 17, 2020, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions,
derivatives and in-kind transactions.
Page 114 See Notes to Financial Statements
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FT CBOE VEST U.S. EQUITY BUFFER ETF - AUGUST (FAUG)
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
8/31/21 8/31/2020 (a)
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period........................... $ 32.95 $ 30.10
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.13) (0.08)
Net realized and unrealized gain (loss)........................ 4.68 2.93
-------- --------
Total from investment operations............................... 4.55 2.85
-------- --------
Net asset value, end of period................................. $ 37.50 $ 32.95
======== ========
TOTAL RETURN (b)............................................... 13.81% 9.47%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $155,642 $ 36,246
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (0.83)% (c)
Portfolio turnover rate (d).................................... 0% 0%
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - AUGUST (DAUG)
YEAR PERIOD
ENDED ENDED
8/31/21 8/31/2020 (a)
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period........................... $ 32.15 $ 30.10
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.49) (0.19)
Net realized and unrealized gain (loss)........................ 3.10 2.24
-------- --------
Total from investment operations............................... 2.61 2.05
-------- --------
Net asset value, end of period................................. $ 34.76 $ 32.15
======== ========
TOTAL RETURN (b)............................................... 8.12% 6.81%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 90,370 $133,431
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (0.85)% (c)
Portfolio turnover rate (d).................................... 0% 0%
</TABLE>
(a) Inception date is November 6, 2019, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions,
derivatives and in-kind transactions.
See Notes to Financial Statements Page 115
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
FT CBOE VEST U.S. EQUITY BUFFER ETF - SEPTEMBER (FSEP)
<TABLE>
<CAPTION>
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 29.76
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.16)
Net realized and unrealized gain (loss)........................ 4.85
--------
Total from investment operations............................... 4.69
--------
Net asset value, end of period................................. $ 34.45
========
TOTAL RETURN (b)............................................... 15.76%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 41,344
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (c)
Portfolio turnover rate (d).................................... 0%
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - SEPTEMBER (DSEP)
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 29.76
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.25)
Net realized and unrealized gain (loss)........................ 2.79
--------
Total from investment operations............................... 2.54
--------
Net asset value, end of period................................. $ 32.30
========
TOTAL RETURN (b)............................................... 8.53%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 25,841
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (c)
Portfolio turnover rate (d).................................... 0%
</TABLE>
(a) Inception date is September 18, 2020, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The return presented does not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions,
derivatives and in-kind transactions.
Page 116 See Notes to Financial Statements
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
FT CBOE VEST U.S. EQUITY BUFFER ETF - OCTOBER (FOCT)
<TABLE>
<CAPTION>
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 29.87
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.21)
Net realized and unrealized gain (loss)........................ 4.74
--------
Total from investment operations............................... 4.53
--------
Net asset value, end of period................................. $ 34.40
========
TOTAL RETURN (b)............................................... 15.17%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 70,529
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (c)
Portfolio turnover rate (d).................................... 0%
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - OCTOBER (DOCT)
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 29.87
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.21)
Net realized and unrealized gain (loss)........................ 2.75
--------
Total from investment operations............................... 2.54
--------
Net asset value, end of period................................. $ 32.41
========
TOTAL RETURN (b)............................................... 8.50%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 40,511
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (c)
Portfolio turnover rate (d).................................... 0%
</TABLE>
(a) Inception date is October 16, 2020, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The return presented does not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions,
derivatives and in-kind transactions.
See Notes to Financial Statements Page 117
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FT CBOE VEST U.S. EQUITY BUFFER ETF - NOVEMBER (FNOV)
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
8/31/21 8/31/2020 (a)
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period........................... $ 32.89 $ 30.56
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.40) (0.10)
Net realized and unrealized gain (loss)........................ 5.81 2.43
-------- --------
Total from investment operations............................... 5.41 2.33
-------- --------
Net asset value, end of period................................. $ 38.30 $ 32.89
======== ========
TOTAL RETURN (b)............................................... 16.45% 7.62%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $143,616 $138,133
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (0.85)% (c)
Portfolio turnover rate (d).................................... 0% 0%
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - NOVEMBER (DNOV)
YEAR PERIOD
ENDED ENDED
8/31/21 8/31/2020 (a)
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period........................... $ 32.09 $ 30.55
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.43) (0.10)
Net realized and unrealized gain (loss)........................ 3.33 1.64
-------- --------
Total from investment operations............................... 2.90 1.54
-------- --------
Net asset value, end of period................................. $ 34.99 $ 32.09
======== ========
TOTAL RETURN (b)............................................... 9.04% 5.04%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 90,968 $146,012
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (0.85)% (c)
Portfolio turnover rate (d).................................... 0% 0%
</TABLE>
(a) Inception date is November 15, 2019, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions,
derivatives and in-kind transactions.
Page 118 See Notes to Financial Statements
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
FT CBOE VEST U.S. EQUITY BUFFER ETF - DECEMBER (FDEC)
<TABLE>
<CAPTION>
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 30.27
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.17)
Net realized and unrealized gain (loss)........................ 3.68
--------
Total from investment operations............................... 3.51
--------
Net asset value, end of period................................. $ 33.78
========
TOTAL RETURN (b)............................................... 11.60%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 70,943
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (c)
Portfolio turnover rate (d).................................... 0%
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - DECEMBER (DDEC)
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 30.27
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.18)
Net realized and unrealized gain (loss)........................ 2.10
--------
Total from investment operations............................... 1.92
--------
Net asset value, end of period................................. $ 32.19
========
TOTAL RETURN (b)............................................... 6.34%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 59,546
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (c)
Portfolio turnover rate (d).................................... 0%
</TABLE>
(a) Inception date is December 18, 2020, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The return presented does not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions,
derivatives and in-kind transactions.
See Notes to Financial Statements Page 119
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FT CBOE VEST FUND OF BUFFER ETFS (BUFR)
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
8/31/21 8/31/2020 (a)
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period........................... $ 20.41 $ 20.05
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.02) --
Net realized and unrealized gain (loss)........................ 2.91 0.36
-------- --------
Total from investment operations............................... 2.89 0.36
-------- --------
Net asset value, end of period................................. $ 23.30 $ 20.41
======== ========
TOTAL RETURN (b)............................................... 14.16% 1.80%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $301,762 $ 6,124
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets (c).............. 0.20% 0.20% (d)
Ratio of net investment income (loss) to average net assets.... (0.20)% (0.20)% (d)
Portfolio turnover rate (e).................................... 1% 0%
FT CBOE VEST FUND OF DEEP BUFFER ETFS (BUFD)
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 20.07
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.01)
Net realized and unrealized gain (loss)........................ 0.86
--------
Total from investment operations............................... 0.85
--------
Net asset value, end of period................................. $ 20.92
========
TOTAL RETURN (b)............................................... 4.24%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $161,109
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets (c).............. 0.20% (d)
Ratio of net investment income (loss) to average net assets.... (0.20)% (d)
Portfolio turnover rate (e).................................... 6%
</TABLE>
(a) Inception dates for BUFR and BUFD are August 10, 2020 and January 20,
2021, respectively, which are consistent with the respective Fund's
commencement of investment operations and are the dates the initial
creation units were established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) The Fund indirectly bears its proportionate share of fees and expenses
incurred by the underlying funds in which the Fund invests. This ratio
does not include these indirect fees and expenses.
(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 120 See Notes to Financial Statements
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
1. ORGANIZATION
First Trust Exchange-Traded Fund VIII (the "Trust") is an open-end management
investment company organized as a Massachusetts business trust on February 22,
2016, 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 forty-nine funds that are offering shares. This
report covers the twenty-six funds (each a "Fund" and collectively, "the Funds")
listed below. The shares of each Fund are listed and traded on the Cboe BZX
Exchange, Inc. ("Cboe BZX").
FT Cboe Vest U.S. Equity Buffer ETF - January - (ticker "FJAN")(1)
FT CboeVest U.S. Equity Deep Buffer ETF - January - (ticker "DJAN")(1)
FT Cboe Vest U.S. Equity Buffer ETF - February - (ticker "FFEB")
FT Cboe Vest U.S. Equity Deep Buffer ETF - February - (ticker "DFEB")
FT Cboe Vest U.S. Equity Buffer ETF - March - (ticker "FMAR")(2)
FT Cboe Vest U.S. Equity Deep Buffer ETF - March - (ticker "DMAR")(2)
FT Cboe Vest U.S. Equity Buffer ETF - April - (ticker "FAPR")(3)
FT Cboe Vest U.S. Equity Deep Buffer ETF - April - (ticker "DAPR")(3)
FT Cboe Vest U.S. Equity Buffer ETF - May - (ticker "FMAY")
FT Cboe Vest U.S. Equity Deep Buffer ETF - May - (ticker "DMAY")
FT Cboe Vest U.S. Equity Buffer ETF - June - (ticker "FJUN")
FT Cboe Vest U.S. Equity Deep Buffer ETF - June - (ticker "DJUN")
FT Cboe Vest U.S. Equity Buffer ETF - July - (ticker "FJUL")
FT Cboe Vest U.S. Equity Deep Buffer ETF - July - (ticker "DJUL")
FT Cboe Vest U.S. Equity Buffer ETF - August - (ticker "FAUG")
FT Cboe Vest U.S. Equity Deep Buffer ETF - August - (ticker "DAUG")
FT Cboe Vest U.S. Equity Buffer ETF - September - (ticker "FSEP")(4)
FT Cboe Vest U.S. Equity Deep Buffer ETF - September - (ticker "DSEP")(4)
FT Cboe Vest U.S. Equity Buffer ETF - October - (ticker "FOCT")(5)
FT Cboe Vest U.S. Equity Deep Buffer ETF - October - (ticker "DOCT")(5)
FT Cboe Vest U.S. Equity Buffer ETF - November - (ticker "FNOV")
FT Cboe Vest U.S. Equity Deep Buffer ETF - November - (ticker "DNOV")
FT Cboe Vest U.S. Equity Buffer ETF - December - (ticker "FDEC")(6)
FT Cboe Vest U.S. Equity Deep Buffer ETF - December - (ticker "DDEC")(6)
FT Cboe Vest Fund of Buffer ETFs - (ticker "BUFR")
FT Cboe Vest Fund of Deep Buffer ETFs - (ticker "BUFD")(7)
(1) Commenced investment operations on January 15, 2021.
(2) Commenced investment operations on March 19, 2021.
(3) Commenced investment operations on April 16, 2021.
(4) Commenced investment operations on September 18, 2020.
(5) Commenced investment operations on October 16, 2020.
(6) Commenced investment operations on December 18, 2020.
(7) Commenced investment operations on January 20, 2021.
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."
Each Fund is an actively managed exchange-traded fund.
The investment objective of FJAN is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the SPDR(R) S&P
500(R) ETF Trust (the "Underlying ETF"), up to a predetermined upside cap of
14.50% (before fees, expenses and taxes) and 13.64% (after fees and expenses,
excluding brokerage commissions, trading fees, taxes and extraordinary expenses
not included in the Fund's management fee), while providing a buffer against the
first 10% (before fees, expenses and taxes) of Underlying ETF losses, over the
period from January 19, 2021 to January 21, 2022.
The investment objective of DJAN is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 8.20% (before fees, expenses and taxes)
and 7.34% (after fees and expenses, excluding brokerage commissions, trading
fees, taxes and extraordinary expenses not included in the Fund's management
fee), while providing a buffer against Underlying ETF losses between -5% and
-30% (before fees, expenses and taxes) over the period from January 19, 2021 to
January 21, 2022.
Page 121
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
The investment objective of FFEB is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 15.85% (before fees, expenses and
taxes) and 15.00% (after fees and expenses, excluding brokerage commissions,
trading fees, taxes and extraordinary expenses not included in the Fund's
management fee), while providing a buffer against the first 10% (before fees,
expenses and taxes) of Underlying ETF losses, over the period from February 22,
2021 to February 18, 2022. Prior to February 22, 2021, the Fund's investment
objective included an upside cap of 10.75% (before fees, expenses and taxes) and
9.90% (after fees and expenses, excluding brokerage commissions, trading fees,
taxes and extraordinary expenses not included in the Fund's management fee) and
an Outcome Period of February 24, 2020 to February 19, 2021.
The investment objective of DFEB is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 8.85% (before fees, expenses and taxes)
and 8.00% (after fees and expenses, excluding brokerage commissions, trading
fees, taxes and extraordinary expenses not included in the Fund's management
fee), while providing a buffer against Underlying ETF losses between -5% and
-30% (before fees, expenses and taxes) over the period from February 22, 2021 to
February 18, 2022. Prior to February 22, 2021, the Fund's investment objective
included an upside cap of 7.50% (before fees, expenses and taxes) and 6.65%
(after fees and expenses, excluding brokerage commissions, trading fees, taxes
and extraordinary expenses not included in the Fund's management fee) and an
Outcome Period of February 24, 2020 to February 19, 2021.
The investment objective of FMAR is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 14.20% (before fees, expenses and
taxes) and 13.35% (after fees and expenses, excluding brokerage commissions,
trading fees, taxes and extraordinary expenses not included in the Fund's
management fee), while providing a buffer against the first 10% (before fees,
expenses and taxes) of Underlying ETF losses, over the period from March 22,
2021 to March 18, 2022.
The investment objective of DMAR is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 9.30% (before fees, expenses and taxes)
and 8.45% (after fees and expenses, excluding brokerage commissions, trading
fees, taxes and extraordinary expenses not included in the Fund's management
fee), while providing a buffer against Underlying ETF losses between -5% and
-30% (before fees, expenses and taxes) over the period from March 22, 2021 to
March 18, 2022.
The investment objective of FAPR is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 12.00% (before fees, expenses and
taxes) and 11.15% (after fees and expenses, excluding brokerage commissions,
trading fees, taxes and extraordinary expenses not included in the Fund's
management fee), while providing a buffer against the first 10% (before fees,
expenses and taxes) of Underlying ETF losses, over the period from April 19,
2021 to April 14, 2022.
The investment objective of DAPR is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 7.50% (before fees, expenses and taxes)
and 6.65% (after fees and expenses, excluding brokerage commissions, trading
fees, taxes and extraordinary expenses not included in the Fund's management
fee), while providing a buffer against Underlying ETF losses between -5% and
-30% (before fees, expenses and taxes) over the period from April 19, 2021 to
April 14, 2022.
The investment objective of FMAY is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 12.50% (before fees, expenses and
taxes) and 11.65% (after fees and expenses, excluding brokerage commissions,
trading fees, taxes and extraordinary expenses not included in the Fund's
management fee), while providing a buffer against the first 10% (before fees,
expenses and taxes) of Underlying ETF losses, over the period from May 24, 2021
to May 20, 2022. Prior to May 24, 2021, the Fund's investment objective included
an upside cap of 17.07% (before fees, expenses and taxes) and 16.21% (after fees
and expenses, excluding brokerage commissions, trading fees, taxes and
extraordinary expenses not included in the Fund's management fee) and an Outcome
Period of May 18, 2020 to May 21, 2021.
The investment objective of DMAY is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 7.60% (before fees, expenses and taxes)
and 6.75% (after fees and expenses, excluding brokerage commissions, trading
fees, taxes and extraordinary expenses not included in the Fund's management
fee), while providing a buffer against Underlying ETF losses between -5% and
-30% (before fees, expenses and taxes) over the period from May 24, 2021 to May
20, 2022. Prior to May 24, 2021, the Fund's investment objective included an
upside cap of 9.95% (before fees, expenses and taxes) and 9.09% (after fees and
expenses, excluding brokerage commissions, trading fees, taxes and extraordinary
expenses not included in the Fund's management fee) and an Outcome Period of May
18, 2020 to May 21, 2021.
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
The investment objective of FJUN is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 11.70% (before fees, expenses and
taxes) and 10.85% (after fees and expenses, excluding brokerage commissions,
trading fees, taxes and extraordinary expenses not included in the Fund's
management fee), while providing a buffer against the first 10% (before fees,
expenses and taxes) of Underlying ETF losses, over the period from June 21, 2021
to June 17, 2022. Prior to June 21, 2021, the Fund's investment objective
included an upside cap of 17.72% (before fees, expenses and taxes) and 16.87%
(after fees and expenses, excluding brokerage commissions, trading fees, taxes
and extraordinary expenses not included in the Fund's management fee) and an
Outcome Period of June 22, 2020 to June 18, 2021.
The investment objective of DJUN is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 7.06% (before fees, expenses and taxes)
and 6.21% (after fees and expenses, excluding brokerage commissions, trading
fees, taxes and extraordinary expenses not included in the Fund's management
fee), while providing a buffer against Underlying ETF losses between -5% and
-30% (before fees, expenses and taxes) over the period from June 21,2021 to June
17, 2022. Prior to June 21, 2021, the Fund's investment objective included an
upside cap of 10.28% (before fees, expenses and taxes) and 9.43% (after fees and
expenses, excluding brokerage commissions, trading fees, taxes and extraordinary
expenses not included in the Fund's management fee) and an Outcome Period of
June 22, 2020 to June 18, 2021.
The investment objective of FJUL is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 11.70% (before fees, expenses and
taxes) and 10.85% (after fees and expenses, excluding brokerage commissions,
trading fees, taxes and extraordinary expenses not included in the Fund's
management fee), while providing a buffer against the first 10% (before fees,
expenses and taxes) of Underlying ETF losses, over the period from July 19, 2021
to July 15, 2022. Prior to July 19, 2021, the Fund's investment objective
included an upside cap of 14.95% (before fees, expenses and taxes) and 14.10%
(after fees and expenses, excluding brokerage commissions, trading fees, taxes
and extraordinary expenses not included in the Fund's management fee) and an
Outcome Period of July 20, 2020 to July 16, 2021.
The investment objective of DJUL is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 7.30% (before fees, expenses and taxes)
and 6.45% (after fees and expenses, excluding brokerage commissions, trading
fees, taxes and extraordinary expenses not included in the Fund's management
fee), while providing a buffer against Underlying ETF losses between -5% and
-30% (before fees, expenses and taxes) over the period from July 19, 2021 to
July 15, 2022. Prior to July 19, 2021, the Fund's investment objective included
an upside cap of 8.40% (before fees, expenses and taxes) and 7.55% (after fees
and expenses, excluding brokerage commissions, trading fees, taxes and
extraordinary expenses not included in the Fund's management fee) and an Outcome
Period of July 20, 2020 to July 16, 2021.
The investment objective of FAUG is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 11.64% (before fees, expenses and
taxes) and 10.79% (after fees and expenses, excluding brokerage commissions,
trading fees, taxes and extraordinary expenses not included in the Fund's
management fee), while providing a buffer against the first 10% (before fees,
expenses and taxes) of Underlying ETF losses, over the period from August 23,
2021 to August 19, 2022. Prior to August 23, 2021, the Fund's investment
objective included an upside cap of 14.71% (before fees, expenses and taxes) and
13.86% (after fees and expenses, excluding brokerage commissions, trading fees,
taxes and extraordinary expenses not including the Fund's management fee) and an
Outcome Period of August 24, 2020 to August 20, 2021.
The investment objective of DAUG is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 7.37% (before fees, expenses and taxes)
and 6.52% (after fees and expenses, excluding brokerage commissions, trading
fees, taxes and extraordinary expenses not included in the Fund's management
fee), while providing a buffer against Underlying ETF losses between -5% and
-30% (before fees, expenses and taxes) over the period from August 23, 2021 to
August 19, 2022. Prior to August 23, 2021, the Fund's investment objective
included an upside cap of 8.63% (before fees, expenses and taxes) and 7.78%
(after fees and expenses, excluding brokerage commissions, trading fees, taxes
and extraordinary expenses not including the Fund's management fee) and an
Outcome Period of August 24, 2020 to August 20, 2021.
The investment objective of FSEP is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 12.20% (before fees, expenses and
taxes) and 11.35% (after fees and expenses, excluding brokerage commissions,
trading fees, taxes and extraordinary expenses not included in the Fund's
management fee), while providing a buffer against the first 10% (before fees,
expenses and taxes) of Underlying ETF losses, over the period from September 20,
2021 to September 16, 2022.
The investment objective of DSEP is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 7.43% (before fees, expenses and taxes)
and 6.58% (after fees and expenses, excluding brokerage commissions, trading
fees, taxes and extraordinary expenses not included in the Fund's management
fee), while providing a buffer against Underlying ETF losses between -5% and
-30% (before fees, expenses and taxes) over the period from September 20, 2021
to September 16, 2022.
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
The investment objective of FOCT is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 16.22% (before fees, expenses and
taxes) and 15.37% (after fees and expenses, excluding brokerage commissions,
trading fees, taxes and extraordinary expenses not included in the Fund's
management fee), while providing a buffer against the first 10% (before fees,
expenses and taxes) of Underlying ETF losses, over the period from October 19,
2020 to October 15, 2021.
The investment objective of DOCT is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 9.34% (before fees, expenses and taxes)
and 8.49% (after fees and expenses, excluding brokerage commissions, trading
fees, taxes and extraordinary expenses not included in the Fund's management
fee), while providing a buffer against Underlying ETF losses between -5% and
-30% (before fees, expenses and taxes) over the period from October 19, 2020 to
October 15, 2021.
The investment objective of FNOV is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price of the Underlying ETF, up
to a predetermined upside cap of 13.72% (before fees, expenses and taxes) and
12.87% (after fees and expenses, excluding brokerage commissions, trading fees,
taxes and extraordinary expenses not included in the Fund's management fee),
while providing a buffer against the first 10% (before fees, expenses and taxes)
of Underlying ETF losses, over the period from November 23, 2020 to November 19,
2021. Prior to November 23, 2020, the Fund's investment objective included an
upside cap of 12.36% (before fees, expenses and taxes) and 11.50% (after fees
and expenses, excluding brokerage commissions, trading fees, taxes and
extraordinary expenses not included in the Fund's management fee) and an Outcome
Period of November 18, 2019 to November 20, 2020.
The investment objective of DNOV is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price of the Underlying ETF, up
to a predetermined upside cap of 7.75% (before fees, expenses and taxes) and
6.90% (after fees and expenses, excluding brokerage commissions, trading fees,
taxes and extraordinary expenses not included in the Fund's management fee),
while providing a buffer against Underlying ETF losses between -5% and -30%
(before fees, expenses and taxes) over the period from November 23, 2020 to
November 19, 2021. Prior to November 23, 2020, the Fund's investment objective
included an upside cap of 8.12% (before fees, expenses and taxes) and 7.26%
(after fees and expenses, excluding brokerage commissions, trading fees, taxes
and extraordinary expenses not included in the Fund's management fee) and an
Outcome Period of November 18, 2019 to November 20, 2020.
The investment objective of FDEC is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 14.00% (before fees, expenses and
taxes) and 13.15% (after fees and expenses, excluding brokerage commissions,
trading fees, taxes and extraordinary expenses not included in the Fund's
management fee), while providing a buffer against the first 10% (before fees,
expenses and taxes) of Underlying ETF losses, over the period from December 21,
2020 to December 17, 2021.
The investment objective of DDEC is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
ETF, up to a predetermined upside cap of 8.00% (before fees, expenses and taxes)
and 7.15% (after fees and expenses, excluding brokerage commissions, trading
fees, taxes and extraordinary expenses not included in the Fund's management
fee), while providing a buffer against Underlying ETF losses between -5% and
-30% (before fees, expenses and taxes) over the period from December 21, 2020 to
December 17, 2021.
Under normal market conditions, each Fund, except BUFR and BUFD, will invest
substantially all of its assets in FLexible EXchange(R) Options ("FLEX Options")
that reference the price performance of the Underlying ETF.
The investment objective of BUFR is to seek to provide investors with capital
appreciation. BUFR seeks to achieve its investment objective by providing
investors with US large cap equity market exposure while limiting downside risk
through a laddered portfolio of twelve FT Cboe Vest U.S. Equity Buffer ETFs ("FT
ETFs"). Under normal market conditions, BUFR will invest substantially all of
its assets in the FT ETFs, which seek to provide investors with returns (before
fees, expenses and taxes) that match the price return of the SPDR(R) S&P 500(R)
ETF Trust ("SPY"), up to a predetermined upside cap, while providing a buffer
against the first 10% (before fees, expenses and taxes) of SPY losses, over a
defined one-year period. The buffer is only provided by the FT ETFs. BUFR itself
does not provide any buffer against losses. BUFR simply seeks to provide
diversified exposure to all the FT ETFs in a single investment. In order to
understand BUFR's strategy and risks, it is important to understand the
strategies and risks of the FT ETFs.
The investment objective of BUFD is to seek to provide investors with capital
appreciation. BUFD seeks to achieve its investment objective by providing
investors with US large cap equity market exposure while limiting downside risk
through a laddered portfolio of twelve FT Cboe Vest U.S. Equity Deep Buffer ETFs
("FT DB ETFs"). Under normal market conditions, BUFD will invest substantially
all of its assets in the FT DB ETFs, which seek to provide investors with
returns (before fees, expenses and taxes) that match the price return of the
SPY, up to a predetermined upside cap, while providing a deep buffer against
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
losses between -5% and -30% (before fees, expenses and taxes) of SPY, over a
defined one-year period. The buffer is only provided by the FT DB ETFs. BUFD
itself does not provide any buffer against losses. BUFD simply seeks to provide
diversified exposure to all the FT DB ETFs in a single investment. In order to
understand BUFD's strategy and risks, it is important to understand the
strategies and risks of the FT DB ETFs.
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. Each Fund's NAV is calculated by dividing the
value of all assets of the Fund (including accrued interest and dividends), less
all liabilities (including accrued expenses and dividends declared but unpaid),
by the total number of shares outstanding.
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:
Exchange-traded options contracts (other than FLEX Option contracts) are
valued at the closing price in the market where such contracts are
principally traded. If no closing price is available, exchange-traded
options contracts are fair valued at the mean of their most recent bid and
asked price, if available, and otherwise at their closing bid price.
Over-the-counter options contracts are fair valued at the mean of their
most recent bid and asked price, if available, and otherwise at their
closing bid price. FLEX Option contracts are normally valued using a
model-based price provided by a third-party pricing vendor. On days when a
trade in a FLEX Option contract occurs, the trade price will be used to
value such FLEX Option contracts in lieu of the model price.
Common stocks and other equity securities listed on any national or
foreign exchange (excluding Nasdaq and the London Stock Exchange
Alternative Investment Market ("AIM")) are valued at the last sale price
on the exchange on which they are principally traded or, for Nasdaq and
AIM securities, the official closing price. Securities traded on more than
one securities exchange are valued at the last sale price or official
closing price, as applicable, at the close of the securities exchange
representing the principal market for such securities.
Shares of open-end funds are valued at fair value which is based on NAV
per share.
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;
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
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.
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 August 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. Negative dividend amount
represents charges by broker on excess cash held in the account.
C. FLEX OPTIONS
FLEX Options are customized equity or index option contracts that trade on an
exchange, but provide investors with the ability to customize key contract terms
like exercise prices, styles and expiration dates. FLEX Options are guaranteed
for settlement by the Options Clearing Corporation.
Each Fund, with the exception of BUFR and BUFD, purchases and sells, call and
put FLEX Options based on the performance of the Underlying ETF. The FLEX
Options that each Fund holds that reference the Underlying ETF will give each
Fund the right to receive or deliver shares of the Underlying ETF on the option
expiration date at a strike price, depending on whether the option is a put or
call option and whether each Fund purchases or sells the option. The FLEX
Options held by each Fund are European style options, which are exercisable at
the strike price only on the FLEX Option expiration date. All options held by
each Fund at fiscal year end are FLEX Options.
D. AFFILIATED TRANSACTIONS
BUFR and BUFD invest in securities of affiliated funds. Each Fund's investment
performance and risks are directly related to the investment performance and
risks of the affiliated funds. Dividend income, if any, realized gains and
losses, and change in appreciation (depreciation) from affiliated funds are
presented on the Statements of Operations.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
Amounts related to these investments in BUFR at August 31, 2021 and for the
fiscal year then ended are as follows:
<TABLE>
<CAPTION>
CHANGE IN
UNREALIZED REALIZED
SHARES AT VALUE AT APPRECIATION GAIN VALUE AT DIVIDEND
SECURITY NAME 8/31/2021 8/31/2020 PURCHASES SALES (DEPRECIATION) (LOSS) 8/31/2021 INCOME
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FT Cboe Vest U.S.
Equity Buffer ETF -
January 752,957 $ -- $ 25,202,788 $ (653,970) $ 576,942 $ 16,679 $ 25,142,439 $ --
FT Cboe Vest U.S.
Equity Buffer ETF -
February 680,850 1,537,359 54,281,517 (34,284,445) 1,042,395 2,825,687 25,402,513 --
FT Cboe Vest U.S.
Equity Buffer ETF -
March 779,899 -- 25,262,868 (744,612) 668,455 19,313 25,206,024 --
FT Cboe Vest U.S.
Equity Buffer ETF -
April 798,404 -- 25,244,152 (862,407) 826,505 26,107 25,234,357 --
FT Cboe Vest U.S.
Equity Buffer ETF -
May 678,065 1,516,012 53,952,234 (32,404,301) 1,012,515 1,156,237 25,232,697 --
FT Cboe Vest U.S.
Equity Buffer ETF -
June 680,941 -- 25,343,907 (1,034,812) 844,565 34,347 25,188,007 --
FT Cboe Vest U.S.
Equity Buffer ETF -
July 710,605 -- 25,118,957 (504,472) 628,018 12,399 25,254,902 --
FT Cboe Vest U.S.
Equity Buffer ETF -
August 671,296 1,542,042 53,775,841 (32,927,875) 632,533 2,152,469 25,175,010 --
FT Cboe Vest U.S.
Equity Buffer ETF -
September 721,527 -- 25,179,581 (570,849) 226,715 6,728 24,842,175 --
FT Cboe Vest U.S.
Equity Buffer ETF -
October 724,890 -- 25,178,773 (664,733) 397,071 10,607 24,921,718 --
FT Cboe Vest U.S.
Equity Buffer ETF -
November 655,012 1,528,468 54,043,532 (33,583,852) 618,562 2,446,844 25,053,554 --
FT Cboe Vest U.S.
Equity Buffer ETF -
December 740,753 -- 25,119,934 (650,191) 514,122 13,512 24,997,377 --
----------------------------------------------------------------------------------------------
$6,123,881 $417,704,084 $(138,886,519) $ 7,988,398 $8,720,929 $301,650,773 $ --
==============================================================================================
</TABLE>
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
Amounts related to these investments in BUFD at August 31, 2021 and for the
fiscal period then ended are as follows:
<TABLE>
<CAPTION>
CHANGE IN
UNREALIZED REALIZED
SHARES AT VALUE AT APPRECIATION GAIN VALUE AT DIVIDEND
SECURITY NAME 8/31/2021 1/20/2021 PURCHASES SALES (DEPRECIATION) (LOSS) 8/31/2021 INCOME
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - January 420,388 $ -- $ 13,438,769 $ (203,965) $ 166,235 $ 1,099 $ 13,402,138 $ --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - February 387,555 -- 28,355,239 (15,489,451) 243,513 311,729 13,421,030 --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - March 428,762 -- 13,474,296 (239,243) 215,065 2,290 13,452,408 --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - April 434,206 -- 13,478,396 (287,407) 269,810 3,712 13,464,511 --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - May 394,276 -- 28,006,152 (14,913,889) 280,708 92,225 13,465,196 --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - June 394,415 -- 13,466,576 (315,474) 241,283 3,644 13,396,029 --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - July 405,935 -- 13,393,487 (142,087) 190,083 243 13,441,726 --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - August 387,204 -- 28,145,956 (15,094,472) 187,825 194,734 13,434,043 --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - September 412,331 -- 13,376,043 (107,767) 82,766 236 13,351,278 --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - October 413,354 -- 13,450,742 (164,197) 107,377 814 13,394,736 --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - November 383,972 -- 28,229,224 (15,175,786) 134,135 205,370 13,392,943 --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - December 416,711 -- 13,443,568 (169,415) 146,970 1,138 13,422,261 --
----------------------------------------------------------------------------------------------
$ -- $220,258,448 $ (62,303,153) $ 2,265,770 $ 817,234 $161,038,299 $ --
==============================================================================================
</TABLE>
E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income of each Fund, if any, are declared and paid
annually, with the exception of BUFR and BUFD which declare and pay 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. During their applicable taxable periods,
none of the Funds paid a distribution in 2020 or 2021.
Page 128
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
As of August 31, 2021, 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>
FT Cboe Vest U.S. Equity Buffer ETF - January $ (510,282) $ 249,190 $ 9,771,011
FT Cboe Vest U.S. Equity Deep Buffer ETF - January (332,171) 3,003,904 1,442,263
FT Cboe Vest U.S. Equity Buffer ETF - February (1,393,329) (14,483,838) 23,079,609
FT Cboe Vest U.S. Equity Deep Buffer ETF - February (1,853,064) (40,256,800) 16,574,100
FT Cboe Vest U.S. Equity Buffer ETF - March (241,856) (3,795) 5,346,998
FT Cboe Vest U.S. Equity Deep Buffer ETF - March (206,381) 2,840,305 339,850
FT Cboe Vest U.S. Equity Buffer ETF - April (326,272) 22,848 6,966,618
FT Cboe Vest U.S. Equity Deep Buffer ETF - April (22,689) 1,631,130 2,188,989
FT Cboe Vest U.S. Equity Buffer ETF - May (445,329) (14,151,389) 5,260,205
FT Cboe Vest U.S. Equity Deep Buffer ETF - May (205,557) (2,693,365) 1,870,380
FT Cboe Vest U.S. Equity Buffer ETF - June (386,105) (12,013,369) 4,527,539
FT Cboe Vest U.S. Equity Deep Buffer ETF - June (131,613) (2,509,830) 981,346
FT Cboe Vest U.S. Equity Buffer ETF - July (245,863) (1,426,745) 2,930,778
FT Cboe Vest U.S. Equity Deep Buffer ETF - July (124,647) (1,958,377) 884,312
FT Cboe Vest U.S. Equity Buffer ETF - August (550,353) (15,584,393) 1,565,006
FT Cboe Vest U.S. Equity Deep Buffer ETF - August (559,990) (14,594,264) 877,982
FT Cboe Vest U.S. Equity Buffer ETF - September (187,082) 5,243,909 (1,864,811)
FT Cboe Vest U.S. Equity Deep Buffer ETF - September 465,043 3,050,936 (1,372,536)
FT Cboe Vest U.S. Equity Buffer ETF - October (209,041) 1,606,852 6,677,830
FT Cboe Vest U.S. Equity Deep Buffer ETF - October (226,847) 257,031 2,958,947
FT Cboe Vest U.S. Equity Buffer ETF - November (1,143,785) 1,316,454 12,904,084
FT Cboe Vest U.S. Equity Deep Buffer ETF - November (1,388,289) (5,023,607) 3,787,542
FT Cboe Vest U.S. Equity Buffer ETF - December (358,174) 1,364,513 5,741,840
FT Cboe Vest U.S. Equity Deep Buffer ETF - December (123,247) 328,334 3,162,051
FT Cboe Vest Fund of Buffer ETFs (228,991) -- 8,041,726
FT Cboe Vest Fund of Deep Buffer ETFs -- -- 2,258,567
</TABLE>
F. INCOME TAXES
Each Fund intends to qualify or continue to qualify as a regulated investment
company by complying with the requirements under Subchapter M of the Internal
Revenue Code of 1986, as amended, which includes distributing substantially all
of its net investment income and net realized gains to shareholders.
Accordingly, no provision has been made for federal and state income taxes.
However, due to the timing and amount of distributions, each Fund may be subject
to an excise tax of 4% of the amount by which approximately 98% of each Fund's
taxable income exceeds the distributions from such taxable income for the
calendar year.
The Funds are subject to accounting standards that establish a minimum threshold
for recognizing, and a system for measuring, the benefits of a tax position
taken or expected to be taken in a tax return. For FFEB, DFEB, FMAY, DMAY, FJUN,
DJUN, FJUL, DJUL, FAUG, DAUG, FNOV, DNOV, and BUFR, the taxable years ended 2020
and 2021 remain open to federal and state audit. For FJAN, DJAN, FMAR, DMAR,
FAPR, DAPR, FSEP, DSEP, FOCT, DOCT, FDEC, DDEC, and BUFD, the taxable year ended
2021 remains open to federal and state audit. As of August 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.
Page 129
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
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 each Fund's applicable
taxable year end, for federal income tax purposes, the Funds 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 the Funds' shareholders.
<TABLE>
<CAPTION>
Non-Expiring
Taxable Capital Loss
Year End Carryforwards
------------------ ------------------
<S> <C> <C>
FT Cboe Vest U.S. Equity Buffer ETF - January 31-Jan-21 $ --
FT Cboe Vest U.S. Equity Deep Buffer ETF - January 31-Jan-21 --
FT Cboe Vest U.S. Equity Buffer ETF - February 28-Feb-21 19,939,269
FT Cboe Vest U.S. Equity Deep Buffer ETF - February 28-Feb-21 43,356,380
FT Cboe Vest U.S. Equity Buffer ETF - March 31-Mar-21 --
FT Cboe Vest U.S. Equity Deep Buffer ETF - March 31-Mar-21 --
FT Cboe Vest U.S. Equity Buffer ETF - April 30-Apr-21 --
FT Cboe Vest U.S. Equity Deep Buffer ETF - April 30-Apr-21 --
FT Cboe Vest U.S. Equity Buffer ETF - May 31-May-21 14,532,034
FT Cboe Vest U.S. Equity Deep Buffer ETF - May 31-May-21 2,795,698
FT Cboe Vest U.S. Equity Buffer ETF - June 30-Jun-21 12,023,874
FT Cboe Vest U.S. Equity Deep Buffer ETF - June 30-Jun-21 2,509,830
FT Cboe Vest U.S. Equity Buffer ETF - July 31-Jul-21 1,426,745
FT Cboe Vest U.S. Equity Deep Buffer ETF - July 31-Jul-21 1,962,468
FT Cboe Vest U.S. Equity Buffer ETF - August 31-Aug-21 15,584,393
FT Cboe Vest U.S. Equity Deep Buffer ETF - August 31-Aug-21 14,594,264
FT Cboe Vest U.S. Equity Buffer ETF - September 30-Sep-20 --
FT Cboe Vest U.S. Equity Deep Buffer ETF - September 30-Sep-20 --
FT Cboe Vest U.S. Equity Buffer ETF - October 31-Oct-20 --
FT Cboe Vest U.S. Equity Deep Buffer ETF - October 31-Oct-20 --
FT Cboe Vest U.S. Equity Buffer ETF - November 30-Nov-20 6,618,155
FT Cboe Vest U.S. Equity Deep Buffer ETF - November 30-Nov-20 8,177,376
FT Cboe Vest U.S. Equity Buffer ETF - December 31-Dec-20 --
FT Cboe Vest U.S. Equity Deep Buffer ETF - December 31-Dec-20 --
FT Cboe Vest Fund of Buffer ETFs 31-Aug-21 --
FT Cboe Vest Fund of Deep Buffer ETFs 31-Aug-21 --
</TABLE>
Page 130
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
Certain losses realized during the current taxable year may be deferred and
treated as occurring on the first day of the following taxable year for federal
income tax purposes. At each Fund's applicable taxable year end, the following
Funds listed below incurred and elected to defer net late year ordinary or
capital losses as follows:
<TABLE>
<CAPTION>
Qualified Late Year Losses
Taxable ------------------------------------------------
Year End Ordinary Losses Capital Losses
-------------------- -------------------- --------------------
<S> <C> <C> <C>
FT Cboe Vest U.S. Equity Buffer ETF - January 31-Jan-21 $ -- $ --
FT Cboe Vest U.S. Equity Deep Buffer ETF - January 31-Jan-21 -- --
FT Cboe Vest U.S. Equity Buffer ETF - February 28-Feb-21 273,656 --
FT Cboe Vest U.S. Equity Deep Buffer ETF - February 28-Feb-21 510,834 --
FT Cboe Vest U.S. Equity Buffer ETF - March 31-Mar-21 -- --
FT Cboe Vest U.S. Equity Deep Buffer ETF - March 31-Mar-21 -- --
FT Cboe Vest U.S. Equity Buffer ETF - April 30-Apr-21 -- --
FT Cboe Vest U.S. Equity Deep Buffer ETF - April 30-Apr-21 -- --
FT Cboe Vest U.S. Equity Buffer ETF - May 31-May-21 225,273 --
FT Cboe Vest U.S. Equity Deep Buffer ETF - May 31-May-21 76,604 --
FT Cboe Vest U.S. Equity Buffer ETF - June 30-Jun-21 233,399 --
FT Cboe Vest U.S. Equity Deep Buffer ETF - June 30-Jun-21 70,458 --
FT Cboe Vest U.S. Equity Buffer ETF - July 31-Jul-21 167,281 --
FT Cboe Vest U.S. Equity Deep Buffer ETF - July 31-Jul-21 87,476 --
FT Cboe Vest U.S. Equity Buffer ETF - August 31-Aug-21 550,353 --
FT Cboe Vest U.S. Equity Deep Buffer ETF - August 31-Aug-21 559,990 --
FT Cboe Vest U.S. Equity Buffer ETF - September 30-Sep-20 -- --
FT Cboe Vest U.S. Equity Deep Buffer ETF - September 30-Sep-20 -- --
FT Cboe Vest U.S. Equity Buffer ETF - October 31-Oct-20 -- --
FT Cboe Vest U.S. Equity Deep Buffer ETF - October 31-Oct-20 -- --
FT Cboe Vest U.S. Equity Buffer ETF - November 30-Nov-20 700,626 --
FT Cboe Vest U.S. Equity Deep Buffer ETF - November 30-Nov-20 753,193 --
FT Cboe Vest U.S. Equity Buffer ETF - December 31-Dec-20 -- --
FT Cboe Vest U.S. Equity Deep Buffer ETF - December 31-Dec-20 -- --
FT Cboe Vest Fund of Buffer ETFs 31-Aug-21 228,991 --
FT Cboe Vest Fund of Deep Buffer ETFs 31-Aug-21 -- --
</TABLE>
Page 131
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
In order to present paid-in capital and accumulated distributable earnings
(loss) (which consists of accumulated net investment income (loss), accumulated
net realized gain (loss) on investments and net unrealized appreciation
(depreciation) on investments) on the Statements of Assets and Liabilities that
more closely represent their tax character, certain adjustments have been made
to paid-in capital, accumulated net investment income (loss) and accumulated net
realized gain (loss) on investments. These adjustments are primarily due to the
difference between book and tax treatments of income and gains on various
investment securities held by the Funds and in-kind transactions. The results of
operations and net assets were not affected by these adjustments. For each
Fund's applicable taxable period the adjustments were as follows:
<TABLE>
<CAPTION>
Accumulated
Accumulated Net Realized
Taxable Net Investment Gain (Loss) Paid-In
Year End Income (Loss) on Investments Capital
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
FT Cboe Vest U.S. Equity Buffer ETF - January 31-Jan-21 $ 7,166 $ (3,031) $ (4,135)
FT Cboe Vest U.S. Equity Deep Buffer ETF - January 31-Jan-21 5,016 -- (5,016)
FT Cboe Vest U.S. Equity Buffer ETF - February 28-Feb-21 1,177,236 (50,007,317) 48,830,081
FT Cboe Vest U.S. Equity Deep Buffer ETF - February 28-Feb-21 3,318,559 (108,165,954) 104,847,395
FT Cboe Vest U.S. Equity Buffer ETF - March 31-Mar-21 6,352 -- (6,352)
FT Cboe Vest U.S. Equity Deep Buffer ETF - March 31-Mar-21 8,272 -- (8,272)
FT Cboe Vest U.S. Equity Buffer ETF - April 30-Apr-21 7,908 -- (7,908)
FT Cboe Vest U.S. Equity Deep Buffer ETF - April 30-Apr-21 8,857 -- (8,857)
FT Cboe Vest U.S. Equity Buffer ETF - May 31-May-21 229,999 (20,950,708) 20,720,709
FT Cboe Vest U.S. Equity Deep Buffer ETF - May 31-May-21 59,605 (3,971,871) 3,912,266
FT Cboe Vest U.S. Equity Buffer ETF - June 30-Jun-21 214,735 (20,222,194) 20,007,459
FT Cboe Vest U.S. Equity Deep Buffer ETF - June 30-Jun-21 94,245 (4,400,555) 4,306,310
FT Cboe Vest U.S. Equity Buffer ETF - July 31-Jul-21 122,173 (5,846,299) 5,724,126
FT Cboe Vest U.S. Equity Deep Buffer ETF - July 31-Jul-21 55,512 (3,176,377) 3,120,865
FT Cboe Vest U.S. Equity Buffer ETF - August 31-Aug-21 332,987 (28,605,953) 28,272,966
FT Cboe Vest U.S. Equity Deep Buffer ETF - August 31-Aug-21 1,210,417 (13,347,580) 12,137,163
FT Cboe Vest U.S. Equity Buffer ETF - September 30-Sep-20 1,142 -- (1,142)
FT Cboe Vest U.S. Equity Deep Buffer ETF - September 30-Sep-20 3,353 -- (3,353)
FT Cboe Vest U.S. Equity Buffer ETF - October 31-Oct-20 5,887 -- (5,887)
FT Cboe Vest U.S. Equity Deep Buffer ETF - October 31-Oct-20 2,861 -- (2,861)
FT Cboe Vest U.S. Equity Buffer ETF - November 30-Nov-20 13,632 (21,488,679) 21,475,047
FT Cboe Vest U.S. Equity Deep Buffer ETF - November 30-Nov-20 6,559 (25,195,517) 25,188,958
FT Cboe Vest U.S. Equity Buffer ETF - December 31-Dec-20 4,164 -- (4,164)
FT Cboe Vest U.S. Equity Deep Buffer ETF - December 31-Dec-20 2,646 -- (2,646)
FT Cboe Vest Fund of Buffer ETFs 31-Aug-21 21,051 (8,722,376) 8,701,325
FT Cboe Vest Fund of Deep Buffer ETFs 31-Aug-21 90,593 (824,437) 733,844
</TABLE>
G. EXPENSES
Expenses, other than the investment advisory fee and other excluded expenses,
are paid by the Advisor (see Note 3).
3. INVESTMENT ADVISORY FEE, AFFILIATED TRANSACTIONS AND OTHER FEE ARRANGEMENTS
First Trust, the investment advisor to the 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 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.
First Trust is paid an annual unitary management fee of 0.85% of each Fund's
average daily net assets with the exception of BUFR and BUFD which each pay an
annual unitary management fee of 0.20%. In addition, BUFR and BUFD incur pro
rata share of fees and expenses attributable to investments in other investment
companies ("acquired fund fees and expenses"). The total of the unitary
management fee and acquired fund fees and expenses represents each Fund's total
annual operating expenses.
First Trust is responsible for each Fund's expenses, including the cost of
transfer agency, sub-advisory, custody, fund administration, legal, audit and
other services, but excluding fee payments under the Investment Management
Agreement, interest, taxes, acquired fund fees and expenses, if any, brokerage
commissions and other expenses connected with the execution of portfolio
transactions, distribution and service fees payable pursuant to a Rule 12b-1
plan, if any, and extraordinary expenses.
Page 132
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
Cboe Vest Financial LLC ("Cboe Vest"), an affiliate of First Trust, serves as
the Funds' sub-advisor and manages each Fund's portfolio subject to First
Trust's supervision. Pursuant to the Investment Management Agreement, between
the Trust, on behalf of the Funds, and the Advisor, and the Investment
Sub-Advisory Agreement among the Trust, on behalf of the Funds (other than BUFR
and BUFD), the Advisor and Cboe Vest, First Trust will supervise Cboe Vest and
its management of the investment of each Fund's assets and will pay Cboe Vest
for its services as the Funds' sub-advisor a sub-advisory fee equal to 50% of
any remaining monthly unitary management fee paid to the Advisor after the
average Fund's expenses accrued during the most recent twelve months (or shorter
period during the first eleven months of the Investment Sub-Advisory Agreement)
are subtracted from the unitary management fee for that month. Pursuant to the
Investment Management Agreement, between the Trust, on behalf of the Funds, and
the Advisor, and the Investment Sub-Advisory Agreement among the Trust, on
behalf of BUFR and BUFD, the Advisor and Cboe Vest, First Trust will supervise
Cboe Vest and its management of the investment of each Fund's assets and will
pay Cboe Vest for its services as the Funds' sub-advisor a sub-advisory fee
equal to 50% of the monthly unitary management fee paid to the Advisor, less
Cboe Vest's 50% share of each of BUFR and BUFD's expenses for that month.
The Trust has multiple service agreements with The Bank of New York Mellon
("BNYM"). Under the service agreements, BNYM performs custodial, fund
accounting, certain administrative services, and transfer agency services for
each Fund. As custodian, BNYM is responsible for custody of each Fund's assets.
As fund accountant and administrator, BNYM is responsible for maintaining the
books and records of each Fund's securities and cash. As transfer agent, BNYM is
responsible for maintaining shareholder records for each Fund. BNYM is a
subsidiary of The Bank of New York Mellon Corporation, a financial holding
company.
Each Trustee who is not an officer or employee of First Trust, any sub-advisor
or any of their affiliates ("Independent Trustees") is paid a fixed annual
retainer that is allocated equally among each fund in the First Trust Fund
Complex. Each Independent Trustee is also paid an annual per fund fee that
varies based on whether the fund is a closed-end or other actively managed fund,
a defined-outcome fund or is an index fund.
Additionally, the Lead Independent Trustee and the Chairmen of the Audit
Committee, Nominating and Governance Committee and Valuation Committee are paid
annual fees to serve in such capacities, with such compensation allocated pro
rata among each fund in the First Trust Fund Complex based on net assets.
Independent Trustees are reimbursed for travel and out-of-pocket expenses in
connection with all meetings. The Lead Independent Trustee and Committee
Chairmen rotate every three years. The officers and "Interested" Trustee receive
no compensation from the Trust for acting in such capacities.
4. PURCHASES AND SALES OF SECURITIES
For the fiscal period ended August 31, 2021, the Funds, except BUFR and BUFD,
had no purchases or sales of investments, excluding short-term investments and
in-kind transactions. Each Fund, except BUFR and BUFD, holds options for a
target outcome period of approximately one year based on the expiration date of
the options, which occurs on the third Friday of the month corresponding to the
month in each Fund name. For securities transactions purposes, the options are
considered short-term investments.
For the fiscal period ended August 31, 2021, the cost of purchases and proceeds
from sales of investments for BUFR and BUFD, excluding short-term investments
and in-kind transactions, were as follows:
<TABLE>
<CAPTION>
Purchases Sales
-------------- --------------
<S> <C> <C>
FT Cboe Vest Fund of Buffer ETFs $ 130,199,042 $ 1,126,376
FT Cboe Vest Fund of Deep Buffer ETFs 60,035,480 3,920,305
</TABLE>
Page 133
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
For the fiscal period ended August 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>
FT Cboe Vest U.S. Equity Buffer ETF - January $ 81,585,134 $ --
FT Cboe Vest U.S. Equity Deep Buffer ETF - January 39,247,155 26,295,600
FT Cboe Vest U.S. Equity Buffer ETF - February 57,537,488 223,740,290
FT Cboe Vest U.S. Equity Deep Buffer ETF - February 27,250,626 416,933,545
FT Cboe Vest U.S. Equity Buffer ETF - March 30,661,284 --
FT Cboe Vest U.S. Equity Deep Buffer ETF - March 19,596,228 24,690,028
FT Cboe Vest U.S. Equity Buffer ETF - April 61,332,111 --
FT Cboe Vest U.S. Equity Deep Buffer ETF - April 43,235,322 18,270,052
FT Cboe Vest U.S. Equity Buffer ETF - May 47,362,282 84,756,725
FT Cboe Vest U.S. Equity Deep Buffer ETF - May 16,525,474 21,326,436
FT Cboe Vest U.S. Equity Buffer ETF - June 45,466,336 66,902,243
FT Cboe Vest U.S. Equity Deep Buffer ETF - June 26,243,069 25,980,592
FT Cboe Vest U.S. Equity Buffer ETF - July 71,836,443 28,593,759
FT Cboe Vest U.S. Equity Deep Buffer ETF - July 33,801,360 15,853,545
FT Cboe Vest U.S. Equity Buffer ETF - August 75,699,819 102,994,952
FT Cboe Vest U.S. Equity Deep Buffer ETF - August 29,647,179 67,688,916
FT Cboe Vest U.S. Equity Buffer ETF - September 33,629,692 23,498,010
FT Cboe Vest U.S. Equity Deep Buffer ETF - September 33,077,451 17,276,638
FT Cboe Vest U.S. Equity Buffer ETF - October 37,912,660 3,386,313
FT Cboe Vest U.S. Equity Deep Buffer ETF - October 15,234,480 --
FT Cboe Vest U.S. Equity Buffer ETF - November 48,470,952 187,020,685
FT Cboe Vest U.S. Equity Deep Buffer ETF - November 6,593,116 111,746,343
FT Cboe Vest U.S. Equity Buffer ETF - December 54,657,602 --
FT Cboe Vest U.S. Equity Deep Buffer ETF - December 24,557,971 --
FT Cboe Vest Fund of Buffer ETFs 287,505,042 137,760,143
FT Cboe Vest Fund of Deep Buffer ETFs 160,222,968 58,382,848
</TABLE>
5. DERIVATIVE TRANSACTIONS
The following table presents the types of derivatives held by each Fund at
August 31, 2021, the primary underlying risk exposure and the location of these
instruments as presented on the Statements of Assets and Liabilities.
<TABLE>
<CAPTION>
ASSET DERIVATIVES LIABILITY DERIVATIVES
----------------------------------------- -----------------------------------------
DERIVATIVES STATEMENTS OF ASSETS AND STATEMENTS OF ASSETS AND
INSTRUMENT RISK EXPOSURE LIABILITIES LOCATION VALUE LIABILITIES LOCATION VALUE
------------------ ------------------ -------------------------- ------------ -------------------------- ------------
<S> <C> <C> <C> <C> <C>
FJAN
Options contracts Options contracts
Options Equity Risk purchased, at value $136,708,800 written, at value $ 10,551,840
DJAN
Options contracts Options contracts
Options Equity Risk purchased, at value 55,858,338 written, at value 6,607,590
FFEB
Options contracts Options contracts
Options Equity Risk purchased, at value 271,488,091 written, at value 14,562,335
DFEB
Options contracts Options contracts
Options Equity Risk purchased, at value 308,370,108 written, at value 27,471,816
</TABLE>
Page 134
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
<TABLE>
<CAPTION>
ASSET DERIVATIVES LIABILITY DERIVATIVES
----------------------------------------- -----------------------------------------
DERIVATIVES STATEMENTS OF ASSETS AND STATEMENTS OF ASSETS AND
INSTRUMENT RISK EXPOSURE LIABILITIES LOCATION VALUE LIABILITIES LOCATION VALUE
------------------ ------------------ -------------------------- ------------ -------------------------- ------------
<S> <C> <C> <C> <C> <C>
FMAR
Options contracts Options contracts
Options Equity Risk purchased, at value $ 88,141,177 written, at value $ 6,089,149
DMAR
Options contracts Options contracts
Options Equity Risk purchased, at value 72,234,454 written, at value 6,626,122
FAPR
Options contracts Options contracts
Options Equity Risk purchased, at value 140,977,522 written, at value 7,245,756
DAPR
Options contracts Options contracts
Options Equity Risk purchased, at value 98,664,033 written, at value 6,142,865
FMAY
Options contracts Options contracts
Options Equity Risk purchased, at value 118,011,915 written, at value 7,049,903
DMAY
Options contracts Options contracts
Options Equity Risk purchased, at value 67,701,532 written, at value 4,853,951
FJUN
Options contracts Options contracts
Options Equity Risk purchased, at value 120,370,538 written, at value 8,285,215
DJUN
Options contracts Options contracts
Options Equity Risk purchased, at value 49,413,062 written, at value 3,854,759
FJUL
Options contracts Options contracts
Options Equity Risk purchased, at value 131,477,670 written, at value 7,964,698
DJUL
Options contracts Options contracts
Options Equity Risk purchased, at value 57,680,536 written, at value 3,481,621
FAUG
Options contracts Options contracts
Options Equity Risk purchased, at value 163,89,374 written, at value 9,924,809
DAUG
Options contracts Options contracts
Options Equity Risk purchased, at value 94,409,427 written, at value 4,963,665
FSEP
Options contracts Options contracts
Options Equity Risk purchased, at value 48,233,598 written, at value 7,013,202
DSEP
Options contracts Options contracts
Options Equity Risk purchased, at value 32,155,115 written, at value 6,391,253
</TABLE>
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--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
<TABLE>
<CAPTION>
ASSET DERIVATIVES LIABILITY DERIVATIVES
----------------------------------------- -----------------------------------------
DERIVATIVES STATEMENTS OF ASSETS AND STATEMENTS OF ASSETS AND
INSTRUMENT RISK EXPOSURE LIABILITIES LOCATION VALUE LIABILITIES LOCATION VALUE
------------------ ------------------ -------------------------- ------------ -------------------------- ------------
<S> <C> <C> <C> <C> <C>
FOCT
Options contracts Options contracts
Options Equity Risk purchased, at value $ 78,965,041 written, at value $ 8,684,219
DOCT
Options contracts Options contracts
Options Equity Risk purchased, at value 48,135,631 written, at value 7,764,548
FNOV
Options contracts Options contracts
Options Equity Risk purchased, at value 61,685,299 written, at value 18,673,555
DNOV
Options contracts Options contracts
Options Equity Risk purchased, at value 07,650,008 written, at value 17,071,714
FDEC
Options contracts Options contracts
Options Equity Risk purchased, at value 77,228,616 written, at value 6,610,594
DDEC
Options contracts Options contracts
Options Equity Risk purchased, at value 67,790,179 written, at value 8,522,506
</TABLE>
The following table presents the amount of net realized gain (loss) and change
in net unrealized appreciation (depreciation) recognized for the fiscal period
ended August 31, 2021, on each Fund's derivative instruments, as well as the
primary underlying risk exposure associated with the instruments.
<TABLE>
<CAPTION>
EQUITY RISK
-----------------------------------------------------------------------------
STATEMENTS OF OPERATIONS LOCATION FJAN DJAN FFEB DFEB FMAR DMAR
------------------------------------- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net realized gain (loss) on:
Purchased options contracts $ 119,420 $ 3,788,715 $36,502,369 $ 91,680,423 $ (6,025) $ 2,704,418
Written options contracts 101,827 (784,811) 3,178,825 (10,903,278) (5,348) 135,887
Net change in unrealized appreciation
(depreciation) on:
Purchased options contracts 11,542,279 4,736,422 5,787,852 (35,768,308) 6,508,169 3,798,542
Written options contracts (1,740,294) (3,294,159) 1,452,318 (1,466,254) (1,153,593) (3,458,692)
</TABLE>
<TABLE>
<CAPTION>
EQUITY RISK
-----------------------------------------------------------------------------
STATEMENTS OF OPERATIONS LOCATION FAPR DAPR FMAY DMAY FJUN DJUN
------------------------------------- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net realized gain (loss) on:
Purchased options contracts $ 20,166 $ 2,055,767 $15,265,373 $ 5,377,127 $11,711,311 $ 4,810,973
Written options contracts (16,682) (162,579) (8,445,749) (4,217,671) (3,506,706) (2,929,499)
Net change in unrealized appreciation
(depreciation) on:
Purchased options contracts 6,554,482 4,526,921 1,051,073 2,228,178 1,892,918 634,386
Written options contracts 431,500 (2,337,580) 1,489,751 (855,180) (688,036) (440,149)
</TABLE>
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<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
<TABLE>
<CAPTION>
EQUITY RISK
-----------------------------------------------------------------------------
STATEMENTS OF OPERATIONS LOCATION FJUL DJUL FAUG DAUG FSEP DSEP
------------------------------------- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net realized gain (loss) on:
Purchased options contracts $ 7,771,111 $ 4,004,211 $20,106,991 $ 25,548,807 $ 4,700,856 $ 4,414,030
Written options contracts (3,351,557) (2,797,029) (6,267,052) (14,980,228) 552,772 (701,130)
Net change in unrealized appreciation
(depreciation) on:
Purchased options contracts 1,613,933 1,053,464 (891,390) (1,382,735) 2,015,621 2,281,475
Written options contracts 389,836 (373,086) 2,075,585 1,213,639 (3,880,432) (3,654,011)
</TABLE>
<TABLE>
<CAPTION>
EQUITY RISK
-----------------------------------------------------------------------------
STATEMENTS OF OPERATIONS LOCATION FOCT DOCT FNOV DNOV FDEC DDEC
------------------------------------- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net realized gain (loss) on:
Purchased options contracts $ 1,747,009 $ 686,298 $23,505,973 $ 26,252,586 $ 658,927 $ 980,610
Written options contracts 71,289 (401,944) 3,328,687 (1,745,262) (91,440) (449,835)
Net change in unrealized appreciation
(depreciation) on:
Purchased options contracts 10,735,381 7,859,741 10,279,695 (4,882,295) 8,080,787 7,945,852
Written options contracts (4,057,551) (4,900,794) (10,136,007) (9,482,076) (1,541,921) (4,783,801)
</TABLE>
The Funds do not have the right to offset financial assets and financial
liabilities related to options contracts on the Statements of Assets and
Liabilities.
The following table presents the premiums for purchased options contracts
opened, premiums for purchased options contracts closed, exercised and expired,
premiums for written options contracts opened, and premiums for written options
contracts closed, exercised and expired, for the fiscal period ended August 31,
2021, on each Fund's options contracts.
<TABLE>
<CAPTION>
PREMIUMS FOR PREMIUMS FOR
PREMIUMS FOR PURCHASED WRITTEN OPTIONS
PURCHASED OPTIONS CONTRACTS PREMIUMS FOR CONTRACTS CLOSED,
OPTIONS CONTRACTS CLOSED, EXERCISED WRITTEN OPTIONS EXERCISED AND
OPENED AND EXPIRED CONTRACTS OPENED EXPIRED
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FJAN $ 141,854,127 $ 16,687,606 $ 9,995,593 $ 1,184,047
DJAN 143,489,847 92,367,931 10,222,589 6,909,158
FFEB 568,457,036 525,431,297 31,973,303 29,248,234
DFEB 833,851,845 1,053,387,657 46,358,660 53,472,941
FMAR 88,119,879 6,486,871 5,306,580 371,024
DMAR 95,617,262 27,181,350 5,467,761 2,300,331
FAPR 148,774,799 14,351,759 8,357,853 680,597
DAPR 151,153,841 57,016,729 6,480,850 2,675,565
FMAY 285,828,590 212,383,575 32,088,790 28,916,244
DMAY 121,307,869 68,998,245 12,837,985 10,845,622
FJUN 223,172,948 157,635,397 21,158,783 18,141,970
DJUN 85,103,836 59,045,982 7,957,384 6,909,834
FJUL 199,648,676 105,824,396 14,445,602 9,294,289
DJUL 96,312,521 53,251,927 7,993,239 6,196,316
FAUG 392,645,172 266,794,276 34,122,379 25,227,069
DAUG 200,312,420 246,607,616 17,582,031 21,549,925
FSEP 76,662,415 30,444,438 7,092,870 3,960,100
DSEP 67,147,213 37,273,573 6,337,378 3,600,136
FOCT 85,946,500 17,716,840 6,139,267 1,512,599
DOCT 59,183,467 18,907,577 4,665,137 1,801,383
FNOV 364,332,440 357,657,744 18,901,313 17,640,853
DNOV 225,952,227 269,597,501 12,023,950 15,209,083
FDEC 119,430,676 50,282,847 8,277,631 3,208,958
DDEC 107,097,443 47,253,116 6,898,596 3,159,891
</TABLE>
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<PAGE>
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
6. 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.
7. DISTRIBUTION PLAN
The Board of Trustees adopted a Distribution and Service Plan pursuant to Rule
12b-1 under the 1940 Act. In accordance with the Rule 12b-1 plan, the Funds are
authorized to pay an amount up to 0.25% of their average daily net assets each
year to reimburse First Trust Portfolios L.P. ("FTP"), the distributor of the
Funds, for amounts expended to finance activities primarily intended to result
in the sale of Creation Units or the provision of investor services. FTP may
also use this amount to compensate securities dealers or other persons that are
Authorized Participants for providing distribution assistance, including
broker-dealer and shareholder support and educational and promotional services.
No 12b-1 fees are currently paid by the Funds, and pursuant to a contractual
arrangement, no 12b-1 fees will be paid any time before December 31, 2022 for
FFEB, DFEB, FMAY, DMAY, FJUN, DJUN, FJUL, DJUL, FAUG, DAUG, FSEP, DSEP, FOCT,
DOCT, FNOV, DNOV, FDEC, DDEC, and BUFR, January 10, 2023 for FJAN and DJAN,
January 15, 2023 for BUFD, March 8, 2023 for FMAR and DMAR, and April 15, 2023
for DAPR and FAPR.
8. INDEMNIFICATION
The Trust, on behalf of the Funds, has a variety of indemnification obligations
under contracts with its service providers. The Trust's maximum exposure under
these arrangements is unknown. However, the Trust has not had prior claims or
losses pursuant to these contracts and expects the risk of loss to be remote.
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<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
9. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Funds
through the date the financial statements were issued, and has determined that
there were the following subsequent events:
On September 20, 2021, FT Cboe Vest International Equity Buffer ETF - September
and FT Cboe Vest Nasdaq-100(R) Buffer ETF - September, each an additional series
of the Trust, began trading under the symbols "YSEP" and "QSPT," respectively,
on Cboe BZX.
On September 21, 2021, First Trust SkyBridge Crypto Industry and Digital Economy
ETF, an additional series of the Trust, began trading under the symbol "CRPT" on
NYSE Arca, Inc.
On October 14, 2021, First Trust Multi-Manager Small Cap Opportunities ETF, an
additional series of the Trust, began trading under the symbol "MMSC" on NYSE
Arca, Inc.
Page 139
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF FIRST TRUST EXCHANGE-TRADED
FUND VIII:
OPINION ON THE FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS
We have audited the accompanying statements of assets and liabilities of FT Cboe
Vest U.S. Equity Buffer ETF - January, FT Cboe Vest U.S. Equity Deep Buffer ETF
- January, FT Cboe Vest U.S. Equity Buffer ETF - February, FT Cboe Vest U.S.
Equity Deep Buffer ETF - February, FT Cboe Vest U.S. Equity Buffer ETF - March,
FT Cboe Vest U.S. Equity Deep Buffer ETF - March, FT Cboe Vest U.S. Equity
Buffer ETF - April, FT Cboe Vest U.S. Equity Deep Buffer ETF - April, FT Cboe
Vest U.S. Equity Buffer ETF - May, FT Cboe Vest U.S. Equity Deep Buffer ETF -
May, FT Cboe Vest U.S. Equity Buffer ETF - June, FT Cboe Vest U.S. Equity Deep
Buffer ETF - June, FT Cboe Vest U.S. Equity Buffer ETF - July, FT Cboe Vest U.S.
Equity Deep Buffer ETF - July, FT Cboe Vest U.S. Equity Buffer ETF - August, FT
Cboe Vest U.S. Equity Deep Buffer ETF - August, FT Cboe Vest U.S. Equity Buffer
ETF - September, FT Cboe Vest U.S. Equity Deep Buffer ETF - September, FT Cboe
Vest U.S. Equity Buffer ETF - October, FT Cboe Vest U.S. Equity Deep Buffer ETF
- October, FT Cboe Vest U.S. Equity Buffer ETF - November, FT Cboe Vest U.S.
Equity Deep Buffer ETF - November, FT Cboe Vest U.S. Equity Buffer ETF -
December, FT Cboe Vest U.S. Equity Deep Buffer ETF - December, FT Cboe Vest Fund
of Buffer ETFs, and FT Cboe Vest Fund of Deep Buffer ETFs (the "Funds"), each a
series of the First Trust Exchange-Traded Fund VIII, including the portfolios of
investments, as of August 31, 2021, and the related statements of operations,
the changes in net assets, and the financial highlights for the periods
indicated in the table below, and the related notes. In our opinion, the
financial statements and financial highlights present fairly, in all material
respects, the financial position of the Funds as of August 31, 2021, and the
results of their operations, the changes in their net assets, and the financial
highlights for the periods listed in the table below, in conformity with
accounting principles generally accepted in the United States of America.
<TABLE>
<CAPTION>
INDIVIDUAL FUNDS STATEMENTS OF STATEMENTS OF FINANCIAL
INCLUDED IN THE TRUST OPERATIONS CHANGES IN NET ASSETS HIGHLIGHTS
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FT Cboe Vest U.S. Equity Buffer For the period from January 15, 2021 (commencement of operations)
ETF - January through August 31, 2021
FT Cboe Vest U.S. Equity Deep
Buffer ETF - January
FT Cboe Vest U.S. Equity Buffer For the year ended For the year ended August 31, 2021, and for the period from
ETF - February August 31, 2021 February 21, 2020 (commencement of operations) through
August 31, 2020
FT Cboe Vest U.S. Equity Deep
Buffer ETF - February
FT Cboe Vest U.S. Equity Buffer For the period from March 19, 2021 (commencement of operations)
ETF - March through August 31, 2021
FT Cboe Vest U.S. Equity Deep
Buffer ETF - March
FT Cboe Vest U.S. Equity Buffer For the period from April 16, 2021 (commencement of operations)
ETF - April through August 31, 2021
FT Cboe Vest U.S. Equity Deep
Buffer ETF - April
FT Cboe Vest U.S. Equity Buffer For the year ended For the year ended August 31, 2021, and for the period from
ETF - May August 31, 2021 May 15, 2020 (commencement of operations) through
August 31, 2020
FT Cboe Vest U.S. Equity Deep
Buffer ETF - May
FT Cboe Vest U.S. Equity Buffer For the year ended For the year ended August 31, 2021, and for the period from
ETF - June August 31, 2021 June 19, 2020 (commencement of operations) through
August 31, 2020
FT Cboe Vest U.S. Equity Deep
Buffer ETF - June
FT Cboe Vest U.S. Equity Buffer For the year ended For the year ended August 31, 2021, and for the period from
ETF - July August 31, 2021 July 17, 2020 (commencement of operations) through
August 31, 2020
FT Cboe Vest U.S. Equity Deep
Buffer ETF - July
</TABLE>
Page 140
<PAGE>
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDIVIDUAL FUNDS STATEMENTS OF STATEMENTS OF FINANCIAL
INCLUDED IN THE TRUST OPERATIONS CHANGES IN NET ASSETS HIGHLIGHTS
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FT Cboe Vest U.S. Equity Buffer For the year ended For the year ended August 31, 2021, and for the period from
ETF - August August 31, 2021 November 6, 2019 (commencement of operations) through
August 31, 2020
FT Cboe Vest U.S. Equity Deep
Buffer ETF - August
FT Cboe Vest U.S. Equity Buffer For the period from September 18, 2020 (commencement of operations) through
ETF - September August 31, 2021
FT Cboe Vest U.S. Equity Deep
Buffer ETF - September
FT Cboe Vest U.S. Equity Buffer For the period from October 16, 2020 (commencement of operations) through
ETF - October August 31, 2021
FT Cboe Vest U.S. Equity Deep
Buffer ETF - October
FT Cboe Vest U.S. Equity Buffer For the year ended For the year ended August 31, 2021, and for the period from
ETF - November August 31, 2021 November 15, 2019 (commencement of operations) through
August 31, 2020
FT Cboe Vest U.S. Equity Deep
Buffer ETF - November
FT Cboe Vest U.S. Equity Buffer For the period from December 18, 2020 (commencement of operations) through
ETF - December August 31, 2021
FT Cboe Vest U.S. Equity Deep
Buffer ETF - December
FT Cboe Vest Fund of Buffer For the year ended For the year ended August 31, 2021, and for the period from
ETFs August 31, 2021 August 10, 2020 (commencement of operations) through
August 31, 2020
FT Cboe Vest Fund of Deep Buffer For the period from January 20, 2021 (commencement of operations) through
ETFs August 31, 2021
</TABLE>
BASIS FOR OPINION
These financial statements and financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an opinion on the Funds'
financial statements and financial highlights based on our audits. We are a
public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to
the Funds in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement, whether due to error or fraud. The Funds are not
required to have, nor were we engaged to perform, an audit of their internal
control over financial reporting. As part of our audits we are required to
obtain an understanding of internal control over financial reporting but not for
the purpose of expressing an opinion on the effectiveness of the Funds' internal
control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material
misstatement of the financial statements and financial highlights, whether due
to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the financial statements and financial highlights. Our audits
Page 141
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (CONTINUED)
--------------------------------------------------------------------------------
also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of August 31, 2021, by correspondence with
the custodian and brokers; when replies were not received from brokers, we
performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
Chicago, Illinois
October 25, 2021
We have served as the auditor of one or more First Trust investment companies
since 2001.
Page 142
<PAGE>
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 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.
FEDERAL TAX INFORMATION
There were no distributions made by each Fund during their applicable taxable
period; therefore, no analysis for the corporate dividends received deduction
and qualified dividend income were completed.
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 significant
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
more broadly diversified.
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.
DEFINED OUTCOME FUNDS RISK. To the extent a fund's investment strategy is
designed to deliver returns tied to the price performance of an underlying ETF,
an investor may not realize the returns the fund seeks to achieve if that
investor does not hold shares for the entire target outcome period. In the event
an investor purchases shares after the first day of the target outcome period or
sells shares prior to the end of the target outcome period, the buffer that the
fund seeks to provide against a decline in the value of the underlying ETF may
not be available, the enhanced returns that the fund seeks to provide (if any)
may not be available and the investor may not participate in a gain in the value
of the underlying ETF up to the cap for the investor's investment period.
Additionally, the fund will not participate in gains of the underlying ETF above
the cap and a shareholder may lose their entire investment. If the fund seeks
enhanced returns, there are certain time periods when the value of the fund may
fall faster than the value of the underlying ETF, and it is very unlikely that,
on any given day during which the underlying ETF share price increases in value,
the fund's share price will increase at the same rate as the enhanced returns
sought by the fund, which is designed for an entire target outcome period.
Trading flexible exchange options involves risks different from, or possibly
greater than, the risks associated with investing directly in securities, such
as less liquidity and correlation and valuation risks. A fund may experience
substantial downside from specific flexible exchange option positions and
certain positions may expire worthless.
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
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
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 OR MODEL CONSTITUENT RISK. Certain funds may be a constituent of one or
more indices or ETF models. 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 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. In addition, index rebalances may potentially result in increased
trading activity in a fund's shares.
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.
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
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. While the development of
vaccines has slowed the spread of the virus and allowed for the resumption of
"reasonably" normal business activity in the United States, many countries
continue to impose lockdown measures in an attempt to slow the spread.
Additionally, there is no guarantee that vaccines will be effective against
emerging variants of the disease.
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;
capital controls; lack of liquidity; currency exchange rates; excessive
taxation; government seizure of assets; the imposition of sanctions by foreign
governments; different legal or accounting standards; and less government
supervision and regulation of exchanges in foreign countries. Investments in
non-U.S. securities may involve higher costs than investments in U.S.
securities, including higher transaction and custody costs, as well as
additional taxes imposed by non-U.S. governments. These risks may be heightened
for securities of companies located, or with significant operations, in emerging
market countries.
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. Each fund relies on third-parties for a range of services, including
custody. Any delay or failure relating to engaging or maintaining such service
providers may affect a fund's ability to meet its investment objective. Although
the funds and the funds' investment 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.
DISCLAIMER
The funds are not sponsored, endorsed, sold or promoted by SPDR(R) S&P 500(R)
ETF Trust, PDR, or Standard & Poor's(R) (together with their affiliates
hereinafter referred to as the "Corporations"). The Corporations have not passed
on the legality or suitability of, or the accuracy or adequacy of, descriptions
and disclosures relating to the funds or the FLEX Options. The Corporations make
no representations or warranties, express or implied, regarding the advisability
of investing in the funds or the FLEX Options or results to be obtained by the
funds or the FLEX Options, shareholders or any other person or entity from use
of the SPDR(R) S&P 500(R) ETF Trust. The Corporations have no liability in
connection with the management, administration, marketing or trading of the
funds or the FLEX Options.
NOT FDIC INSURED NOT BANK GUARANTEED MAY LOSE VALUE
ADVISORY AND SUB-ADVISORY AGREEMENTS
BOARD CONSIDERATIONS REGARDING APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT
AND INVESTMENT SUB-ADVISORY AGREEMENT FOR
FT CBOE VEST U.S. EQUITY BUFFER ETF - MARCH
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - MARCH
FT CBOE VEST U.S. EQUITY BUFFER ETF - APRIL
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - APRIL
Independent Trustees, unanimously approved the Investment Management Agreement
(the "Advisory Agreement") with First Trust Advisors L.P. (the "Advisor") and
the Investment Sub-Advisory Agreement (the "Sub-Advisory Agreement" and together
with the Advisory Agreement, the "Agreements") among the Trust, the Advisor and
Cboe Vest Financial LLC (the "Sub-Advisor") on behalf of the following four
series of the Trust (each a "Fund" and collectively, the "Funds"):
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
FT Cboe Vest U.S. Equity Buffer ETF - March (FMAR)
FT Cboe Vest U.S. Equity Deep Buffer ETF - March (DMAR)
FT Cboe Vest U.S. Equity Buffer ETF - April (FAPR)
FT Cboe Vest U.S. Equity Deep Buffer ETF - April (DAPR)
The Board approved the Agreements for each Fund for an initial two-year term at
a meeting held on June 8, 2020. The Board determined for each Fund that the
Agreements are in the best interests of the Fund in light of the nature, extent
and quality of the services expected to be provided and such other matters as
the Board considered to be relevant in the exercise of its reasonable business
judgment.
To reach this determination for each Fund, the Board considered its duties under
the Investment Company Act of 1940, as amended (the "1940 Act"), as well as
under the general principles of state law, in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; the fiduciary duty
of investment advisors with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Board in voting
on such agreements. To assist the Board in its evaluation of the Agreements for
each Fund, the Independent Trustees received a separate report from each of the
Advisor and the Sub-Advisor in advance of the Board meeting responding to
requests for information from counsel to the Independent Trustees, submitted on
behalf of the Independent Trustees, that, among other things, outlined: the
services to be provided by the Advisor and the Sub-Advisor to each Fund
(including the relevant personnel responsible for these services and their
experience); the proposed unitary fee rate payable by each Fund as compared to
fees charged to a peer group of funds (the "Expense Group") and a broad peer
universe of funds (the "Expense Universe"), each assembled by Broadridge
Financial Solutions, Inc. ("Broadridge"), an independent source, and as compared
to fees charged to other clients of the Advisor, including other exchange-traded
funds ("ETFs") managed by the Advisor; the proposed sub-advisory fee rate as
compared to fees charged to other clients of the Sub-Advisor; the estimated
expense ratio of each Fund as compared to expense ratios of the funds in the
Fund's Expense Group and Expense Universe; the nature of expenses to be incurred
in providing services to each Fund and the potential for the Advisor and the
Sub-Advisor to realize economies of scale, if any; profitability and other
financial data for the Advisor; financial data for the Sub-Advisor; any fall-out
benefits to the Advisor and its affiliates, First Trust Portfolios L.P. ("FTP")
and First Trust Capital Partners, LLC ("FTCP"), and the Sub-Advisor; and
information on the Advisor's and the Sub-Advisor's compliance programs. The
Independent Trustees and their counsel also met separately to discuss the
information provided by the Advisor and the Sub-Advisor. The Board applied its
business judgment to determine whether the arrangements between the Trust and
the Advisor and among the Trust, the Advisor and the Sub-Advisor are reasonable
business arrangements from each Fund's perspective.
In evaluating whether to approve the Agreements for each Fund, the Board
considered the nature, extent and quality of the services to be provided by the
Advisor and the Sub-Advisor under the Agreements. With respect to the Advisory
Agreement, the Board considered that the Advisor will be responsible for the
overall management and administration of each Fund and reviewed all of the
services to be provided by the Advisor to the Funds, including the oversight of
the Sub-Advisor, as well as the background and experience of the persons
responsible for such services. The Board considered that each Fund will be an
actively-managed ETF and will employ an advisor/sub-advisor management structure
and considered that the Advisor manages other ETFs with a similar structure in
the First Trust Fund Complex. The Board noted that the Advisor will oversee the
Sub-Advisor's day-to-day management of the Fund's investments, including
portfolio risk monitoring and performance review. In reviewing the services to
be provided, the Board noted the compliance program that had been developed by
the Advisor and considered that it includes a robust program for monitoring the
Advisor's, the Sub-Advisor's and each Fund's compliance with the 1940 Act, as
well as each Fund's compliance with its investment objective, policies and
restrictions. The Board noted that employees of the Advisor provide management
services to other ETFs and to other funds in the First Trust Fund Complex with
diligence and care. With respect to the Sub-Advisory Agreement, in addition to
the written materials provided by the Sub-Advisor, at the June 8, 2020 meeting,
the Board also received a presentation from representatives of the Sub-Advisor
discussing the services that the Sub-Advisor will provide to the Funds, and the
Trustees were able to ask questions about the proposed investment strategy for
the Funds. The Board noted the background and experience of the Sub-Advisor's
portfolio management team and the Sub-Advisor's investment style. The Board also
noted that the Sub-Advisor manages eight other defined-outcome ETFs with
strategies similar to those of the Funds in the First Trust Fund Complex.
Because the Funds had yet to commence investment operations, the Board could not
consider the historical investment performance of the Funds. In light of the
information presented and the considerations made, the Board concluded that the
nature, extent and quality of the services to be provided to each Fund by the
Advisor and the Sub-Advisor under the Agreements are expected to be
satisfactory.
The Board considered the proposed unitary fee rate payable by each Fund under
the Advisory Agreement for the services to be provided. The Board noted that,
under the unitary fee arrangement, each Fund would pay the Advisor a unitary fee
equal to an annual rate of 0.85% of its average daily net assets. The Board
considered that, from the unitary fee for each Fund, the Advisor would pay the
Sub-Advisor a sub-advisory fee equal to 50% of the Fund's unitary fee remaining
after the Fund's expenses are paid. The Board noted that the Advisor would be
responsible for each Fund's expenses, including the cost of sub-advisory,
transfer agency, custody, fund administration, legal, audit and other services
and license fees, if any, but excluding the fee payment under the Advisory
Agreement and interest, taxes, brokerage commissions and other expenses
connected with the execution of portfolio transactions, distribution and service
fees pursuant to a Rule 12b-1 plan, if any, and extraordinary expenses, if any.
The Board received and reviewed information showing the advisory or unitary fee
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
rates and expense ratios of the peer funds in the Expense Groups, as well as
advisory and unitary fee rates charged by the Advisor and the Sub-Advisor to
other fund (including ETF) and non-fund clients, as applicable. Because each
Fund will pay a unitary fee, the Board determined that expense ratios were the
most relevant comparative data point. Based on the information provided, the
Board noted that the unitary fee rate for each Fund was above the median total
(net) expense ratio of the peer funds in its Expense Group. With respect to the
Expense Groups, the Board discussed with representatives of the Advisor how the
Expense Groups were assembled and how each Fund compared and differed from the
peer funds. The Board took this information into account in considering the peer
data. With respect to fees charged to other clients, the Board considered that
the Funds are part of the FT Cboe Vest U.S. Equity Target Outcome ETF product
line in the First Trust Fund Complex and noted that eight ETFs in the product
line, identical to the Funds except with respect to the target outcome periods,
had been launched since November 2019, each of which also pays a unitary fee
equal to an annual rate of 0.85% of its average daily net assets and is
sub-advised by the Sub-Advisor. In light of the information considered and the
nature, extent and quality of the services expected to be provided to each Fund
under the Agreements, the Board determined that, for each Fund, the proposed
unitary fee, including the sub-advisory fee to be paid by the Advisor to the
Sub-Advisor from the unitary fee, was fair and reasonable.
The Board noted that the proposed unitary fee for each Fund was not structured
to pass on to shareholders the benefits of any economies of scale as the Fund's
assets grow. The Board noted that any reduction in fixed costs associated with
the management of the Funds would benefit the Advisor and the Sub-Advisor, but
that the unitary fee structure provides a level of certainty in expenses for the
Funds. The Board noted that the Advisor has continued to hire personnel and
build infrastructure, including technology, to improve the services to the funds
in the First Trust Fund Complex. The Board took into consideration the types of
costs to be borne by the Advisor in connection with its services to be performed
for each Fund under the Advisory Agreement. The Board considered the Advisor's
estimate of the asset level for each Fund at which the Advisor expects the
Advisory Agreement for the Fund to be profitable to the Advisor and the
Advisor's estimate of the profitability of the Advisory Agreement for each Fund
if its assets reach $100 million. The Board noted the inherent limitations in
the profitability analysis and concluded that, based on the information
provided, the Advisor's estimated profitability level for each Fund was not
unreasonable. The Board reviewed financial information provided by the
Sub-Advisor, but did not review any potential profitability of the Sub-Advisory
Agreement for each Fund to the Sub-Advisor. The Board considered that the
Sub-Advisor would be paid by the Advisor from each Fund's unitary fee and its
understanding that the sub-advisory fee rate for each Fund was the product of an
arm's length negotiation. In addition, the Board considered fall-out benefits
described by the Advisor that may be realized from its relationship with the
Funds. The Board noted that FTCP has a controlling ownership interest in the
Sub-Advisor's parent company and considered potential fall-out benefits to the
Advisor from such ownership interest. The Board also considered that the Advisor
had identified as a fall-out benefit to the Advisor and FTP their exposure to
investors and brokers who, absent their exposure to the Funds, may have had no
dealings with the Advisor or FTP. The Board also considered the potential
fall-out benefits to the Sub-Advisor from FTCP's controlling ownership interest
in the Sub-Advisor's parent company. The Board noted the Sub-Advisor's
statements that it does not foresee any fall-out benefits from its relationship
with the Funds and that, as a policy, it does not enter into soft-dollar
arrangements for the procurement of research services in connection with client
securities transactions. The Board concluded that the character and amount of
potential fall-out benefits to the Advisor and the Sub-Advisor were not
unreasonable.
Based on all of the information considered and the conclusions reached, the
Board, including the Independent Trustees, unanimously determined that the terms
of the Agreements are fair and reasonable and that the approval of the
Agreements is in the best interests of each Fund. No single factor was
determinative in the Board's analysis.
BOARD CONSIDERATIONS REGARDING CONTINUATION OF INVESTMENT MANAGEMENT AGREEMENT
AND INVESTMENT SUB-ADVISORY AGREEMENT FOR
FT CBOE VEST U.S. EQUITY BUFFER ETF - AUGUST
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - AUGUST
FT CBOE VEST U.S. EQUITY BUFFER ETF - NOVEMBER
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - NOVEMBER
FT CBOE VEST U.S. EQUITY BUFFER ETF - FEBRUARY
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - FEBRUARY
FT CBOE VEST U.S. EQUITY BUFFER ETF - MAY
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - MAY
FT CBOE VEST U.S. EQUITY BUFFER ETF - JUNE
FT CBOE VEST U.S. EQUITY DEEP BUFFER ETF - JUNE
The Board of Trustees of First Trust Exchange-Traded Fund VIII (the "Trust"),
including the Independent Trustees, unanimously approved the continuation of the
Investment Management Agreement (the "Advisory Agreement") with First Trust
Advisors L.P. (the "Advisor") and the Investment Sub-Advisory Agreement (the
"Sub-Advisory Agreement" and together with the Advisory Agreement, the
"Agreements") among the Trust, the Advisor and Cboe Vest Financial LLC (the
"Sub-Advisor") on behalf of the following ten series of the Trust (each a "Fund"
and collectively, the "Funds"):
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
FT Cboe Vest U.S. Equity Buffer ETF - August (FAUG)
FT Cboe Vest U.S. Equity Deep Buffer ETF - August (DAUG)
FT Cboe Vest U.S. Equity Buffer ETF - November (FNOV)
FT Cboe Vest U.S. Equity Deep Buffer ETF - November (DNOV)
FT Cboe Vest U.S. Equity Buffer ETF - February (FFEB)
FT Cboe Vest U.S. Equity Deep Buffer ETF - February (DFEB)
FT Cboe Vest U.S. Equity Buffer ETF - May (FMAY)
FT Cboe Vest U.S. Equity Deep Buffer ETF - May (DMAY)
FT Cboe Vest U.S. Equity Buffer ETF - June (FJUN)
FT Cboe Vest U.S. Equity Deep Buffer ETF - June (DJUN)
The Board approved the continuation of the Agreements for each Fund for a
one-year period ending June 30, 2022 at a meeting held on June 6-7, 2021. The
Board determined for each Fund that the continuation of the Agreements is in the
best interests of the Fund in light of the nature, extent and quality of the
services provided and such other matters as the Board considered to be relevant
in the exercise of its business judgment.
To reach this determination for each Fund, the Board considered its duties under
the Investment Company Act of 1940, as amended (the "1940 Act"), as well as
under the general principles of state law, in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; the fiduciary duty
of investment advisors with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Board in voting
on such agreements. At meetings held on April 26, 2021 and June 6-7, 2021, the
Board, including the Independent Trustees, reviewed materials provided by the
Advisor and the Sub-Advisor responding to requests for information from counsel
to the Independent Trustees, submitted on behalf of the Independent Trustees,
that, among other things, outlined: the services provided by the Advisor and the
Sub-Advisor to each Fund (including the relevant personnel responsible for these
services and their experience); the unitary fee rate payable by each Fund as
compared to fees charged to a peer group of funds (the "Expense Group") and a
broad peer universe of funds (the "Expense Universe"), each assembled by
Broadridge Financial Solutions, Inc. ("Broadridge"), an independent source, and
as compared to fees charged to other clients of the Advisor, including other
exchange-traded funds ("ETFs") managed by the Advisor; the sub-advisory fee rate
as compared to fees charged to other clients of the Sub-Advisor; the expense
ratio of each Fund as compared to expense ratios of the funds in the Fund's
Expense Group and Expense Universe; performance information for each Fund,
including, for each of FAUG, DAUG, FNOV and DNOV, comparisons of each Fund's
performance to that of one or more relevant benchmark indexes and to that of a
performance group of funds and a broad performance universe of funds (the
"Performance Universe"), each assembled by Broadridge; the nature of expenses
incurred in providing services to each Fund and the potential for the Advisor
and the Sub-Advisor to realize economies of scale, if any; profitability and
other financial data for the Advisor; financial data for the Sub-Advisor; any
fall-out benefits to the Advisor and its affiliates, First Trust Portfolios L.P.
("FTP") and First Trust Capital Partners, LLC ("FTCP"), and the Sub-Advisor; and
information on the Advisor's and the Sub-Advisor's compliance programs. The
Board reviewed initial materials with the Advisor at the meeting held on April
26, 2021, prior to which the Independent Trustees and their counsel met
separately to discuss the information provided by the Advisor and the
Sub-Advisor. Following the April meeting, counsel to the Independent Trustees,
on behalf of the Independent Trustees, requested certain clarifications and
supplements to the materials provided, and the information provided in response
to those requests was considered at an executive session of the Independent
Trustees and their counsel held prior to the June 6-7, 2021 meeting, as well as
at the June meeting. The Board applied its business judgment to determine
whether the arrangements between the Trust and the Advisor and among the Trust,
the Advisor and the Sub-Advisor continue to be reasonable business arrangements
from each Fund's perspective. The Board determined that, given the totality of
the information provided with respect to the Agreements, the Board had received
sufficient information to renew the Agreements. The Board considered that
shareholders chose to invest or remain invested in a Fund knowing that the
Advisor and the Sub-Advisor manage the Fund and knowing the Fund's unitary fee.
In reviewing the Agreements for each Fund, the Board considered the nature,
extent and quality of the services provided by the Advisor and the Sub-Advisor
under the Agreements. With respect to the Advisory Agreement, the Board
considered that the Advisor is responsible for the overall management and
administration of the Trust and each Fund and reviewed all of the services
provided by the Advisor to the Funds, including the oversight of the
Sub-Advisor, as well as the background and experience of the persons responsible
for such services. The Board noted that the Advisor oversees the Sub-Advisor's
day-to-day management of each Fund's investments, including portfolio risk
monitoring and performance review. In reviewing the services provided, the Board
noted the compliance program that had been developed by the Advisor and
considered that it includes a robust program for monitoring the Advisor's, the
Sub-Advisor's and each Fund's compliance with the 1940 Act, as well as each
Fund's compliance with its investment objective, policies and restrictions. The
Board also considered a report from the Advisor with respect to its risk
management functions related to the operation of the Funds. Finally, as part of
the Board's consideration of the Advisor's services, the Advisor, in its written
materials and at the April 26, 2021 meeting, described to the Board the scope of
its ongoing investment in additional personnel and infrastructure to maintain
and improve the quality of services provided to the Funds and the other funds in
the First Trust Fund Complex. With respect to the Sub-Advisory Agreement, the
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AUGUST 31, 2021 (UNAUDITED)
Board noted that each Fund is an actively-managed ETF and the Sub-Advisor
actively manages the Fund's investments. In addition to the written materials
provided by the Sub-Advisor, at the June 6-7, 2021 meeting, the Board also
received a presentation from representatives of the Sub-Advisor, who discussed
the services that the Sub-Advisor provides to each Fund, including the
Sub-Advisor's day-to-day management of the Funds' investments. In considering
the Sub-Advisor's management of the Funds, the Board noted the background and
experience of the Sub-Advisor's portfolio management team. In light of the
information presented and the considerations made, the Board concluded that the
nature, extent and quality of the services provided to the Trust and each Fund
by the Advisor and the Sub-Advisor under the Agreements have been and are
expected to remain satisfactory and that the Sub-Advisor, under the oversight of
the Advisor, has managed each Fund consistent with its investment objective,
policies and restrictions.
The Board considered the unitary fee rate payable by each Fund under the
Advisory Agreement for the services provided. The Board noted that the
sub-advisory fee for each Fund is paid by the Advisor from the Fund's unitary
fee. The Board considered that as part of the unitary fee the Advisor is
responsible for each Fund's expenses, including the cost of sub-advisory,
transfer agency, custody, fund administration, legal, audit and other services
and license fees, if any, but excluding the fee payment under the Advisory
Agreement and interest, taxes, brokerage commissions and other expenses
connected with the execution of portfolio transactions, distribution and service
fees pursuant to a Rule 12b-1 plan, if any, and extraordinary expenses, if any.
The Board received and reviewed information showing the unitary fee rates and
expense ratios of the peer funds in the Expense Groups, as well as advisory and
unitary fee rates charged by the Advisor and the Sub-Advisor to other fund
(including ETFs) and non-fund clients, as applicable. Because each Fund pays a
unitary fee, the Board determined that expense ratios were the most relevant
comparative data point. Based on the information provided, the Board noted that
the unitary fee rate for each Fund was above the median total (net) expense
ratio of the peer funds in its Expense Group. With respect to the Expense
Groups, the Board, at the April 26, 2021 meeting, discussed with the Advisor
limitations in creating peer groups for actively-managed ETFs and different
business models that may affect the pricing of services among ETF sponsors. The
Board also noted that not all peer funds employ an advisor/sub-advisor
management structure. The Board took these limitations and differences into
account in considering the peer data. With respect to fees charged to other
non-ETF clients, the Board considered differences between the Funds and other
non-ETF clients that limited their comparability. In considering the unitary fee
rates overall, the Board also considered the Advisor's statement that it seeks
to meet investor needs through innovative and value-added investment solutions
and the Advisor's demonstrated long-term commitment to each Fund and the other
funds in the First Trust Fund Complex.
The Board considered performance information for each Fund. The Board noted the
process it has established for monitoring each Fund's performance and portfolio
risk on an ongoing basis, which includes quarterly performance reporting from
the Advisor and the Sub-Advisor for the Funds. The Board determined that this
process continues to be effective for reviewing each Fund's performance. The
Board received and reviewed information comparing the performance of each of
FAUG, DAUG, FNOV and DNOV for the one-year period ended December 31, 2020 to the
performance of the funds in the Fund's respective Performance Universe and a
benchmark index. The Board noted that the Funds are target outcome ETFs that
seek to provide investors with returns (before fees and expenses) over a defined
period of time (typically one year) that match the price return of the SPDR S&P
500 ETF Trust ("SPY"), up to a predetermined cap, while providing a buffer
against certain losses on the price return of SPY. The Board considered
information provided by the Sub-Advisor on each of FAUG's, DAUG's, FNOV's and
DNOV's performance during its respective target outcome period that ended in
2020 and noted that each Fund delivered on its target outcome objective. Because
each of FFEB, DFEB, FMAY, DMAY, FJUN and DJUN commenced operations in 2020 and
therefore has a limited performance history, comparative performance information
for the Fund was not considered. In addition, the initial target outcome period
for each of FFEB, DFEB, FMAY, DMAY, FJUN and DJUN ended after December 31, 2020.
On the basis of all the information provided on the unitary fee and performance,
as applicable, of each Fund and the ongoing oversight by the Board, the Board
concluded that the unitary fee for each Fund (out of which the Sub-Advisor is
compensated) continues to be reasonable and appropriate in light of the nature,
extent and quality of the services provided by the Advisor and the Sub-Advisor
to each Fund under the Agreements.
The Board considered information and discussed with the Advisor whether there
were any economies of scale in connection with providing advisory services to
the Funds and noted the Advisor's statement that it believes its expenses will
likely increase during the next twelve months as the Advisor continues to hire
personnel and build infrastructure, including technology, to improve the
services to the Funds. The Board noted that any reduction in fixed costs
associated with the management of the Funds would benefit the Advisor, but that
the unitary fee structure provides a level of certainty in expenses for the
Funds. The Board considered the revenues and allocated costs (including the
allocation methodology) of the Advisor in serving as investment advisor to each
of FAUG, DAUG, FNOV and DNOV for the twelve months ended December 31, 2020 and
to each of FFEB, DFEB, FMAY, DMAY, FJUN and DJUN for the period from inception
through December 31, 2020 and the estimated profitability level for each Fund
calculated by the Advisor based on such data, as well as complex-wide and
product-line profitability data, for the twelve months ended December 31, 2020.
The Board noted the inherent limitations in the profitability analysis and
concluded that, based on the information provided, the Advisor's profitability
level for each Fund was not unreasonable. In addition, the Board considered
fall-out benefits described by the Advisor that may be realized from its
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ADDITIONAL INFORMATION (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
relationship with the Funds. The Board considered that the Advisor had
identified as a fall-out benefit to the Advisor and FTP their exposure to
investors and brokers who, absent their exposure to the Funds, may have had no
dealings with the Advisor or FTP. The Board also noted that FTCP has a
controlling ownership interest in the Sub-Advisor's parent company and
considered potential fall-out benefits to the Advisor from such ownership
interest. The Board concluded that the character and amount of potential
fall-out benefits to the Advisor were not unreasonable.
The Board considered the Sub-Advisor's statement that it believes that the
sub-advisory fee for each Fund is appropriate. The Board noted the Sub-Advisor's
statements that it continues to invest in infrastructure, technology and
personnel, and that it anticipates that its expenses relating to providing
services to the Funds will remain approximately the same for the next twelve
months. The Board did not review the profitability of the Sub-Advisor with
respect to each Fund. The Board noted that the Advisor pays the Sub-Advisor for
each Fund from its unitary fee and its understanding that each Fund's
sub-advisory fee rate was the product of an arm's length negotiation. The Board
concluded that the profitability analysis for the Advisor was more relevant. The
Board considered the potential fall-out benefits to the Sub-Advisor from being
associated with the Advisor and the Funds, and noted the Sub-Advisor's
statements that it is the Sub-Advisor's policy currently not to enter into
soft-dollar arrangements for the procurement of research services in connection
with client securities transactions and that, as a result, there are no foreseen
fall-out benefits from its relationship with the Funds. The Board also
considered the potential fall-out benefits to the Sub-Advisor from FTCP's
controlling ownership interest in the Sub-Advisor's parent company. The Board
concluded that the character and amount of potential fall-out benefits to the
Sub-Advisor were not unreasonable.
Based on all of the information considered and the conclusions reached, the
Board, including the Independent Trustees, unanimously determined that the terms
of the Agreements continue to be fair and reasonable and that the continuation
of the Agreements is in the best interests of each Fund. No single factor was
determinative in the Board's analysis.
LIQUIDITY RISK MANAGEMENT PROGRAM
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as
amended (the "1940 Act"), the Funds and each other fund in the First Trust Fund
Complex, other than the closed-end funds, have adopted and implemented a
liquidity risk management program (the "Program") reasonably designed to assess
and manage the funds' liquidity risk, i.e., the risk that a fund could not meet
requests to redeem shares issued by the fund without significant dilution of
remaining investors' interests in the fund. The Board of Trustees of the First
Trust Funds has appointed First Trust Advisors, L.P. (the "Advisor") as the
person designated to administer the Program, and in this capacity the Advisor
performs its duties primarily through the activities and efforts of the First
Trust Liquidity Committee (the "Liquidity Committee").
Pursuant to the Program, the Liquidity Committee classifies the liquidity of
each fund's portfolio investments into one of the four liquidity categories
specified by Rule 22e-4: highly liquid investments, moderately liquid
investments, less liquid investments and illiquid investments. The Liquidity
Committee determines certain of the inputs for this classification process,
including reasonably anticipated trade sizes and significant investor dilution
thresholds. The Liquidity Committee also determines and periodically reviews a
highly liquid investment minimum for certain funds, monitors the funds' holdings
of assets classified as illiquid investments to seek to ensure they do not
exceed 15% of a fund's net assets and establishes policies and procedures
regarding redemptions in kind.
At the April 26, 2021 meeting of the Board of Trustees, as required by Rule
22e-4 and the Program, the Advisor provided the Board with a written report
prepared by the Advisor that addressed the operation of the Program during the
period from March 20, 2020 through the Liquidity Committee's annual meeting held
on March 16, 2021 and assessed the Program's adequacy and effectiveness of
implementation during this period, including the operation of the highly liquid
investment minimum for each fund that is required under the Program to have one,
and any material changes to the Program. Note that because the Funds primarily
hold assets that are highly liquid investments, the Funds have not adopted any
highly liquid investment minimums.
As stated in the written report, during the review period, no fund breached the
15% limitation on illiquid investments, no fund with a highly liquid investment
minimum breached that minimum and no fund filed a Form N-LIQUID. The Advisor
concluded that each fund's investment strategy is appropriate for an open-end
fund; that the Program operated effectively in all material respects during the
review period; and that the Program is reasonably designed to assess and manage
the liquidity risk of each fund and to maintain compliance with Rule 22e-4.
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BOARD OF TRUSTEES AND OFFICERS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
The following tables identify the Trustees and Officers of the Trust. Unless
otherwise indicated, the address of all persons is 120 East Liberty Drive, Suite
400, Wheaton, IL 60187.
The Trust's statement of additional information includes additional information
about the Trustees and is available, without charge, upon request, by calling
(800) 988-5891.
<TABLE>
<CAPTION>
NUMBER OF OTHER
PORTFOLIOS IN TRUSTEESHIPS OR
TERM OF OFFICE THE FIRST TRUST DIRECTORSHIPS
NAME, AND YEAR FIRST FUND COMPLEX HELD BY TRUSTEE
YEAR OF BIRTH AND ELECTED OR PRINCIPAL OCCUPATIONS OVERSEEN BY DURING PAST
POSITION WITH THE TRUST APPOINTED DURING PAST 5 YEARS TRUSTEE 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard E. Erickson, Trustee o Indefinite Term Physician, Officer, Wheaton Orthopedics; 210 None
(1951) Limited Partner, Gundersen Real Estate
o Since Inception Limited Partnership (June 1992 to
December 2016)
Thomas R. Kadlec, Trustee o Indefinite Term President, ADM Investors Services, Inc. 210 Director of ADM
(1957) (Futures Commission Merchant) Investor Services,
o Since Inception Inc., ADM
Investor Services
International,
Futures Industry
Association, and
National Futures
Association
Robert F. Keith, Trustee o Indefinite Term President, Hibs Enterprises (Financial 210 Director of Trust
(1956) and Management Consulting) Company of
o Since Inception Illinois
Niel B. Nielson, Trustee o Indefinite Term Senior Advisor (August 2018 to Present), 210 None
(1954) Managing Director and Chief Operating
o Since Inception Officer (January 2015 to August 2018),
Pelita Harapan Educational Foundation
(Educational Products and Services)
------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
James A. Bowen(1), Trustee, o Indefinite Term Chief Executive Officer, First Trust 210 None
Chairman of the Board Advisors L.P. and First Trust
(1955) o Since Inception Portfolios L.P.; Chairman of the
Board of Directors, BondWave LLC
(Software Development Company)
and Stonebridge Advisors LLC
(Investment Advisor)
</TABLE>
-----------------------------
(1) Mr. Bowen is deemed an "interested person" of the Trust due to his
position as Chief Executive Officer of First Trust Advisors L.P.,
investment advisor of the Trust.
Page 151
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--------------------------------------------------------------------------------
BOARD OF TRUSTEES AND OFFICERS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
POSITION AND TERM OF OFFICE
NAME OFFICES AND LENGTH OF PRINCIPAL OCCUPATIONS
AND YEAR OF BIRTH WITH TRUST SERVICE DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS(2)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
James M. Dykas President and Chief o Indefinite Term Managing Director and Chief Financial Officer
(1966) Executive Officer (January 2016 to Present), Controller (January 2011
o Since Inception to January 2016), Senior Vice President (April 2007
to January 2016), First Trust Advisors L.P. and First
Trust Portfolios L.P.; Chief Financial Officer
(January 2016 to Present), BondWave LLC
(Software Development Company) and Stonebridge
Advisors LLC (Investment Advisor)
Donald P. Swade Treasurer, Chief Financial o Indefinite Term Senior Vice President (July 2016 to Present), Vice
(1972) Officer and Chief President (April 2012 to July 2016), First Trust
Accounting Officer o Since Inception Advisors L.P. and First Trust Portfolios L.P.
W. Scott Jardine Secretary and Chief o Indefinite Term General Counsel, First Trust Advisors L.P. and
(1960) Legal Officer First Trust Portfolios L.P.; Secretary and General
o Since Inception Counsel, BondWave LLC; Secretary, Stonebridge
Advisors LLC
Daniel J. Lindquist Vice President o Indefinite Term Managing Director, First Trust Advisors L.P. and
(1970) First Trust Portfolios L.P.
o Since Inception
Kristi A. Maher Chief Compliance Officer o Indefinite Term Deputy General Counsel, First Trust Advisors L.P.
(1966) and Assistant Secretary and First Trust Portfolios L.P.
o Since Inception
Roger F. Testin Vice President o Indefinite Term Senior Vice President, First Trust Advisors L.P.
(1966) and First Trust Portfolios L.P.
o Since Inception
Stan Ueland Vice President o Indefinite Term Senior Vice President, First Trust Advisors L.P.
(1970) and First Trust Portfolios L.P.
o Since Inception
</TABLE>
-----------------------------
(2) The term "officer" means the president, vice president, secretary,
treasurer, controller or any other officer who performs a policy making
function.
Page 152
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PRIVACY POLICY
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
PRIVACY POLICY
First Trust values our relationship with you and considers your privacy an
important priority in maintaining that relationship. We are committed to
protecting the security and confidentiality of your personal information.
SOURCES OF INFORMATION
We collect nonpublic personal information about you from the following sources:
o Information we receive from you and your broker-dealer, investment
professional or financial representative through interviews,
applications, agreements or other forms;
o Information about your transactions with us, our affiliates or
others;
o Information we receive from your inquiries by mail, e-mail or
telephone; and
o Information we collect on our website through the use of "cookies".
For example, we may identify the pages on our website that your
browser requests or visits.
INFORMATION COLLECTED
The type of data we collect may include your name, address, social security
number, age, financial status, assets, income, tax information, retirement and
estate plan information, transaction history, account balance, payment history,
investment objectives, marital status, family relationships and other personal
information.
DISCLOSURE OF INFORMATION
We do not disclose any nonpublic personal information about our customers or
former customers to anyone, except as permitted by law. In addition to using
this information to verify your identity (as required under law), the permitted
uses may also include the disclosure of such information to unaffiliated
companies for the following reasons:
o In order to provide you with products and services and to effect
transactions that you request or authorize, we may disclose your
personal information as described above to unaffiliated financial
service providers and other companies that perform administrative or
other services on our behalf, such as transfer agents, custodians
and trustees, or that assist us in the distribution of investor
materials such as trustees, banks, financial representatives, proxy
services, solicitors and printers.
o We may release information we have about you if you direct us to do
so, if we are compelled by law to do so, or in other legally limited
circumstances (for example to protect your account from fraud).
In addition, in order to alert you to our other financial products and services,
we may share your personal information within First Trust.
USE OF WEBSITE ANALYTICS
We currently use third party analytics tools, Google Analytics and AddThis to
gather information for purposes of improving First Trust's website and marketing
our products and services to you. These tools employ cookies, which are small
pieces of text stored in a file by your web browser and sent to websites that
you visit, to collect information, track website usage and viewing trends such
as the number of hits, pages visited, videos and PDFs viewed and the length of
user sessions in order to evaluate website performance and enhance navigation of
the website. We may also collect other anonymous information, which is generally
limited to technical and web navigation information such as the IP address of
your device, internet browser type and operating system for purposes of
analyzing the data to make First Trust's website better and more useful to our
users. The information collected does not include any personal identifiable
information such as your name, address, phone number or email address unless you
provide that information through the website for us to contact you in order to
answer your questions or respond to your requests. To find out how to opt-out of
these services click on: Google Analytics and AddThis.
CONFIDENTIALITY AND SECURITY
With regard to our internal security procedures, First Trust restricts access to
your nonpublic personal information to those First Trust employees who need to
know that information to provide products or services to you. We maintain
physical, electronic and procedural safeguards to protect your nonpublic
personal information.
POLICY UPDATES AND INQUIRIES
As required by federal law, we will notify you of our privacy policy annually.
We reserve the right to modify this policy at any time, however, if we do change
it, we will tell you promptly. For questions about our policy, or for additional
copies of this notice, please go to www.ftportfolios.com, or contact us at
1-800-621-1675 (First Trust Portfolios) or 1-800-222-6822 (First Trust
Advisors).
March 2021
Page 153
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FIRST TRUST
First Trust Exchange-Traded Fund VIII
INVESTMENT ADVISOR
First Trust Advisors L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
INVESTMENT SUB-ADVISOR
Cboe Vest Financial LLC
1765 Greensboro Station Pl, 9th Floor
McLean, VA 22102
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 VIII
--------------------------------------------------------------------------------
FT Cboe Vest International Equity Buffer ETF - March (YMAR)
FT Cboe Vest Nasdaq-100(R) Buffer ETF - March (QMAR)
FT Cboe Vest International Equity Buffer ETF - June (YJUN)
FT Cboe Vest Nasdaq-100(R) Buffer ETF - June (QJUN)
FT Cboe Vest U.S. Equity Enhance & Moderate Buffer ETF - June (XJUN)
FT Cboe Vest International Equity Buffer ETF - December (YDEC)
FT Cboe Vest Nasdaq-100(R) Buffer ETF - December (QDEC)
----------------------------
Annual Report
For the Period Ended
August 31, 2021
----------------------------
<PAGE>
--------------------------------------------------------------------------------
TABLE OF CONTENTS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021
Shareholder Letter........................................................... 2
Fund Performance Overview
FT Cboe Vest International Equity Buffer ETF - March (YMAR)............... 3
FT Cboe Vest Nasdaq-100(R) Buffer ETF - March (QMAR)...................... 4
FT Cboe Vest International Equity Buffer ETF - June (YJUN)................ 5
FT Cboe Vest Nasdaq-100(R) Buffer ETF - June (QJUN)....................... 6
FT Cboe Vest U.S. Equity Enhance & Moderate Buffer ETF - June (XJUN)...... 7
FT Cboe Vest International Equity Buffer ETF - December (YDEC)............ 8
FT Cboe Vest Nasdaq-100(R) Buffer ETF - December (QDEC)................... 9
Notes to Fund Performance Overview........................................... 10
Portfolio Commentary......................................................... 11
Understanding Your Fund Expenses............................................. 14
Portfolio of Investments
FT Cboe Vest International Equity Buffer ETF - March (YMAR)............... 16
FT Cboe Vest Nasdaq-100(R) Buffer ETF - March (QMAR)...................... 18
FT Cboe Vest International Equity Buffer ETF - June (YJUN)................ 20
FT Cboe Vest Nasdaq-100(R) Buffer ETF - June (QJUN)....................... 22
FT Cboe Vest U.S. Equity Enhance & Moderate Buffer ETF - June (XJUN)...... 24
FT Cboe Vest International Equity Buffer ETF - December (YDEC)............ 26
FT Cboe Vest Nasdaq-100(R) Buffer ETF - December (QDEC)................... 28
Statements of Assets and Liabilities......................................... 30
Statements of Operations..................................................... 32
Statements of Changes in Net Assets.......................................... 34
Financial Highlights......................................................... 36
Notes to Financial Statements................................................ 40
Report of Independent Registered Public Accounting Firm...................... 48
Additional Information....................................................... 50
Board of Trustees and Officers............................................... 60
Privacy Policy............................................................... 62
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021
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/or Cboe VestSM Financial LLC ("Cboe Vest" or the
"Sub-Advisor") and their respective 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
the series of First Trust Exchange-Traded Fund VIII (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/or Sub-Advisor and their respective 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 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 portfolio commentary from the portfolio management team of the
Funds, you may obtain an understanding of how the market environment affected
each Fund's performance. The statistical information that follows may help you
understand each Fund's performance compared to that of a relevant market
benchmark.
It is important to keep in mind that the opinions expressed by personnel of the
Advisor and/or Sub-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 the prospectus, statement of
additional information, and other Fund regulatory filings.
Page 1
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SHAREHOLDER LETTER
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL LETTER FROM THE CHAIRMAN AND CEO
AUGUST 31, 2021
Dear Shareholders:
First Trust is pleased to provide you with the annual report for certain series
of the First Trust Exchange-Traded Fund VIII (the "Funds"), which contains
detailed information about the Funds for the period ended August 31, 2021.
Please note that all of the Funds were incepted after September 1, 2020, the
start of the reporting period, so information in this letter and the report
prior to those inception dates will not apply to all of the Funds.
The coronavirus ("COVID-19") pandemic has proven to be as stubborn as
advertised. We were warned by the scientific community early on that we would
have to coexist with this virus from here on out, and that appears to be the
case some 19 months after its onset. While the three main vaccines have proven
to be effective at keeping those people who have gotten all the required shots
out of the hospital, the U.S., unfortunately, had only achieved a 54% fully
vaccinated rate as of September 9, 2021, according to the Centers for Disease
Control and Prevention. If you add in the people ages 18 and older who have
received just one of the two-dose vaccines, it jumps to 75.3%. The U.S. and
global economies continue to underperform due to the pandemic. The U.S. alone
had a record high 10.9 million job openings at the end of July 2021, according
to the latest Job Openings and Labor Turnover Survey from the Department of
Labor. It appears that many people do not seem to want to work right now. An
estimated 7.5 million unemployment recipients in the U.S. were scheduled to lose
their benefits on September 6, 2021. Perhaps that will be enough to incentivize
people to go back to work.
The Federal Reserve (the "Fed") continues to play a major role in the U.S.
economy. It has kept short-term interest rates artificially low for the better
part of the past 13 years. The Federal Funds target rate (upper bound), while
held at 0.25% for roughly nine of those 13 years, reached as high as 2.50% in
the same 13-year period, but only for a few months and that was just prior to
the COVID-19 pandemic, according to data from the Fed. For comparative purposes,
the target rate averaged 2.56% for the 30-year period ended September 21, 2021.
It currently stands at 0.25%. In addition to keeping rates low, the Fed has been
buying assets, specifically Treasuries and mortgage-backed securities. It has
been buying a combined $120 billion of these securities every month. This has
helped keep bond yields artificially low as well. As of February 26, 2020, the
value of the assets on the Fed's balance sheet totaled $4.16 trillion, according
to its own data. As of September 15, 2021, the assets were valued at $8.45
trillion. Keep in mind, the balance sheet stood at $1 trillion on September 17,
2008. That was during the 2007-2008 Financial Crisis. Due to the reopening of
the U.S. economy and a bigger-than-expected rise in inflation this year, the Fed
has signaled that it could begin to taper its bond buying program by the end of
2021. With respect to the Federal Funds rate, the Fed continues to say it
intends to leave short-term rates where they are until 2023. In other words, the
Fed is poised to maintain its accommodative stance towards monetary policy. They
are not looking to get tight - just less loose. We will monitor this scenario
closely in the months ahead to see if the Fed's actions impact the direction of
interest rates and bond yields.
Overall, I am pleased to report that the securities markets have performed well
in this tumultuous climate. It appears, in our opinion, that the extremely low
interest rates offered on savings vehicles has motivated many investors to
assume more risk to potentially generate higher returns. The S&P 500(R) Index
(the "Index") posted a total return of 31.17% for the 12-month period ended
August 31, 2021, according to Bloomberg. For comparative purposes, from 1926
through 2020 (95 years), the Index returned an average of 10.28% per year on a
total return basis, according to Morningstar/Ibbotson Associates. Should
interest rates and bond yields eventually trend higher, investors should be
prepared for a bit of turbulence as stocks and bonds may be subjected to some
potential short-term profit taking, in my opinion. Having said that, I encourage
investors to stay the course. I remain optimistic due in large part to the
trillions of dollars in government stimulus money already circulating in the
economy as well as the potential for trillions of additional dollars from
President Joe Biden's infrastructure and "human infrastructure" bills still
weaving their way through Congress. It's hard to bet against growth in the
current climate.
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
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED)
--------------------------------------------------------------------------------
FT CBOE VEST INTERNATIONAL EQUITY BUFFER ETF - MARCH (YMAR)
The investment objective of the FT Cboe Vest International Equity Buffer ETF -
March (the "Fund") is to seek to provide investors with returns (before fees,
expenses and taxes) that match the price return of the iShares MSCI EAFE ETF
(the "Underlying ETF"), up to a predetermined upside cap of 14.18% (before fees,
expenses and taxes) and 13.29% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against the first 10% (before
fees, expenses and taxes) of Underlying ETF losses, over the period from March
22, 2021 to March 18, 2022 (the "Outcome Period"). Under normal market
conditions, the Fund will invest substantially all of its assets in FLexible
EXchange(R) Options ("FLEX Options") that reference the price performance of the
Underlying ETF. Subsequent Outcome Periods will begin on the day the prior
Outcome Period ends and will end on the approximate one-year anniversary of that
new Outcome Period. On the first day of each new Outcome Period, the Fund resets
by investing in a new set of FLEX Options that will provide a new cap for the
new Outcome Period. This means that the cap will change for each Outcome Period
based upon prevailing market conditions at the beginning of each Outcome Period.
The Fund will be perpetually offered and not terminate after the initial or any
subsequent Outcome Period. An investor that purchases Fund shares other than on
the first day of an Outcome Period and/or sells Fund shares prior to the end of
an Outcome Period may experience results that are very different from the target
outcomes sought by the Fund for that Outcome Period. The Fund is classified as
non-diversified under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on the Cboe BZX Exchange, Inc., under the
ticker symbol "YMAR."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(3/19/21)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 5.59%
Market Price 5.44%
INDEX PERFORMANCE
MSCI EAFE Index 5.60%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 10.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
MARCH 19, 2021 - AUGUST 31, 2021
FT Cboe Vest International MSCI EAFE
Equity Buffer ETF - March Index
<S> <C> <C>
3/19/21 $10,000 $10,000
8/31/21 10,559 10,560
</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 index does
not actually hold a portfolio of securities and therefore does 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 3
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST NASDAQ-100(R) BUFFER ETF - MARCH (QMAR)
The investment objective of the FT Cboe Vest Nasdaq-100(R) Buffer ETF - March
(the "Fund") is to seek to provide investors with returns (before fees, expenses
and taxes) that match the price return of the Invesco QQQ Trust(SM), Series 1
(the "Underlying ETF"), up to a predetermined upside cap of 15.51% (before fees,
expenses and taxes) and 14.61% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against the first 10% (before
fees, expenses and taxes) of Underlying ETF losses, over the period from March
22, 2021 to March 18, 2022 (the "Outcome Period"). Under normal market
conditions, the Fund will invest substantially all of its assets in FLexible
EXchange(R) Options ("FLEX Options") that reference the price performance of the
Underlying ETF. Subsequent Outcome Periods will begin on the day the prior
Outcome Period ends and will end on the approximate one-year anniversary of that
new Outcome Period. On the first day of each new Outcome Period, the Fund resets
by investing in a new set of FLEX Options that will provide a new cap for the
new Outcome Period. This means that the cap will change for each Outcome Period
based upon prevailing market conditions at the beginning of each Outcome Period.
The Fund will be perpetually offered and not terminate after the initial or any
subsequent Outcome Period. An investor that purchases Fund shares other than on
the first day of an Outcome Period and/or sells Fund shares prior to the end of
an Outcome Period may experience results that are very different from the target
outcomes sought by the Fund for that Outcome Period. The Fund is classified as
non-diversified under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on the Cboe BZX Exchange, Inc., under the
ticker symbol "QMAR."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(3/19/21)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 10.88%
Market Price 10.83%
INDEX PERFORMANCE
Nasdaq 100 Stock Index 21.10%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 10.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
MARCH 19, 2021 - AUGUST 31, 2021
FT Cboe Vest Nasdaq-100(R) Nasdaq 100
Buffer ETF - March Stock Index
<S> <C> <C>
3/19/21 $10,000 $10,000
8/31/21 11,088 12,110
</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 index does
not actually hold a portfolio of securities and therefore does 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 4
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST INTERNATIONAL EQUITY BUFFER ETF - JUNE (YJUN)
The investment objective of the FT Cboe Vest International Equity Buffer ETF -
June (the "Fund") is to seek to provide investors with returns (before fees,
expenses and taxes) that match the price return of the iShares MSCI EAFE ETF
(the "Underlying ETF"), up to a predetermined upside cap of 11.81% (before fees,
expenses and taxes) and 10.91% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against the first 10% (before
fees, expenses and taxes) of Underlying ETF losses, over the period from June
21, 2021 to June 17, 2022 (the "Outcome Period"). Under normal market
conditions, the Fund will invest substantially all of its assets in FLexible
EXchange(R) Options ("FLEX Options") that reference the price performance of the
Underlying ETF. Subsequent Outcome Periods will begin on the day the prior
Outcome Period ends and will end on the approximate one-year anniversary of that
new Outcome Period. On the first day of each new Outcome Period, the Fund resets
by investing in a new set of FLEX Options that will provide a new cap for the
new Outcome Period. This means that the cap will change for each Outcome Period
based upon prevailing market conditions at the beginning of each Outcome Period.
The Fund will be perpetually offered and not terminate after the initial or any
subsequent Outcome Period. An investor that purchases Fund shares other than on
the first day of an Outcome Period and/or sells Fund shares prior to the end of
an Outcome Period may experience results that are very different from the target
outcomes sought by the Fund for that Outcome Period. The Fund is classified as
non-diversified under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on the Cboe BZX Exchange, Inc., under the
ticker symbol "YJUN."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(6/18/21)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 2.46%
Market Price 1.85%
INDEX PERFORMANCE
MSCI EAFE Index 2.07%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 10.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
JUNE 18, 2021 - AUGUST 31, 2021
FT Cboe Vest International MSCI EAFE
Equity Buffer ETF - June Index
<S> <C> <C>
6/16/21 $10,000 $10,000
8/31/21 10,246 10,207
</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 index does
not actually hold a portfolio of securities and therefore does 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)
--------------------------------------------------------------------------------
FT CBOE VEST NASDAQ-100(R) BUFFER ETF - JUNE (QJUN)
The investment objective of the FT Cboe Vest Nasdaq-100(R) Buffer ETF - June
(the "Fund") is to seek to provide investors with returns (before fees, expenses
and taxes) that match the price return of the Invesco QQQ Trust(SM), Series 1
(the "Underlying ETF"), up to a predetermined upside cap of 13.00% (before fees,
expenses and taxes) and 12.10% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against the first 10% (before
fees, expenses and taxes) of Underlying ETF losses, over the period from June
21, 2021 to June 17, 2022 (the "Outcome Period"). Under normal market
conditions, the Fund will invest substantially all of its assets in FLexible
EXchange(R) Options ("FLEX Options") that reference the price performance of the
Underlying ETF. Subsequent Outcome Periods will begin on the day the prior
Outcome Period ends and will end on the approximate one-year anniversary of that
new Outcome Period. On the first day of each new Outcome Period, the Fund resets
by investing in a new set of FLEX Options that will provide a new cap for the
new Outcome Period. This means that the cap will change for each Outcome Period
based upon prevailing market conditions at the beginning of each Outcome Period.
The Fund will be perpetually offered and not terminate after the initial or any
subsequent Outcome Period. An investor that purchases Fund shares other than on
the first day of an Outcome Period and/or sells Fund shares prior to the end of
an Outcome Period may experience results that are very different from the target
outcomes sought by the Fund for that Outcome Period. The Fund is classified as
non-diversified under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on the Cboe BZX Exchange, Inc., under the
ticker symbol "QJUN."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(6/18/21)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 5.49%
Market Price 5.39%
INDEX PERFORMANCE
Nasdaq 100 Stock Index 10.91%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 10.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
JUNE 18, 2021 - AUGUST 31, 2021
FT Cboe Vest Growth-100(R) Nasdaq 100
Buffer ETF - June Stock Index
<S> <C> <C>
6/18/21 $10,000 $10,000
8/31/21 10,549 11,091
</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 index does
not actually hold a portfolio of securities and therefore does 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 6
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST U.S. EQUITY ENHANCE & MODERATE BUFFER ETF - JUNE (XJUN)
The investment objective of the FT Cboe Vest U.S. Equity Enhance & Moderate
Buffer ETF - June (the "Fund") is to seek to provide investors with returns of
approximately twice any positive return of the SPDR(R) S&P 500(R) ETF Trust (the
"Underlying ETF"), up to a predetermined upside cap of 6.16% (before fees,
expenses and taxes) and 5.37% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer (before fees, expenses and
taxes) against the first 15% of Underlying ETF losses, over the period from July
13, 2021 to June 17, 2022 (the "Outcome Period"). Under normal market
conditions, the Fund will invest substantially all of its assets in FLexible
EXchange(R) Options ("FLEX Options") that reference the price performance of the
Underlying ETF. Subsequent Outcome Periods will begin on the day the prior
Outcome Period ends and will end on the approximate one-year anniversary of that
new Outcome Period. On the first day of each new Outcome Period, the Fund resets
by investing in a new set of FLEX Options that will provide a new cap for the
new Outcome Period. This means that the cap will change for each Outcome Period
based upon prevailing market conditions at the beginning of each Outcome Period.
The Fund will be perpetually offered and not terminate after the initial or any
subsequent Outcome Period. An investor that purchases Fund shares other than on
the first day of an Outcome Period and/or sells Fund shares prior to the end of
an Outcome Period may experience results that are very different from the target
outcomes sought by the Fund for that Outcome Period. The Fund is classified as
non-diversified under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on the Cboe BZX Exchange, Inc., under the
ticker symbol "XJUN."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(7/12/21)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 1.31%
Market Price 1.08%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return 3.15%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 10.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
JULY 12, 2021 - AUGUST 31, 2021
FT Cboe Vest U.S. Equity S&P 500(R) Index -
Enhance & Moderate Buffer Price Return
ETF - June
<S> <C> <C>
7/12/21 $10,000 $10,000
8/31/21 10,131 10,315
</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 index does
not actually hold a portfolio of securities and therefore does 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)
--------------------------------------------------------------------------------
FT CBOE VEST INTERNATIONAL EQUITY BUFFER ETF - DECEMBER (YDEC)
The investment objective of the FT Cboe Vest International Equity Buffer ETF -
December (the "Fund") is to seek to provide investors with returns (before fees,
expenses and taxes) that match the price return of the iShares MSCI EAFE ETF
(the "Underlying ETF"), up to a predetermined upside cap of 13.79% (before fees,
expenses and taxes) and 12.89% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against the first 10% (before
fees, expenses and taxes) of Underlying ETF losses, over the period from
December 21, 2020 to December 17, 2021 (the "Outcome Period"). Under normal
market conditions, the Fund will invest substantially all of its assets in
FLexible EXchange(R) Options ("FLEX Options") that reference the price
performance of the Underlying ETF. Subsequent Outcome Periods will begin on the
day the prior Outcome Period ends and will end on the approximate one-year
anniversary of that new Outcome Period. On the first day of each new Outcome
Period, the Fund resets by investing in a new set of FLEX Options that will
provide a new cap for the new Outcome Period. This means that the cap will
change for each Outcome Period based upon prevailing market conditions at the
beginning of each Outcome Period. The Fund will be perpetually offered and not
terminate after the initial or any subsequent Outcome Period. An investor that
purchases Fund shares other than on the first day of an Outcome Period and/or
sells Fund shares prior to the end of an Outcome Period may experience results
that are very different from the target outcomes sought by the Fund for that
Outcome Period. The Fund is classified as non-diversified under the Investment
Company Act of 1940, as amended. The shares of the Fund are listed and traded on
the Cboe BZX Exchange, Inc., under the ticker symbol "YDEC."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(12/18/20)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 8.92%
Market Price 8.77%
INDEX PERFORMANCE
MSCI EAFE Index 10.55%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 10.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
DECEMBER 18, 2020 - AUGUST 31, 2021
FT Cboe Vest International MSCI EAFE
Equity Buffer ETF - December Index
<S> <C> <C>
12/18/20 $10,000 $10,000
2/28/21 10,184 10,175
8/31/21 10,892 11,055
</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 index does
not actually hold a portfolio of securities and therefore does 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 8
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FT CBOE VEST NASDAQ-100(R) BUFFER ETF - DECEMBER (QDEC)
The investment objective of the FT Cboe Vest Nasdaq-100(R) Buffer ETF - December
(the "Fund") is to seek to provide investors with returns (before fees, expenses
and taxes) that match the price return of the Invesco QQQ Trust(SM), Series 1
(the "Underlying ETF"), up to a predetermined upside cap of 17.04% (before fees,
expenses and taxes) and 16.14% (after fees and expenses, excluding brokerage
commissions, trading fees, taxes and extraordinary expenses not included in the
Fund's management fee), while providing a buffer against the first 10% (before
fees, expenses and taxes) of Underlying ETF losses, over the period from
December 21, 2020 to December 17, 2021 (the "Outcome Period"). Under normal
market conditions, the Fund will invest substantially all of its assets in
FLexible EXchange(R) Options ("FLEX Options") that reference the price
performance of the Underlying ETF. Subsequent Outcome Periods will begin on the
day the prior Outcome Period ends and will end on the approximate one-year
anniversary of that new Outcome Period. On the first day of each new Outcome
Period, the Fund resets by investing in a new set of FLEX Options that will
provide a new cap for the new Outcome Period. This means that the cap will
change for each Outcome Period based upon prevailing market conditions at the
beginning of each Outcome Period. The Fund will be perpetually offered and not
terminate after the initial or any subsequent Outcome Period. An investor that
purchases Fund shares other than on the first day of an Outcome Period and/or
sells Fund shares prior to the end of an Outcome Period may experience results
that are very different from the target outcomes sought by the Fund for that
Outcome Period. The Fund is classified as non-diversified under the Investment
Company Act of 1940, as amended. The shares of the Fund are listed and traded on
the Cboe BZX Exchange, Inc., under the ticker symbol "QDEC."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(12/18/20)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 13.71%
Market Price 13.51%
INDEX PERFORMANCE
Nasdaq 100 Stock Index 22.33%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 10.)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
DECEMBER 18, 2020 - AUGUST 31, 2021
FT Cboe Vest Nasdaq-100(R) Nasdaq 100
Buffer ETF - December Stock Index
<S> <C> <C>
12/18/20 $10,000 $10,000
2/28/21 10,111 10,134
8/31/21 11,371 12,233
</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 index does
not actually hold a portfolio of securities and therefore does 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>
--------------------------------------------------------------------------------
NOTES TO FUND PERFORMANCE OVERVIEW (UNAUDITED)
--------------------------------------------------------------------------------
Total returns for the periods since inception are calculated from the inception
date of each Fund. "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. 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 10
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
ADVISOR
First Trust Advisors L.P. ("First Trust" or the "Advisor") is the investment
advisor to FT Cboe Vest International Equity Buffer ETF - March ("YMAR"), FT
Cboe Vest Nasdaq-100(R) Buffer ETF - March ("QMAR"), FT Cboe Vest International
Equity Buffer ETF - June ("YJUN"), FT Cboe Vest Nasdaq-100(R) Buffer ETF - June
("QJUN"), FT Cboe Vest U.S. Equity Enhance & Moderate Buffer ETF - June
("XJUN"), FT Cboe Vest International Equity Buffer ETF - December ("YDEC"), and
FT Cboe Vest Nasdaq-100(R) Buffer ETF - December ("QDEC") (each a "Fund" and
collectively, the "Funds"). First Trust is responsible for the ongoing
monitoring of each Fund's investment portfolio, managing each Fund's business
affairs and providing certain administrative services necessary for the
management of each Fund.
SUB-ADVISOR
Cboe VestSM Financial LLC ("Cboe Vest" or the "Sub-Advisor") serves as the
sub-advisor to the Funds. In this capacity, Cboe Vest is responsible for the
selection and ongoing monitoring of the securities in each Fund's investment
portfolio. Cboe Vest, with principal offices at 1765 Greensboro Station Pl., 9th
Floor, McLean, Virginia 22102, was founded in 2012. Cboe Vest had approximately
$3.9 billion under management or committed to management as of August 31, 2021.
PORTFOLIO MANAGEMENT TEAM
KARAN SOOD, MANAGING DIRECTOR OF CBOE VEST
HOWARD RUBIN, MANAGING DIRECTOR OF CBOE VEST
COMMENTARY
MARKET RECAP
Each of the monthly FT Cboe Vest Funds has an investment objective that seeks to
provide investors with returns (before fees, expenses, and taxes) that match
those of a specified reference ETF, either the SPDR(R) S&P 500(R) ETF Trust, the
Invesco QQQ Trust Series 1 ETF, or the iShares MSCI EAFE ETF (the "Underlying
ETF" or "Reference ETF"), up to a predetermined upside cap (after fees and
expenses, excluding brokerage commissions, trading fees, taxes and extraordinary
expenses not included in the Fund's management fee), while providing a buffer
against a specific level (before fees, expenses and taxes) of losses in the
Reference ETF, over a specified time period.
During the twelve-month period ended August 31, 2021, stock markets continued to
soar extending the massive rally from the March 2020 lows brought on by the
coronavirus ("COVID-19") pandemic. Governments across the globe continue to
support their economies with extensive fiscal and monetary programs. These
efforts, combined with extraordinarily strong corporate earnings, have fueled
equity markets across the globe. Markets moved persistently higher during the
period, with intermittent pull backs being both small and infrequent.
The S&P 500(R) Index, the well-known measure of U.S. large-cap stocks, ended the
same period up 31.2%. Mid- and small-cap stocks, as measured by the S&P MidCap
400(R) Index and the Russell 2000(R) Small Cap Index, rose even more, gaining
44.8% and 47.1%, respectively. The Nasdaq 100 Index, a tech-heavy market
measure, gained 29.6% during the same period. International markets fared well,
too, albeit not to the same extent as the U.S. markets, with broad foreign
market indices such as MSCI EAFE and MSCI Emerging Markets gaining 26.8% and
21.5%, respectively, during the same period.
Within the S&P 500(R) Index, the market continued to see significant variation
in returns across the various sectors of the economy for the 12-month period
ended August 31, 2021. While the variation was not as dramatic as in the prior
twelve months, sector performances still saw an approximately 42 percentage
point differential from top to bottom: the top performing sector was the
Financials sector, up 56.5%, while the worst performing sector was the Consumer
Staples sector, up 14.4%, during the same period.
U.S. economic data printed in the period all pointed to a rapidly recovering
economy. Gross domestic product ("GDP") growth in the most recent four quarterly
reports (the third quarter of 2020 through the second quarter of 2021) came in
at seasonally adjusted annualized rates of +33.8%, +4.5%, +6.3%, and 6.6%,
sequentially. This recent growth has brought the U.S. GDP back to 0.8% above the
level it was at in the fourth quarter of 2019, just prior to the pandemic. A
current Bloomberg survey of economists shows a consensus projection of 4.4% GDP
growth over the coming four quarters.
The U.S. unemployment rate, which had been sitting at a 50-year low of 3.5% in
February of 2020, shot up to 14.7% just two months later, at the height of the
pandemic frenzy. This rate had fallen to 8.4% in August of 2020, as the 12-month
period ended August 31, 2021 began. Throughout the same period, unemployment
continued to move sharply lower, ending the period at 5.2%, well below the
50-year average of 6.3%.
Page 11
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
U.S. inflation levels accelerated dramatically over the 12-month period ended
August 31, 2021, as the Federal Reserve (the "Fed") kept short-term interest
rates near zero throughout the period. The most recent (July 2021) Consumer
Price Index report shows year-over-year inflation running at a 5.4% rate, up
from just 1.0% from the report twelve months earlier. One particular component
of the economy that is clearly overheating, in our view, is the housing market.
Housing prices in the U.S. increased by 18.6% over the last twelve months,
according to the most recent (June 2021) S&P Case-Shiller U.S. National Home
Price Index.
The Fed has made comments that they see this increase in inflation as transitory
and expect it to cool off as the economy stabilizes after the sharp growth of
the last year. That said, the Fed has said they will continue to monitor signs
of persistent inflation and will be prepared to taper back on their easy money
policies as needed.
MARKET AND FUND OUTLOOK
Over the 12-month period ended August 31, 2021, implied volatilities in U.S.
equity markets fell sharply. We expect to see implied volatilities continue to
decline over the coming year. Buffer strategies, such as those used in the FT
Cboe Vest Funds, generally benefit from declining implied volatilities. The CBOE
S&P 500 1-Year Volatility Index, which is derived from option prices, estimates
the market's expectation of S&P 500 volatility for the next twelve months. This
index, which peaked during the period at about 41% on September 3, 2020, was
down, though still at an elevated level of 25%, as of August 31, 2021. For
comparison purposes, the historical volatility of the S&P 500 since its
inception in 1937 has been about 15.7%.
From short-term Treasuries to High Yield Bonds, fixed income investments
continue to linger at or around all-time lows in nominal yield. Combined with
the elevated inflation levels seen in the last half year, almost all fixed
income investments currently have negative real yields (i.e., nominal yield less
inflation.) This bodes quite poorly for future fixed income returns. For this
reason, many market analysts are claiming the traditional "60/40 stock/bond
allocation" strategy is dead. Investors are looking to reallocate away from
fixed income.
The FT Cboe Vest Funds are an alternative that these investors should consider.
The FT Cboe Vest Funds are designed to protect investors against varying levels
of downside movements in their Reference ETF (e.g., SPY, QQQ, or EFA), while
limiting the investor's participation in larger upside moves in the Reference
ETF. In the current negative real yield environment, such Funds, in appropriate
allocations, can be suitable alternatives to fixed investments.
PERFORMANCE ANALYSIS
The following table provides information pertaining to recent caps and
performance for the period ended August 31, 2021 for each FT Cboe Vest Fund, as
well as an attribution analysis that estimates the impact of various factors on
each Fund's performance.
Each Fund's cap is reset at the Fund's annual reset date. The table shows the
caps that were in effect both at the beginning of the period and after the
annual reset date if it occurred within the period. Both of these caps are shown
pre and post expenses. Funds that were launched within the period do not yet
have new caps, as they have not yet reached their first annual reset date.
Each Fund's performance may be impacted by a number of factors. These factors
include changes in each of: the level of the Reference ETF, the Reference ETF's
dividends, interest rates, implied volatility, and time to option expiration.
Generally, changes in the level of the Reference ETF is the primary factor, but
the other factors can also contribute significantly to Fund performance.
Additionally, expenses will impact Fund performance.
The impact from these factors for the period are shown in the table under
"Estimated Performance Attribution."
Page 12
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FUND TICKER YMAR QMAR YJUN QJUN XJUN YDEC QDEC
Annual Expense Ratio 0.90% 0.90% 0.90% 0.90% 0.85% 0.90% 0.90%
Reporting Period Start Date (close of Seed Date) 3/19/21 3/19/21 6/18/21 6/18/21 7/12/21 12/18/20 12/18/20
Reporting Period End Date (close of Period) 8/31/21 8/31/21 8/31/21 8/31/21 8/31/21 8/31/21 8/31/21
CAP INFORMATION:
Cap Prior to Annual Reset (pre-expenses) 14.18% 15.51% 11.81% 13.00% 6.16% 13.79% 17.04%
Cap Prior to Annual Reset (post-expenses) 13.29% 14.61% 10.91% 12.10% 5.37% 12.89% 16.14%
Reset Date (prior to 8/31/21) None None None None None None None
New Cap on Annual Reset Date (pre-expenses) None None None None None None None
New Cap on Annual Reset Date (post-expenses) None None None None None None None
PERFORMANCE (LATER OF 8/31/20 OR SEED DATE, TO 8/31/21):
Fund Performance (using NAVs) 5.59% 10.88% 2.46% 5.49% 1.31% 8.92% 13.71%
Fund Performance (using Market Price) 5.44% 10.83% 1.85% 5.39% 1.08% 8.77% 13.51%
Reference Asset Price Return 5.51% 21.34% 2.70% 10.89% 3.31% 10.97% 22.54%
ESTIMATED PERFORMANCE ATTRIBUTION
Fund NAV Performance Attributed to:
a) Changes in Reference Asset 3.35% 9.40% 1.54% 4.98% 2.68% 6.06% 11.27%
b) Changes in other Variables* 2.65% 1.89% 1.10% 0.69% -1.25% 3.49% 3.07%
c) Expenses (pro-rated annual expense ratio) -0.41% -0.41% -0.18% -0.18% -0.12% -0.63% -0.63%
Attribution TOTAL 5.59% 10.88% 2.46% 5.49% 1.31% 8.92% 13.71%
</TABLE>
* Includes changes in a) Reference Asset's dividends, b) interest rates, c)
implied volatility, and d) time to option expiration.
Page 13
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
UNDERSTANDING YOUR FUND EXPENSES
AUGUST 31, 2021 (UNAUDITED)
As a shareholder of FT Cboe Vest International Equity Buffer ETF - March, FT
Cboe Vest Nasdaq-100(R) Buffer ETF - March, FT Cboe Vest International Equity
Buffer ETF - June, FT Cboe Vest Nasdaq-100(R) Buffer ETF - June, FT Cboe Vest
U.S. Equity Enhance & Moderate Buffer ETF - June, FT Cboe Vest International
Equity Buffer ETF - December and FT Cboe Vest Nasdaq-100(R) Buffer ETF -
December (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 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 (or since inception) and held through the six-month (or shorter) period
ended August 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 Period"
to estimate the expenses you paid on your account during this six-month (or
shorter) 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 EXPENSES PAID
EXPENSE RATIO DURING THE PERIOD
BEGINNING ENDING BASED ON THE MARCH 19, 2021 (a)
ACCOUNT VALUE ACCOUNT VALUE NUMBER OF DAYS TO
MARCH 19, 2021 (a) AUGUST 31, 2021 IN THE PERIOD AUGUST 31, 2021 (b)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FT CBOE VEST INTERNATIONAL EQUITY BUFFER ETF - MARCH (YMAR)
Actual $1,000.00 $1,055.90 0.90% $4.21
Hypothetical (5% return before expenses) $1,000.00 $1,020.67 0.90% $4.58
FT CBOE VEST NASDAQ-100(R) BUFFER ETF - MARCH (QMAR)
Actual $1,000.00 $1,108.80 0.90% $4.32
Hypothetical (5% return before expenses) $1,000.00 $1,020.67 0.90% $4.58
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED EXPENSES PAID
EXPENSE RATIO DURING THE PERIOD
BEGINNING ENDING BASED ON THE JUNE 18, 2021 (a)
ACCOUNT VALUE ACCOUNT VALUE NUMBER OF DAYS TO
JUNE 18, 2021 (a) AUGUST 31, 2021 IN THE PERIOD AUGUST 31, 2021 (c)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FT CBOE VEST INTERNATIONAL EQUITY BUFFER ETF - JUNE (YJUN)
Actual $1,000.00 $1,024.60 0.90% $1.87
Hypothetical (5% return before expenses) $1,000.00 $1,020.67 0.90% $4.58
FT CBOE VEST NASDAQ-100(R) BUFFER ETF - JUNE (QJUN)
Actual $1,000.00 $1,054.90 0.90% $1.90
Hypothetical (5% return before expenses) $1,000.00 $1,020.67 0.90% $4.58
</TABLE>
Page 14
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
UNDERSTANDING YOUR FUND EXPENSES (CONTINUED)
AUGUST 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED EXPENSES PAID
EXPENSE RATIO DURING THE PERIOD
BEGINNING ENDING BASED ON THE JULY 12, 2021 (a)
ACCOUNT VALUE ACCOUNT VALUE NUMBER OF DAYS TO
JULY 12, 2021 (a) AUGUST 31, 2021 IN THE PERIOD AUGUST 31, 2021 (d)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FT CBOE VEST U.S. EQUITY ENHANCE & MODERATE BUFFER ETF - JUNE (XJUN)
Actual $1,000.00 $1,013.10 0.85% $1.20
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED
EXPENSE RATIO EXPENSES PAID
BEGINNING ENDING BASED ON THE DURING THE
ACCOUNT VALUE ACCOUNT VALUE SIX-MONTH SIX-MONTH
MARCH 1, 2021 AUGUST 31, 2021 PERIOD PERIOD (e)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FT CBOE VEST INTERNATIONAL EQUITY BUFFER ETF - DECEMBER (YDEC)
Actual $1,000.00 $1,069.50 0.90% $4.69
Hypothetical (5% return before expenses) $1,000.00 $1,020.67 0.90% $4.58
FT CBOE VEST NASDAQ-100(R) BUFFER ETF - DECEMBER (QDEC)
Actual $1,000.00 $1,124.60 0.90% $4.82
Hypothetical (5% return before expenses) $1,000.00 $1,020.67 0.90% $4.58
</TABLE>
(a) Inception date.
(b) Actual expenses are equal to the annualized expense ratio as indicated in
the table multiplied by the average account value over the period (March
19, 2021 through August 31, 2021), multiplied by 166/365. Hypothetical
expenses are assumed for the most recent six-month period.
(c) Actual expenses are equal to the annualized expense ratio as indicated in
the table multiplied by the average account value over the period (June
18, 2021 through August 31, 2021), multiplied by 75/365. Hypothetical
expenses are assumed for the most recent six-month period.
(d) Actual expenses are equal to the annualized expense ratio as indicated in
the table multiplied by the average account value over the period (July
12, 2021 through August 31, 2021), multiplied by 51/365. Hypothetical
expenses are assumed for the most recent six-month period.
(e) Expenses are equal to the annualized expense ratio as indicated in the
table multiplied by the average account value over the period (March 1,
2021 through August 31, 2021), multiplied by 184/365 (to reflect the
six-month period).
Page 15
<PAGE>
FT CBOE VEST INTERNATIONAL EQUITY BUFFER ETF - MARCH (YMAR)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.9%
<S> <C> <C>
109,935 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 109,935
(Cost $109,935) --------------
TOTAL INVESTMENTS -- 0.9%...................................................................... 109,935
(Cost $109,935) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 101.6%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 98.5%
1,572 iShares MSCI EAFE ETF.............................. $ 12,676,608 $ 0.76 03/18/22 12,496,813
(Cost $12,213,836) --------------
PUT OPTIONS PURCHASED -- 3.1%
1,572 iShares MSCI EAFE ETF.............................. 12,676,608 76.43 03/18/22 388,863
(Cost $614,239) --------------
TOTAL PURCHASED OPTIONS........................................................................ 12,885,676
(Cost $12,828,075) (b) --------------
WRITTEN OPTIONS -- (2.4)%
CALL OPTIONS WRITTEN -- (0.9)%
(1,572) iShares MSCI EAFE ETF.............................. (12,676,608) 87.27 03/18/22 (113,288)
(Premiums received $178,449) --------------
PUT OPTIONS WRITTEN -- (1.5)%
(1,572) iShares MSCI EAFE ETF.............................. (12,676,608) 68.79 03/18/22 (188,372)
(Premiums received $316,230) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (301,660)
(Premiums received $494,679) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (7,386)
--------------
NET ASSETS -- 100.0%........................................................................... $ 12,686,565
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $12,443,331. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$500,576 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$249,956. The net unrealized appreciation was $250,620. The amounts
presented are inclusive of derivative contracts.
Page 16 See Notes to Financial Statements
<PAGE>
FT CBOE VEST INTERNATIONAL EQUITY BUFFER ETF - MARCH (YMAR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 109,935 $ 109,935 $ -- $ --
Call Options Purchased............................... 12,496,813 -- 12,496,813 --
Put Options Purchased................................ 388,863 -- 388,863 --
-------------- -------------- -------------- --------------
Total................................................ $ 12,995,611 $ 109,935 $ 12,885,676 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (113,288) $ -- $ (113,288) $ --
Put Options Written.................................. (188,372) -- (188,372) --
-------------- -------------- -------------- --------------
Total................................................ $ (301,660) $ -- $ (301,660) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 17
<PAGE>
FT CBOE VEST NASDAQ-100(R) BUFFER ETF - MARCH (QMAR)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.7%
<S> <C> <C>
137,389 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 137,389
(Cost $137,389) --------------
TOTAL INVESTMENTS -- 0.7%...................................................................... 137,389
(Cost $137,389) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 110.5%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 108.5%
544 Invesco QQQ Trust(SM), Series 1.................... $ 20,669,280 $ 3.13 03/18/22 20,488,301
(Cost $17,879,996) --------------
PUT OPTIONS PURCHASED -- 2.0%
544 Invesco QQQ Trust(SM), Series 1.................... 20,669,280 313.14 03/18/22 380,748
(Cost $1,239,763) --------------
TOTAL PURCHASED OPTIONS........................................................................ 20,869,049
(Cost $19,119,759) (b) --------------
WRITTEN OPTIONS -- (11.1)%
CALL OPTIONS WRITTEN -- (10.0)%
(544) Invesco QQQ Trust(SM), Series 1.................... (20,669,280) 361.71 03/18/22 (1,889,093)
(Premiums received $890,236) --------------
PUT OPTIONS WRITTEN -- (1.1)%
(544) Invesco QQQ Trust(SM), Series 1.................... (20,669,280) 281.83 03/18/22 (220,315)
(Premiums received $752,715) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (2,109,408)
(Premiums received $1,642,951) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (12,375)
--------------
NET ASSETS -- 100.0%........................................................................... $ 18,884,655
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $17,627,597. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$3,134,005 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$1,864,572. The net unrealized appreciation was $1,269,433. The amounts
presented are inclusive of derivative contracts.
Page 18 See Notes to Financial Statements
<PAGE>
FT CBOE VEST NASDAQ-100(R) BUFFER ETF - MARCH (QMAR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 137,389 $ 137,389 $ -- $ --
Call Options Purchased............................... 20,488,301 -- 20,488,301 --
Put Options Purchased................................ 380,748 -- 380,748 --
-------------- -------------- -------------- --------------
Total................................................ $ 21,006,438 $ 137,389 $ 20,869,049 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (1,889,093) $ -- $ (1,889,093) $ --
Put Options Written.................................. (220,315) -- (220,315) --
-------------- -------------- -------------- --------------
Total................................................ $ (2,109,408) $ -- $ (2,109,408) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 19
<PAGE>
FT CBOE VEST INTERNATIONAL EQUITY BUFFER ETF - JUNE (YJUN)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 1.1%
<S> <C> <C>
146,326 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 146,326
(Cost $146,326) --------------
TOTAL INVESTMENTS -- 1.1%...................................................................... 146,326
(Cost $146,326) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 103.2%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 97.9%
1,651 iShares MSCI EAFE ETF.............................. $ 13,313,664 $ 0.79 06/17/22 13,002,341
(Cost $12,651,059) --------------
PUT OPTIONS PURCHASED -- 5.3%
1,651 iShares MSCI EAFE ETF.............................. 13,313,664 78.52 06/17/22 702,922
(Cost $903,413) --------------
TOTAL PURCHASED OPTIONS........................................................................ 13,705,263
(Cost $13,554,472) (b) --------------
WRITTEN OPTIONS -- (4.2)%
CALL OPTIONS WRITTEN -- (1.4)%
(1,651) iShares MSCI EAFE ETF.............................. (13,313,664) 87.79 06/17/22 (183,279)
(Premiums received $177,589) --------------
PUT OPTIONS WRITTEN -- (2.8)%
(1,651) iShares MSCI EAFE ETF.............................. (13,313,664) 70.67 06/17/22 (374,847)
(Premiums received $479,153) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (558,126)
(Premiums received $656,742) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (8,882)
--------------
NET ASSETS -- 100.0%........................................................................... $ 13,284,581
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $13,044,056. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$465,065 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$215,658. The net unrealized appreciation was $249,407. The amounts
presented are inclusive of derivative contracts.
Page 20 See Notes to Financial Statements
<PAGE>
FT CBOE VEST INTERNATIONAL EQUITY BUFFER ETF - JUNE (YJUN)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 146,326 $ 146,326 $ -- $ --
Call Options Purchased............................... 13,002,341 -- 13,002,341 --
Put Options Purchased................................ 702,922 -- 702,922 --
-------------- -------------- -------------- --------------
Total................................................ $ 13,851,589 $ 146,326 $ 13,705,263 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (183,279) $ -- $ (183,279) $ --
Put Options Written.................................. (374,847) -- (374,847) --
-------------- -------------- -------------- --------------
Total................................................ $ (558,126) $ -- $ (558,126) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 21
<PAGE>
FT CBOE VEST NASDAQ-100(R) BUFFER ETF - JUNE (QJUN)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 1.0%
<S> <C> <C>
318,806 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 318,806
(Cost $318,806) --------------
TOTAL INVESTMENTS -- 1.0%...................................................................... 318,806
(Cost $318,806) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 108.7%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 104.1%
928 Invesco QQQ Trust(SM), Series 1.................... $ 35,259,360 $ 3.43 06/17/22 34,911,687
(Cost $32,640,532) --------------
PUT OPTIONS PURCHASED -- 4.6%
928 Invesco QQQ Trust(SM), Series 1.................... 35,259,360 342.63 06/17/22 1,527,463
(Cost $2,289,720) --------------
TOTAL PURCHASED OPTIONS........................................................................ 36,439,150
(Cost $34,930,252) (b) --------------
WRITTEN OPTIONS -- (9.6)%
CALL OPTIONS WRITTEN -- (6.9)%
(928) Invesco QQQ Trust(SM), Series 1.................... (35,259,360) 387.17 06/17/22 (2,295,830)
(Premiums received $1,427,181) --------------
PUT OPTIONS WRITTEN -- (2.7)%
(928) Invesco QQQ Trust(SM), Series 1.................... (35,259,360) 308.37 06/17/22 (905,096)
(Premiums received $1,338,826) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (3,200,926)
(Premiums received $2,766,007) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (24,066)
--------------
NET ASSETS -- 100.0%........................................................................... $ 33,532,964
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $32,483,051. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$2,704,885 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$1,630,906. The net unrealized appreciation was $1,073,979. The amounts
presented are inclusive of derivative contracts.
Page 22 See Notes to Financial Statements
<PAGE>
FT CBOE VEST NASDAQ-100(R) BUFFER ETF - JUNE (QJUN)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 318,806 $ 318,806 $ -- $ --
Call Options Purchased............................... 34,911,687 -- 34,911,687 --
Put Options Purchased................................ 1,527,463 -- 1,527,463 --
-------------- -------------- -------------- --------------
Total................................................ $ 36,757,956 $ 318,806 $ 36,439,150 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (2,295,830) $ -- $ (2,295,830) $ --
Put Options Written.................................. (905,096) -- (905,096) --
-------------- -------------- -------------- --------------
Total................................................ $ (3,200,926) $ -- $ (3,200,926) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 23
<PAGE>
FT CBOE VEST U.S. EQUITY ENHANCE & MODERATE BUFFER ETF - JUNE (XJUN)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 1.0%
<S> <C> <C>
61,666 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 61,666
(Cost $61,666) --------------
TOTAL INVESTMENTS -- 1.0%...................................................................... 61,666
(Cost $61,666) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 114.1%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 108.4%
136 SPDR(R) S&P 500(R) ETF Trust....................... $ 6,141,216 $ 4.37 06/17/22 6,033,377
136 SPDR(R) S&P 500(R) ETF Trust....................... 6,141,216 437.08 06/17/22 496,031
--------------
TOTAL CALL OPTIONS PURCHASED................................................................... 6,529,408
(Cost $6,242,517) --------------
PUT OPTIONS PURCHASED -- 5.7%
136 SPDR(R) S&P 500(R) ETF Trust....................... 6,141,216 437.08 06/17/22 343,621
(Cost $406,239) --------------
TOTAL PURCHASED OPTIONS........................................................................ 6,873,029
(Cost $6,648,756) (b) --------------
WRITTEN OPTIONS -- (15.0)%
CALL OPTIONS WRITTEN -- (12.6)%
(272) SPDR(R) S&P 500(R) ETF Trust....................... (12,282,432) 450.54 06/17/22 (759,876)
(Premiums received $569,346) --------------
PUT OPTIONS WRITTEN -- (2.4)%
(136) SPDR(R) S&P 500(R) ETF Trust....................... (6,141,216) 371.52 06/17/22 (148,252)
(Premiums received $184,476) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (908,128)
(Premiums received $753,822) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (3,764)
--------------
NET ASSETS -- 100.0%........................................................................... $ 6,022,803
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $5,956,600. As of August
31, 2021, the aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost was $323,115 and the
aggregate gross unrealized depreciation for all investments in which there
was an excess of tax cost over value was $253,148. The net unrealized
appreciation was $69,967. The amounts presented are inclusive of
derivative contracts.
Page 24 See Notes to Financial Statements
<PAGE>
FT CBOE VEST U.S. EQUITY ENHANCE & MODERATE BUFFER ETF - JUNE (XJUN)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 61,666 $ 61,666 $ -- $ --
Call Options Purchased............................... 6,529,408 -- 6,529,408 --
Put Options Purchased................................ 343,621 -- 343,621 --
-------------- -------------- -------------- --------------
Total................................................ $ 6,934,695 $ 61,666 $ 6,873,029 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (759,876) $ -- $ (759,876) $ --
Put Options Written.................................. (148,252) -- (148,252) --
-------------- -------------- -------------- --------------
Total................................................ $ (908,128) $ -- $ (908,128) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 25
<PAGE>
FT CBOE VEST INTERNATIONAL EQUITY BUFFER ETF - DECEMBER (YDEC)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.6%
<S> <C> <C>
75,015 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 75,015
(Cost $75,015) --------------
TOTAL INVESTMENTS -- 0.6%...................................................................... 75,015
(Cost $75,015) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 101.3%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 100.1%
1,518 iShares MSCI EAFE ETF.............................. $ 12,241,152 $ 0.73 12/17/21 12,033,834
(Cost $11,131,079) --------------
PUT OPTIONS PURCHASED -- 1.2%
1,518 iShares MSCI EAFE ETF.............................. 12,241,152 72.67 12/17/21 139,859
(Cost $662,628) --------------
TOTAL PURCHASED OPTIONS........................................................................ 12,173,693
(Cost $11,793,707) (b) --------------
WRITTEN OPTIONS -- (1.8)%
CALL OPTIONS WRITTEN -- (1.3)%
(1,518) iShares MSCI EAFE ETF.............................. (12,241,152) 82.69 12/17/21 (162,103)
(Premiums received $186,059) --------------
PUT OPTIONS WRITTEN -- (0.5)%
(1,518) iShares MSCI EAFE ETF.............................. (12,241,152) 65.40 12/17/21 (62,522)
(Premiums received $364,910) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (224,625)
(Premiums received $550,969) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (7,590)
--------------
NET ASSETS -- 100.0%........................................................................... $ 12,016,493
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $11,317,753. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$1,233,376 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$527,046. The net unrealized appreciation was $706,330. The amounts
presented are inclusive of derivative contracts.
Page 26 See Notes to Financial Statements
<PAGE>
FT CBOE VEST INTERNATIONAL EQUITY BUFFER ETF - DECEMBER (YDEC)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 75,015 $ 75,015 $ -- $ --
Call Options Purchased............................... 12,033,834 -- 12,033,834 --
Put Options Purchased................................ 139,859 -- 139,859 --
-------------- -------------- -------------- --------------
Total................................................ $ 12,248,708 $ 75,015 $ 12,173,693 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (162,103) $ -- $ (162,103) $ --
Put Options Written.................................. (62,522) -- (62,522) --
-------------- -------------- -------------- --------------
Total................................................ $ (224,625) $ -- $ (224,625) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 27
<PAGE>
FT CBOE VEST NASDAQ-100(R) BUFFER ETF - DECEMBER (QDEC)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
-------------- ----------------------------------------------------------------------------------------------- --------------
MONEY MARKET FUNDS -- 0.5%
<S> <C> <C>
388,422 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (a)...................... $ 388,422
(Cost $388,422) --------------
TOTAL INVESTMENTS -- 0.5%...................................................................... 388,422
(Cost $388,422) (b) --------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NOTIONAL EXERCISE EXPIRATION
CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE
-------------- --------------------------------------------------- ------------- ----------- ----------- --------------
PURCHASED OPTIONS -- 107.7%
<S> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 106.9%
2,240 Invesco QQQ Trust(SM), Series 1.................... $ 85,108,800 $ 3.10 12/17/21 84,380,507
(Cost $69,957,049) --------------
PUT OPTIONS PURCHASED -- 0.8%
2,240 Invesco QQQ Trust(SM), Series 1.................... 85,108,800 310.06 12/17/21 671,110
(Cost $6,582,952) --------------
TOTAL PURCHASED OPTIONS........................................................................ 85,051,617
(Cost $76,540,001) (b) --------------
WRITTEN OPTIONS -- (8.1)%
CALL OPTIONS WRITTEN -- (7.7)%
(2,240) Invesco QQQ Trust(SM), Series 1.................... (85,108,800) 362.89 12/17/21 (6,094,884)
(Premiums received $2,646,406) --------------
PUT OPTIONS WRITTEN -- (0.4)%
(2,240) Invesco QQQ Trust(SM), Series 1.................... (85,108,800) 279.05 12/17/21 (342,397)
(Premiums received $4,142,219) --------------
TOTAL WRITTEN OPTIONS.......................................................................... (6,437,281)
(Premiums received $6,788,625) (b) --------------
NET OTHER ASSETS AND LIABILITIES -- (0.1)%..................................................... (50,381)
--------------
NET ASSETS -- 100.0%........................................................................... $ 78,952,377
==============
</TABLE>
-----------------------------
(a) Rate shown reflects yield as of August 31, 2021.
(b) Aggregate cost for federal income tax purposes is $70,324,532. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$18,056,526 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$9,378,300. The net unrealized appreciation was $8,678,226. The amounts
presented are inclusive of derivative contracts.
Page 28 See Notes to Financial Statements
<PAGE>
FT CBOE VEST NASDAQ-100(R) BUFFER ETF - DECEMBER (QDEC)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Money Market Funds................................... $ 388,422 $ 388,422 $ -- $ --
Call Options Purchased............................... 84,380,507 -- 84,380,507 --
Put Options Purchased................................ 671,110 -- 671,110 --
-------------- -------------- -------------- --------------
Total................................................ $ 85,440,039 $ 388,422 $ 85,051,617 $ --
============== ============== ============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2021 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Call Options Written................................. $ (6,094,884) $ -- $ (6,094,884) $ --
Put Options Written.................................. (342,397) -- (342,397) --
-------------- -------------- -------------- --------------
Total................................................ $ (6,437,281) $ -- $ (6,437,281) $ --
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements Page 29
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 2021
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST
INTERNATIONAL EQUITY NASDAQ-100(R) INTERNATIONAL EQUITY NASDAQ-100(R)
BUFFER ETF - BUFFER ETF - BUFFER ETF - BUFFER ETF -
MARCH MARCH JUNE JUNE
(YMAR) (QMAR) (YJUN) (QJUN)
---------------- ----------------- ----------------- -----------------
ASSETS:
<S> <C> <C> <C> <C>
Investments, at value........................... $ 109,935 $ 137,389 $ 146,326 $ 318,806
Options contracts purchased, at value........... 12,885,676 20,869,049 13,705,263 36,439,150
Cash............................................ 16 -- 27 --
Receivables:
Dividends.................................... 2 5 3 8
Capital shares sold.......................... -- -- -- --
---------------- ----------------- ----------------- -----------------
Total Assets................................. 12,995,629 21,006,443 13,851,619 36,757,964
---------------- ----------------- ----------------- -----------------
LIABILITIES:
Options contracts written, at value............. 301,660 2,109,408 558,126 3,200,926
Payables:
Investment advisory fees..................... 7,404 12,380 8,912 24,074
Capital shares purchased..................... -- -- -- --
---------------- ----------------- ----------------- -----------------
Total Liabilities............................ 309,064 2,121,788 567,038 3,225,000
---------------- ----------------- ----------------- -----------------
NET ASSETS...................................... $ 12,686,565 $ 18,884,655 $ 13,284,581 $ 33,532,964
================ ================= ================= =================
NET ASSETS CONSIST OF:
Paid-in capital................................. $ 12,454,243 $ 17,654,479 $ 13,041,208 $ 32,481,530
Par value....................................... 6,000 8,500 6,500 16,000
Accumulated distributable earnings (loss)....... 226,322 1,221,676 236,873 1,035,434
---------------- ----------------- ----------------- -----------------
NET ASSETS...................................... $ 12,686,565 $ 18,884,655 $ 13,284,581 $ 33,532,964
================ ================= ================= =================
NET ASSET VALUE, per share...................... $ 21.14 $ 22.22 $ 20.44 $ 20.96
================ ================= ================= =================
Number of shares outstanding (unlimited number
of shares authorized, par value
$0.01 per share)............................. 600,002 850,002 650,002 1,600,002
================ ================= ================= =================
Investments, at cost............................ $ 109,935 $ 137,389 $ 146,326 $ 318,806
================ ================= ================= =================
Premiums paid on options contracts purchased.... $ 12,828,075 $ 19,119,759 $ 13,554,472 $ 34,930,252
================ ================= ================= =================
Premiums received on options contracts written.. $ 494,679 $ 1,642,951 $ 656,742 $ 2,766,007
================ ================= ================= =================
</TABLE>
Page 30 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FT CBOE VEST
U.S. EQUITY FT CBOE VEST FT CBOE VEST
ENHANCE & MODERATE INTERNATIONAL EQUITY NASDAQ-100(R)
BUFFER ETF - BUFFER ETF - BUFFER ETF -
JUNE DECEMBER DECEMBER
(XJUN) (YDEC) (QDEC)
------------------ ----------------- -----------------
<S> <C> <C>
$ 61,666 $ 75,015 $ 388,422
6,873,029 12,173,693 85,051,617
-- -- --
1 2 260
-- -- 2,254,929
------------------ ----------------- -----------------
6,934,696 12,248,710 87,695,228
------------------ ----------------- -----------------
908,128 224,625 6,437,281
3,765 7,592 59,698
-- -- 2,245,872
------------------ ----------------- -----------------
911,893 232,217 8,742,851
------------------ ----------------- -----------------
$ 6,022,803 $ 12,016,493 $ 78,952,377
================== ================= =================
$ 5,956,020 $ 11,355,898 $ 69,684,179
2,000 5,500 35,000
64,783 655,095 9,233,198
------------------ ----------------- -----------------
$ 6,022,803 $ 12,016,493 $ 78,952,377
================== ================= =================
$ 30.11 $ 21.85 $ 22.56
================== ================= =================
200,002 550,002 3,500,002
================== ================= =================
$ 61,666 $ 75,015 $ 388,422
================== ================= =================
$ 6,648,756 $ 11,793,707 $ 76,540,001
================== ================= =================
$ 753,822 $ 550,969 $ 6,788,625
================== ================= =================
</TABLE>
See Notes to Financial Statements Page 31
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED AUGUST 31, 2021
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST
INTERNATIONAL EQUITY NASDAQ-100(R) INTERNATIONAL EQUITY NASDAQ-100(R)
BUFFER ETF - BUFFER ETF - BUFFER ETF - BUFFER ETF -
MARCH MARCH JUNE JUNE
(YMAR) (a) (QMAR) (a) (YJUN) (b) (QJUN) (b)
---------------- ----------------- ----------------- -----------------
INVESTMENT INCOME:
<S> <C> <C> <C> <C>
Dividends....................................... $ 25 $ 22 $ 31 $ 13
---------------- ----------------- ----------------- -----------------
Total investment income...................... 25 22 31 13
---------------- ----------------- ----------------- -----------------
EXPENSES:
Investment advisory fees........................ 25,042 52,962 13,065 40,300
---------------- ----------------- ----------------- -----------------
Total expenses............................... 25,042 52,962 13,065 40,300
---------------- ----------------- ----------------- -----------------
NET INVESTMENT INCOME (LOSS).................... (25,017) (52,940) (13,034) (40,287)
---------------- ----------------- ----------------- -----------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Purchased options contracts.................. -- 2,058 -- --
Written options contracts.................... -- (11,640) -- --
In-kind redemptions - Purchased options
contracts................................. -- -- -- --
In-kind redemptions - Written options
contracts................................. -- -- -- --
---------------- ----------------- ----------------- -----------------
Net realized gain (loss)........................ -- (9,582) -- --
---------------- ----------------- ----------------- -----------------
Net change in unrealized appreciation
(depreciation) on:
Purchased options contracts.................. 57,601 1,749,290 150,791 1,508,898
Written options contracts.................... 193,019 (466,457) 98,616 (434,919)
---------------- ----------------- ----------------- -----------------
Net change in unrealized appreciation
(depreciation)............................... 250,620 1,282,833 249,407 1,073,979
---------------- ----------------- ----------------- -----------------
NET REALIZED AND UNREALIZED
GAIN (LOSS).................................. 250,620 1,273,251 249,407 1,073,979
---------------- ----------------- ----------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS.................... $ 225,603 $ 1,220,311 $ 236,373 $ 1,033,692
================ ================= ================= =================
</TABLE>
(a) Inception date is March 19, 2021, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(b) Inception date is June 18, 2021, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
(c) Inception date is July 12, 2021, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
(d) Inception date is December 18, 2020, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
Page 32 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FT CBOE VEST
U.S. EQUITY FT CBOE VEST FT CBOE VEST
ENHANCE & MODERATE INTERNATIONAL EQUITY NASDAQ-100(R)
BUFFER ETF - BUFFER ETF - BUFFER ETF -
JUNE DECEMBER DECEMBER
(XJUN) (c) (YDEC) (d) (QDEC) (d)
------------------ ----------------- -----------------
<S> <C> <C>
$ 1 $ 17 $ 130
------------------ ----------------- -----------------
1 17 130
------------------ ----------------- -----------------
5,185 52,222 442,737
------------------ ----------------- -----------------
5,185 52,222 442,737
------------------ ----------------- -----------------
(5,184) (52,205) (442,607)
------------------ ----------------- -----------------
-- -- 422,830
-- -- (23,932)
-- -- 280,798
-- -- 129,890
------------------ ----------------- -----------------
-- -- 809,586
------------------ ----------------- -----------------
224,273 379,986 8,511,616
(154,306) 326,344 351,344
------------------ ----------------- -----------------
69,967 706,330 8,862,960
------------------ ----------------- -----------------
69,967 706,330 9,672,546
------------------ ----------------- -----------------
$ 64,783 $ 654,125 $ 9,229,939
================== ================= =================
</TABLE>
See Notes to Financial Statements Page 33
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FT CBOE VEST FT CBOE VEST FT CBOE VEST FT CBOE VEST
INTERNATIONAL EQUITY NASDAQ-100(R) INTERNATIONAL EQUITY NASDAQ-100(R)
BUFFER ETF - BUFFER ETF - BUFFER ETF - BUFFER ETF -
MARCH MARCH JUNE JUNE
(YMAR) (QMAR) (YJUN) (QJUN)
---------------- ----------------- ----------------- -----------------
PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED
8/31/2021 (a) 8/31/2021 (a) 8/31/2021 (b) 8/31/2021 (b)
---------------- ----------------- ----------------- -----------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income (loss).................... $ (25,017) $ (52,940) $ (13,034) $ (40,287)
Net realized gain (loss)........................ -- (9,582) -- --
Net change in unrealized appreciation
(depreciation)............................... 250,620 1,282,833 249,407 1,073,979
---------------- ----------------- ----------------- -----------------
Net increase (decrease) in net assets resulting
from operations.............................. 225,603 1,220,311 236,373 1,033,692
---------------- ----------------- ----------------- -----------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold....................... 12,460,962 22,902,662 13,048,208 32,499,272
Cost of shares redeemed......................... -- (5,238,318) -- --
---------------- ----------------- ----------------- -----------------
Net increase (decrease) in net assets resulting
from shareholder transactions................ 12,460,962 17,664,344 13,048,208 32,499,272
---------------- ----------------- ----------------- -----------------
Total increase (decrease) in net assets......... 12,686,565 18,884,655 13,284,581 33,532,964
NET ASSETS:
Beginning of period............................. -- -- -- --
---------------- ----------------- ----------------- -----------------
End of period................................... $ 12,686,565 $ 18,884,655 $ 13,284,581 $ 33,532,964
================ ================= ================= =================
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period......... -- -- -- --
Shares sold..................................... 600,002 1,100,002 650,002 1,600,002
Shares redeemed................................. -- (250,000) -- --
---------------- ----------------- ----------------- -----------------
Shares outstanding, end of period............... 600,002 850,002 650,002 1,600,002
================ ================= ================= =================
</TABLE>
(a) Inception date is March 19, 2021, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(b) Inception date is June 18, 2021, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
(c) Inception date is July 12, 2021, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
(d) Inception date is December 18, 2020, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
Page 34 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FT CBOE VEST
U.S. EQUITY FT CBOE VEST FT CBOE VEST
ENHANCE & MODERATE INTERNATIONAL EQUITY NASDAQ-100(R)
BUFFER ETF - BUFFER ETF - BUFFER ETF -
JUNE DECEMBER DECEMBER
(XJUN) (YDEC) (QDEC)
------------------ ----------------- -----------------
PERIOD ENDED PERIOD ENDED PERIOD ENDED
8/31/2021 (c) 8/31/2021 (d) 8/31/2021 (d)
------------------ ----------------- -----------------
<S> <C> <C>
$ (5,184) $ (52,205) $ (442,607)
-- -- 809,586
69,967 706,330 8,862,960
------------------ ----------------- -----------------
64,783 654,125 9,229,939
------------------ ----------------- -----------------
5,958,020 11,362,368 89,195,903
-- -- (19,473,465)
------------------ ----------------- -----------------
5,958,020 11,362,368 69,722,438
------------------ ----------------- -----------------
6,022,803 12,016,493 78,952,377
-- -- --
------------------ ----------------- -----------------
$ 6,022,803 $ 12,016,493 $ 78,952,377
================== ================= =================
-- -- --
200,002 550,002 4,400,002
-- -- (900,000)
------------------ ----------------- -----------------
200,002 550,002 3,500,002
================== ================= =================
</TABLE>
See Notes to Financial Statements Page 35
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
FT CBOE VEST INTERNATIONAL EQUITY BUFFER ETF - MARCH (YMAR)
<TABLE>
<CAPTION>
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 20.02
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.04)
Net realized and unrealized gain (loss)........................ 1.16
--------
Total from investment operations............................... 1.12
--------
Net asset value, end of period................................. $ 21.14
========
TOTAL RETURN (b)............................................... 5.59%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 12,687
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.90% (c)
Ratio of net investment income (loss) to average net assets.... (0.90)% (c)
Portfolio turnover rate (d).................................... 0%
FT CBOE VEST NASDAQ-100(R) BUFFER ETF - MARCH (QMAR)
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 20.04
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.06)
Net realized and unrealized gain (loss)........................ 2.24
--------
Total from investment operations............................... 2.18
--------
Net asset value, end of period................................. $ 22.22
========
TOTAL RETURN (b)............................................... 10.88%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 18,885
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.90% (c)
Ratio of net investment income (loss) to average net assets.... (0.90)% (c)
Portfolio turnover rate (d).................................... 0%
</TABLE>
(a) Inception date is March 19, 2021, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The return presented does not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions,
derivatives and in-kind transactions.
Page 36 See Notes to Financial Statements
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
FT CBOE VEST INTERNATIONAL EQUITY BUFFER ETF - JUNE (YJUN)
<TABLE>
<CAPTION>
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 19.95
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.02)
Net realized and unrealized gain (loss)........................ 0.51
--------
Total from investment operations............................... 0.49
--------
Net asset value, end of period................................. $ 20.44
========
TOTAL RETURN (b)............................................... 2.46%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 13,285
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.90% (c)
Ratio of net investment income (loss) to average net assets.... (0.90)% (c)
Portfolio turnover rate (d).................................... 0%
FT CBOE VEST NASDAQ-100(R) BUFFER ETF - JUNE (QJUN)
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 19.87
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.03)
Net realized and unrealized gain (loss)........................ 1.12
--------
Total from investment operations............................... 1.09
--------
Net asset value, end of period................................. $ 20.96
========
TOTAL RETURN (b)............................................... 5.49%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 33,533
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.90% (c)
Ratio of net investment income (loss) to average net assets.... (0.90)% (c)
Portfolio turnover rate (d).................................... 0%
</TABLE>
(a) Inception date is June 18, 2021, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The return presented does not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions,
derivatives and in-kind transactions.
See Notes to Financial Statements Page 37
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
FT CBOE VEST U.S. EQUITY ENHANCE & MODERATE BUFFER ETF - JUNE (XJUN)
<TABLE>
<CAPTION>
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 29.72
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.03)
Net realized and unrealized gain (loss)........................ 0.42
--------
Total from investment operations............................... 0.39
--------
Net asset value, end of period................................. $ 30.11
========
TOTAL RETURN (b)............................................... 1.31%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 6,023
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% (c)
Ratio of net investment income (loss) to average net assets.... (0.85)% (c)
Portfolio turnover rate (d).................................... 0%
</TABLE>
(a) Inception date is July 12, 2021, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The return presented does not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions,
derivatives and in-kind transactions.
Page 38 See Notes to Financial Statements
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
FT CBOE VEST INTERNATIONAL EQUITY BUFFER ETF - DECEMBER (YDEC)
<TABLE>
<CAPTION>
PERIOD
ENDED
8/31/2021 (a)
--------------
Net asset value, beginning of period........................... $ 20.06
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.09)
Net realized and unrealized gain (loss)........................ 1.88
--------
Total from investment operations............................... 1.79
--------
Net asset value, end of period................................. $ 21.85
========
TOTAL RETURN (b)............................................... 8.92%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 12,016
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.90% (c)
Ratio of net investment income (loss) to average net assets.... (0.90)% (c)
Portfolio turnover rate (d).................................... 0%
FT CBOE VEST NASDAQ-100(R) BUFFER ETF - DECEMBER (QDEC)
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 19.84
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.13)
Net realized and unrealized gain (loss)........................ 2.85
--------
Total from investment operations............................... 2.72
--------
Net asset value, end of period................................. $ 22.56
========
TOTAL RETURN (b)............................................... 13.71%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 78,952
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.90% (c)
Ratio of net investment income (loss) to average net assets.... (0.90)% (c)
Portfolio turnover rate (d).................................... 0%
</TABLE>
(a) Inception date is December 18, 2020, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The return presented does not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions,
derivatives and in-kind transactions.
See Notes to Financial Statements Page 39
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
1. ORGANIZATION
First Trust Exchange-Traded Fund VIII (the "Trust") is an open-end management
investment company organized as a Massachusetts business trust on February 22,
2016, 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 forty-nine funds that are offering shares. This
report covers the seven funds (each a "Fund" and collectively, "the Funds")
listed below. The shares of each Fund are listed and traded on the Cboe BZX
Exchange, Inc. ("Cboe BZX").
FT Cboe Vest International Equity Buffer ETF - March - (ticker
"YMAR")(1)
FT Cboe Vest Nasdaq-100(R) Buffer ETF - March - (ticker "QMAR")(1)(2)
FT Cboe Vest International Equity Buffer ETF - June - (ticker "YJUN")(3)
FT Cboe Vest Nasdaq-100(R) Buffer ETF - June - (ticker "QJUN")(3)(4)
FT Cboe Vest U.S. Equity Enhance & Moderate Buffer ETF - June - (ticker
"XJUN")(5)
FT Cboe Vest International Equity Buffer ETF - December - (ticker
"YDEC")(6)
FT Cboe Vest Nasdaq-100(R) Buffer ETF - December - (ticker "QDEC")(6)(7)
(1) Commenced investment operations on March 19, 2021.
(2) Effective on August 27, 2021, FT Cboe Vest Growth-100 Buffer ETF - March
changed its name to FT Cboe Vest Nasdaq-100(R) Buffer ETF - March. The
Fund's ticker symbol was not changed.
(3) Commenced investment operations on June 18, 2021.
(4) Effective on August 27, 2021, FT Cboe Vest Growth-100 Buffer ETF - June
changed its name to FT Cboe Vest Nasdaq-100(R) Buffer ETF - June. The
Fund's ticker symbol was not changed.
(5) Commenced investment operations on July 12, 2021.
(6) Commenced investment operations on December 18, 2020.
(7) Effective on August 27, 2021, FT Cboe Vest Growth-100 Buffer ETF -
December changed its name to FT Cboe Vest Nasdaq-100(R) Buffer ETF -
December. The Fund's ticker symbol was not changed.
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."
Each Fund is an actively managed exchange-traded fund.
The investment objective of YMAR is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the iShares
MSCI EAFE ETF (the "Underlying MSCI ETF"), up to a predetermined upside cap of
14.18% (before fees, expenses and taxes), while providing a buffer against the
first 10% (before fees, expenses and taxes) of Underlying MSCI ETF losses, over
the period from March 22, 2021 to March 18, 2022.
The investment objective of QMAR is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Invesco QQQ
TrustSM, Series 1 (the "Underlying Invesco ETF"), up to a predetermined upside
cap of 15.51% (before fees, expenses and taxes), while providing a buffer
against the first 10% (before fees, expenses and taxes) of Underlying Invesco
ETF losses, over the period from March 22, 2021 to March 18, 2022.
The investment objective of YJUN is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
MSCI ETF, up to a predetermined upside cap of 11.81% (before fees, expenses and
taxes), while providing a buffer against the first 10% (before fees, expenses
and taxes) of Underlying MSCI ETF losses, over the period from June 21, 2021 to
June 17, 2022.
The investment objective of QJUN is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
Invesco ETF, up to a predetermined upside cap of 13.00% (before fees, expenses
and taxes), while providing a buffer against the first 10% (before fees,
expenses and taxes) of Underlying Invesco ETF losses, over the period from June
21, 2021 to June 17, 2022.
The investment objective of XJUN is to seek to provide investors with returns
(before fees, expenses and taxes) of approximately twice any positive price
return of the SPDR(R) S&P 500(R) ETF Trust (the "Underlying SPDR ETF"), up to a
predetermined upside cap of 6.16% (before fees, expenses and taxes), while
providing a buffer against the first 15% (before fees, expenses and taxes) of
Underlying SPDR ETF losses, over the period from July 13, 2021 to June 17, 2022.
Page 40
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
The investment objective of YDEC is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
MSCI ETF, up to a predetermined upside cap of 13.79% (before fees, expenses and
taxes) and 12.89% (after fees and expenses, excluding brokerage commissions,
trading fees, taxes and extraordinary expenses not included in the Fund's
management fee), while providing a buffer against the first 10% (before fees,
expenses and taxes) of Underlying MSCI ETF losses, over the period from December
21, 2020 to December 17, 2021.
The investment objective of QDEC is to seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the Underlying
Invesco ETF, up to a predetermined upside cap of 17.04% (before fees, expenses
and taxes) and 16.14% (after fees and expenses, excluding brokerage commissions,
trading fees, taxes and extraordinary expenses not included in the Fund's
management fee), while providing a buffer against the first 10% (before fees,
expenses and taxes) of Underlying Invesco ETF losses, over the period from
December 21, 2020 to December 17, 2021.
Under normal market conditions, each Fund will invest substantially all of its
assets in FLexible EXchange(R) Options ("FLEX Options") that reference the price
performance that match those of a specified reference ETF, either the SPDR(R)
S&P 500(R) ETF Trust, the Invesco QQQ TrustSM Series 1 ETF, or the iShares MSCI
EAFE ETF (the "Underlying ETF").
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. Each Fund's NAV is calculated by dividing the
value of all assets of the Fund (including accrued interest and dividends), less
all liabilities (including accrued expenses and dividends declared but unpaid),
by the total number of shares outstanding.
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:
Exchange-traded options contracts (other than FLEX Option contracts) are
valued at the closing price in the market where such contracts are
principally traded. If no closing price is available, exchange-traded
options contracts are fair valued at the mean of their most recent bid and
asked price, if available, and otherwise at their closing bid price.
Over-the-counter options contracts are fair valued at the mean of their
most recent bid and asked price, if available, and otherwise at their
closing bid price. FLEX Option contracts are normally valued using a
model-based price provided by a third-party pricing vendor. On days when a
trade in a FLEX Option contract occurs, the trade price will be used to
value such FLEX Option contracts in lieu of the model price.
Common stocks and other equity securities listed on any national or
foreign exchange (excluding Nasdaq and the London Stock Exchange
Alternative Investment Market ("AIM")) are valued at the last sale price
on the exchange on which they are principally traded or, for Nasdaq and
AIM securities, the official closing price. Securities traded on more than
one securities exchange are valued at the last sale price or official
closing price, as applicable, at the close of the securities exchange
representing the principal market for such securities.
Shares of open-end funds are valued at fair value which is based on NAV
per share.
Certain securities may not be able to be priced by pre-established pricing
methods. Such securities may be valued by the Trust's Board of Trustees or its
delegate, the Advisor's Pricing Committee, at fair value. These securities
generally include, but are not limited to, restricted securities (securities
which may not be publicly sold without registration under the Securities Act of
1933, as amended) for which a third-party pricing service is unable to provide a
market price; securities whose trading has been formally suspended; a security
whose market or fair value price is not available from a pre-established pricing
Page 41
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
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.
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 August 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.
C. FLEX OPTIONS
FLEX Options are customized equity or index option contracts that trade on an
exchange, but provide investors with the ability to customize key contract terms
like exercise prices, styles and expiration dates. FLEX Options are guaranteed
for settlement by the Options Clearing Corporation.
Each Fund purchases and sells call and put FLEX Options based on the performance
of the Underlying ETF. The FLEX Options that each Fund holds that reference the
Underlying ETF will give each Fund the right to receive or deliver shares of the
Underlying ETF on the option expiration date at a strike price, depending on
whether the option is a put or call option and whether each Fund purchases or
sells the option. The FLEX Options held by each Fund are European style options,
which are exercisable at the strike price only on the FLEX Option expiration
date. All options held by each Fund at fiscal year end are FLEX Options.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income of each Fund, if any, are declared and paid
annually, 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.
Page 42
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--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
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. During their applicable taxable periods
ended, none of the Funds paid a distribution in 2020 or 2021.
As of August 31, 2021, 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>
FT Cboe Vest International Equity Buffer ETF - March $ (24,298) $ -- $ 250,620
FT Cboe Vest Nasdaq-100(R) Buffer ETF - March (51,575) 3,818 1,269,433
FT Cboe Vest International Equity Buffer ETF - June (12,534) -- 249,407
FT Cboe Vest Nasdaq-100(R) Buffer ETF - June (38,545) -- 1,073,979
FT Cboe Vest U.S. Equity Enhance & Moderate Buffer ETF - June (5,184) -- 69,967
FT Cboe Vest International Equity Buffer ETF - December (51,235) -- 706,330
FT Cboe Vest Nasdaq-100(R) Buffer ETF - December (298,323) 853,295 8,678,226
</TABLE>
E. INCOME TAXES
Each Fund intends to qualify as a regulated investment company by complying with
the requirements under Subchapter M of the Internal Revenue Code of 1986, as
amended, which includes distributing substantially all of its net investment
income and net realized gains to shareholders. Accordingly, no provision has
been made for federal and state income taxes. However, due to the timing and
amount of distributions, each Fund may be subject to an excise tax of 4% of the
amount by which approximately 98% of each Fund's taxable income exceeds the
distributions from such taxable income for the calendar year.
The Funds are subject to accounting standards that establish a minimum threshold
for recognizing, and a system for measuring, the benefits of a tax position
taken or expected to be taken in a tax return. The taxable year ended 2021
remains open to federal and state audit. As of August 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 each Fund's applicable
taxable year end, the Funds had no capital loss carryforwards for federal income
tax purposes.
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. At each Fund's applicable taxable year end, the Funds had
no net late year ordinary or capital losses.
In order to present paid-in capital and accumulated distributable earnings
(loss) (which consists of accumulated net investment income (loss), accumulated
net realized gain (loss) on investments and net unrealized appreciation
(depreciation) on investments) on the Statements of Assets and Liabilities that
more closely represent their tax character, certain adjustments have been made
to paid-in capital, accumulated net investment income (loss) and accumulated net
realized gain (loss) on investments. These adjustments are primarily due to the
difference between book and tax treatments of income and gains on various
investment securities held by the Funds and in-kind transactions. The results of
operations and net assets were not affected by these adjustments. For each
Fund's applicable taxable period the adjustments were as follows:
Page 43
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--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
<TABLE>
<CAPTION>
Accumulated
Accumulated Net Realized
Taxable Net Investment Gain (Loss) Paid-in
Year End Income (Loss) on Investments Capital
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
FT Cboe Vest International Equity Buffer ETF - March 31-Mar-21 $ 719 $ -- $ (719)
FT Cboe Vest Nasdaq-100(R) Buffer ETF - March 31-Mar-21 1,365 -- (1,365)
FT Cboe Vest International Equity Buffer ETF - June 30-Jun-21 500 -- (500)
FT Cboe Vest Nasdaq-100(R) Buffer ETF - June 30-Jun-21 1,742 -- (1,742)
FT Cboe Vest U.S. Equity Enhance & Moderate Buffer ETF - June 30-Jun-22 -- -- --
FT Cboe Vest International Equity Buffer ETF - December 31-Dec-20 970 -- (970)
FT Cboe Vest Nasdaq-100(R) Buffer ETF - December 31-Dec-20 3,259 -- (3,259)
</TABLE>
F. EXPENSES
Expenses, other than the investment advisory fee and other excluded expenses,
are paid by the Advisor (see Note 3).
3. INVESTMENT ADVISORY FEE, AFFILIATED TRANSACTIONS AND OTHER FEE ARRANGEMENTS
First Trust, the investment advisor to the 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 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.
First Trust is paid an annual unitary management fee of 0.90% of each Fund's
average daily net assets with the exception of XJUN which pays an annual unitary
management fee of 0.85%.
First Trust and Cboe Vest Financial LLC ("Cboe Vest"), an affiliate of First
Trust, are responsible for each Fund's expenses, including the cost of transfer
agency, sub-advisory, custody, fund administration, legal, audit and other
services, but excluding fee payments under the Investment Management Agreement,
interest, taxes, acquired fund fees and expenses, if any, brokerage commissions
and other expenses connected with the execution of portfolio transactions,
distribution and service fees payable pursuant to a Rule 12b-1 plan, if any, and
extraordinary expenses.
Cboe Vest serves as the Funds' sub-advisor and manages each Fund's portfolio
subject to First Trust's supervision. Pursuant to the Investment Management
Agreement, between the Trust, on behalf of the Funds, and the Advisor, and the
Investment Sub-Advisory Agreement among the Trust, on behalf of the Funds, the
Advisor and Cboe Vest, First Trust will supervise Cboe Vest and its management
of the investment of each Fund's assets and will pay Cboe Vest for its services
as the Funds' sub-advisor a sub-advisory fee equal to 50% of any remaining
monthly unitary management fee paid to the Advisor, after the average Fund's
expenses accrued during the most recent twelve months are subtracted from the
unitary management fee for that month.
The Trust has multiple service agreements with The Bank of New York Mellon
("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 44
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
4. PURCHASES AND SALES OF SECURITIES
For the fiscal period ended August 31, 2021, the Funds had no purchases or sales
of investments, excluding short-term investments and in-kind transactions. Each
Fund holds options for a target outcome period of approximately one year based
on the expiration date of the options, which occurs on the third Friday of the
month corresponding to the month in each Fund name. For securities transactions
purposes, the options are considered short-term investments.
For the fiscal period ended August 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>
FT Cboe Vest International Equity Buffer ETF - March $ 4,155,816 $ --
FT Cboe Vest Nasdaq-100(R) Buffer ETF - March 8,222,751 --
FT Cboe Vest International Equity Buffer ETF - June 9,915,025 --
FT Cboe Vest Nasdaq-100(R) Buffer ETF - June 16,132,687 --
FT Cboe Vest U.S. Equity Enhance & Moderate Buffer ETF - June -- --
FT Cboe Vest International Equity Buffer ETF - December 5,106,186 --
FT Cboe Vest Nasdaq-100(R) Buffer ETF - December 30,179,402 2,182,886
</TABLE>
5. DERIVATIVE TRANSACTIONS
The following table presents the types of derivatives held by each Fund at
August 31, 2021, the primary underlying risk exposure and the location of these
instruments as presented on the Statements of Assets and Liabilities.
<TABLE>
<CAPTION>
ASSET DERIVATIVES LIABILITY DERIVATIVES
----------------------------------------- -----------------------------------------
DERIVATIVES STATEMENTS OF ASSETS AND STATEMENTS OF ASSETS AND
INSTRUMENT RISK EXPOSURE LIABILITIES LOCATION VALUE LIABILITIES LOCATION VALUE
------------------ ------------------ -------------------------- ------------ -------------------------- ------------
<S> <C> <C> <C> <C> <C>
YMAR
Options contracts Options contracts
Options Equity Risk purchased, at value $ 12,885,676 written, at value $ 301,660
QMAR
Options contracts Options contracts
Options Equity Risk purchased, at value 20,869,049 written, at value 2,109,408
YJUN
Options contracts Options contracts
Options Equity Risk purchased, at value 13,705,263 written, at value 558,126
QJUN
Options contracts Options contracts
Options Equity Risk purchased, at value 36,439,150 written, at value 3,200,926
XJUN
Options contracts Options contracts
Options Equity Risk purchased, at value 6,873,029 written, at value 908,128
YDEC
Options contracts Options contracts
Options Equity Risk purchased, at value 12,173,693 written, at value 224,625
QDEC
Options contracts Options contracts
Options Equity Risk purchased, at value 85,051,617 written, at value 6,437,281
</TABLE>
Page 45
<PAGE>
--------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
The following table presents the amount of net realized gain (loss) and change
in net unrealized appreciation (depreciation) recognized for the fiscal period
ended August 31, 2021, on each Fund's derivative instruments, as well as the
primary underlying risk exposure associated with the instruments.
<TABLE>
<CAPTION>
EQUITY RISK
-------------------------------------------------------------
STATEMENTS OF OPERATIONS LOCATION YMAR QMAR YJUN QJUN XJUN
------------------------------------- -------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net realized gain (loss) on:
Purchased options contracts $ -- $ 2,058 $ -- $ -- $ --
Written options contracts -- (11,640) -- -- --
Net change in unrealized appreciation
(depreciation) on:
Purchased options contracts 57,601 1,749,290 150,791 1,508,898 224,273
Written options contracts 193,019 (466,457) 98,616 (434,919) (154,306)
</TABLE>
<TABLE>
<CAPTION>
EQUITY RISK
-----------------------
STATEMENTS OF OPERATIONS LOCATION YDEC QDEC
------------------------------------- -----------------------
<S> <C> <C>
Net realized gain (loss) on:
Purchased options contracts $ -- $ 703,628
Written options contracts -- 105,958
Net change in unrealized appreciation
(depreciation) on:
Purchased options contracts 379,986 8,511,616
Written options contracts 326,344 351,344
</TABLE>
The Funds do not have the right to offset financial assets and financial
liabilities related to options contracts on the Statements of Assets and
Liabilities.
The following table presents the premiums for purchased options contracts
opened, premiums for purchased options contracts closed, exercised and expired,
premiums for written options contracts opened, and premiums for written options
contracts closed, exercised and expired, for the fiscal period ended August 31,
2021, on each Fund's options contracts.
<TABLE>
<CAPTION>
PREMIUMS FOR PREMIUMS FOR
PREMIUMS FOR PURCHASED WRITTEN OPTIONS
PURCHASED OPTIONS CONTRACTS PREMIUMS FOR CONTRACTS CLOSED,
OPTIONS CONTRACTS CLOSED, EXERCISED WRITTEN OPTIONS EXERCISED AND
OPENED AND EXPIRED CONTRACTS OPENED EXPIRED
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
YMAR $ 12,828,075 $ -- $ 494,679 $ --
QMAR 24,755,072 5,635,313 2,080,503 437,552
YJUN 13,554,472 -- 656,742 --
QJUN 34,930,252 -- 2,766,007 --
XJUN 6,648,756 -- 753,822 --
YDEC 11,793,707 -- 550,969 --
QDEC 96,561,953 20,021,952 8,269,438 1,480,813
</TABLE>
6. 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
Page 46
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
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.
7. DISTRIBUTION PLAN
The Board of Trustees adopted a Distribution and Service Plan pursuant to Rule
12b-1 under the 1940 Act. In accordance with the Rule 12b-1 plan, the Funds are
authorized to pay an amount up to 0.25% of their average daily net assets each
year to reimburse First Trust Portfolios L.P. ("FTP"), the distributor of the
Funds, for amounts expended to finance activities primarily intended to result
in the sale of Creation Units or the provision of investor services. FTP may
also use this amount to compensate securities dealers or other persons that are
Authorized Participants for providing distribution assistance, including
broker-dealer and shareholder support and educational and promotional services.
No 12b-1 fees are currently paid by the Funds, and pursuant to a contractual
arrangement, no 12b-1 fees will be paid any time before December 31, 2022 for
YDEC and QDEC, March 8, 2023 for YMAR and QMAR, June 1, 2023 for YJUN and QJUN,
and June 28, 2023 for XJUN.
8. INDEMNIFICATION
The Trust, on behalf of the Funds, has a variety of indemnification obligations
under contracts with its service providers. The Trust's maximum exposure under
these arrangements is unknown. However, the Trust has not had prior claims or
losses pursuant to these contracts and expects the risk of loss to be remote.
9. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Funds
through the date the financial statements were issued, and has determined that
there were the following subsequent events:
On September 20, 2021, FT Cboe Vest International Equity Buffer ETF - September
and FT Cboe Vest Nasdaq-100(R) Buffer ETF - September, each an additional series
of the Trust, began trading under the symbols "YSEP" and "QSPT," respectively,
on Cboe BZX.
On September 21, 2021, First Trust SkyBridge Crypto Industry and Digital Economy
ETF, an additional series of the Trust, began trading under the symbol "CRPT" on
NYSE Arca, Inc.
On October 14, 2021, First Trust Multi-Manager Small Cap Opportunities ETF, an
additional series of the Trust, began trading under the symbol "MMSC" on NYSE
Arca, Inc.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF FIRST TRUST EXCHANGE-TRADED
FUND VIII:
OPINION ON THE FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS
We have audited the accompanying statements of assets and liabilities of FT Cboe
Vest International Equity Buffer ETF - March, FT Cboe Vest Nasdaq-100(R) Buffer
ETF - March, FT Cboe Vest International Equity Buffer ETF - June, FT Cboe Vest
Nasdaq-100(R) Buffer ETF - June, FT Cboe Vest U.S. Equity Enhance & Moderate
Buffer ETF - June, FT Cboe Vest International Equity Buffer ETF - December, and
FT Cboe Vest Nasdaq-100(R) Buffer ETF - December (the "Funds"), each a series of
the First Trust Exchange-Traded Fund VIII, including the portfolios of
investments, as of August 31, 2021, and the related statements of operations,
the changes in net assets, and the financial highlights for the periods
indicated in the table below, and the related notes. In our opinion, the
financial statements and financial highlights present fairly, in all material
respects, the financial position of the Funds as of August 31, 2021, and the
results of their operations, the changes in their net assets, and the financial
highlights for the periods listed in the table below, in conformity with
accounting principles generally accepted in the United States of America.
<TABLE>
<CAPTION>
INDIVIDUAL FUNDS STATEMENTS OF STATEMENTS OF FINANCIAL
INCLUDED IN THE TRUST OPERATIONS CHANGES IN NET ASSETS HIGHLIGHTS
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FT Cboe Vest International Equity For the period from March 19, 2021 (commencement of operations) through
Buffer ETF - March August 31, 2021
FT Cboe Vest Nasdaq-100(R)
Buffer ETF - March
FT Cboe Vest International Equity For the period from June 18, 2021 (commencement of operations) through
Buffer ETF - June August 31, 2021
FT Cboe Vest Nasdaq-100(R)
Buffer ETF - June
FT Cboe Vest U.S. Equity Enhance For the period from July 12, 2021 (commencement of operations) through
& Moderate Buffer ETF - June August 31, 2021
FT Cboe Vest International Equity For the period from December 18, 2020 (commencement of operations) through
Buffer ETF - December August 31, 2021
FT Cboe Vest Nasdaq-100(R)
Buffer ETF - December
</TABLE>
BASIS FOR OPINION
These financial statements and financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an opinion on the Funds'
financial statements and financial highlights based on our audits. We are a
public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to
the Funds in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement, whether due to error or fraud. The Funds are not
required to have, nor were we engaged to perform, an audit of their internal
control over financial reporting. As part of our audits we are required to
obtain an understanding of internal control over financial reporting but not for
the purpose of expressing an opinion on the effectiveness of the Funds' internal
control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material
misstatement of the financial statements and financial highlights, whether due
to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the financial statements and financial highlights. Our
Page 48
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (CONTINUED)
--------------------------------------------------------------------------------
audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of August 31, 2021, by correspondence with
the custodian and brokers. We believe that our audits provide a reasonable basis
for our opinion.
/s/ Deloitte & Touche LLP
Chicago, Illinois
October 25, 2021
We have served as the auditor of one or more First Trust investment companies
since 2001.
Page 49
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ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 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.
FEDERAL TAX INFORMATION
There were no distributions made by each Fund during their applicable taxable
period; therefore, no analysis for the corporate dividends received deduction
and qualified dividend income were completed.
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 significant
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
more broadly diversified.
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.
DEFINED OUTCOME FUNDS RISK. To the extent a fund's investment strategy is
designed to deliver returns tied to the price performance of an underlying ETF,
an investor may not realize the returns the fund seeks to achieve if that
investor does not hold shares for the entire target outcome period. In the event
an investor purchases shares after the first day of the target outcome period or
sells shares prior to the end of the target outcome period, the buffer that the
fund seeks to provide against a decline in the value of the underlying ETF may
not be available, the enhanced returns that the fund seeks to provide (if any)
may not be available and the investor may not participate in a gain in the value
of the underlying ETF up to the cap for the investor's investment period.
Additionally, the fund will not participate in gains of the underlying ETF above
the cap and a shareholder may lose their entire investment. If the fund seeks
enhanced returns, there are certain time periods when the value of the fund may
fall faster than the value of the underlying ETF, and it is very unlikely that,
on any given day during which the underlying ETF share price increases in value,
the fund's share price will increase at the same rate as the enhanced returns
sought by the fund, which is designed for an entire target outcome period.
Trading flexible exchange options involves risks different from, or possibly
greater than, the risks associated with investing directly in securities, such
as less liquidity and correlation and valuation risks. A fund may experience
substantial downside from specific flexible exchange option positions and
certain positions may expire worthless.
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
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
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 OR MODEL CONSTITUENT RISK. Certain funds may be a constituent of one or
more indices or ETF models. 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 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. In addition, index rebalances may potentially result in increased
trading activity in a fund's shares.
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.
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
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. While the development of
vaccines has slowed the spread of the virus and allowed for the resumption of
"reasonably" normal business activity in the United States, many countries
continue to impose lockdown measures in an attempt to slow the spread.
Additionally, there is no guarantee that vaccines will be effective against
emerging variants of the disease.
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;
capital controls; lack of liquidity; currency exchange rates; excessive
taxation; government seizure of assets; the imposition of sanctions by foreign
governments; different legal or accounting standards; and less government
supervision and regulation of exchanges in foreign countries. Investments in
non-U.S. securities may involve higher costs than investments in U.S.
securities, including higher transaction and custody costs, as well as
additional taxes imposed by non-U.S. governments. These risks may be heightened
for securities of companies located, or with significant operations, in emerging
market countries.
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. Each fund relies on third-parties for a range of services, including
custody. Any delay or failure relating to engaging or maintaining such service
providers may affect a fund's ability to meet its investment objective. Although
the funds and the funds' investment 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.
DISCLAIMER
The funds are not sponsored, endorsed, sold or promoted by Invesco QQQ
Trust(SM), Series 1, Invesco, or Nasdaq, Inc., (together with their affiliates
hereinafter referred to as the "Corporations"). The Corporations have not passed
on the legality or suitability of, or the accuracy or adequacy of, descriptions
and disclosures relating to the funds or the FLEX Options. The Corporations make
no representations or warranties, express or implied, regarding the advisability
of investing in the funds or the FLEX Options or results to be obtained by the
funds or the FLEX Options, shareholders or any other person or entity from use
of the Invesco QQQ Trust(SM). The Corporations have no liability in connection
with the management, administration, marketing or trading of the funds or the
FLEX Options.
MSCI EAFE ETF, BFA, or MSCI Inc., (together with their affiliates hereinafter
referred to as the "Corporations") have not passed on the legality or
suitability of, or the accuracy or adequacy of, descriptions and disclosures
relating to funds or the FLEX Options. The Corporations make no representations
or warranties, express or implied, regarding the advisability of investing in
the funds or the FLEX Options or results to be obtained by the funds or the FLEX
Options, shareholders or any other person or entity from use of iShares MSCI
EAFE ETF. The Corporations have no liability in connection with the management,
administration, marketing or trading of the funds or the FLEX Options.
The funds are not sponsored, endorsed, sold or promoted by SPDR(R) S&P 500(R)
ETF Trust, PDR, or Standard & Poor's(R) (together with their affiliates
hereinafter referred to as the "Corporations"). The Corporations have not passed
on the legality or suitability of, or the accuracy or adequacy of, descriptions
and disclosures relating to the funds or the FLEX Options. The Corporations make
no representations or warranties, express or implied, regarding the advisability
of investing in the funds or the FLEX Options or results to be obtained by the
funds or the FLEX Options, shareholders or any other person or entity from use
of the SPDR(R) S&P 500(R) ETF Trust. The Corporations have no liability in
connection with the management, administration, marketing or trading of the
funds or the FLEX Options.
NOT FDIC INSURED NOT BANK GUARANTEED MAY LOSE VALUE
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
ADVISORY AND SUB-ADVISORY AGREEMENTS
BOARD CONSIDERATIONS REGARDING APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT
AND INVESTMENT SUB-ADVISORY AGREEMENT FOR
FT CBOE VEST INTERNATIONAL EQUITY BUFFER ETF - MARCH
FT CBOE VEST INTERNATIONAL EQUITY BUFFER ETF - JUNE
The Board of Trustees of First Trust Exchange-Traded Fund VIII (the "Trust"),
including the Independent Trustees, approved the Investment Management Agreement
(the "Advisory Agreement") with First Trust Advisors L.P. (the "Advisor") and
the Investment Sub-Advisory Agreement (the "Sub-Advisory Agreement" and together
with the Advisory Agreement, the "Agreements") among the Trust, the Advisor and
Cboe Vest Financial LLC (the "Sub-Advisor") on behalf of the following two
series of the Trust (each a "Fund" and collectively, the "Funds"):
FT Cboe Vest International Equity Buffer ETF - March (YMAR)
FT Cboe Vest International Equity Buffer ETF - June (YJUN)
The Board approved the Agreements for each Fund for an initial two-year term at
a meeting held on December 7, 2020. The Board determined for each Fund that the
Agreements are in the best interests of the Fund in light of the nature, extent
and quality of the services expected to be provided and such other matters as
the Board considered to be relevant in the exercise of its reasonable business
judgment.
To reach this determination for each Fund, the Board considered its duties under
the Investment Company Act of 1940, as amended (the "1940 Act"), as well as
under the general principles of state law, in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; the fiduciary duty
of investment advisors with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Board in voting
on such agreements. To assist the Board in its evaluation of the Agreements for
each Fund, the Independent Trustees received a separate report from each of the
Advisor and the Sub-Advisor in advance of the Board meeting responding to
requests for information from counsel to the Independent Trustees, submitted on
behalf of the Independent Trustees, that, among other things, outlined: the
services to be provided by the Advisor and the Sub-Advisor to each Fund
(including the relevant personnel responsible for these services and their
experience); the proposed unitary fee rate payable by each Fund as compared to
fees charged to a peer group of funds (the "Expense Group") and a broad peer
universe of funds (the "Expense Universe"), each assembled by Broadridge
Financial Solutions, Inc. ("Broadridge"), an independent source, and as compared
to fees charged to other exchange-traded funds ("ETFs") managed by the Advisor;
the proposed sub-advisory fee rate as compared to fees charged to other clients
of the Sub-Advisor; the estimated expense ratio of each Fund as compared to
expense ratios of the funds in the Fund's Expense Group and Expense Universe;
the nature of expenses to be incurred in providing services to each Fund and the
potential for the Advisor and the Sub-Advisor to realize economies of scale, if
any; profitability and other financial data for the Advisor; financial data for
the Sub-Advisor; any fall-out benefits to the Advisor and its affiliates, First
Trust Portfolios L.P. ("FTP") and First Trust Capital Partners, LLC ("FTCP"),
and the Sub-Advisor; and information on the Advisor's and the Sub-Advisor's
compliance programs. The Independent Trustees and their counsel also met
separately to discuss the information provided by the Advisor and the
Sub-Advisor. The Board applied its business judgment to determine whether the
arrangements between the Trust and the Advisor and among the Trust, the Advisor
and the Sub-Advisor are reasonable business arrangements from each Fund's
perspective.
In evaluating whether to approve the Agreements for each Fund, the Board
considered the nature, extent and quality of the services to be provided by the
Advisor and the Sub-Advisor under the Agreements. With respect to the Advisory
Agreement, the Board considered that the Advisor will be responsible for the
overall management and administration of each Fund and reviewed all of the
services to be provided by the Advisor to the Funds, including the oversight of
the Sub-Advisor, as well as the background and experience of the persons
responsible for such services. The Board considered that each Fund will be an
actively-managed ETF and will employ an advisor/sub-advisor management structure
and considered that the Advisor manages other ETFs with a similar structure in
the First Trust Fund Complex. The Board noted that the Advisor will oversee the
Sub-Advisor's day-to-day management of the Fund's investments, including
portfolio risk monitoring and performance review. In reviewing the services to
be provided, the Board noted the compliance program that had been developed by
the Advisor and considered that it includes a robust program for monitoring the
Advisor's, the Sub-Advisor's and each Fund's compliance with the 1940 Act, as
well as each Fund's compliance with its investment objective, policies and
restrictions. The Board noted that employees of the Advisor provide management
services to other ETFs and to other funds in the First Trust Fund Complex with
diligence and care. With respect to the Sub-Advisory Agreement, in addition to
the written materials provided by the Sub-Advisor, at the December 7, 2020
meeting, the Board also received a presentation from representatives of the
Sub-Advisor discussing the services that the Sub-Advisor will provide to the
Funds, and the Trustees were able to ask questions about the proposed investment
strategy for the Funds. The Board noted the background and experience of the
Sub-Advisor's portfolio management team and the Sub-Advisor's investment style.
The Board also noted that the Sub-Advisor manages a number of other
defined-outcome ETFs with strategies similar to those of the Funds in the First
Trust Fund Complex. Because the Funds had yet to commence investment
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
operations, the Board could not consider the historical investment performance
of the Funds. In light of the information presented and the considerations made,
the Board concluded that the nature, extent and quality of the services to be
provided to each Fund by the Advisor and the Sub-Advisor under the Agreements
are expected to be satisfactory.
The Board considered the proposed unitary fee rate payable by each Fund under
the Advisory Agreement for the services to be provided. The Board noted that,
under the unitary fee arrangement, each Fund would pay the Advisor a unitary fee
equal to an annual rate of 0.90% of its average daily net assets. The Board
considered that, from the unitary fee for each Fund, the Advisor would pay the
Sub-Advisor a sub-advisory fee equal to 50% of the Fund's unitary fee less
one-half of the Fund's expenses. The Board noted that the Advisor and the
Sub-Advisor would be responsible for each Fund's expenses, including the cost of
sub-advisory, transfer agency, custody, fund administration, legal, audit and
other services and license fees, if any, but excluding the fee payment under the
Advisory Agreement and interest, taxes, acquired fund fees and expenses, if any,
brokerage commissions and other expenses connected with the execution of
portfolio transactions, distribution and service fees pursuant to a Rule 12b-1
plan, if any, and extraordinary expenses, if any. The Board received and
reviewed information showing the advisory or unitary fee rates and expense
ratios of the peer funds in the Expense Groups, as well as advisory and unitary
fee rates charged by the Advisor and the Sub-Advisor to other fund (including
ETF) and non-fund clients, as applicable. Because each Fund will pay a unitary
fee, the Board determined that expense ratios were the most relevant comparative
data point. Based on the information provided, the Board noted that the unitary
fee rate for each Fund was equal to the median total (net) expense ratio of the
peer funds in its Expense Group. With respect to the Expense Groups, the Board
discussed with representatives of the Advisor how the Expense Groups were
assembled and how each Fund compared and differed from the peer funds. The Board
took this information into account in considering the peer data. With respect to
fees charged to other clients, the Board considered the Advisor's statement that
the Funds will be unique to the market and the First Trust Fund Complex, but
will be most similar to the ETFs in the FT Cboe Vest U.S. Equity Target Outcome
ETF product line in the First Trust Fund Complex that are managed by the Advisor
and sub-advised by the Sub-Advisor, as well as two other actively-managed ETFs
in the First Trust Fund Complex that are managed by the Advisor and employ
options-based strategies, each of which pays a unitary fee equal to an annual
rate of 0.85% of its average daily net assets. In light of the information
considered and the nature, extent and quality of the services expected to be
provided to each Fund under the Agreements, the Board determined that, for each
Fund, the proposed unitary fee, including the sub-advisory fee to be paid by the
Advisor to the Sub-Advisor from the unitary fee, was fair and reasonable.
The Board noted that the proposed unitary fee for each Fund was not structured
to pass on to shareholders the benefits of any economies of scale as the Fund's
assets grow. The Board noted that any reduction in fixed costs associated with
the management of the Funds would benefit the Advisor and the Sub-Advisor, but
that the unitary fee structure provides a level of certainty in expenses for the
Funds. The Board noted that the Advisor has continued to hire personnel and
build infrastructure, including technology, to improve the services to the funds
in the First Trust Fund Complex. The Board took into consideration the types of
costs to be borne by the Advisor in connection with its services to be performed
for each Fund under the Advisory Agreement. The Board considered the Advisor's
estimate of the asset level for each Fund at which the Advisor expects the
Advisory Agreement for the Fund to be profitable to the Advisor and the
Advisor's estimate of the profitability of the Advisory Agreement for each Fund
if its assets reach $100 million. The Board noted the inherent limitations in
the profitability analysis and concluded that, based on the information
provided, the Advisor's estimated profitability level for each Fund was not
unreasonable. The Board reviewed financial information provided by the
Sub-Advisor, but did not review any potential profitability of the Sub-Advisory
Agreement for each Fund to the Sub-Advisor. The Board considered that the
Sub-Advisor would be paid by the Advisor from each Fund's unitary fee and its
understanding that the sub-advisory fee rate for each Fund was the product of an
arm's length negotiation. In addition, the Board considered fall-out benefits
described by the Advisor that may be realized from its relationship with the
Funds. The Board noted that FTCP has a controlling ownership interest in the
Sub-Advisor's parent company and considered potential fall-out benefits to the
Advisor from such ownership interest. The Board also considered that the Advisor
had identified as a fall-out benefit to the Advisor and FTP their exposure to
investors and brokers who, absent their exposure to the Funds, may have had no
dealings with the Advisor or FTP. The Board also considered the potential
fall-out benefits to the Sub-Advisor from FTCP's controlling ownership interest
in the Sub-Advisor's parent company. The Board noted the Sub-Advisor's
statements that it does not foresee any fall-out benefits from its relationship
with the Funds and that, as a policy, it does not enter into soft-dollar
arrangements for the procurement of research services in connection with client
securities transactions. The Board concluded that the character and amount of
potential fall-out benefits to the Advisor and the Sub-Advisor were not
unreasonable.
Based on all of the information considered and the conclusions reached, the
Board, including the Independent Trustees, determined that the terms of the
Agreements are fair and reasonable and that the approval of the Agreements is in
the best interests of each Fund. No single factor was determinative in the
Board's analysis.
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
BOARD CONSIDERATIONS REGARDING APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT
AND INVESTMENT SUB-ADVISORY AGREEMENT FOR
FT CBOE VEST NASDAQ-100(R) BUFFER ETF - MARCH
FT CBOE VEST NASDAQ-100(R) BUFFER ETF - JUNE
The Board of Trustees of First Trust Exchange-Traded Fund VIII (the "Trust"),
including the Independent Trustees, approved the Investment Management Agreement
(the "Advisory Agreement") with First Trust Advisors L.P. (the "Advisor") and
the Investment Sub-Advisory Agreement (the "Sub-Advisory Agreement" and together
with the Advisory Agreement, the "Agreements") among the Trust, the Advisor and
Cboe Vest Financial LLC (the "Sub-Advisor") on behalf of the following two
series of the Trust (each a "Fund" and collectively, the "Funds"):
FT Cboe Vest Nasdaq-100(R) Buffer ETF - March (QMAR)
FT Cboe Vest Nasdaq-100(R) Buffer ETF - June (QJUN)
The Board approved the Agreements for each Fund for an initial two-year term at
a meeting held on December 7, 2020. The Board determined for each Fund that the
Agreements are in the best interests of the Fund in light of the nature, extent
and quality of the services expected to be provided and such other matters as
the Board considered to be relevant in the exercise of its reasonable business
judgment.
To reach this determination for each Fund, the Board considered its duties under
the Investment Company Act of 1940, as amended (the "1940 Act"), as well as
under the general principles of state law, in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; the fiduciary duty
of investment advisors with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Board in voting
on such agreements. To assist the Board in its evaluation of the Agreements for
each Fund, the Independent Trustees received a separate report from each of the
Advisor and the Sub-Advisor in advance of the Board meeting responding to
requests for information from counsel to the Independent Trustees, submitted on
behalf of the Independent Trustees, that, among other things, outlined: the
services to be provided by the Advisor and the Sub-Advisor to each Fund
(including the relevant personnel responsible for these services and their
experience); the proposed unitary fee rate payable by each Fund as compared to
fees charged to a peer group of funds (the "Expense Group") and a broad peer
universe of funds (the "Expense Universe"), each assembled by Broadridge
Financial Solutions, Inc. ("Broadridge"), an independent source, and as compared
to fees charged to other exchange-traded funds ("ETFs") managed by the Advisor;
the proposed sub-advisory fee rate as compared to fees charged to other clients
of the Sub-Advisor; the estimated expense ratio of each Fund as compared to
expense ratios of the funds in the Fund's Expense Group and Expense Universe;
the nature of expenses to be incurred in providing services to each Fund and the
potential for the Advisor and the Sub-Advisor to realize economies of scale, if
any; profitability and other financial data for the Advisor; financial data for
the Sub-Advisor; any fall-out benefits to the Advisor and its affiliates, First
Trust Portfolios L.P. ("FTP") and First Trust Capital Partners, LLC ("FTCP"),
and the Sub-Advisor; and information on the Advisor's and the Sub-Advisor's
compliance programs. The Independent Trustees and their counsel also met
separately to discuss the information provided by the Advisor and the
Sub-Advisor. The Board applied its business judgment to determine whether the
arrangements between the Trust and the Advisor and among the Trust, the Advisor
and the Sub-Advisor are reasonable business arrangements from each Fund's
perspective.
In evaluating whether to approve the Agreements for each Fund, the Board
considered the nature, extent and quality of the services to be provided by the
Advisor and the Sub-Advisor under the Agreements. With respect to the Advisory
Agreement, the Board considered that the Advisor will be responsible for the
overall management and administration of each Fund and reviewed all of the
services to be provided by the Advisor to the Funds, including the oversight of
the Sub-Advisor, as well as the background and experience of the persons
responsible for such services. The Board considered that each Fund will be an
actively-managed ETF and will employ an advisor/sub-advisor management structure
and considered that the Advisor manages other ETFs with a similar structure in
the First Trust Fund Complex. The Board noted that the Advisor will oversee the
Sub-Advisor's day-to-day management of the Fund's investments, including
portfolio risk monitoring and performance review. In reviewing the services to
be provided, the Board noted the compliance program that had been developed by
the Advisor and considered that it includes a robust program for monitoring the
Advisor's, the Sub-Advisor's and each Fund's compliance with the 1940 Act, as
well as each Fund's compliance with its investment objective, policies and
restrictions. The Board noted that employees of the Advisor provide management
services to other ETFs and to other funds in the First Trust Fund Complex with
diligence and care. With respect to the Sub-Advisory Agreement, in addition to
the written materials provided by the Sub-Advisor, at the December 7, 2020
meeting, the Board also received a presentation from representatives of the
Sub-Advisor discussing the services that the Sub-Advisor will provide to the
Funds, and the Trustees were able to ask questions about the proposed investment
strategy for the Funds. The Board noted the background and experience of the
Sub-Advisor's portfolio management team and the Sub-Advisor's investment style.
The Board also noted that the Sub-Advisor manages a number of other
defined-outcome ETFs with strategies similar to those of the Funds in the First
Trust Fund Complex. Because the Funds had yet to commence investment operations,
the Board could not consider the historical investment performance of the Funds.
In light of the information presented and the considerations made, the Board
concluded that the nature, extent and quality of the services to be provided to
each Fund by the Advisor and the Sub-Advisor under the Agreements are expected
to be satisfactory.
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ADDITIONAL INFORMATION (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
The Board considered the proposed unitary fee rate payable by each Fund under
the Advisory Agreement for the services to be provided. The Board noted that,
under the unitary fee arrangement, each Fund would pay the Advisor a unitary fee
equal to an annual rate of 0.90% of its average daily net assets. The Board
considered that, from the unitary fee for each Fund, the Advisor would pay the
Sub-Advisor a sub-advisory fee equal to 50% of the Fund's unitary fee less
one-half of the Fund's expenses. The Board noted that the Advisor and the
Sub-Advisor would be responsible for each Fund's expenses, including the cost of
sub-advisory, transfer agency, custody, fund administration, legal, audit and
other services and license fees, if any, but excluding the fee payment under the
Advisory Agreement and interest, taxes, acquired fund fees and expenses, if any,
brokerage commissions and other expenses connected with the execution of
portfolio transactions, distribution and service fees pursuant to a Rule 12b-1
plan, if any, and extraordinary expenses, if any. The Board received and
reviewed information showing the advisory or unitary fee rates and expense
ratios of the peer funds in the Expense Groups, as well as advisory and unitary
fee rates charged by the Advisor and the Sub-Advisor to other fund (including
ETF) and non-fund clients, as applicable. Because each Fund will pay a unitary
fee, the Board determined that expense ratios were the most relevant comparative
data point. Based on the information provided, the Board noted that the unitary
fee rate for each Fund was above the median total (net) expense ratio of the
peer funds in its Expense Group. With respect to the Expense Groups, the Board
discussed with representatives of the Advisor how the Expense Groups were
assembled and how each Fund compared and differed from the peer funds. The Board
took this information into account in considering the peer data. With respect to
fees charged to other clients, the Board considered the Advisor's statement that
the Funds will be unique to the market and the First Trust Fund Complex, but
will be most similar to the ETFs in the FT Cboe Vest U.S. Equity Target Outcome
ETF product line in the First Trust Fund Complex that are managed by the Advisor
and sub-advised by the Sub-Advisor, as well as two other actively-managed ETFs
in the First Trust Fund Complex that are managed by the Advisor and employ
options-based strategies, each of which pays a unitary fee equal to an annual
rate of 0.85% of its average daily net assets. In light of the information
considered and the nature, extent and quality of the services expected to be
provided to each Fund under the Agreements, the Board determined that, for each
Fund, the proposed unitary fee, including the sub-advisory fee to be paid by the
Advisor to the Sub-Advisor from the unitary fee, was fair and reasonable.
The Board noted that the proposed unitary fee for each Fund was not structured
to pass on to shareholders the benefits of any economies of scale as the Fund's
assets grow. The Board noted that any reduction in fixed costs associated with
the management of the Funds would benefit the Advisor and the Sub-Advisor, but
that the unitary fee structure provides a level of certainty in expenses for the
Funds. The Board noted that the Advisor has continued to hire personnel and
build infrastructure, including technology, to improve the services to the funds
in the First Trust Fund Complex. The Board took into consideration the types of
costs to be borne by the Advisor in connection with its services to be performed
for each Fund under the Advisory Agreement. The Board considered the Advisor's
estimate of the asset level for each Fund at which the Advisor expects the
Advisory Agreement for the Fund to be profitable to the Advisor and the
Advisor's estimate of the profitability of the Advisory Agreement for each Fund
if its assets reach $100 million. The Board noted the inherent limitations in
the profitability analysis and concluded that, based on the information
provided, the Advisor's estimated profitability level for each Fund was not
unreasonable. The Board reviewed financial information provided by the
Sub-Advisor, but did not review any potential profitability of the Sub-Advisory
Agreement for each Fund to the Sub-Advisor. The Board considered that the
Sub-Advisor would be paid by the Advisor from each Fund's unitary fee and its
understanding that the sub-advisory fee rate for each Fund was the product of an
arm's length negotiation. In addition, the Board considered fall-out benefits
described by the Advisor that may be realized from its relationship with the
Funds. The Board noted that FTCP has a controlling ownership interest in the
Sub-Advisor's parent company and considered potential fall-out benefits to the
Advisor from such ownership interest. The Board also considered that the Advisor
had identified as a fall-out benefit to the Advisor and FTP their exposure to
investors and brokers who, absent their exposure to the Funds, may have had no
dealings with the Advisor or FTP. The Board also considered the potential
fall-out benefits to the Sub-Advisor from FTCP's controlling ownership interest
in the Sub-Advisor's parent company. The Board noted the Sub-Advisor's
statements that it does not foresee any fall-out benefits from its relationship
with the Funds and that, as a policy, it does not enter into soft-dollar
arrangements for the procurement of research services in connection with client
securities transactions. The Board concluded that the character and amount of
potential fall-out benefits to the Advisor and the Sub-Advisor were not
unreasonable.
Based on all of the information considered and the conclusions reached, the
Board, including the Independent Trustees, determined that the terms of the
Agreements are fair and reasonable and that the approval of the Agreements is in
the best interests of each Fund. No single factor was determinative in the
Board's analysis.
BOARD CONSIDERATIONS REGARDING APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT
AND INVESTMENT SUB-ADVISORY AGREEMENT FOR
FT CBOE VEST U.S. EQUITY ENHANCE & MODERATE BUFFER ETF - JUNE
The Board of Trustees of First Trust Exchange-Traded Fund VIII (the "Trust"),
including the Independent Trustees, approved the Investment Management Agreement
(the "Advisory Agreement") with First Trust Advisors L.P. (the "Advisor"), on
behalf of FT Cboe Vest U.S. Equity Enhance & Moderate Buffer ETF - June (the
"Fund"), and the Investment Sub-Advisory Agreement (the "Sub-Advisory Agreement"
and together with the Advisory Agreement, the "Agreements") among the Trust, on
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ADDITIONAL INFORMATION (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
behalf of the Fund, the Advisor and Cboe Vest Financial LLC (the "Sub-Advisor"),
for an initial two-year term at a meeting held on June 7, 2021. The Board
determined that the Agreements are in the best interests of the Fund in light of
the nature, extent and quality of the services expected to be provided and such
other matters as the Board considered to be relevant in the exercise of its
business judgment.
To reach this determination, the Board considered its duties under the
Investment Company Act of 1940, as amended (the "1940 Act"), as well as under
the general principles of state law, in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; the fiduciary duty
of investment advisors with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Board in voting
on such agreements. To assist the Board in its evaluation of the Agreements for
the Fund, the Independent Trustees received a separate report from each of the
Advisor and the Sub-Advisor in advance of the Board meeting responding to
requests for information from counsel to the Independent Trustees, submitted on
behalf of the Independent Trustees, that, among other things, outlined: the
services to be provided by the Advisor and the Sub-Advisor to the Fund
(including the relevant personnel responsible for these services and their
experience); the proposed unitary fee rate payable by the Fund as compared to
fees charged to a peer group of funds (the "Expense Group") and a broad peer
universe of funds (the "Expense Universe"), each assembled by Broadridge
Financial Solutions, Inc. ("Broadridge"), an independent source, and as compared
to fees charged to other exchange-traded funds ("ETFs") managed by the Advisor;
the proposed sub-advisory fee rate as compared to fees charged to other clients
of the Sub-Advisor; the estimated expense ratio of the Fund as compared to
expense ratios of the funds in the Fund's Expense Group and Expense Universe;
the nature of expenses to be incurred in providing services to the Fund and the
potential for the Advisor and the Sub-Advisor to realize economies of scale, if
any; profitability and other financial data for the Advisor; financial data for
the Sub-Advisor; any fall-out benefits to the Advisor and its affiliates, First
Trust Portfolios L.P. ("FTP") and First Trust Capital Partners, LLC ("FTCP"),
and the Sub-Advisor; and information on the Advisor's and the Sub-Advisor's
compliance programs. The Independent Trustees and their counsel also met
separately to discuss the information provided by the Advisor and the
Sub-Advisor. The Board applied its business judgment to determine whether the
arrangements between the Trust and the Advisor and among the Trust, the Advisor
and the Sub-Advisor are reasonable business arrangements from the Fund's
perspective.
In evaluating whether to approve the Agreements for the Fund, the Board
considered the nature, extent and quality of the services to be provided by the
Advisor and the Sub-Advisor under the Agreements. With respect to the Advisory
Agreement, the Board considered that the Advisor will be responsible for the
overall management and administration of the Fund and reviewed all of the
services to be provided by the Advisor to the Fund, including the oversight of
the Sub-Advisor, as well as the background and experience of the persons
responsible for such services. The Board considered that the Fund will be an
actively-managed ETF and will employ an advisor/sub-advisor management structure
and considered that the Advisor manages other ETFs with a similar structure in
the First Trust Fund Complex. The Board noted that the Advisor will oversee the
Sub-Advisor's day-to-day management of the Fund's investments, including
portfolio risk monitoring and performance review. In reviewing the services to
be provided, the Board noted the compliance program that had been developed by
the Advisor and considered that it includes a robust program for monitoring the
Advisor's, the Sub-Advisor's and the Fund's compliance with the 1940 Act, as
well as the Fund's compliance with its investment objective, policies and
restrictions. The Board noted that employees of the Advisor provide management
services to other ETFs and to other funds in the First Trust Fund Complex with
diligence and care. With respect to the Sub-Advisory Agreement, in addition to
the written materials provided by the Sub-Advisor, at the June 7, 2021 meeting,
the Board also received a presentation from representatives of the Sub-Advisor
discussing the services that the Sub-Advisor will provide to the Fund, and the
Trustees were able to ask questions about the proposed investment strategy for
the Fund. The Board noted the background and experience of the Sub-Advisor's
portfolio management team and the Sub-Advisor's investment style. The Board also
noted that the Sub-Advisor manages a number of other defined-outcome ETFs with
strategies similar to those of the Fund in the First Trust Fund Complex. Because
the Fund had yet to commence investment operations, the Board could not consider
the historical investment performance of the Fund. In light of the information
presented and the considerations made, the Board concluded that the nature,
extent and quality of the services to be provided to the Fund by the Advisor and
the Sub-Advisor under the Agreements are expected to be satisfactory.
The Board considered the proposed unitary fee rate payable by the Fund under the
Advisory Agreement for the services to be provided. The Board noted that, under
the unitary fee arrangement, the Fund would pay the Advisor a unitary fee equal
to an annual rate of 0.85% of its average daily net assets. The Board considered
that, from the unitary fee for the Fund, the Advisor would pay the Sub-Advisor a
sub-advisory fee equal to 50% of the Fund's unitary fee less one-half of the
Fund's expenses. The Board noted that the Advisor and the Sub-Advisor would be
responsible for the Fund's expenses, including the cost of sub-advisory,
transfer agency, custody, fund administration, legal, audit and other services
and license fees, if any, but excluding the fee payment under the Advisory
Agreement and interest, taxes, acquired fund fees and expenses, if any,
brokerage commissions and other expenses connected with the execution of
portfolio transactions, distribution and service fees pursuant to a Rule 12b-1
plan, if any, and extraordinary expenses, if any. The Board received and
reviewed information showing the unitary fee rates and expense ratios of the
peer funds in the Expense Group, as well as advisory and unitary fee rates
charged by the Advisor and the Sub-Advisor to other fund (including ETF) and
non-fund clients, as applicable. Because the Fund will pay a unitary fee, the
Board determined that expense ratios were the most relevant comparative data
point. Based on the information provided, the Board noted that the unitary fee
rate for the Fund was above the median total (net) expense ratio of the peer
funds in the Expense Group. With respect to the Expense Group, the Board
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--------------------------------------------------------------------------------
ADDITIONAL INFORMATION (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
discussed with representatives of the Advisor how the Expense Group was
assembled and how the Fund compared and differed from the peer funds. The Board
took this information into account in considering the peer data. With respect to
fees charged to other clients, the Board considered the Advisor's statement that
the Fund will be unique to the market and the First Trust Fund Complex, but will
be most similar to the ETFs in the FT Cboe Vest U.S. Equity Buffer ETF and FT
Cboe Vest U.S. Equity Deep Buffer ETF product lines in the First Trust Fund
Complex that are managed by the Advisor and sub-advised by the Sub-Advisor, each
of which pays a unitary fee equal to an annual rate of 0.85% of its average
daily net assets. In light of the information considered and the nature, extent
and quality of the services expected to be provided to the Fund under the
Agreements, the Board determined that the proposed unitary fee, including the
sub-advisory fee to be paid by the Advisor to the Sub-Advisor from the unitary
fee, was fair and reasonable.
The Board noted that the proposed unitary fee for the Fund was not structured to
pass on to shareholders the benefits of any economies of scale as the Fund's
assets grow. The Board noted that any reduction in fixed costs associated with
the management of the Fund would benefit the Advisor and the Sub-Advisor, but
that the unitary fee structure provides a level of certainty in expenses for the
Fund. The Board noted that the Advisor has continued to hire personnel and build
infrastructure, including technology, to improve the services to the funds in
the First Trust Fund Complex. The Board took into consideration the types of
costs to be borne by the Advisor in connection with its services to be performed
for the Fund under the Advisory Agreement. The Board considered the Advisor's
estimate of the asset level for the Fund at which the Advisor expects the
Advisory Agreement to be profitable to the Advisor and the Advisor's estimate of
the profitability of the Advisory Agreement if the Fund's assets reach $100
million. The Board noted the inherent limitations in the profitability analysis
and concluded that, based on the information provided, the Advisor's estimated
profitability level for the Fund was not unreasonable. The Board reviewed
financial information provided by the Sub-Advisor, but did not review any
potential profitability of the Sub-Advisory Agreement to the Sub-Advisor. The
Board considered that the Sub-Advisor would be paid by the Advisor from the
Fund's unitary fee and its understanding that the sub-advisory fee rate was the
product of an arm's length negotiation. In addition, the Board considered
fall-out benefits described by the Advisor that may be realized from its
relationship with the Fund. The Board noted that FTCP has a controlling
ownership interest in the Sub-Advisor's parent company and considered potential
fall-out benefits to the Advisor from such ownership interest. The Board also
considered that the Advisor had identified as a fall-out benefit to the Advisor
and FTP their exposure to investors and brokers who, absent their exposure to
the Fund, may have had no dealings with the Advisor or FTP. The Board also
considered the potential fall-out benefits to the Sub-Advisor from FTCP's
controlling ownership interest in the Sub-Advisor's parent company. The Board
noted the Sub-Advisor's statements that it does not foresee any fall-out
benefits from its relationship with the Fund and that, as a policy, it does not
enter into soft-dollar arrangements for the procurement of research services in
connection with client securities transactions. The Board concluded that the
character and amount of potential fall-out benefits to the Advisor and the
Sub-Advisor were not unreasonable.
Based on all of the information considered and the conclusions reached, the
Board, including the Independent Trustees, determined that the terms of the
Agreements are fair and reasonable and that the approval of the Agreements is in
the best interests of the Fund. No single factor was determinative in the
Board's analysis.
LIQUIDITY RISK MANAGEMENT PROGRAM
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as
amended (the "1940 Act"), the Funds and each other fund in the First Trust Fund
Complex, other than the closed-end funds, have adopted and implemented a
liquidity risk management program (the "Program") reasonably designed to assess
and manage the funds' liquidity risk, i.e., the risk that a fund could not meet
requests to redeem shares issued by the fund without significant dilution of
remaining investors' interests in the fund. The Board of Trustees of the First
Trust Funds has appointed First Trust Advisors, L.P. (the "Advisor") as the
person designated to administer the Program, and in this capacity the Advisor
performs its duties primarily through the activities and efforts of the First
Trust Liquidity Committee.
Pursuant to the Program, the Liquidity Committee classifies the liquidity of
each fund's portfolio investments into one of the four liquidity categories
specified by Rule 22e-4: highly liquid investments, moderately liquid
investments, less liquid investments and illiquid investments. The Liquidity
Committee determines certain of the inputs for this classification process,
including reasonably anticipated trade sizes and significant investor dilution
thresholds. The Liquidity Committee also determines and periodically reviews a
highly liquid investment minimum for certain funds, monitors the funds' holdings
of assets classified as illiquid investments to seek to ensure they do not
exceed 15% of a fund's net assets and establishes policies and procedures
regarding redemptions in kind.
At the April 26, 2021 meeting of the Board of Trustees, as required by Rule
22e-4 and the Program, the Advisor provided the Board with a written report
prepared by the Advisor that addressed the operation of the Program during the
period from March 20, 2020 through the Liquidity Committee's annual meeting held
on March 16, 2021 and assessed the Program's adequacy and effectiveness of
implementation during this period, including the operation of the highly liquid
investment minimum for each fund that is required under the Program to have one,
and any material changes to the Program. Note that because the Funds primarily
hold assets that are highly liquid investments, the Funds have not adopted any
highly liquid investment minimums.
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--------------------------------------------------------------------------------
ADDITIONAL INFORMATION (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
As stated in the written report, during the review period, no fund breached the
15% limitation on illiquid investments, no fund with a highly liquid investment
minimum breached that minimum and no fund filed a Form N-LIQUID. The Advisor
concluded that each fund's investment strategy is appropriate for an open-end
fund; that the Program operated effectively in all material respects during the
review period; and that the Program is reasonably designed to assess and manage
the liquidity risk of each fund and to maintain compliance with Rule 22e-4.
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BOARD OF TRUSTEES AND OFFICERS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
The following tables identify the Trustees and Officers of the Trust. Unless
otherwise indicated, the address of all persons is 120 East Liberty Drive, Suite
400, Wheaton, IL 60187.
The Trust's statement of additional information includes additional information
about the Trustees and is available, without charge, upon request, by calling
(800) 988-5891.
<TABLE>
<CAPTION>
NUMBER OF OTHER
PORTFOLIOS IN TRUSTEESHIPS OR
TERM OF OFFICE THE FIRST TRUST DIRECTORSHIPS
NAME, AND YEAR FIRST FUND COMPLEX HELD BY TRUSTEE
YEAR OF BIRTH AND ELECTED OR PRINCIPAL OCCUPATIONS OVERSEEN BY DURING PAST
POSITION WITH THE TRUST APPOINTED DURING PAST 5 YEARS TRUSTEE 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard E. Erickson, Trustee o Indefinite Term Physician, Officer, Wheaton Orthopedics; 210 None
(1951) Limited Partner, Gundersen Real Estate
o Since Inception Limited Partnership (June 1992 to
December 2016)
Thomas R. Kadlec, Trustee o Indefinite Term President, ADM Investors Services, Inc. 210 Director of ADM
(1957) (Futures Commission Merchant) Investor Services,
o Since Inception Inc., ADM
Investor Services
International,
Futures Industry
Association, and
National Futures
Association
Robert F. Keith, Trustee o Indefinite Term President, Hibs Enterprises (Financial 210 Director of Trust
(1956) and Management Consulting) Company of
o Since Inception Illinois
Niel B. Nielson, Trustee o Indefinite Term Senior Advisor (August 2018 to Present), 210 None
(1954) Managing Director and Chief Operating
o Since Inception Officer (January 2015 to August 2018),
Pelita Harapan Educational Foundation
(Educational Products and Services)
------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
James A. Bowen(1), Trustee, o Indefinite Term Chief Executive Officer, First Trust 210 None
Chairman of the Board Advisors L.P. and First Trust
(1955) o Since Inception Portfolios L.P.; Chairman of the
Board of Directors, BondWave LLC
(Software Development Company)
and Stonebridge Advisors LLC
(Investment Advisor)
</TABLE>
-----------------------------
(1) Mr. Bowen is deemed an "interested person" of the Trust due to his
position as Chief Executive Officer of First Trust Advisors L.P.,
investment advisor of the Trust.
Page 60
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--------------------------------------------------------------------------------
BOARD OF TRUSTEES AND OFFICERS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
POSITION AND TERM OF OFFICE
NAME OFFICES AND LENGTH OF PRINCIPAL OCCUPATIONS
AND YEAR OF BIRTH WITH TRUST SERVICE DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS(2)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
James M. Dykas President and Chief o Indefinite Term Managing Director and Chief Financial Officer
(1966) Executive Officer (January 2016 to Present), Controller (January 2011
o Since Inception to January 2016), Senior Vice President (April 2007
to January 2016), First Trust Advisors L.P. and First
Trust Portfolios L.P.; Chief Financial Officer
(January 2016 to Present), BondWave LLC
(Software Development Company) and Stonebridge
Advisors LLC (Investment Advisor)
Donald P. Swade Treasurer, Chief Financial o Indefinite Term Senior Vice President (July 2016 to Present), Vice
(1972) Officer and Chief President (April 2012 to July 2016), First Trust
Accounting Officer o Since Inception Advisors L.P. and First Trust Portfolios L.P.
W. Scott Jardine Secretary and Chief o Indefinite Term General Counsel, First Trust Advisors L.P. and
(1960) Legal Officer First Trust Portfolios L.P.; Secretary and General
o Since Inception Counsel, BondWave LLC; Secretary, Stonebridge
Advisors LLC
Daniel J. Lindquist Vice President o Indefinite Term Managing Director, First Trust Advisors L.P. and
(1970) First Trust Portfolios L.P.
o Since Inception
Kristi A. Maher Chief Compliance Officer o Indefinite Term Deputy General Counsel, First Trust Advisors L.P.
(1966) and Assistant Secretary and First Trust Portfolios L.P.
o Since Inception
Roger F. Testin Vice President o Indefinite Term Senior Vice President, First Trust Advisors L.P.
(1966) and First Trust Portfolios L.P.
o Since Inception
Stan Ueland Vice President o Indefinite Term Senior Vice President, First Trust Advisors L.P.
(1970) and First Trust Portfolios L.P.
o Since Inception
</TABLE>
-----------------------------
(2) The term "officer" means the president, vice president, secretary,
treasurer, controller or any other officer who performs a policy making
function.
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PRIVACY POLICY
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
PRIVACY POLICY
First Trust values our relationship with you and considers your privacy an
important priority in maintaining that relationship. We are committed to
protecting the security and confidentiality of your personal information.
SOURCES OF INFORMATION
We collect nonpublic personal information about you from the following sources:
o Information we receive from you and your broker-dealer, investment
professional or financial representative through interviews,
applications, agreements or other forms;
o Information about your transactions with us, our affiliates or
others;
o Information we receive from your inquiries by mail, e-mail or
telephone; and
o Information we collect on our website through the use of "cookies".
For example, we may identify the pages on our website that your
browser requests or visits.
INFORMATION COLLECTED
The type of data we collect may include your name, address, social security
number, age, financial status, assets, income, tax information, retirement and
estate plan information, transaction history, account balance, payment history,
investment objectives, marital status, family relationships and other personal
information.
DISCLOSURE OF INFORMATION
We do not disclose any nonpublic personal information about our customers or
former customers to anyone, except as permitted by law. In addition to using
this information to verify your identity (as required under law), the permitted
uses may also include the disclosure of such information to unaffiliated
companies for the following reasons:
o In order to provide you with products and services and to effect transactions
that you request or authorize, we may disclose your personal information as
described above to unaffiliated financial service providers and other companies
that perform administrative or other services on our behalf, such as transfer
agents, custodians and trustees, or that assist us in the distribution of
investor materials such as trustees, banks, financial representatives, proxy
services, solicitors and printers.
o We may release information we have about you if you direct us to do so, if we
are compelled by law to do so, or in other legally limited circumstances (for
example to protect your account from fraud).
In addition, in order to alert you to our other financial products and services,
we may share your personal information within First Trust.
USE OF WEBSITE ANALYTICS
We currently use third party analytics tools, Google Analytics and AddThis to
gather information for purposes of improving First Trust's website and marketing
our products and services to you. These tools employ cookies, which are small
pieces of text stored in a file by your web browser and sent to websites that
you visit, to collect information, track website usage and viewing trends such
as the number of hits, pages visited, videos and PDFs viewed and the length of
user sessions in order to evaluate website performance and enhance navigation of
the website. We may also collect other anonymous information, which is generally
limited to technical and web navigation information such as the IP address of
your device, internet browser type and operating system for purposes of
analyzing the data to make First Trust's website better and more useful to our
users. The information collected does not include any personal identifiable
information such as your name, address, phone number or email address unless you
provide that information through the website for us to contact you in order to
answer your questions or respond to your requests. To find out how to opt-out of
these services click on: Google Analytics and AddThis.
CONFIDENTIALITY AND SECURITY
With regard to our internal security procedures, First Trust restricts access to
your nonpublic personal information to those First Trust employees who need to
know that information to provide products or services to you. We maintain
physical, electronic and procedural safeguards to protect your nonpublic
personal information.
POLICY UPDATES AND INQUIRIES
As required by federal law, we will notify you of our privacy policy annually.
We reserve the right to modify this policy at any time, however, if we do change
it, we will tell you promptly. For questions about our policy, or for additional
copies of this notice, please go to www.ftportfolios.com, or contact us at
1-800-621-1675 (First Trust Portfolios) or 1-800-222-6822 (First Trust
Advisors).
March 2021
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<PAGE>
FIRST TRUST
First Trust Exchange-Traded Fund VIII
INVESTMENT ADVISOR
First Trust Advisors L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
INVESTMENT SUB-ADVISOR
Cboe Vest Financial LLC
1765 Greensboro Station Pl, 9th Floor
McLean, VA 22102
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 VIII
--------------------------------------------------------------------------------
First Trust Low Duration Strategic Focus ETF (LDSF)
First Trust Active Factor Large Cap ETF (AFLG)
First Trust Active Factor Mid Cap ETF (AFMC)
First Trust Active Factor Small Cap ETF (AFSM)
First Trust Innovation Leaders ETF (ILDR)
First Trust Expanded Technology ETF (XPND)
----------------------------
Annual Report
For the Period Ended
August 31, 2021
----------------------------
<PAGE>
--------------------------------------------------------------------------------
TABLE OF CONTENTS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021
Shareholder Letter........................................................... 2
Fund Performance Overview
First Trust Low Duration Strategic Focus ETF (LDSF)....................... 3
First Trust Active Factor Large Cap ETF (AFLG)............................ 5
First Trust Active Factor Mid Cap ETF (AFMC).............................. 7
First Trust Active Factor Small Cap ETF (AFSM)............................ 9
First Trust Innovation Leaders ETF (ILDR)................................. 11
First Trust Expanded Technology ETF (XPND)................................ 13
Notes to Fund Performance Overview........................................... 15
Portfolio Commentary......................................................... 16
Understanding Your Fund Expenses............................................. 23
Portfolio of Investments
First Trust Low Duration Strategic Focus ETF (LDSF)....................... 25
First Trust Active Factor Large Cap ETF (AFLG)............................ 26
First Trust Active Factor Mid Cap ETF (AFMC).............................. 31
First Trust Active Factor Small Cap ETF (AFSM)............................ 36
First Trust Innovation Leaders ETF (ILDR)................................. 41
First Trust Expanded Technology ETF (XPND)................................ 44
Statements of Assets and Liabilities......................................... 46
Statements of Operations..................................................... 48
Statements of Changes in Net Assets.......................................... 50
Financial Highlights......................................................... 52
Notes to Financial Statements................................................ 55
Report of Independent Registered Public Accounting Firm...................... 63
Additional Information....................................................... 65
Board of Trustees and Officers............................................... 76
Privacy Policy............................................................... 78
<PAGE>
--------------------------------------------------------------------------------
TABLE OF CONTENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021
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 VIII (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 objectives. 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 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 portfolio commentary from the portfolio management team of the
Funds, you may obtain an understanding of how the market environment affected
each Fund's performance. The statistical information that follows may help you
understand each Fund's performance compared to that of a 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
<PAGE>
--------------------------------------------------------------------------------
SHAREHOLDER LETTER
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL LETTER FROM THE CHAIRMAN AND CEO
AUGUST 31, 2021
Dear Shareholders:
First Trust is pleased to provide you with the annual report for certain series
of the First Trust Exchange-Traded Fund VIII (the "Funds"), which contains
detailed information about the Funds for the twelve months ended August 31,
2021. Please note that the First Trust Innovation Leaders ETF ("ILDR") and the
First Trust Expanded Technology ETF ("XPND") incepted after September 1, 2020,
the start of the reporting period, so information in this letter and the report
prior to those inception dates will not apply to those Funds.
The coronavirus ("COVID-19") pandemic has proven to be as stubborn as
advertised. We were warned by the scientific community early on that we would
have to coexist with this virus from here on out, and that appears to be the
case some 19 months after its onset. While the three main vaccines have proven
to be effective at keeping those people who have gotten all the required shots
out of the hospital, the U.S., unfortunately, had only achieved a 54% fully
vaccinated rate as of September 9, 2021, according to the Centers for Disease
Control and Prevention. If you add in the people ages 18 and older who have
received just one of the two-dose vaccines, it jumps to 75.3%. The U.S. and
global economies continue to underperform due to the pandemic. The U.S. alone
had a record high 10.9 million job openings at the end of July 2021, according
to the latest Job Openings and Labor Turnover Survey from the Department of
Labor. It appears that many people do not seem to want to work right now. An
estimated 7.5 million unemployment recipients in the U.S. were scheduled to lose
their benefits on September 6, 2021. Perhaps that will be enough to incentivize
people to go back to work.
The Federal Reserve (the "Fed") continues to play a major role in the U.S.
economy. It has kept short-term interest rates artificially low for the better
part of the past 13 years. The Federal Funds target rate (upper bound), while
held at 0.25% for roughly nine of those 13 years, reached as high as 2.50% in
the same 13-year period, but only for a few months and that was just prior to
the COVID-19 pandemic, according to data from the Fed. For comparative purposes,
the target rate averaged 2.56% for the 30-year period ended September 21, 2021.
It currently stands at 0.25%. In addition to keeping rates low, the Fed has been
buying assets, specifically Treasuries and mortgage-backed securities. It has
been buying a combined $120 billion of these securities every month. This has
helped keep bond yields artificially low as well. As of February 26, 2020, the
value of the assets on the Fed's balance sheet totaled $4.16 trillion, according
to its own data. As of September 15, 2021, the assets were valued at $8.45
trillion. Keep in mind, the balance sheet stood at $1 trillion on September 17,
2008. That was during the 2007-2008 Financial Crisis. Due to the reopening of
the U.S. economy and a bigger-than-expected rise in inflation this year, the Fed
has signaled that it could begin to taper its bond buying program by the end of
2021. With respect to the Federal Funds rate, the Fed continues to say it
intends to leave short-term rates where they are until 2023. In other words, the
Fed is poised to maintain its accommodative stance towards monetary policy. They
are not looking to get tight - just less loose. We will monitor this scenario
closely in the months ahead to see if the Fed's actions impact the direction of
interest rates and bond yields.
Overall, I am pleased to report that the securities markets have performed well
in this tumultuous climate. It appears, in our opinion, that the extremely low
interest rates offered on savings vehicles has motivated many investors to
assume more risk to potentially generate higher returns. The S&P 500(R) Index
(the "Index") posted a total return of 31.17% for the 12-month period ended
August 31, 2021, according to Bloomberg. For comparative purposes, from 1926
through 2020 (95 years), the Index returned an average of 10.28% per year on a
total return basis, according to Morningstar/Ibbotson Associates. Should
interest rates and bond yields eventually trend higher, investors should be
prepared for a bit of turbulence as stocks and bonds may be subjected to some
potential short-term profit taking, in my opinion. Having said that, I encourage
investors to stay the course. I remain optimistic due in large part to the
trillions of dollars in government stimulus money already circulating in the
economy as well as the potential for trillions of additional dollars from
President Joe Biden's infrastructure and "human infrastructure" bills still
weaving their way through Congress. It's hard to bet against growth in the
current climate.
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
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED)
--------------------------------------------------------------------------------
FIRST TRUST LOW DURATION STRATEGIC FOCUS ETF (LDSF)
The First Trust Low Duration Strategic Focus ETF (the "Fund") seeks to generate
current income, with a secondary objective of preservation of capital. Under
normal market conditions, the Fund seeks to achieve its investment objectives by
investing at least 80% of its net assets (including investment borrowings) in a
portfolio of U.S.-listed exchange-traded funds ("ETFs") that principally invest
in income-generating securities that provide the Fund with an effective
portfolio duration of three years or less. The Fund is classified as
"non-diversified" under the Investment Company Act of 1940, as amended. The
shares of the Fund are listed and traded on The Nasdaq Stock Market LLC under
the ticker symbol "LDSF."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
1 Year Ended Inception (1/3/19) Inception (1/3/19)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 1.57% 3.08% 8.39%
Market Price 1.52% 3.06% 8.33%
INDEX PERFORMANCE
Blended Benchmark(1) 2.26% 4.74% 13.08%
Bloomberg 1-5 Year Government/Credit Index 0.33% 3.52% 9.62%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 15.)
-----------------------------
(1) The Blended Benchmark consists of the following two indexes: 80% of the
Bloomberg 1-5 Year Government/Credit Index which measures the performance
of U.S. dollar-denominated U.S. Treasury bonds, government related bonds
and investment grade U.S. corporate bonds that have a maturity between one
and five years; and 20% of the ICE BofA US High Yield Constrained Index
which tracks the performance of U.S. dollar denominated below investment
grade corporate debt publicly issued in the U.S. domestic market but caps
issuer exposure at 2%. The indexes do not charge management fees or
brokerage expenses, and no such fees or expenses were deducted from the
performance shown. Indexes are unmanaged and an investor cannot invest
directly in an index. The Blended Index returns are calculated by using
the monthly return of the two indices during each period shown above. At
the beginning of each month the two indices are rebalanced to a 80-20
ratio to account for divergence from that ratio that occurred during the
course of each month. The monthly returns are then compounded for each
period shown above, giving the performance for the Blended Index for each
period shown above.
Page 3
<PAGE>
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FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST LOW DURATION STRATEGIC FOCUS ETF (LDSF) (CONTINUED)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
JANUARY 3, 2019 - AUGUST 31, 2021
First Trust Low Duration Blended Bloomberg 1-5 Year
Strategic Focus ETF Benchmark Government/Credit Index
<S> <C> <C> <C>
1/3/19 $10,000 $10,000 $10,000
2/28/19 10,210 10,151 10,037
8/31/19 10,453 10,564 10,433
2/29/20 10,648 10,789 10,676
8/31/20 10,672 11,059 10,926
2/28/21 10,781 11,190 10,924
8/31/21 10,839 11,308 10,962
</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 does 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 4
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST ACTIVE FACTOR LARGE CAP ETF (AFLG)
The First Trust Active Factor Large Cap ETF (the "Fund") seeks to provide
capital appreciation. Under normal market conditions, the Fund will invest at
least 80% of its net assets (including investment borrowings) in U.S.-listed
equity securities issued by large capitalization companies. The Fund defines
large capitalization companies as those that, at the time of investment, have a
minimum market capitalization equal to or greater than the minimum market
capitalization of a widely recognized index of large capitalization companies
based upon the composition of the index at the time of investment. The Fund is
actively managed primarily relying on a multi-factor quantitative methodology
with active risk management to construct a portfolio of securities exhibiting
exposures to one or more investing factors. The multi-factor quantitative
methodology currently used by the Fund may take into account the following
factors: (i) value; (ii) momentum; (iii) quality; and (iv) low volatility. The
Fund is classified as "non-diversified" under the Investment Company Act of
1940, as amended. The shares of the Fund are listed and traded on the NYSE Arca,
Inc., under the ticker symbol "AFLG."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
1 Year Ended (12/3/19) (12/3/19)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 28.74% 19.93% 37.33%
Market Price 28.51% 19.91% 37.28%
INDEX PERFORMANCE
S&P 500(R) Index 31.17% 26.48% 50.57%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 15.)
----------------------------------------------------------
% OF TOTAL
LONG-TERM
SECTOR CLASSIFICATION INVESTMENTS
----------------------------------------------------------
Information Technology 26.9%
Consumer Discretionary 14.5
Health Care 11.7
Industrials 11.7
Communication Services 8.7
Financials 8.6
Consumer Staples 4.9
Materials 3.9
Real Estate 3.6
Utilities 2.9
Energy 2.6
--------
Total 100.0%
========
----------------------------------------------------------
% OF TOTAL
LONG-TERM
TOP TEN HOLDINGS INVESTMENTS
----------------------------------------------------------
Apple, Inc. 4.2%
Microsoft Corp. 4.0
Alphabet, Inc., Class A 3.7
Amazon.com, Inc. 2.1
Berkshire Hathaway, Inc., Class B 1.5
Oracle Corp. 1.5
Target Corp. 1.3
Quanta Services, Inc. 1.1
Johnson & Johnson 1.0
Cisco Systems, Inc. 1.0
--------
Total 21.4%
========
Page 5
<PAGE>
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FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST ACTIVE FACTOR LARGE CAP ETF (AFLG) (CONTINUED)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
DECEMBER 3, 2019 - AUGUST 31, 2021
First Trust Active S&P 500(R)
Factor Large Cap ETF Index
<S> <C> <C>
12/3/19 $10,000 $10,000
2/29/20 9,344 9,595
8/31/20 10,667 11,479
2/28/21 11,677 12,597
8/31/21 13,733 15,058
</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 index does
not actually hold a portfolio of securities and therefore does 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 6
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST ACTIVE FACTOR MID CAP ETF (AFMC)
The First Trust Active Factor Mid Cap ETF (the "Fund") seeks to provide capital
appreciation. Under normal market conditions, the Fund will invest at least 80%
of its net assets (including investment borrowings) in U.S.-listed equity
securities issued by mid capitalization companies. The Fund defines mid
capitalization companies as those that, at the time of investment, have a market
capitalization between the minimum and maximum market capitalization of a widely
recognized index of mid capitalization companies based upon the composition of
the index at the time of investment. The Fund is actively managed primarily
relying on a multi-factor quantitative methodology with active risk management
to construct a portfolio of securities exhibiting exposures to one or more
investing factors. The multi-factor quantitative methodology currently used by
the Fund may take into account the following factors: (i) value; (ii) momentum;
(iii) quality; and (iv) low volatility. The Fund is classified as
"non-diversified" under the Investment Company Act of 1940, as amended. The
shares of the Fund are listed and traded on the NYSE Arca, Inc., under the
ticker symbol "AFMC."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
1 Year Ended (12/3/19) (12/3/19)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 43.52% 18.10% 33.68%
Market Price 43.23% 18.07% 33.63%
INDEX PERFORMANCE
S&P MidCap 400(R) Index 44.77% 22.50% 42.42%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 15.)
----------------------------------------------------------
% OF TOTAL
LONG-TERM
SECTOR CLASSIFICATION INVESTMENTS
----------------------------------------------------------
Industrials 16.9%
Consumer Discretionary 16.6
Information Technology 14.7
Financials 14.0
Health Care 13.4
Real Estate 8.7
Materials 5.3
Consumer Staples 3.0
Utilities 2.9
Communication Services 2.8
Energy 1.7
--------
Total 100.0%
========
----------------------------------------------------------
% OF TOTAL
LONG-TERM
TOP TEN HOLDINGS INVESTMENTS
----------------------------------------------------------
Jones Lang LaSalle, Inc. 1.6%
Dick's Sporting Goods, Inc. 1.4
Arrow Electronics, Inc. 1.3
AutoNation, Inc. 1.3
AGCO Corp. 1.3
Louisiana-Pacific Corp. 1.1
SYNNEX Corp. 1.1
UGI Corp. 1.1
American Financial Group, Inc. 1.1
ManpowerGroup, Inc. 1.0
--------
Total 12.3%
========
Page 7
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST ACTIVE FACTOR MID CAP ETF (AFMC) (CONTINUED)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
DECEMBER 3, 2019 - AUGUST 31, 2021
First Trust Active S&P MidCap
Factor Mid Cap ETF 400(R) Index
<S> <C> <C>
12/3/19 $10,000 $10,000
2/29/20 9,126 9,181
8/31/20 9,314 9,838
2/28/21 11,858 12,834
8/31/21 13,367 14,242
</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 index does
not actually hold a portfolio of securities and therefore does 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 8
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST ACTIVE FACTOR SMALL CAP ETF (AFSM)
The First Trust Active Factor Small Cap ETF (the "Fund") seeks to provide
capital appreciation. Under normal market conditions, the Fund will invest at
least 80% of its net assets (including investment borrowings) in U.S.-listed
equity securities issued by small capitalization companies. The Fund defines
small capitalization companies as those that, at the time of investment, have a
market capitalization between a minimum of $250 million and the maximum market
capitalization of a widely recognized index of small capitalization companies
based upon the composition of the index at the time of investment. The Fund is
actively managed primarily relying on a multi-factor quantitative methodology
with active risk management to construct a portfolio of securities exhibiting
exposures to one or more investing factors. The multi-factor quantitative
methodology currently used by the Fund may take into account the following
factors: (i) value; (ii) momentum; (iii) quality; and (iv) low volatility. The
Fund is classified as "non-diversified" under the Investment Company Act of
1940, as amended. The shares of the Fund are listed and traded on the NYSE Arca,
Inc., under the ticker symbol "AFSM."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
1 Year Ended (12/3/19) (12/3/19)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 45.40% 18.85% 35.17%
Market Price 45.24% 18.77% 35.02%
INDEX PERFORMANCE
Russell 2000(R) Index 47.08% 23.72% 44.90%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 15.)
----------------------------------------------------------
% OF TOTAL
LONG-TERM
SECTOR CLASSIFICATION INVESTMENTS
----------------------------------------------------------
Health Care 19.9%
Industrials 17.0
Consumer Discretionary 14.8
Financials 14.6
Information Technology 13.6
Real Estate 6.0
Consumer Staples 4.5
Materials 3.9
Energy 2.7
Communication Services 2.3
Utilities 0.7
--------
Total 100.0%
========
----------------------------------------------------------
% OF TOTAL
LONG-TERM
TOP TEN HOLDINGS INVESTMENTS
----------------------------------------------------------
ArcBest Corp. 1.0%
Smith & Wesson Brands, Inc. 1.0
Hibbett, Inc. 1.0
Boise Cascade Co. 1.0
Navient Corp. 1.0
ModivCare, Inc. 1.0
MYR Group, Inc. 0.9
Vista Outdoor, Inc. 0.9
Louisiana-Pacific Corp. 0.9
Sprout Social, Inc., Class A 0.8
--------
Total 9.5%
========
Page 9
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST ACTIVE FACTOR SMALL CAP ETF (AFSM) (CONTINUED)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
DECEMBER 3, 2019 - AUGUST 31, 2021
First Trust Active Russell 2000(R)
Factor Small Cap ETF Index
<S> <C> <C>
12/3/19 $10,000 $10,000
2/29/20 8,981 9,244
8/31/20 9,297 9,851
2/28/21 12,461 13,958
8/31/21 13,518 14,489
</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 index does
not actually hold a portfolio of securities and therefore does 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 10
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST INNOVATION LEADERS ETF (ILDR)
The First Trust Innovation Leaders ETF (the "Fund") seeks to provide capital
appreciation. Under normal market conditions, the Fund will invest at least 80%
of its net assets (plus any borrowings for investment purposes) in common stock
and depository receipts issued by U.S. and non-U.S. companies that may benefit
from the development or application of scientific and technological innovation.
This includes, but is not limited to, companies that are poised to benefit from
new products or services, scientific research, technological improvements and/or
enhancements to existing products or services related to automation, advanced
medicine, networks, advanced computing, enhanced mobility, energy revolution and
e-commerce. The Fund is classified as "non-diversified" under the Investment
Company Act of 1940, as amended. The shares of the Fund are listed and traded on
the NYSE Arca, Inc. under the ticker symbol "ILDR."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(5/25/21)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 14.35%
Market Price 14.50%
INDEX PERFORMANCE
Russell 3000(R) Growth Index 13.37%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 15.)
----------------------------------------------------------
% OF TOTAL
LONG-TERM
SECTOR CLASSIFICATION INVESTMENTS
----------------------------------------------------------
Information Technology 50.8%
Health Care 19.9
Industrials 11.0
Communication Services 9.6
Consumer Discretionary 7.5
Real Estate 0.6
Financials 0.6
--------
Total 100.0%
========
----------------------------------------------------------
% OF TOTAL
LONG-TERM
TOP TEN HOLDINGS INVESTMENTS
----------------------------------------------------------
Alphabet, Inc., Class C 4.1%
Facebook, Inc., Class A 3.9
Microsoft Corp. 3.6
Amazon.com, Inc. 2.4
salesforce.com, Inc. 2.1
ServiceNow, Inc. 1.9
Regeneron Pharmaceuticals, Inc. 1.9
Northrop Grumman Corp. 1.7
Workday, Inc., Class A 1.7
NVIDIA Corp. 1.6
--------
Total 24.9%
========
Page 11
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST INNOVATION LEADERS ETF (ILDR) (CONTINUED)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
MAY 25, 2021 - AUGUST 31, 2021
First Trust Innovation Russell 3000(R)
Leaders ETF Growth Index
<S> <C> <C>
5/25/21 $10,000 $10,000
2/29/20 11,435 11,337
</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 index does
not actually hold a portfolio of securities and therefore does 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 12
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXPANDED TECHNOLOGY ETF (XPND)
The First Trust Expanded Technology ETF (the "Fund") seeks to provide long-term
capital appreciation. Under normal market conditions, the Fund will invest at
least 80% of its net assets (plus any borrowings for investment purposes) in the
common stocks of companies identified by the Fund's investment advisor as either
information technology companies or consumer discretionary and communication
services companies whose operations are principally derived from and/or
dependent upon technology (such companies are collectively referred to herein as
"Expanded Technology Companies"). The Fund is classified as "non-diversified"
under the Investment Company Act of 1940, as amended. The shares of the Fund are
listed and traded on the NYSE Arca, Inc. under the ticker symbol "XPND."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(6/14/21)
to 8/31/21
<S> <C>
FUND PERFORMANCE
NAV 8.37%
Market Price 8.37%
INDEX PERFORMANCE
S&P 500(R) Information Technology Index 10.97%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 15.)
----------------------------------------------------------
% OF TOTAL
LONG-TERM
SECTOR CLASSIFICATION INVESTMENTS
----------------------------------------------------------
Information Technology 84.7%
Communication Services 13.3
Consumer Discretionary 2.0
--------
Total 100.0%
========
----------------------------------------------------------
% OF TOTAL
LONG-TERM
TOP TEN HOLDINGS INVESTMENTS
----------------------------------------------------------
Adobe, Inc. 5.4%
NVIDIA Corp. 5.3
Intuit, Inc. 5.1
Microsoft Corp. 4.9
Apple, Inc. 4.9
Alphabet, Inc., Class A 4.8
Facebook, Inc., Class A 4.7
Oracle Corp. 4.5
PayPal Holdings, Inc. 4.4
QUALCOMM, Inc. 4.4
--------
Total 48.4%
========
Page 13
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXPANDED TECHNOLOGY ETF (XPND) (CONTINUED)
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
JUNE 14, 2021 - AUGUST 31, 2021
First Trust Expanded S&P 500(R) Information
Technology ETF Technology Index
<S> <C> <C>
6/14/21 $10,000 $10,000
2/29/20 10,837 11,097
</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 index does
not actually hold a portfolio of securities and therefore does 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 14
<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. 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 15
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
ADVISOR
First Trust Advisors L.P. ("First Trust" or the "Advisor") serves as the
investment advisor to the First Trust Low Duration Strategic Focus ETF (the
"Fund"). First Trust is responsible for the ongoing monitoring of the Fund's
investment portfolio, managing the Fund's business affairs and providing certain
administrative services necessary for the management of the Fund.
PORTFOLIO MANAGEMENT TEAM
The Fund's portfolio is managed by a team of portfolio managers consisting of:
DANIEL J. LINDQUIST, MANAGING DIRECTOR OF FIRST TRUST
DAVID G. MCGAREL, CHIEF INVESTMENT OFFICER, CHIEF OPERATING OFFICER AND
MANAGING DIRECTOR OF FIRST TRUST
CHRIS A. PETERSON, SENIOR VICE PRESIDENT OF FIRST TRUST
WILLIAM HOUSEY, SENIOR VICE PRESIDENT OF FIRST TRUST
STEVE COLLINS, VICE PRESIDENT OF FIRST TRUST
The portfolio managers are primarily and jointly responsible for the day-to-day
management of the Fund. Each portfolio manager has served as a part of the
portfolio management team of the Fund since 2019.
COMMENTARY
FIRST TRUST LOW DURATION STRATEGIC FOCUS ETF (LDSF)
MARKET RECAP
In September 2020, the Federal Reserve (the "Fed") announced an updated policy
strategy that seeks inflation that averages 2% over time, indicating that the
Federal Open Market Committee ("FOMC") would remain accommodative if inflation
exceeds its target. In the fourth quarter of 2020, the Food and Drug
Administration authorized emergency use of the Pfizer and Moderna coronavirus
("COVID-19") vaccines and the conclusion of the U.S. presidential election eased
political uncertainty while President Trump signed a major pandemic relief bill
in late December. At the time, odds favored Republicans to maintain control of
the Senate, the implication being that a divided government would reduce the
risk of significant tax and regulatory policy that could stunt economic growth,
buttressing risk assets. Vaccine distribution accelerated in the first quarter
of 2021 and economists began raising estimates for economic growth. The Fed's
commitment to accommodative policy, concurrent with accelerating economic
activity and growth projections, resulted in strong performance of risk assets
and materially tighter investment grade and high yield credit spreads while the
Treasury curve steepened by 101 basis points ("bps") (2-Year versus 10-Year)
through the first quarter of 2021, with the 10-Year ending at 1.75% on March 31,
2021.
Following the substantial move higher in rates through the first quarter of
2021, the yield curve began to flatten as longer-term U.S. Treasury demand was
supported by institutional foreign buyers given the compelling yield levels
relative to very low, even negative, foreign yields and institutional investors
and pension funds rebalanced following strong equity performance. The 10-Year
Treasury peaked on March 31, 2021, and by August 31, 2021 reverted to 1.31%.
Continued economic growth and strong underlying credit fundamentals supported
investment grade and high yield corporate spread tightening in the second
quarter.
PERFORMANCE ANALYSIS
For the fiscal year ended August 31, 2021, the Fund's total return based on the
net asset value ("NAV") was 1.57%. The Bloomberg 1-5 Year Government/Credit
Index, the Fund's primary benchmark ("the Benchmark"), provided a return of
0.33% over the same period, therefore, the Fund's NAV total return outperformed
the Benchmark by 1.24%.
Fund performance benefitted from being both short duration and overweight credit
as the yield curve steepened, and credit spreads tightened. Most of the Fund's
positive performance was gained in the fourth quarter of 2020, specifically in
November 2020, as the Fund returned 1.09% on a NAV basis, outperforming the
Benchmark by 88 bps. High yield bond credit spreads tightened 99 bps in November
2020 propelling the First Trust Tactical High Yield ETF ("HYLS") to strong
relative performance within the Fund. HYLS' exposure to leisure and media drove
performance within high yield as positive vaccine news drove a strong recovery
in prices. In the first quarter of 2021, the Fund was approximately flat versus
the Benchmark but ended the quarter with a -0.56% total return due to emerging
market exposure and longer duration assets hurt by curve steepening while the
allocation to high yield offset some of the weakness. In the second quarter of
2021, the Fund's allocation to longer duration assets was a benefit and aided
performance as the long end of the curve flattened and the Benchmark holds
shorter dated bonds. The Fund's weakest relative performance came in the third
quarter of 2021, specifically July 2021, a month where credit spreads widened,
impacting the Fund's overweight to credit. Also in July, the 10-Year Treasury
declined from 1.47% to 1.22% and the Fund's short duration and senior loan
exposure weighed on relative performance.
Page 16
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
MARKET AND FUND OUTLOOK
During the September 2021 FOMC meeting, the Fed maintained the target range for
the Federal Funds rate at 0.00 - 0.25% and confirmed they will continue to
increase their holding of Treasury securities and agency mortgage-backed
securities by at least $80 billion per month and $40 billion per month,
respectively. However, given recent inflation prints that have far exceeded the
Fed's 2.0% target and continued progress on employment, the Fed also
acknowledged that moderating the pace of these asset purchases may soon be
warranted. Of the 18 Fed survey participants, nine now expect at least one
interest rate hike in 2022, up from seven in June 2021, and the median
expectation is for three hikes in 2023, one more than projected at the last
meeting. The Fed decreased its 2021 projection for growth in real gross domestic
product from 7.0% to 5.9%, however, 2022 was raised from 3.3% to 3.8%. On the
inflation front, the Fed again increased its 2021 personal consumption
expenditures ("PCE") projection, now at 4.2%, well in excess of their 2%, but
they stand by expectations for transitory developments to moderate, projecting
PCE to fall to 2.2% in 2022 and 2023.
The yield curve flattened for the most part in the third quarter of 2021 despite
persistently high inflation. We believe longer term yields were lower primarily
due to the extraordinary quantity of negative yielding foreign debt which
resulted in strong foreign demand for U.S. Treasuries. Moreover, pension fund's
rebalancing into fixed income securities and state government demand for U.S.
Treasuries, given their high cash balances after federal stimulus and tax
receipts, also contributed to lower yields.
We believe a combination of factors is likely to lead to higher interest rates.
Specifically, we expect continued employment gains in the coming months
following the September expiration of extended employment benefits which will
support the anticipated imminent tapering of the Fed's quantitative easing
program. In addition, we expect persistent inflationary pressure driven by
continued supply chain disruptions, strong commodity prices, upward wage
pressure, and large deficit spending. In our opinion, corporate balance sheets
are in good shape, bolstered by robust revenue and earnings growth, and the
consumer is strong and default rates are at cyclical lows. Though valuations
across fixed income remain tight, we believe fundamentals will continue to
support corporate credit. In our view, a trajectory of higher interest rates is
expected to benefit investors that are short duration relative to their
benchmarks.
Page 17
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
ADVISOR
First Trust Advisors L.P. ("First Trust" or the "Advisor") serves as the
investment advisor to the First Trust Active Factor Large Cap ETF ("AFLG"), the
First Trust Active Factor Mid Cap ETF ("AFMC"), and the First Trust Active
Factor Small Cap ETF ("AFSM") (each a "Fund" and collectively, the "Funds").
First Trust is responsible for the selection and ongoing monitoring of the
securities in the Funds' portfolios, managing the Funds' business affairs and
providing certain administrative services necessary for the management of the
Funds.
PORTFOLIO MANAGEMENT TEAM
Each Fund's portfolio is managed by a team (the "Investment Committee")
consisting of:
DANIEL J. LINDQUIST, CHAIRMAN OF THE INVESTMENT COMMITTEE AND MANAGING DIRECTOR
OF FIRST TRUST
JON C. ERICKSON, SENIOR VICE PRESIDENT OF FIRST TRUST
DAVID G. MCGAREL, CHIEF INVESTMENT OFFICER, CHIEF OPERATING OFFICER AND
MANAGING DIRECTOR OF FIRST TRUST
ROGER F. TESTIN, SENIOR VICE PRESIDENT OF FIRST TRUST
STAN UELAND, SENIOR VICE PRESIDENT OF FIRST TRUST
CHRIS A. PETERSON, SENIOR VICE PRESIDENT OF FIRST TRUST
CHRIS BUSH, VICE PRESIDENT OF FIRST TRUST
The Investment Committee members are primarily and jointly responsible for the
day-to-day management of the Funds. Each Investment Committee member has served
as a part of the portfolio management team of the Funds since 2019, except for
Chris Bush, who has served as a part of the portfolio management team since
2021.
COMMENTARY
MARKET RECAP
While the fiscal year ended August 31, 2021 experienced sporadic market
corrections, the main theme of the fiscal year was a resurgent economy in the
wake of the development and widespread availability of coronavirus ("COVID-19")
vaccines, and the gradual reopening of society. Monetary policy was extremely
dovish, and fiscal policy was stimulative as well during the period.
Macroeconomic measures improved dramatically, with the annualized quarter over
quarter growth rate of real gross domestic product ("GDP") improving from a
severe contraction in the second quarter of 2020 to a sharp recovery in the
third quarter of that year before settling in to over 6% growth in both the
first and second quarters of 2021. The economy added millions of jobs during the
fiscal year and manufacturing data was quite robust, as well. The U.S. equity
market surged ahead, with the S&P 500(R) Index rewarding investors with a 31.17%
return over the fiscal year ended August 31, 2021. Financials sector stocks were
the top sector performers within the S&P 500(R) Index during the fiscal year,
with Banks enjoying a strong rally on rising Treasury yields, followed by the
Energy sector on rising crude prices. The Industrials sector also enjoyed solid
returns, as did the Communication Services sector, which benefited from a surge
in share prices for internet giant Alphabet, Inc. Consumer Staples, Consumer
Discretionary and Utilities were the weakest sectors over the same period. On a
size basis, mid- and small-cap stocks far outpaced the S&P 500(R) Index during
the fiscal year ended August 31, 2021, with the S&P MidCap 400(R) Index earning
a 44.77% return, while the S&P SmallCap 600(R) Index returned 53.97% over the
same period.
FIRST TRUST ACTIVE FACTOR LARGE CAP ETF (THE "FUND" OR "AFLG")
FUND PERFORMANCE
The Fund returned 28.74% on a net asset value ("NAV") basis and 28.51% on a
market price basis over the fiscal year ended August 31, 2021. The S&P 500(R)
Index (the "Benchmark") returned 31.17% over the same period. The Fund paid
total distributions of $0.2557 per share over the same period.
Most of the underperformance can be attributed to defensive factors as the bull
market favored a risk-on posture. The quality and low volatility factors
significantly underperformed the broader market as stocks with higher market
betas and more variability outperformed. Additionally, the momentum factor
lagged by a wide margin as the market rotated from favoring technology stocks to
economically sensitive stocks in early November 2020 because of the highly
effective COVID-19 vaccines, in our opinion, only to see a rotation back to
growth parts of the market in mid-May 2021 due to a rise in cases from the Delta
variant. Sharp reversals in the market tend to lead to poor performance for the
momentum factor. On the positive side, market performance began to broaden out
from the narrow mega-cap technology rally and the value factor posted strong
performance. However, the benefit from value and small size could not overcome
the detraction from exposure to the quality, momentum, and low volatility
factors. Sector allocation effects and stock selection were also a drag on
relative performance.
Page 18
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
FIRST TRUST ACTIVE FACTOR MID CAP ETF (THE "FUND" OR "AFMC")
FUND PERFORMANCE
The Fund returned 43.52% on a NAV basis and 43.23% on a market price basis over
the fiscal year ended August 31, 2021. The S&P MidCap 400(R) Index (the
"Benchmark") returned 44.77% over the same period. The Fund paid total
distributions of $0.1993 per share over the same period.
Most of the underperformance can be attributed to defensive factors as the bull
market favored a risk-on posture. The quality and low volatility factors
significantly underperformed the broader market as stocks with higher market
betas and more variability outperformed. Additionally, the momentum factor
lagged by a wide margin as the market rotated from technology stocks to
economically sensitive stocks in early November 2020 on highly effective
COVID-19 vaccines, only to see a rotation back to growth parts of the market in
mid-May 2021 due to a rise in cases from the Delta variant. Sharp reversals in
the market tend to lead to poor performance for the momentum factor. On the
positive side, the value factor posted strong performance. However, the benefit
from the value factor could not overcome exposure from the quality, momentum,
and low volatility factors. Sector allocation effects were a drag on relative
performance, while idiosyncratic exposures benefited relative performance.
FIRST TRUST ACTIVE FACTOR SMALL CAP ETF (THE "FUND" OR "AFSM")
FUND PERFORMANCE
The Fund returned 45.40% on a NAV basis and 45.24% on a market price basis over
the fiscal year ended August 31, 2021. The Russell 2000(R) Index (the
"Benchmark") returned 47.08% over the same period. The Fund paid total
distributions of $0.0825 per share over the same period.
Most of the underperformance can be attributed to defensive factors as the bull
market favored a risk-on posture. The quality and low volatility factors
significantly underperformed the broader market as stocks with higher market
betas and more variability outperformed. Additionally, the momentum factor
lagged by a wide margin as the market rotated from technology stocks to
economically sensitive stocks in early November 2020 on highly effective
COVID-19 vaccines, only to see a rotation back to growth parts of the market in
mid-May 2021 due to a rise in cases from the Delta variant. Sharp reversals in
the market tend to lead to poor performance for the momentum factor. On the
positive side, the value factor posted strong performance. However, the benefit
from the value factor could not overcome exposure from the quality, momentum,
and low volatility factors. Sector allocation effects and single-stock selection
were a benefit to relative performance.
MARKET AND FUND OUTLOOK
We believe market risk is more balanced in the near term due to uncertainty
across several spectrums, including tapering, the path of COVID-19, U.S.
relations with China, U.S. fiscal policy, and peaking growth rates. We remain
constructive on equities for the long-term, especially relative to bonds, but we
believe future returns are likely to be lower than the last decade with stocks
trading at elevated earnings multiples.
While the last year again proved to be an especially difficult environment for
factor investing, we believe a more normalized environment could lead to better
conditions for the Active Factor suite. The spread between value and growth
stocks is especially extreme today. In addition, lower market gains would likely
benefit the quality and low volatility factors. The Funds continue to offer
diversified exposure across the quality, low volatility, value and momentum
factors, while reducing sector and single-stock risk. We continue to target key
factors that historically have offered premiums to the market return.
Page 19
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
ADVISOR
First Trust Advisors L.P. ("First Trust" or the "Advisor") is the investment
advisor to the First Trust Innovation Leaders ETF (the "Fund"). First Trust is
responsible for the ongoing monitoring of the Fund's investment portfolio,
managing the Fund's business affairs and providing certain administrative
services necessary for the management of the Fund.
PORTFOLIO MANAGEMENT TEAM
The following persons serve as portfolio managers of the Fund:
BOB HENSLEY, CFA, VICE PRESIDENT OF FIRST TRUST
DAVID MCGAREL, CFA, CHIEF INVESTMENT OFFICER, CHIEF OPERATING OFFICER AND
MANAGING DIRECTOR OF FIRST TRUST
CHRIS PETERSON, CFA, SENIOR VICE PRESIDENT OF FIRST TRUST
JARED WOLLEN, CFA, VICE PRESIDENT OF FIRST TRUST
Each portfolio manager has served in such capacity for the Fund since 2021.
COMMENTARY
FIRST TRUST INNOVATION LEADERS ETF (ILDR)
MARKET RECAP
As markets entered 2021, participants anticipated the effects of coronavirus
("COVID-19") vaccines, and a subsequent reopening of the economy, to favor
stocks that had been negatively impacted by COVID-19-related shutdowns. And
broadly, the reopen trade, exemplified by airline and hotel stocks, led the
markets through the winter and into spring. However, vaccine adoption was
subdued and by mid-summer, the Delta variant began to affect economic activity
and expectations. This resulted in digital transformation and companies that
facilitated work-from-everywhere regaining favor. Macroeconomic measures
improved dramatically, with the annualized quarter-over-quarter growth rate of
real gross domestic product improving to over 6% growth in both the first and
second quarter of 2021. Personal incomes remained high as government
disbursements to support individuals and businesses continued to benefit from
Congress's $900 billion-dollar COVID-19 economic relief bill passed on December
21, 2020, and funding federal agency operations through September 2021. Further,
the Federal Reserve (the "Fed") maintained easy policies, which coupled with
declining confidence in the strength of expanding economic activity, resulted in
easing yields, and rising Treasury prices. The U.S. equity market surged ahead,
but growth stocks particularly benefited. The S&P 500(R) Index rewarded
investors with an 8.18% return from the Fund's inception date of May 25, 2021
through August 31, 2021 while the Russell 3000(R) Growth Index returned 13.37%
over the same period.
FUND PERFORMANCE
The Fund returned 14.35% over the period from the Fund's inception on May 25,
2021 through August 31, 2021. The Russell 3000(R) Growth Index (the "Benchmark")
returned 13.37% over the same period. The Fund's outperformance was driven
entirely by sector allocation while stock selection created a small drag on
performance. The top ten holdings of the Fund accounted for approximately 25% of
the portfolio's weight. The Consumer Discretionary and the Industrials sectors
underperformed relative to the Benchmark and created the largest aggregate
relative drag on the Fund's performance. The Industrials sector had the worst
total return out of the sectors to which the Fund had exposure, primarily driven
by weakness in the stock selection of Uber Technologies, Inc. Conversely, the
Information Technology sector outperformed the Benchmark, and the Fund was
overweight in this sector which resulted in a total positive contribution to the
Fund's performance. The portfolio management team has a positive view on the
network and advanced computing themes which has driven an overweight to the
Information Technology sector.
MARKET AND FUND OUTLOOK
Global responses to COVID-19 called for work-from-home provisions which required
immediate digital solutions to enable employees to work remotely and conference
from anywhere. Though vaccines were widely available, and the northern
hemisphere turned to summer, the reopening of the economy was more halting than
anticipated due to the emergence of the Delta variant. These conditions pulled
digital trends forward and are driving 26% 12-month sales growth (blended
12-month trailing sales divided by the forward sales) for U.S.-listed technology
stocks. The Fund is aggressively invested in themes such as advanced computing
and networks which were direct beneficiaries of the above trends.
Looking forward, we expect continued adoption of digital commerce, data science
and analytics, cloud computing, cybersecurity, automation, and novel drug
sequencing. While we believe the themes identified, and the holdings within
them, are favorably positioned to long-term secular shifts, current valuation
levels are high. As of August 31, 2021, the forward price-to-earnings ratio of
the broad-market Russell 3000(R) Index was at 23 times. While below the 1999
highs, it is elevated relative to 2001-2019. Should economic conditions or
monetary policy tighten, growth companies with elevated expectations and
valuation levels may be more at risk than other parts of equity markets.
Page 20
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
ADVISOR
First Trust Advisors L.P. ("First Trust" or the "Advisor") serves as the
investment advisor to the First Trust Expanded Technology ETF (the "Fund").
First Trust is responsible for the ongoing monitoring of the Fund's investment
portfolio, managing the Fund's business affairs and providing certain
administrative services necessary for the management of the Fund.
PORTFOLIO MANAGEMENT TEAM
The Fund's portfolio is managed by a team (the "Investment Committee")
consisting of:
DANIEL J. LINDQUIST, CHAIRMAN OF THE INVESTMENT COMMITTEE AND MANAGING DIRECTOR
OF FIRST TRUST
JON C. ERICKSON, SENIOR VICE PRESIDENT OF FIRST TRUST
DAVID G. MCGAREL, CHIEF INVESTMENT OFFICER, CHIEF OPERATING OFFICER AND MANAGING
DIRECTOR OF FIRST TRUST
ROGER F. TESTIN, SENIOR VICE PRESIDENT OF FIRST TRUST
STAN UELAND, SENIOR VICE PRESIDENT OF FIRST TRUST
CHRIS A. PETERSON, SENIOR VICE PRESIDENT OF FIRST TRUST
ERIK RUSSO, VICE PRESIDENT OF FIRST TRUST
OMAR SEPULVEDA, VICE PRESIDENT OF FIRST TRUST
The Investment Committee members are primarily and jointly responsible for the
day-to-day management of the Fund. Each Investment Committee member has served
as a part of the portfolio management team for the Fund since June 2021.
COMMENTARY
FIRST TRUST EXPANDED TECHNOLOGY ETF (XPND)
MARKET RECAP
While the fiscal year ended August 31, 2021 experienced sporadic market
corrections, the main theme of the year was a resurgent economy in the wake of
the development and widespread availability of coronavirus ("COVID-19")
vaccines, and the gradual re-opening of society. Monetary policy was extremely
dovish, and fiscal policy was stimulative as well during the period.
Macroeconomic measures improved dramatically, with the annualized quarter over
quarter growth rate of real gross domestic product ("GDP") improving from a
severe contraction in the first quarter of 2020 to a sharp recovery in the third
quarter of that year before settling in to over 6% growth in both the first and
second quarters of 2021. The economy added millions of jobs during the fiscal
year and manufacturing data was quite robust, as well. The U.S. equity market
surged ahead, with the S&P 500(R) Index rewarding investors with a 31.17% return
over the fiscal year ended August 31, 2021. The stocks in the Financials sector
were the top sector performers within the S&P 500(R) Index during the fiscal
year, with Banks enjoying a strong rally on rising Treasury yields, followed by
the Energy sector on rising crude prices. The Industrials sector also enjoyed
solid returns, as did the Communication Services sector, which benefited from a
surge in share prices for internet giant Alphabet. Consumer Staples, Consumer
Discretionary, and Utilities were the weakest sectors over the same period. On a
size basis, mid- and small-cap stocks far outpaced the S&P 500(R) Index during
the same period, with the S&P MidCap 400(R) Index earning a 44.77% return, while
the S&P SmallCap 600(R) Index returned 53.97% over the same period.
FUND PERFORMANCE
From the Fund's inception date on June 14, 2021, through August 31, 2021, the
Fund returned 8.37% on a net asset value ("NAV") basis and a market price basis.
The S&P 500(R) Information Technology Index (the "Benchmark") returned 10.97%
over the same period making it the best performing sector, outperforming the
overall equity market as the S&P 500(R) Index returned 6.58%. The Fund had a
$16.4 million market capitalization as of August 31, 2021 and no distributions
were paid in the Fund's first two and a half months of the Fund's existence.
The Fund's focus on information technology stocks and those whose operations are
principally derived from and/or dependent upon technology helped it outperform
the overall equity market. The Fund however, underperformed the Benchmark. Much
of the underperformance can be attributed to the Fund's exposure to
Communication Services' Media and Entertainment industries. The Fund's
performance benefited from exposure to strong performing Information Technology
industries such as Software, Semiconductors & Semiconductor Equipment,
Technology Hardware, and the Communication Services' Interactive Media &
Services industry, though both the Software and the Semiconductor &
Semiconductor Equipment industries lagged the Benchmark's industry returns.
Specific stocks that contributed to the Fund's positive performance included
software companies such as Adobe, Inc. [+19.17%], Intuit, Inc. [+18.83%],
Microsoft Corp. [+16.38%], semiconductor companies NVIDIA Corp. [+24.25%],
QUALCOMM, Inc. [+6.83%], technology hardware company Apple, Inc. [+16.54%], and
interactive media & services companies Alphabet, Inc. [+18.17%] and Facebook,
Inc. [+12.65%].
Page 21
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
A factor attribution analysis showed that momentum, growth, and volatility all
contributed to the Fund's performance, while the Fund's exposure to smaller size
companies, due in part to the Fund's modified market capitalization weighting
scheme, created a drag on the Fund's performance. Apple, Inc. and Microsoft
Corp. each carried a weight of 20% or greater in the Benchmark at the time of
the Fund's inception, while the Fund limits weights to a maximum of 4.5% at the
time of selection at every rebalance to lower exposure to single-stock risk.
MARKET AND FUND OUTLOOK
We believe market risk is more balanced in the near term due to uncertainty
across several spectrums, including tapering, the path of COVID-19, U.S.
relations with China, U.S. fiscal policy, and peaking growth rates. We remain
constructive on equities for the long-term, especially relative to bonds, but
future returns are likely to be lower than the last decade with stocks trading
at elevated earnings multiples.
Growth outperformed value for the period from the Fund's inception on June 14,
2021 through August 31, 2021. While this contributed to the Fund's strong
performance, the spread between the two styles appears to be large today and we
believe a more normalized environment could be just ahead. Going forward, the
Fund's largest factor exposures include quality, growth, momentum, and smaller
size. While the Fund's technology focus does expose it to single-sector risk, we
believe the Fund's factor exposures will be beneficial as we expect quality to
benefit from more muted market gains going forward.
Page 22
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
UNDERSTANDING YOUR FUND EXPENSES
AUGUST 31, 2021 (UNAUDITED)
As a shareholder of First Trust Low Duration Strategic Focus ETF, First Trust
Active Factor Large Cap ETF, First Trust Active Factor Mid Cap ETF, First Trust
Active Factor Small Cap ETF, First Trust Innovation Leaders ETF or First Trust
Expanded Technology 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 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 (or since inception) and held through the six-month (or shorter) period
ended August 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 Period"
to estimate the expenses you paid on your account during this six-month (or
shorter) 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
MARCH 1, 2021 AUGUST 31, 2021 PERIOD PERIOD (a)
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIRST TRUST LOW DURATION STRATEGIC FOCUS ETF (LDSF) (b)
Actual $1,000.00 $1,005.40 0.20% $1.01
Hypothetical (5% return before expenses) $1,000.00 $1,024.20 0.20% $1.02
FIRST TRUST ACTIVE FACTOR LARGE CAP ETF (AFLG)
Actual $1,000.00 $1,176.00 0.55% $3.02
Hypothetical (5% return before expenses) $1,000.00 $1,022.43 0.55% $2.80
FIRST TRUST ACTIVE FACTOR MID CAP ETF (AFMC)
Actual $1,000.00 $1,127.30 0.65% $3.49
Hypothetical (5% return before expenses) $1,000.00 $1,021.93 0.65% $3.31
FIRST TRUST ACTIVE FACTOR SMALL CAP ETF (AFSM) (b)
Actual $1,000.00 $1,084.90 0.75% $3.94
Hypothetical (5% return before expenses) $1,000.00 $1,021.42 0.75% $3.82
</TABLE>
Page 23
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
UNDERSTANDING YOUR FUND EXPENSES (CONTINUED)
AUGUST 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
ANNUALIZED EXPENSES PAID
EXPENSE RATIO DURING THE PERIOD
BEGINNING ENDING BASED ON THE MAY 25, 2021 (c)
ACCOUNT VALUE ACCOUNT VALUE NUMBER OF DAYS TO
MAY 25, 2021 (c) AUGUST 31, 2021 IN THE PERIOD AUGUST 31, 2021 (d)
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIRST TRUST INNOVATION LEADERS ETF (ILDR)
Actual $1,000.00 $1,143.50 0.75% $2.18
Hypothetical (5% return before expenses) $1,000.00 $1,021.42 0.75% $3.82
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
ANNUALIZED EXPENSES PAID
EXPENSE RATIO DURING THE PERIOD
BEGINNING ENDING BASED ON THE JUNE 14, 2021 (c)
ACCOUNT VALUE ACCOUNT VALUE NUMBER OF DAYS TO
JUNE 14, 2021 (c) AUGUST 31, 2021 IN THE PERIOD AUGUST 31, 2021 (e)
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIRST TRUST EXPANDED TECHNOLOGY ETF (XPND)
Actual $1,000.00 $1,083.70 0.65% $1.47
Hypothetical (5% return before expenses) $1,000.00 $1,021.93 0.65% $3.31
</TABLE>
(a) Expenses are equal to the annualized expense ratio as indicated in the
table multiplied by the average account value over the period (March 1,
2021 through August 31, 2021), multiplied by 184/365 (to reflect the
six-month period).
(b) Annualized expense ratio and expenses paid during the six-month period do
not include fees and expenses of the underlying funds in which the Fund
invests, or the underlying securities in which the Fund invests.
(c) Inception date.
(d) Actual expenses are equal to the annualized expense ratio as indicated in
the table multiplied by the average account value over the period (May 25,
2021 through August 31, 2021), multiplied by 99/365. Hypothetical expenses
are assumed for the most recent six-month period.
(e) Actual expenses are equal to the annualized expense ratio as indicated in
the table multiplied by the average account value over the period (June
14, 2021 through August 31, 2021), multiplied by 79/365. Hypothetical
expenses are assumed for the most recent six-month period.
Page 24
<PAGE>
FIRST TRUST LOW DURATION STRATEGIC FOCUS ETF (LDSF)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
EXCHANGE-TRADED FUNDS -- 99.9%
CAPITAL MARKETS -- 99.9%
131,585 First Trust Emerging Markets
Local Currency Bond ETF (a) $ 4,515,997
307,407 First Trust Enhanced Short
Maturity ETF (a) 18,425,976
1,448,343 First Trust Low Duration
Opportunities ETF (a) 73,503,407
671,805 First Trust Senior Loan Fund (a) 32,186,177
189,796 First Trust Tactical High Yield
ETF (a) 9,186,126
691,713 First Trust TCW Unconstrained
Plus Bond ETF (a) 18,399,566
355,532 iShares 0-5 Year Investment
Grade Corporate Bond ETF 18,427,224
169,290 iShares CMBS ETF 9,256,777
-------------
TOTAL EXCHANGE-TRADED FUNDS
-- 99.9% 183,901,250
(Cost $184,246,126) -------------
MONEY MARKET FUNDS -- 0.1%
197,554 Morgan Stanley Institutional Liquidity
Funds - Treasury Portfolio -
Institutional Class -
0.01% (b) 197,554
(Cost $197,554) -------------
TOTAL INVESTMENTS -- 100.0% 184,098,804
(Cost $184,443,680) (c)
NET OTHER ASSETS AND
LIABILITIES -- (0.0)% (26,874)
-------------
NET ASSETS -- 100.0% $ 184,071,930
=============
(a) Investment in an affiliated fund.
(b) Rate shown reflects yield as of August 31, 2021.
(c) Aggregate cost for federal income tax purposes is $184,592,542. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$825,227 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$1,318,965. The net unrealized depreciation was $493,738.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 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
---------------------------------------------
Exchange-Traded
Funds* $183,901,250 $ -- $ --
Money Market Funds 197,554 -- --
---------------------------------------------
Total Investments $184,098,804 $ -- $ --
=============================================
* See Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 25
<PAGE>
FIRST TRUST ACTIVE FACTOR LARGE CAP ETF (AFLG)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS -- 99.8%
AEROSPACE & DEFENSE -- 1.5%
63 General Dynamics Corp. $ 12,620
90 Huntington Ingalls Industries, Inc. 18,375
54 L3Harris Technologies, Inc. 12,583
9 Lockheed Martin Corp. 3,238
33 Northrop Grumman Corp. 12,134
-------------
58,950
-------------
AIR FREIGHT & LOGISTICS -- 0.9%
170 Expeditors International of
Washington, Inc. 21,189
81 United Parcel Service, Inc.,
Class B 15,846
-------------
37,035
-------------
AUTO COMPONENTS -- 0.4%
397 BorgWarner, Inc. 16,944
-------------
BANKS -- 0.7%
195 Citizens Financial Group, Inc. 8,539
392 Wells Fargo & Co. 17,914
43 Zions Bancorp N.A. 2,490
-------------
28,943
-------------
BIOTECHNOLOGY -- 0.9%
18 Amgen, Inc. 4,060
34 Biogen, Inc. (a) 11,523
161 Gilead Sciences, Inc. 11,718
21 Moderna, Inc. (a) 7,910
-------------
35,211
-------------
BUILDING PRODUCTS -- 2.4%
332 A.O. Smith Corp. 24,143
15 Allegion PLC 2,160
36 Fortune Brands Home & Security,
Inc. 3,505
350 Johnson Controls International
PLC 26,180
15 Lennox International, Inc. 5,028
302 Masco Corp. 18,337
90 Trane Technologies PLC 17,865
-------------
97,218
-------------
CAPITAL MARKETS -- 2.6%
372 Bank of New York Mellon (The)
Corp. 20,542
18 BlackRock, Inc. 16,979
189 Blackstone, Inc. 23,763
374 Franklin Resources, Inc. 12,133
69 Invesco Ltd. 1,747
15 MSCI, Inc. 9,519
12 Nasdaq, Inc. 2,349
81 T. Rowe Price Group, Inc. 18,133
-------------
105,165
-------------
CHEMICALS -- 0.8%
355 Corteva, Inc. 15,609
27 Dow, Inc. 1,698
24 DuPont de Nemours, Inc. 1,777
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
CHEMICALS (CONTINUED)
12 PPG Industries, Inc. $ 1,915
30 Sherwin-Williams (The) Co. 9,110
-------------
30,109
-------------
COMMUNICATIONS EQUIPMENT
-- 2.7%
685 Cisco Systems, Inc. 40,429
132 F5 Networks, Inc. (a) 26,871
704 Juniper Networks, Inc. 20,402
45 Motorola Solutions, Inc. 10,990
30 Ubiquiti, Inc. 9,761
-------------
108,453
-------------
CONSTRUCTION & ENGINEERING
-- 1.1%
418 Quanta Services, Inc. 42,678
-------------
CONSUMER FINANCE -- 0.3%
24 Capital One Financial Corp. 3,983
150 Synchrony Financial 7,463
-------------
11,446
-------------
CONTAINERS & PACKAGING -- 1.3%
87 Avery Dennison Corp. 19,609
353 International Paper Co. 21,212
165 Sealed Air Corp. 10,070
-------------
50,891
-------------
DISTRIBUTORS -- 1.1%
117 Genuine Parts Co. 14,296
367 LKQ Corp. (a) 19,337
21 Pool Corp. 10,381
-------------
44,014
-------------
DIVERSIFIED FINANCIAL SERVICES
-- 1.7%
213 Berkshire Hathaway, Inc.,
Class B (a) 60,869
216 Equitable Holdings, Inc. 6,698
-------------
67,567
-------------
DIVERSIFIED TELECOMMUNICATION
SERVICES -- 1.7%
935 AT&T, Inc. 25,638
1,127 Lumen Technologies, Inc. 13,862
500 Verizon Communications, Inc. 27,500
-------------
67,000
-------------
ELECTRIC UTILITIES -- 2.1%
162 Alliant Energy Corp. 9,848
324 Evergy, Inc. 22,178
248 Exelon Corp. 12,157
253 FirstEnergy Corp. 9,834
251 NRG Energy, Inc. 11,463
105 Pinnacle West Capital Corp. 8,074
325 PPL Corp. 9,539
-------------
83,093
-------------
Page 26 See Notes to Financial Statements
<PAGE>
FIRST TRUST ACTIVE FACTOR LARGE CAP ETF (AFLG)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
ELECTRICAL EQUIPMENT -- 0.7%
81 Eaton Corp. PLC $ 13,637
38 Emerson Electric Co. 4,009
28 Generac Holdings, Inc. (a) 12,236
-------------
29,882
-------------
ELECTRONIC EQUIPMENT,
INSTRUMENTS & COMPONENTS
-- 1.6%
111 CDW Corp. 22,268
33 Keysight Technologies, Inc. (a) 5,920
75 TE Connectivity Ltd. 11,266
24 Trimble, Inc. (a) 2,261
36 Zebra Technologies Corp.,
Class A (a) 21,138
-------------
62,853
-------------
ENERGY EQUIPMENT & SERVICES
-- 0.0%
72 Baker Hughes Co. 1,640
-------------
ENTERTAINMENT -- 0.1%
69 Activision Blizzard, Inc. 5,684
-------------
EQUITY REAL ESTATE INVESTMENT
TRUSTS -- 2.8%
63 Camden Property Trust 9,452
53 Equity Residential 4,456
126 Extra Space Storage, Inc. 23,551
417 Iron Mountain, Inc. 19,912
108 Mid-America Apartment
Communities, Inc. 20,776
81 Public Storage 26,212
262 Weyerhaeuser Co. 9,432
-------------
113,791
-------------
FOOD & STAPLES RETAILING -- 2.1%
45 Costco Wholesale Corp. 20,497
756 Kroger (The) Co. 34,799
184 Walmart, Inc. 27,250
-------------
82,546
-------------
FOOD PRODUCTS -- 0.9%
45 Archer-Daniels-Midland Co. 2,700
156 General Mills, Inc. 9,018
137 J.M. Smucker (The) Co. 16,943
117 Tyson Foods, Inc., Class A 9,187
-------------
37,848
-------------
HEALTH CARE EQUIPMENT &
SUPPLIES -- 2.7%
3 Align Technology, Inc. (a) 2,127
108 Danaher Corp. 35,009
147 Hologic, Inc. (a) 11,635
27 IDEXX Laboratories, Inc. (a) 18,192
9 Masimo Corp. (a) 2,444
36 ResMed, Inc. 10,459
66 West Pharmaceutical Services,
Inc. 29,807
-------------
109,673
-------------
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
HEALTH CARE PROVIDERS &
SERVICES -- 3.4%
18 AmerisourceBergen Corp. $ 2,200
58 Anthem, Inc. 21,757
212 Cardinal Health, Inc. 11,128
96 Centene Corp. (a) 6,046
21 Cigna Corp. 4,445
240 CVS Health Corp. 20,734
57 HCA Healthcare, Inc. 14,420
44 Henry Schein, Inc. (a) 3,326
21 Humana, Inc. 8,514
33 Laboratory Corp. of America
Holdings (a) 10,011
12 McKesson Corp. 2,450
84 Quest Diagnostics, Inc. 12,838
27 UnitedHealth Group, Inc. 11,239
48 Universal Health Services, Inc.,
Class B 7,476
-------------
136,584
-------------
HEALTH CARE TECHNOLOGY -- 0.4%
230 Cerner Corp. 17,560
-------------
HOTELS, RESTAURANTS & LEISURE
-- 0.7%
6 Chipotle Mexican Grill, Inc. (a) 11,420
15 Domino's Pizza, Inc. 7,754
78 Yum! Brands, Inc. 10,220
-------------
29,394
-------------
HOUSEHOLD DURABLES -- 2.5%
72 D.R. Horton, Inc. 6,885
132 Garmin Ltd. 23,025
111 Lennar Corp., Class A 11,911
57 Mohawk Industries, Inc. (a) 11,272
472 Newell Brands, Inc. 11,994
3 NVR, Inc. (a) 15,540
275 PulteGroup, Inc. 14,811
21 Whirlpool Corp. 4,652
-------------
100,090
-------------
INDEPENDENT POWER AND
RENEWABLE ELECTRICITY
PRODUCERS -- 0.2%
403 Vistra Corp. 7,693
-------------
INDUSTRIAL CONGLOMERATES
-- 0.6%
116 3M Co. 22,590
-------------
INSURANCE -- 3.3%
337 Aflac, Inc. 19,101
246 Allstate (The) Corp. 33,279
33 Aon PLC, Class A 9,466
51 Chubb Ltd. 9,380
156 Cincinnati Financial Corp. 19,250
210 CNA Financial Corp. 9,314
72 Loews Corp. 4,023
15 Marsh & McLennan Cos., Inc. 2,358
101 Progressive (The) Corp. 9,730
18 Prudential Financial, Inc. 1,906
See Notes to Financial Statements Page 27
<PAGE>
FIRST TRUST ACTIVE FACTOR LARGE CAP ETF (AFLG)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
INSURANCE (CONTINUED)
12 Travelers (The) Cos., Inc. $ 1,917
454 Unum Group 12,085
-------------
131,809
-------------
INTERACTIVE MEDIA & SERVICES
-- 4.3%
51 Alphabet, Inc., Class A (a) 147,591
33 Facebook, Inc., Class A (a) 12,520
84 Pinterest, Inc., Class A (a) 4,668
93 Snap, Inc., Class A (a) 7,078
-------------
171,857
-------------
INTERNET & DIRECT MARKETING
RETAIL -- 3.0%
24 Amazon.com, Inc. (a) 83,299
377 eBay, Inc. 28,931
36 Etsy, Inc. (a) 7,785
-------------
120,015
-------------
IT SERVICES -- 4.0%
110 Accenture PLC, Class A 37,022
12 Automatic Data Processing, Inc. 2,508
251 Cognizant Technology Solutions
Corp., Class A 19,154
33 EPAM Systems, Inc. (a) 20,883
75 Gartner, Inc. (a) 23,155
173 International Business Machines
Corp. 24,279
62 Jack Henry & Associates, Inc. 10,935
63 Paychex, Inc. 7,212
749 Western Union (The) Co. 16,208
-------------
161,356
-------------
LIFE SCIENCES TOOLS & SERVICES
-- 1.9%
156 Agilent Technologies, Inc. 27,373
6 Mettler-Toledo International,
Inc. (a) 9,317
81 PerkinElmer, Inc. 14,969
54 Waters Corp. (a) 22,357
-------------
74,016
-------------
MACHINERY -- 2.9%
51 Caterpillar, Inc. 10,754
83 Cummins, Inc. 19,586
63 Deere & Co. 23,816
45 Dover Corp. 7,846
75 Fortive Corp. 5,540
48 Otis Worldwide Corp. 4,427
303 Pentair PLC 23,379
30 Snap-on, Inc. 6,749
96 Xylem, Inc. 13,086
-------------
115,183
-------------
MEDIA -- 2.6%
424 Comcast Corp., Class A 25,728
306 Discovery, Inc., Class A (a) 8,825
168 DISH Network Corp., Class A (a) 7,323
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
MEDIA (CONTINUED)
494 Fox Corp., Class A $ 18,495
552 Interpublic Group of (The) Cos.,
Inc. 20,551
471 News Corp., Class A 10,584
76 Omnicom Group, Inc. 5,565
123 ViacomCBS, Inc., Class B 5,098
-------------
102,169
-------------
METALS & MINING -- 1.9%
133 Arconic Corp. (a) 4,587
277 Newmont Corp. 16,063
335 Nucor Corp. 39,383
106 Southern Copper Corp. 6,634
138 Steel Dynamics, Inc. 9,314
-------------
75,981
-------------
MULTILINE RETAIL -- 2.2%
57 Dollar General Corp. 12,706
146 Dollar Tree, Inc. (a) 13,219
189 Kohl's Corp. 10,848
211 Target Corp. 52,113
-------------
88,886
-------------
MULTI-UTILITIES -- 0.7%
230 Consolidated Edison, Inc. 17,353
134 Public Service Enterprise Group,
Inc. 8,568
-------------
25,921
-------------
OIL, GAS & CONSUMABLE FUELS
-- 2.5%
517 Cabot Oil & Gas Corp. 8,215
105 Cheniere Energy, Inc. (a) 9,183
149 Chevron Corp. 14,419
171 Devon Energy Corp. 5,053
150 EOG Resources, Inc. 10,128
628 Exxon Mobil Corp. 34,239
532 Kinder Morgan, Inc. 8,656
39 ONEOK, Inc. 2,048
373 Williams (The) Cos., Inc. 9,209
-------------
101,150
-------------
PERSONAL PRODUCTS -- 0.5%
57 Estee Lauder (The) Cos., Inc.,
Class A 19,408
-------------
PHARMACEUTICALS -- 2.4%
70 Bristol-Myers Squibb Co. 4,680
84 Eli Lilly and Co. 21,696
242 Johnson & Johnson 41,897
161 Merck & Co., Inc. 12,283
336 Pfizer, Inc. 15,480
-------------
96,036
-------------
PROFESSIONAL SERVICES -- 1.0%
194 Booz Allen Hamilton Holding
Corp. 15,891
75 Leidos Holdings, Inc. 7,358
69 Nielsen Holdings PLC 1,481
Page 28 See Notes to Financial Statements
<PAGE>
FIRST TRUST ACTIVE FACTOR LARGE CAP ETF (AFLG)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
PROFESSIONAL SERVICES (CONTINUED)
165 Robert Half International, Inc. $ 17,061
-------------
41,791
-------------
REAL ESTATE MANAGEMENT &
DEVELOPMENT -- 0.7%
308 CBRE Group, Inc., Class A (a) 29,660
-------------
ROAD & RAIL -- 0.3%
45 Old Dominion Freight Line, Inc. 12,992
-------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 3.5%
225 Applied Materials, Inc. 30,404
546 Intel Corp. 29,517
30 KLA Corp. 10,199
6 Lam Research Corp. 3,629
42 Qorvo, Inc. (a) 7,897
81 QUALCOMM, Inc. 11,882
45 Skyworks Solutions, Inc. 8,255
63 Teradyne, Inc. 7,651
170 Texas Instruments, Inc. 32,455
-------------
141,889
-------------
SOFTWARE -- 8.2%
30 Adobe, Inc. (a) 19,911
72 Cadence Design Systems, Inc. (a) 11,771
69 Citrix Systems, Inc. 7,098
30 Fortinet, Inc. (a) 9,454
21 HubSpot, Inc. (a) 14,374
27 Intuit, Inc. 15,285
525 Microsoft Corp. 158,487
658 Oracle Corp. 58,647
226 SS&C Technologies Holdings,
Inc. 17,099
45 Synopsys, Inc. (a) 14,951
-------------
327,077
-------------
SPECIALTY RETAIL -- 3.9%
39 Advance Auto Parts, Inc. 7,911
18 AutoZone, Inc. (a) 27,885
144 Bath & Body Works, Inc. 9,717
115 Best Buy Co., Inc. 13,399
57 Gap (The), Inc. 1,524
29 Home Depot (The), Inc. 9,459
186 Lowe's Cos., Inc. 37,924
30 O'Reilly Automotive, Inc. (a) 17,822
150 Tractor Supply Co. 29,137
37 Victoria's Secret & Co. (a) 2,453
-------------
157,231
-------------
TECHNOLOGY HARDWARE, STORAGE
& PERIPHERALS -- 6.9%
1,100 Apple, Inc. 167,013
90 Dell Technologies, Inc.,
Class C (a) 8,772
1,043 HP, Inc. 31,019
284 NetApp, Inc. 25,256
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
TECHNOLOGY HARDWARE, STORAGE
& PERIPHERALS (CONTINUED)
348 Seagate Technology Holdings
PLC $ 30,481
590 Xerox Holdings Corp. 13,281
-------------
275,822
-------------
TEXTILES, APPAREL & LUXURY
GOODS -- 0.6%
75 NIKE, Inc., Class B 12,355
36 Ralph Lauren Corp. 4,181
84 Tapestry, Inc. (a) 3,387
84 Under Armour, Inc., Class A (a) 1,944
-------------
21,867
-------------
TOBACCO -- 1.4%
503 Altria Group, Inc. 25,266
315 Philip Morris International, Inc. 32,445
-------------
57,711
-------------
TRADING COMPANIES &
DISTRIBUTORS -- 0.2%
36 Fastenal Co. 2,011
12 W.W. Grainger, Inc. 5,204
-------------
7,215
-------------
TOTAL COMMON STOCKS -- 99.8% 3,999,587
(Cost $3,726,029) -------------
MONEY MARKET FUNDS -- 0.1%
3,399 Morgan Stanley Institutional Liquidity
Funds - Treasury Portfolio -
Institutional Class -
0.01% (b) 3,399
(Cost $3,399) -------------
TOTAL INVESTMENTS -- 99.9% 4,002,986
(Cost $3,729,428) (c)
NET OTHER ASSETS AND
LIABILITIES -- 0.1% 4,469
-------------
NET ASSETS -- 100.0% $ 4,007,455
=============
(a) Non-income producing security.
(b) Rate shown reflects yield as of August 31, 2021.
(c) Aggregate cost for federal income tax purposes is $3,744,593. As of August
31, 2021, the aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost was $344,946 and the
aggregate gross unrealized depreciation for all investments in which there
was an excess of tax cost over value was $86,553. The net unrealized
appreciation was $258,393.
See Notes to Financial Statements Page 29
<PAGE>
FIRST TRUST ACTIVE FACTOR LARGE CAP ETF (AFLG)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 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* $ 3,999,587 $ -- $ --
Money Market Funds 3,399 -- --
---------------------------------------------
Total Investments $ 4,002,986 $ -- $ --
=============================================
* See Portfolio of Investments for industry breakout.
Page 30 See Notes to Financial Statements
<PAGE>
FIRST TRUST ACTIVE FACTOR MID CAP ETF (AFMC)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS -- 99.8%
AEROSPACE & DEFENSE -- 0.4%
28 Huntington Ingalls Industries,
Inc. $ 5,717
-------------
BANKS -- 2.7%
168 Associated Banc-Corp. 3,464
270 F.N.B. Corp. 3,154
5 First Citizens BancShares, Inc.,
Class A 4,489
76 Hancock Whitney Corp. 3,493
128 Popular, Inc. 9,720
396 Umpqua Holdings Corp. 7,710
59 Zions Bancorp N.A. 3,416
-------------
35,446
-------------
BEVERAGES -- 0.2%
52 Molson Coors Beverage Co.,
Class B 2,472
-------------
BIOTECHNOLOGY -- 1.5%
23 Blueprint Medicines Corp. (a) 2,145
47 Emergent BioSolutions, Inc. (a) 2,965
46 Exelixis, Inc. (a) 882
114 Halozyme Therapeutics, Inc. (a) 4,787
41 United Therapeutics Corp. (a) 8,810
-------------
19,589
-------------
BUILDING PRODUCTS -- 2.2%
19 A.O. Smith Corp. 1,382
52 Advanced Drainage Systems, Inc. 5,936
21 Carlisle Cos., Inc. 4,425
15 Lennox International, Inc. 5,028
89 Owens Corning 8,504
43 UFP Industries, Inc. 3,228
-------------
28,503
-------------
CAPITAL MARKETS -- 3.5%
45 Affiliated Managers Group, Inc. 7,655
49 Evercore, Inc., Class A 6,842
110 Franklin Resources, Inc. 3,568
35 Houlihan Lokey, Inc. 3,157
171 Janus Henderson Group PLC 7,415
352 Jefferies Financial Group, Inc. 13,010
17 Morningstar, Inc. 4,556
-------------
46,203
-------------
CHEMICALS -- 1.2%
284 Element Solutions, Inc. 6,455
73 Olin Corp. 3,638
62 Sensient Technologies Corp. 5,385
-------------
15,478
-------------
COMMERCIAL SERVICES & SUPPLIES
-- 1.1%
352 CoreCivic, Inc. (a) 3,422
18 Deluxe Corp. 690
117 Herman Miller, Inc. 4,918
133 HNI Corp. 5,039
-------------
14,069
-------------
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT
-- 2.4%
191 Ciena Corp. (a) $ 10,912
171 EchoStar Corp., Class A (a) 4,617
14 F5 Networks, Inc. (a) 2,850
130 Juniper Networks, Inc. 3,767
40 Lumentum Holdings, Inc. (a) 3,466
191 NetScout Systems, Inc. (a) 5,237
-------------
30,849
-------------
CONSTRUCTION & ENGINEERING
-- 3.0%
32 Dycom Industries, Inc. (a) 2,411
82 EMCOR Group, Inc. 9,963
85 MasTec, Inc. (a) 7,772
120 Quanta Services, Inc. 12,252
27 Valmont Industries, Inc. 6,719
-------------
39,117
-------------
CONSUMER FINANCE -- 1.6%
313 Navient Corp. 7,265
39 OneMain Holdings, Inc. 2,255
15 PROG Holdings, Inc. 710
549 SLM Corp. 10,294
-------------
20,524
-------------
CONTAINERS & PACKAGING -- 0.6%
44 Greif, Inc., Class A 2,786
15 Packaging Corp. of America 2,276
38 Sealed Air Corp. 2,319
-------------
7,381
-------------
DISTRIBUTORS -- 0.5%
13 Pool Corp. 6,426
-------------
DIVERSIFIED CONSUMER SERVICES
-- 1.7%
175 Adtalem Global Education,
Inc. (a) 6,475
14 Graham Holdings Co., Class B 8,635
164 H&R Block, Inc. 4,207
29 Strategic Education, Inc. 2,270
14 Terminix Global Holdings,
Inc. (a) 583
-------------
22,170
-------------
DIVERSIFIED FINANCIAL SERVICES
-- 0.5%
97 Equitable Holdings, Inc. 3,008
46 Voya Financial, Inc. 2,989
-------------
5,997
-------------
DIVERSIFIED TELECOMMUNICATION
SERVICES -- 0.4%
402 Lumen Technologies, Inc. 4,945
-------------
ELECTRIC UTILITIES -- 0.9%
110 Hawaiian Electric Industries, Inc. 4,796
74 NRG Energy, Inc. 3,380
61 Portland General Electric Co. 3,132
-------------
11,308
-------------
See Notes to Financial Statements Page 31
<PAGE>
FIRST TRUST ACTIVE FACTOR MID CAP ETF (AFMC)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
ELECTRICAL EQUIPMENT -- 1.2%
44 Acuity Brands, Inc. $ 8,119
58 GrafTech International Ltd. 642
115 nVent Electric PLC 3,952
24 Regal Beloit Corp. 3,586
-------------
16,299
-------------
ELECTRONIC EQUIPMENT,
INSTRUMENTS & COMPONENTS
-- 4.7%
144 Arrow Electronics, Inc. (a) 17,456
97 Avnet, Inc. 3,925
113 SYNNEX Corp. 14,359
78 Trimble, Inc. (a) 7,349
286 Vishay Intertechnology, Inc. 6,283
20 Zebra Technologies Corp.,
Class A (a) 11,743
-------------
61,115
-------------
ENERGY EQUIPMENT & SERVICES
-- 0.4%
83 Helmerich & Payne, Inc. 2,234
331 Patterson-UTI Energy, Inc. 2,569
-------------
4,803
-------------
EQUITY REAL ESTATE INVESTMENT
TRUSTS -- 7.1%
144 American Homes 4 Rent, Class A 6,039
135 Brixmor Property Group, Inc. 3,166
69 Camden Property Trust 10,353
9 CoreSite Realty Corp. 1,335
190 Cousins Properties, Inc. 7,326
152 CubeSmart 8,132
78 First Industrial Realty Trust, Inc. 4,367
648 GEO Group (The), Inc. 5,022
157 Highwoods Properties, Inc. 7,173
152 Iron Mountain, Inc. 7,258
58 Kilroy Realty Corp. 3,808
81 Life Storage, Inc. 10,080
70 National Storage Affiliates Trust 4,008
129 PotlatchDeltic Corp. 6,702
339 Sabra Health Care REIT, Inc. 5,424
145 Urban Edge Properties 2,746
-------------
92,939
-------------
FOOD & STAPLES RETAILING -- 1.3%
105 Albertsons Cos., Inc., Class A 3,188
119 BJ's Wholesale Club Holdings,
Inc. (a) 6,743
265 Sprouts Farmers Market, Inc. (a) 6,598
-------------
16,529
-------------
FOOD PRODUCTS -- 0.9%
76 Darling Ingredients, Inc. (a) 5,662
26 Flowers Foods, Inc. 627
38 Ingredion, Inc. 3,339
52 TreeHouse Foods, Inc. (a) 1,948
-------------
11,576
-------------
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
GAS UTILITIES -- 1.1%
308 UGI Corp. $ 14,263
-------------
HEALTH CARE EQUIPMENT &
SUPPLIES -- 3.5%
2 ABIOMED, Inc. (a) 728
39 DENTSPLY SIRONA, Inc. 2,406
119 Envista Holdings Corp. (a) 5,092
40 Globus Medical, Inc., Class A (a) 3,264
33 Haemonetics Corp. (a) 2,071
45 Hill-Rom Holdings, Inc. 6,551
32 ICU Medical, Inc. (a) 6,379
7 Masimo Corp. (a) 1,901
10 Penumbra, Inc. (a) 2,749
6 Quidel Corp. (a) 774
10 Shockwave Medical, Inc. (a) 2,142
44 STAAR Surgical Co. (a) 6,797
12 West Pharmaceutical Services,
Inc. 5,419
-------------
46,273
-------------
HEALTH CARE PROVIDERS &
SERVICES -- 4.3%
9 Amedisys, Inc. (a) 1,651
80 AMN Healthcare Services,
Inc. (a) 9,082
5 Chemed Corp. 2,383
24 DaVita, Inc. (a) 3,138
45 Henry Schein, Inc. (a) 3,402
23 LHC Group, Inc. (a) 4,295
49 Molina Healthcare, Inc. (a) 13,170
37 Patterson Cos., Inc. 1,134
155 Premier, Inc., Class A 5,763
52 Progyny, Inc. (a) 2,905
50 Tenet Healthcare Corp. (a) 3,768
36 Universal Health Services, Inc.,
Class B 5,607
-------------
56,298
-------------
HEALTH CARE TECHNOLOGY -- 0.6%
13 Inspire Medical Systems, Inc. (a) 2,906
29 Omnicell, Inc. (a) 4,503
-------------
7,409
-------------
HOTELS, RESTAURANTS & LEISURE
-- 0.2%
16 Papa John's International, Inc. 2,040
-------------
HOUSEHOLD DURABLES -- 2.4%
57 KB Home 2,453
44 Meritage Homes Corp. (a) 4,908
20 Mohawk Industries, Inc. (a) 3,955
117 Newell Brands, Inc. 2,973
108 PulteGroup, Inc. 5,817
37 Toll Brothers, Inc. 2,370
238 Tri Pointe Homes, Inc. (a) 5,657
15 Whirlpool Corp. 3,323
-------------
31,456
-------------
Page 32 See Notes to Financial Statements
<PAGE>
FIRST TRUST ACTIVE FACTOR MID CAP ETF (AFMC)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
INDEPENDENT POWER AND
RENEWABLE ELECTRICITY
PRODUCERS -- 0.2%
122 Vistra Corp. $ 2,329
-------------
INSURANCE -- 5.1%
100 American Financial Group, Inc. 13,794
11 Assurant, Inc. 1,871
133 CNA Financial Corp. 5,898
369 CNO Financial Group, Inc. 9,026
67 Fidelity National Financial, Inc. 3,272
39 First American Financial Corp. 2,751
16 Hanover Insurance Group (The),
Inc. 2,261
174 Mercury General Corp. 10,389
507 Old Republic International Corp. 13,182
169 Unum Group 4,499
-------------
66,943
-------------
INTERNET & DIRECT MARKETING
RETAIL -- 0.4%
15 Etsy, Inc. (a) 3,244
185 Qurate Retail, Inc., Series A 2,040
-------------
5,284
-------------
IT SERVICES -- 1.2%
20 Concentrix Corp. (a) 3,468
23 Genpact Ltd. 1,193
49 Maximus, Inc. 4,268
61 TTEC Holdings, Inc. 6,433
47 Western Union (The) Co. 1,017
-------------
16,379
-------------
LEISURE PRODUCTS -- 2.4%
107 Brunswick Corp. 10,365
364 Mattel, Inc. (a) 7,771
31 Polaris, Inc. 3,713
91 YETI Holdings, Inc. (a) 9,040
-------------
30,889
-------------
LIFE SCIENCES TOOLS & SERVICES
-- 2.2%
10 Bio-Rad Laboratories, Inc.,
Class A (a) 8,048
9 Bio-Techne Corp. 4,492
47 Bruker Corp. 4,150
17 Charles River Laboratories
International, Inc. (a) 7,546
22 Medpace Holdings, Inc. (a) 4,012
-------------
28,248
-------------
MACHINERY -- 4.2%
121 AGCO Corp. 16,652
8 Crane Co. 814
8 Lincoln Electric Holdings, Inc. 1,117
105 Oshkosh Corp. 12,031
28 Snap-on, Inc. 6,298
138 Terex Corp. 7,045
62 Toro (The) Co. 6,816
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
MACHINERY (CONTINUED)
24 Watts Water Technologies, Inc.,
Class A $ 4,118
-------------
54,891
-------------
MEDIA -- 2.4%
148 AMC Networks, Inc., Class A (a) 7,034
183 Interpublic Group of (The) Cos.,
Inc. 6,813
101 John Wiley & Sons, Inc., Class A 5,868
33 New York Times (The) Co.,
Class A 1,676
148 News Corp., Class A 3,326
20 Nexstar Media Group, Inc.,
Class A 2,995
186 TEGNA, Inc. 3,296
-------------
31,008
-------------
METALS & MINING -- 2.4%
62 Alcoa Corp. (a) 2,751
376 Commercial Metals Co. 12,265
71 Reliance Steel & Aluminum Co. 10,653
98 Worthington Industries, Inc. 5,679
-------------
31,348
-------------
MULTILINE RETAIL -- 0.6%
19 Dillard's, Inc., Class A 3,619
73 Kohl's Corp. 4,190
-------------
7,809
-------------
MULTI-UTILITIES -- 0.7%
293 MDU Resources Group, Inc. 9,426
-------------
OIL, GAS & CONSUMABLE FUELS
-- 1.3%
304 Antero Midstream Corp. 2,921
65 Cimarex Energy Co. 4,174
90 Targa Resources Corp. 3,953
1 Texas Pacific Land Corp. 1,360
141 World Fuel Services Corp. 4,563
-------------
16,971
-------------
PAPER & FOREST PRODUCTS -- 1.1%
236 Louisiana-Pacific Corp. 14,972
-------------
PERSONAL PRODUCTS -- 0.7%
71 Edgewell Personal Care Co. 3,003
124 Nu Skin Enterprises, Inc., Class A 6,277
-------------
9,280
-------------
PHARMACEUTICALS -- 1.3%
47 Jazz Pharmaceuticals PLC (a) 6,190
183 Prestige Consumer Healthcare,
Inc. (a) 10,503
-------------
16,693
-------------
PROFESSIONAL SERVICES -- 2.8%
27 ASGN, Inc. (a) 3,029
19 CACI International, Inc.,
Class A (a) 4,893
23 Exponent, Inc. 2,689
7 FTI Consulting, Inc. (a) 978
111 ManpowerGroup, Inc. 13,478
See Notes to Financial Statements Page 33
<PAGE>
FIRST TRUST ACTIVE FACTOR MID CAP ETF (AFMC)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
PROFESSIONAL SERVICES (CONTINUED)
55 Robert Half International, Inc. $ 5,687
69 TriNet Group, Inc. (a) 6,353
-------------
37,107
-------------
REAL ESTATE MANAGEMENT &
DEVELOPMENT -- 1.6%
86 Jones Lang LaSalle, Inc. (a) 20,849
-------------
ROAD & RAIL -- 1.3%
78 Knight-Swift Transportation
Holdings, Inc. 4,051
6 Landstar System, Inc. 1,008
43 Ryder System, Inc. 3,418
9 Saia, Inc. (a) 2,161
227 Schneider National, Inc., Class B 5,117
40 Werner Enterprises, Inc. 1,886
-------------
17,641
-------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 0.9%
47 Cirrus Logic, Inc. (a) 3,933
127 Lattice Semiconductor Corp. (a) 7,889
-------------
11,822
-------------
SOFTWARE -- 4.3%
20 Altair Engineering, Inc.,
Class A (a) 1,480
16 CDK Global, Inc. 666
61 CommVault Systems, Inc. (a) 4,939
26 Digital Turbine, Inc. (a) 1,520
22 Dolby Laboratories, Inc., Class A 2,180
20 Dropbox, Inc., Class A (a) 634
54 InterDigital, Inc. 3,894
96 J2 Global, Inc. (a) 13,219
62 Manhattan Associates, Inc. (a) 10,105
17 Paylocity Holding Corp. (a) 4,576
28 Rapid7, Inc. (a) 3,403
17 Sprout Social, Inc., Class A (a) 2,067
96 Teradata Corp. (a) 5,250
21 Workiva, Inc. (a) 2,946
-------------
56,879
-------------
SPECIALTY RETAIL -- 5.5%
101 Aaron's (The) Co., Inc. 2,678
200 American Eagle Outfitters, Inc. 6,104
157 AutoNation, Inc. (a) 17,127
79 Bath & Body Works, Inc. 5,331
133 Dick's Sporting Goods, Inc. 18,728
126 Foot Locker, Inc. 7,143
49 Murphy USA, Inc. 7,609
8 Penske Automotive Group, Inc. 719
12 Victoria's Secret & Co. (a) 796
32 Williams-Sonoma, Inc. 5,974
-------------
72,209
-------------
TECHNOLOGY HARDWARE, STORAGE
& PERIPHERALS -- 1.1%
57 3D Systems Corp. (a) 1,735
85 NetApp, Inc. 7,559
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
TECHNOLOGY HARDWARE, STORAGE
& PERIPHERALS (CONTINUED)
256 Xerox Holdings Corp. $ 5,763
-------------
15,057
-------------
TEXTILES, APPAREL & LUXURY
GOODS -- 2.9%
67 Carter's, Inc. 6,859
62 Crocs, Inc. (a) 8,855
24 Deckers Outdoor Corp. (a) 10,043
69 Hanesbrands, Inc. 1,289
233 Levi Strauss & Co., Class A 6,107
58 Tapestry, Inc. (a) 2,338
90 Under Armour, Inc., Class A (a) 2,083
-------------
37,574
-------------
THRIFTS & MORTGAGE FINANCE
-- 0.6%
201 MGIC Investment Corp. 3,069
61 New York Community Bancorp,
Inc. 764
18 PennyMac Financial Services, Inc. 1,198
98 Radian Group, Inc. 2,316
-------------
7,347
-------------
TRADING COMPANIES &
DISTRIBUTORS -- 0.5%
36 MSC Industrial Direct Co., Inc.,
Class A 3,032
15 Watsco, Inc. 4,176
-------------
7,208
-------------
TOTAL COMMON STOCKS -- 99.8% 1,303,357
(Cost $1,177,157) -------------
MONEY MARKET FUNDS -- 0.2%
2,233 Morgan Stanley Institutional Liquidity
Funds - Treasury Portfolio -
Institutional Class -
0.01% (b) 2,233
(Cost $2,233) -------------
TOTAL INVESTMENTS -- 100.0% 1,305,590
(Cost $1,179,390) (c)
NET OTHER ASSETS AND
LIABILITIES -- 0.0% 466
-------------
NET ASSETS -- 100.0% $ 1,306,056
=============
(a) Non-income producing security.
(b) Rate shown reflects yield as of August 31, 2021.
(c) Aggregate cost for federal income tax purposes is $1,185,325. As of August
31, 2021, the aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost was $153,315 and the
aggregate gross unrealized depreciation for all investments in which there
was an excess of tax cost over value was $33,050. The net unrealized
appreciation was $120,265.
Page 34 See Notes to Financial Statements
<PAGE>
FIRST TRUST ACTIVE FACTOR MID CAP ETF (AFMC)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 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* $ 1,303,357 $ -- $ --
Money Market Funds 2,233 -- --
---------------------------------------------
Total Investments $ 1,305,590 $ -- $ --
=============================================
* See Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 35
<PAGE>
FIRST TRUST ACTIVE FACTOR SMALL CAP ETF (AFSM)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS -- 99.8%
AIR FREIGHT & LOGISTICS -- 0.3%
94 Hub Group, Inc., Class A (a) $ 6,599
-------------
AUTO COMPONENTS -- 1.2%
88 Gentherm, Inc. (a) 7,552
146 Standard Motor Products, Inc. 6,262
226 XPEL, Inc. (a) (b) 17,172
-------------
30,986
-------------
BANKS -- 5.5%
314 Associated Banc-Corp. 6,475
266 Berkshire Hills Bancorp, Inc. 6,818
154 Eagle Bancorp, Inc. 8,886
472 F.N.B. Corp. 5,513
254 Hancock Whitney Corp. 11,674
364 Hilltop Holdings, Inc. 12,183
990 Hope Bancorp, Inc. 13,652
148 PacWest Bancorp 6,297
172 Popular, Inc. 13,062
210 ServisFirst Bancshares, Inc. 15,418
270 Simmons First National Corp.,
Class A 7,844
114 Synovus Financial Corp. 4,913
174 Triumph Bancorp, Inc. (a) 14,306
78 UMB Financial Corp. 7,143
408 WesBanco, Inc. 13,872
-------------
148,056
-------------
BEVERAGES -- 0.6%
188 Celsius Holdings, Inc. (a) 15,371
-------------
BIOTECHNOLOGY -- 4.6%
146 Alkermes PLC (a) 4,564
170 Anika Therapeutics, Inc. (a) 7,332
560 Avid Bioservices, Inc. (a) 13,574
142 Blueprint Medicines Corp. (a) 13,244
294 Coherus Biosciences, Inc. (a) 4,698
182 Eagle Pharmaceuticals, Inc. (a) 9,713
120 Emergent BioSolutions, Inc. (a) 7,570
110 Enanta Pharmaceuticals, Inc. (a) 6,292
234 Halozyme Therapeutics, Inc. (a) 9,826
192 Ironwood Pharmaceuticals,
Inc. (a) 2,515
96 Myriad Genetics, Inc. (a) 3,435
64 Natera, Inc. (a) 7,580
86 Sage Therapeutics, Inc. (a) 3,974
748 Vanda Pharmaceuticals, Inc. (a) 12,522
278 Vericel Corp. (a) 15,059
-------------
121,898
-------------
BUILDING PRODUCTS -- 1.2%
22 Advanced Drainage Systems, Inc. 2,511
378 Apogee Enterprises, Inc. 16,247
100 CSW Industrials, Inc. 13,279
16 UFP Industries, Inc. 1,201
-------------
33,238
-------------
CAPITAL MARKETS -- 2.3%
134 Artisan Partners Asset
Management, Inc., Class A 6,963
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
CAPITAL MARKETS (CONTINUED)
98 B. Riley Financial, Inc. $ 6,423
354 Brightsphere Investment Group,
Inc. 9,625
208 Donnelley Financial Solutions,
Inc. (a) 6,937
28 Evercore, Inc., Class A 3,910
162 Hercules Capital, Inc. 2,738
118 Houlihan Lokey, Inc. 10,644
156 Moelis & Co., Class A 9,664
12 Virtus Investment Partners, Inc. 3,752
-------------
60,656
-------------
CHEMICALS -- 0.4%
192 AdvanSix, Inc. (a) 7,008
56 Sensient Technologies Corp. 4,864
-------------
11,872
-------------
COMMERCIAL SERVICES & SUPPLIES
-- 0.8%
112 ABM Industries, Inc. 5,546
764 CoreCivic, Inc. (a) 7,426
38 Deluxe Corp. 1,458
28 HNI Corp. 1,061
412 Steelcase, Inc., Class A 5,805
-------------
21,296
-------------
COMMUNICATIONS EQUIPMENT
-- 2.1%
294 ADTRAN, Inc. 6,074
278 Calix, Inc. (a) 12,955
216 Cambium Networks Corp. (a) 8,094
226 EchoStar Corp., Class A (a) 6,102
284 NETGEAR, Inc. (a) 10,147
482 NetScout Systems, Inc. (a) 13,216
-------------
56,588
-------------
CONSTRUCTION & ENGINEERING
-- 3.2%
196 Comfort Systems USA, Inc. 14,892
16 Dycom Industries, Inc. (a) 1,205
146 EMCOR Group, Inc. 17,739
170 MasTec, Inc. (a) 15,545
234 MYR Group, Inc. (a) 24,338
218 Primoris Services Corp. 5,603
302 Sterling Construction Co.,
Inc. (a) 6,964
-------------
86,286
-------------
CONSUMER FINANCE -- 1.2%
1,118 Navient Corp. 25,949
88 Nelnet, Inc., Class A 7,117
-------------
33,066
-------------
CONTAINERS & PACKAGING -- 0.3%
286 Ranpak Holdings Corp. (a) 8,780
-------------
DIVERSIFIED CONSUMER SERVICES
-- 1.4%
186 Adtalem Global Education,
Inc. (a) 6,882
26 Graham Holdings Co., Class B 16,037
Page 36 See Notes to Financial Statements
<PAGE>
FIRST TRUST ACTIVE FACTOR SMALL CAP ETF (AFSM)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
DIVERSIFIED CONSUMER SERVICES
(CONTINUED)
52 H&R Block, Inc. $ 1,334
314 Houghton Mifflin Harcourt
Co. (a) 4,229
72 Laureate Education, Inc.,
Class A (a) 1,147
662 Perdoceo Education Corp. (a) 7,269
-------------
36,898
-------------
DIVERSIFIED FINANCIAL SERVICES
-- 0.5%
452 Cannae Holdings, Inc. (a) 14,428
-------------
ELECTRIC UTILITIES -- 0.4%
198 Hawaiian Electric Industries, Inc. 8,633
22 Portland General Electric Co. 1,130
-------------
9,763
-------------
ELECTRICAL EQUIPMENT -- 1.7%
50 Acuity Brands, Inc. 9,227
112 Atkore, Inc. (a) 10,390
84 Encore Wire Corp. 7,141
40 Generac Holdings, Inc. (a) 17,479
96 GrafTech International Ltd. 1,063
-------------
45,300
-------------
ELECTRONIC EQUIPMENT,
INSTRUMENTS & COMPONENTS
-- 2.6%
18 Badger Meter, Inc. 1,928
438 Benchmark Electronics, Inc. 11,839
36 CTS Corp. 1,263
88 Insight Enterprises, Inc. (a) 9,054
292 Methode Electronics, Inc. 13,599
26 OSI Systems, Inc. (a) 2,572
58 PC Connection, Inc. 2,808
128 Plexus Corp. (a) 11,754
64 Sanmina Corp. (a) 2,527
600 Vishay Intertechnology, Inc. 13,182
-------------
70,526
-------------
ENERGY EQUIPMENT & SERVICES
-- 0.3%
202 Helmerich & Payne, Inc. 5,438
34 Nabors Industries Ltd. (a) 2,867
-------------
8,305
-------------
EQUITY REAL ESTATE INVESTMENT
TRUSTS -- 4.6%
538 Brandywine Realty Trust 7,467
126 First Industrial Realty Trust, Inc. 7,055
606 GEO Group (The), Inc. 4,696
92 Gladstone Land Corp. 2,167
208 Industrial Logistics Properties
Trust 5,705
280 iStar, Inc. 7,406
2 Kite Realty Group Trust 41
240 National Health Investors, Inc. 14,357
294 National Storage Affiliates Trust 16,831
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
EQUITY REAL ESTATE INVESTMENT
TRUSTS (CONTINUED)
396 Office Properties Income Trust $ 10,506
412 Piedmont Office Realty Trust,
Inc., Class A 7,342
126 PotlatchDeltic Corp. 6,546
584 RPT Realty 7,557
424 Sabra Health Care REIT, Inc. 6,784
204 Tanger Factory Outlet Centers,
Inc. 3,411
606 UMH Properties, Inc. 14,362
-------------
122,233
-------------
FOOD & STAPLES RETAILING -- 2.3%
156 BJ's Wholesale Club Holdings,
Inc. (a) 8,839
236 Ingles Markets, Inc., Class A 16,022
604 SpartanNash Co. 12,986
246 Sprouts Farmers Market, Inc. (a) 6,125
134 United Natural Foods, Inc. (a) 4,931
228 Weis Markets, Inc. 12,985
-------------
61,888
-------------
FOOD PRODUCTS -- 0.2%
88 Darling Ingredients, Inc. (a) 6,556
-------------
HEALTH CARE EQUIPMENT &
SUPPLIES -- 5.8%
532 AngioDynamics, Inc. (a) 15,055
102 AtriCure, Inc. (a) 7,509
24 Avanos Medical, Inc. (a) 792
114 CryoPort, Inc. (a) 7,247
138 Cutera, Inc. (a) 6,864
18 Globus Medical, Inc., Class A (a) 1,469
24 Haemonetics Corp. (a) 1,506
46 Heska Corp. (a) 12,204
32 ICU Medical, Inc. (a) 6,379
146 Inogen, Inc. (a) 8,642
82 Lantheus Holdings, Inc. (a) 2,162
122 LeMaitre Vascular, Inc. 6,908
615 Meridian Bioscience, Inc. (a) 12,448
492 Natus Medical, Inc. (a) 13,048
46 Novocure Ltd. (a) 6,174
300 Orthofix Medical, Inc. (a) 12,720
48 Quidel Corp. (a) 6,190
64 Shockwave Medical, Inc. (a) 13,709
82 STAAR Surgical Co. (a) 12,666
-------------
153,692
-------------
HEALTH CARE PROVIDERS &
SERVICES -- 4.7%
64 Addus HomeCare Corp. (a) 5,755
6 Amedisys, Inc. (a) 1,101
172 AMN Healthcare Services,
Inc. (a) 19,525
78 Apollo Medical Holdings, Inc. (a) 5,921
72 CorVel Corp. (a) 11,866
46 Fulgent Genetics, Inc. (a) 4,197
208 Joint (The) Corp. (a) 21,251
70 LHC Group, Inc. (a) 13,073
See Notes to Financial Statements Page 37
<PAGE>
FIRST TRUST ACTIVE FACTOR SMALL CAP ETF (AFSM)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
HEALTH CARE PROVIDERS &
SERVICES (CONTINUED)
130 ModivCare, Inc. (a) $ 25,644
175 Owens & Minor, Inc. 6,524
186 Premier, Inc., Class A 6,916
22 US Physical Therapy, Inc. 2,583
-------------
124,356
-------------
HEALTH CARE TECHNOLOGY -- 2.1%
70 Inspire Medical Systems, Inc. (a) 15,649
630 NextGen Healthcare, Inc. (a) 9,614
110 Omnicell, Inc. (a) 17,080
28 OptimizeRx Corp. (a) 1,853
108 Phreesia, Inc. (a) 7,727
70 Vocera Communications, Inc. (a) 3,394
-------------
55,317
-------------
HOTELS, RESTAURANTS & LEISURE
-- 0.4%
76 Papa John's International, Inc. 9,692
4 RCI Hospitality Holdings, Inc. 259
-------------
9,951
-------------
HOUSEHOLD DURABLES -- 2.6%
90 Century Communities, Inc. 6,309
342 Ethan Allen Interiors, Inc. 8,215
136 KB Home 5,852
18 Lovesac (The) Co. (a) 1,018
198 M/I Homes, Inc. (a) 12,749
132 Meritage Homes Corp. (a) 14,723
36 Sonos, Inc. (a) 1,430
146 Taylor Morrison Home Corp. (a) 4,101
602 Tri Pointe Homes, Inc. (a) 14,310
-------------
68,707
-------------
HOUSEHOLD PRODUCTS -- 0.2%
72 Spectrum Brands Holdings, Inc. 5,620
-------------
INSURANCE -- 3.8%
106 American Equity Investment Life
Holding Co. 3,359
204 Argo Group International
Holdings Ltd. 10,792
280 CNO Financial Group, Inc. 6,849
406 Employers Holdings, Inc. 16,715
82 Enstar Group Ltd. (a) 18,915
60 HCI Group, Inc. 6,700
178 Horace Mann Educators Corp. 7,298
166 Mercury General Corp. 9,912
88 Safety Insurance Group, Inc. 7,155
92 Selective Insurance Group, Inc. 7,688
112 Stewart Information Services
Corp. 7,050
-------------
102,433
-------------
INTERNET & DIRECT MARKETING
RETAIL -- 0.8%
208 Liquidity Services, Inc. (a) 5,075
114 Revolve Group, Inc. (a) 6,551
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
INTERNET & DIRECT MARKETING
RETAIL (CONTINUED)
90 Shutterstock, Inc. $ 10,373
-------------
21,999
-------------
IT SERVICES -- 1.7%
312 Brightcove, Inc. (a) 3,544
128 CSG Systems International, Inc. 6,171
62 ExlService Holdings, Inc. (a) 7,635
16 Maximus, Inc. 1,393
166 Perficient, Inc. (a) 19,791
66 TTEC Holdings, Inc. 6,960
-------------
45,494
-------------
LEISURE PRODUCTS -- 2.8%
74 Acushnet Holdings Corp. 3,697
194 Clarus Corp. 5,255
482 Nautilus, Inc. (a) 5,495
1,132 Smith & Wesson Brands, Inc. 27,315
114 Sturm Ruger & Co., Inc. 8,914
560 Vista Outdoor, Inc. (a) 22,876
20 YETI Holdings, Inc. (a) 1,987
-------------
75,539
-------------
LIFE SCIENCES TOOLS & SERVICES
-- 0.5%
30 Medpace Holdings, Inc. (a) 5,471
26 Repligen Corp. (a) 7,357
-------------
12,828
-------------
MACHINERY -- 3.1%
92 Astec Industries, Inc. 5,625
70 Franklin Electric Co., Inc. 5,949
156 Greenbrier (The) Cos., Inc. 6,880
160 Hillenbrand, Inc. 7,427
20 Kadant, Inc. 4,182
64 Lindsay Corp. 10,544
250 Manitowoc (The) Co., Inc. (a) 6,062
162 Mueller Industries, Inc. 7,227
6 REV Group, Inc. 97
166 Shyft Group (The), Inc. 7,306
138 Terex Corp. 7,045
86 Watts Water Technologies, Inc.,
Class A 14,755
-------------
83,099
-------------
MARINE -- 0.3%
112 Matson, Inc. 8,867
-------------
MEDIA -- 1.9%
286 AMC Networks, Inc., Class A (a) 13,594
622 Gray Television, Inc. 14,144
102 John Wiley & Sons, Inc., Class A 5,926
192 TechTarget, Inc. (a) 16,239
68 TEGNA, Inc. 1,205
-------------
51,108
-------------
METALS & MINING -- 2.2%
312 Alcoa Corp. (a) 13,843
536 Commercial Metals Co. 17,484
276 Schnitzer Steel Industries, Inc.,
Class A 13,058
Page 38 See Notes to Financial Statements
<PAGE>
FIRST TRUST ACTIVE FACTOR SMALL CAP ETF (AFSM)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
METALS & MINING (CONTINUED)
620 TimkenSteel Corp. (a) $ 8,482
120 Worthington Industries, Inc. 6,954
-------------
59,821
-------------
MULTILINE RETAIL -- 0.5%
184 Big Lots, Inc. 8,953
24 Dillard's, Inc., Class A 4,571
-------------
13,524
-------------
MULTI-UTILITIES -- 0.3%
184 Avista Corp. 7,700
18 NorthWestern Corp. 1,145
-------------
8,845
-------------
OIL, GAS & CONSUMABLE FUELS
-- 2.3%
124 Bonanza Creek Energy, Inc. 4,821
436 Clean Energy Fuels Corp. (a) 3,457
214 CONSOL Energy, Inc. (a) 4,886
818 Dorian LPG Ltd. 10,814
326 International Seaways, Inc. 5,607
408 Magnolia Oil & Gas Corp.,
Class A 6,397
250 Scorpio Tankers, Inc. 4,053
788 Teekay Tankers Ltd., Class A (a) 9,023
404 World Fuel Services Corp. 13,073
-------------
62,131
-------------
PAPER & FOREST PRODUCTS -- 0.9%
360 Louisiana-Pacific Corp. 22,839
30 Schweitzer-Mauduit International,
Inc. 1,148
-------------
23,987
-------------
PERSONAL PRODUCTS -- 0.7%
30 Medifast, Inc. 6,837
20 Nu Skin Enterprises, Inc., Class A 1,012
66 USANA Health Sciences, Inc. (a) 6,404
440 Veru, Inc. (a) 3,925
-------------
18,178
-------------
PHARMACEUTICALS -- 2.3%
578 Amphastar Pharmaceuticals,
Inc. (a) 11,363
108 Collegium Pharmaceutical,
Inc. (a) 2,217
548 Corcept Therapeutics, Inc. (a) 11,661
958 Innoviva, Inc. (a) 14,619
150 Prestige Consumer Healthcare,
Inc. (a) 8,609
450 Supernus Pharmaceuticals,
Inc. (a) 12,389
-------------
60,858
-------------
PROFESSIONAL SERVICES -- 1.7%
194 Heidrick & Struggles
International, Inc. 8,385
50 Kforce, Inc. 2,921
222 Korn Ferry 15,693
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
PROFESSIONAL SERVICES (CONTINUED)
70 ManTech International Corp.,
Class A $ 5,542
298 Upwork, Inc. (a) 13,323
-------------
45,864
-------------
REAL ESTATE MANAGEMENT &
DEVELOPMENT -- 1.4%
182 eXp World Holdings, Inc. 8,345
140 Realogy Holdings Corp. (a) 2,457
264 RMR Group (The), Inc., Class A 12,234
282 St Joe (The) Co. 13,048
-------------
36,084
-------------
ROAD & RAIL -- 2.0%
414 ArcBest Corp. 27,626
36 Heartland Express, Inc. 604
398 Marten Transport Ltd. 6,205
66 Ryder System, Inc. 5,246
34 Saia, Inc. (a) 8,165
260 Schneider National, Inc., Class B 5,860
-------------
53,706
-------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 2.5%
16 Alpha & Omega Semiconductor
Ltd. (a) 465
346 Amkor Technology, Inc. 9,505
198 Axcelis Technologies, Inc. (a) 9,843
18 Cirrus Logic, Inc. (a) 1,506
114 Kulicke & Soffa Industries, Inc. 8,002
304 Lattice Semiconductor Corp. (a) 18,884
614 Photronics, Inc. (a) 9,253
48 Synaptics, Inc. (a) 9,109
-------------
66,567
-------------
SOFTWARE -- 4.0%
118 Agilysys, Inc. (a) 6,706
18 Alarm.com Holdings, Inc. (a) 1,518
42 Altair Engineering, Inc.,
Class A (a) 3,107
118 CommVault Systems, Inc. (a) 9,554
66 Digital Turbine, Inc. (a) 3,858
172 Ebix, Inc. 4,950
144 InterDigital, Inc. 10,384
110 J2 Global, Inc. (a) 15,147
78 Mitek Systems, Inc. (a) 1,745
178 Sprout Social, Inc., Class A (a) 21,645
14 SPS Commerce, Inc. (a) 1,897
134 Workiva, Inc. (a) 18,796
334 Xperi Holding Corp. 7,138
-------------
106,445
-------------
SPECIALTY RETAIL -- 4.0%
96 Aaron's (The) Co., Inc. 2,546
56 Buckle (The), Inc. 2,169
170 Citi Trends, Inc. (a) 14,644
44 Group 1 Automotive, Inc. 7,279
312 Haverty Furniture Cos., Inc. 11,117
274 Hibbett, Inc. 26,219
See Notes to Financial Statements Page 39
<PAGE>
FIRST TRUST ACTIVE FACTOR SMALL CAP ETF (AFSM)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
SPECIALTY RETAIL (CONTINUED)
444 Lumber Liquidators Holdings,
Inc. (a) $ 9,262
284 MarineMax, Inc. (a) 13,808
84 ODP (The) Corp. (a) 3,962
28 Sleep Number Corp. (a) 2,590
314 Zumiez, Inc. (a) 12,620
-------------
106,216
-------------
TECHNOLOGY HARDWARE, STORAGE
& PERIPHERALS -- 0.7%
438 Avid Technology, Inc. (a) 11,305
180 Super Micro Computer, Inc. (a) 6,577
-------------
17,882
-------------
TEXTILES, APPAREL & LUXURY
GOODS -- 1.2%
94 Crocs, Inc. (a) 13,425
16 Deckers Outdoor Corp. (a) 6,696
110 Fossil Group, Inc. (a) 1,474
140 G-III Apparel Group Ltd. (a) 4,330
46 Kontoor Brands, Inc. 2,482
92 Movado Group, Inc. 3,325
-------------
31,732
-------------
THRIFTS & MORTGAGE FINANCE
-- 1.2%
150 HomeStreet, Inc. 6,128
6 Kearny Financial Corp. 76
952 MGIC Investment Corp. 14,537
484 Northwest Bancshares, Inc. 6,302
194 Radian Group, Inc. 4,584
-------------
31,627
-------------
TOBACCO -- 0.5%
228 Universal Corp. 11,537
88 Vector Group Ltd. 1,322
-------------
12,859
-------------
TRADING COMPANIES &
DISTRIBUTORS -- 2.6%
450 Boise Cascade Co. 26,032
288 Rush Enterprises, Inc., Class A 12,701
48 SiteOne Landscape Supply,
Inc. (a) 9,605
152 Veritiv Corp. (a) 13,630
68 WESCO International, Inc. (a) 7,957
-------------
69,925
-------------
WIRELESS TELECOMMUNICATION
SERVICES -- 0.4%
114 Gogo, Inc. (a) 1,533
180 Telephone and Data Systems, Inc. 3,658
170 United States Cellular Corp. (a) 5,431
-------------
10,622
-------------
TOTAL COMMON STOCKS -- 99.8% 2,666,472
(Cost $2,531,298) -------------
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
MONEY MARKET FUNDS -- 0.2%
4,977 Morgan Stanley Institutional Liquidity
Funds - Treasury Portfolio -
Institutional Class -
0.01% (c) $ 4,977
(Cost $4,977) -------------
TOTAL INVESTMENTS -- 100.0% 2,671,449
(Cost $2,536,275) (d)
NET OTHER ASSETS AND
LIABILITIES -- 0.0% 381
-------------
NET ASSETS -- 100.0% $ 2,671,830
=============
(a) Non-income producing security.
(b) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the Securities Act of 1933, as
amended.
(c) Rate shown reflects yield as of August 31, 2021.
(d) Aggregate cost for federal income tax purposes is $2,552,295. As of August
31, 2021, the aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost was $196,356 and the
aggregate gross unrealized depreciation for all investments in which there
was an excess of tax cost over value was $77,202. The net unrealized
appreciation was $119,154.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 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* $ 2,666,472 $ -- $ --
Money Market Funds 4,977 -- --
---------------------------------------------
Total Investments $ 2,671,449 $ -- $ --
=============================================
* See Portfolio of Investments for industry breakout.
Page 40 See Notes to Financial Statements
<PAGE>
FIRST TRUST INNOVATION LEADERS ETF (ILDR)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS -- 99.7%
AEROSPACE & DEFENSE -- 3.7%
347 AeroVironment, Inc. (a) $ 35,519
93 Lockheed Martin Corp. 33,461
160 Northrop Grumman Corp. 58,832
-------------
127,812
-------------
AUTOMOBILES -- 1.0%
46 Tesla, Inc. (a) 33,843
-------------
BIOTECHNOLOGY -- 12.5%
234 Alnylam Pharmaceuticals, Inc. (a) 47,135
598 Apellis Pharmaceuticals, Inc. (a) 39,378
1,087 Arcus Biosciences, Inc. (a) 31,708
406 BioAtla, Inc. (a) 16,683
226 Intellia Therapeutics, Inc. (a) 36,280
730 Myovant Sciences Ltd. (a) 17,768
96 Regeneron Pharmaceuticals,
Inc. (a) 64,646
604 REGENXBIO, Inc. (a) 19,509
421 Rocket Pharmaceuticals, Inc. (a) 14,402
230 SpringWorks Therapeutics,
Inc. (a) 17,273
879 TG Therapeutics, Inc. (a) 23,795
319 Ultragenyx Pharmaceutical,
Inc. (a) 30,716
244 Vertex Pharmaceuticals, Inc. (a) 48,871
685 Y-mAbs Therapeutics, Inc. (a) 21,084
-------------
429,248
-------------
CAPITAL MARKETS -- 0.6%
78 Coinbase Global, Inc., Class A (a) 20,202
-------------
COMMUNICATIONS EQUIPMENT
-- 4.1%
63 Arista Networks, Inc. (a) 23,280
628 Ciena Corp. (a) 35,878
205 F5 Networks, Inc. (a) 41,732
3,369 Telefonaktiebolaget LM Ericsson,
Class B 39,939
-------------
140,829
-------------
CONSTRUCTION & ENGINEERING
-- 0.6%
228 MasTec, Inc. (a) 20,848
-------------
DIVERSIFIED TELECOMMUNICATION
SERVICES -- 0.9%
1,720 Radius Global Infrastructure,
Inc., Class A (a) 30,754
-------------
ELECTRICAL EQUIPMENT -- 2.6%
123 Acuity Brands, Inc. 22,697
1,162 Bloom Energy Corp., Class A (a) 24,890
240 Schneider Electric SE 42,876
-------------
90,463
-------------
ELECTRONIC EQUIPMENT,
INSTRUMENTS & COMPONENTS
-- 4.8%
208 Keysight Technologies, Inc. (a) 37,311
244 TE Connectivity Ltd. 36,654
441 Trimble, Inc. (a) 41,551
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
ELECTRONIC EQUIPMENT,
INSTRUMENTS & COMPONENTS
(CONTINUED)
772 Vontier Corp. $ 28,077
36 Zebra Technologies Corp.,
Class A (a) 21,138
-------------
164,731
-------------
ENTERTAINMENT -- 0.7%
45 Netflix, Inc. (a) 25,614
-------------
EQUITY REAL ESTATE INVESTMENT
TRUSTS -- 0.6%
24 Equinix, Inc. 20,243
-------------
HEALTH CARE EQUIPMENT &
SUPPLIES -- 4.2%
57 Align Technology, Inc. (a) 40,413
51 Dexcom, Inc. (a) 27,000
522 Globus Medical, Inc., Class A (a) 42,595
17 Intuitive Surgical, Inc. (a) 17,911
347 Outset Medical, Inc. (a) 17,104
-------------
145,023
-------------
HEALTH CARE PROVIDERS &
SERVICES -- 1.3%
353 Castle Biosciences, Inc. (a) 27,086
153 Guardant Health, Inc. (a) 19,472
-------------
46,558
-------------
HEALTH CARE TECHNOLOGY -- 0.3%
198 Schrodinger, Inc. (a) 11,819
-------------
HOTELS, RESTAURANTS & LEISURE
-- 0.5%
105 Airbnb, Inc., Class A (a) 16,274
-------------
HOUSEHOLD DURABLES -- 0.9%
300 Sony Group Corp. 30,978
-------------
INDUSTRIAL CONGLOMERATES
-- 1.8%
108 Honeywell International, Inc. 25,046
222 Siemens AG 36,918
-------------
61,964
-------------
INTERACTIVE MEDIA & SERVICES
-- 7.9%
48 Alphabet, Inc., Class C (a) 139,644
351 Facebook, Inc., Class A (a) 133,162
-------------
272,806
-------------
INTERNET & DIRECT MARKETING
RETAIL -- 3.8%
24 Amazon.com, Inc. (a) 83,299
214 Etsy, Inc. (a) 46,280
-------------
129,579
-------------
IT SERVICES -- 7.7%
9 Adyen N.V. (a) (b) (c) 29,059
90 MongoDB, Inc. (a) 35,264
406 Pagseguro Digital Ltd.,
Class A (a) 24,145
193 PayPal Holdings, Inc. (a) 55,711
160 Square, Inc., Class A (a) 42,891
See Notes to Financial Statements Page 41
<PAGE>
FIRST TRUST INNOVATION LEADERS ETF (ILDR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
IT SERVICES (CONTINUED)
1,570 Switch, Inc., Class A $ 38,952
105 Twilio, Inc., Class A (a) 37,481
-------------
263,503
-------------
LEISURE PRODUCTS -- 1.3%
183 Peloton Interactive, Inc.,
Class A (a) 18,335
231 Polaris, Inc. 27,664
-------------
45,999
-------------
LIFE SCIENCES TOOLS & SERVICES
-- 0.6%
356 NanoString Technologies, Inc. (a) 20,719
-------------
MACHINERY -- 0.6%
100 FANUC Corp. 21,806
-------------
PHARMACEUTICALS -- 0.9%
291 Reata Pharmaceuticals, Inc.,
Class A (a) 30,994
-------------
ROAD & RAIL -- 1.6%
1,396 Uber Technologies, Inc. (a) 54,639
-------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 7.3%
700 Allegro MicroSystems, Inc. (a) 21,035
93 Lam Research Corp. 56,248
253 NVIDIA Corp. 56,634
202 NXP Semiconductors N.V. 43,456
691 Rambus, Inc. (a) 16,446
154 Skyworks Solutions, Inc. 28,253
240 Teradyne, Inc. 29,146
-------------
251,218
-------------
SOFTWARE -- 26.9%
84 Adobe, Inc. (a) 55,751
132 Autodesk, Inc. (a) 40,932
386 C3.ai, Inc., Class A (a) 19,895
126 Crowdstrike Holdings, Inc.,
Class A (a) 35,406
138 CyberArk Software Ltd. (a) 23,176
231 Datadog, Inc., Class A (a) 31,832
308 Domo, Inc., Class B (a) 27,566
766 Dynatrace, Inc. (a) 52,647
225 Elastic N.V. (a) 35,899
153 Five9, Inc. (a) 24,209
111 Fortinet, Inc. (a) 34,981
413 Microsoft Corp. 124,676
761 ON24, Inc. (a) 17,206
132 RingCentral, Inc., Class A (a) 33,298
268 salesforce.com, Inc. (a) 71,092
102 ServiceNow, Inc. (a) 65,651
299 Smartsheet, Inc., Class A (a) 23,791
296 Sprout Social, Inc., Class A (a) 35,994
631 Telos Corp. (a) 20,823
475 Tenable Holdings, Inc. (a) 21,076
426 Trade Desk (The), Inc.,
Class A (a) 34,101
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
SOFTWARE (CONTINUED)
208 Workday, Inc., Class A (a) $ 56,817
282 Workiva, Inc. (a) 39,556
-------------
926,375
-------------
TOTAL COMMON STOCKS -- 99.7% 3,434,841
(Cost $3,113,558) -------------
MONEY MARKET FUNDS -- 0.3%
9,138 Morgan Stanley Institutional Liquidity
Funds - Treasury Portfolio -
Institutional Class -
0.01% (d) 9,138
(Cost $9,138) -------------
TOTAL INVESTMENTS -- 100.0% 3,443,979
(Cost $3,122,696) (e)
NET OTHER ASSETS AND
LIABILITIES -- (0.0)% (806)
-------------
NET ASSETS -- 100.0% $ 3,443,173
=============
(a) Non-income producing security.
(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) Rate shown reflects yield as of August 31, 2021.
(e) Aggregate cost for federal income tax purposes is $3,122,744. As of August
31, 2021, the aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost was $411,492 and the
aggregate gross unrealized depreciation for all investments in which there
was an excess of tax cost over value was $90,257. The net unrealized
appreciation was $321,235.
Page 42 See Notes to Financial Statements
<PAGE>
FIRST TRUST INNOVATION LEADERS ETF (ILDR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 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* $ 3,434,841 $ -- $ --
Money Market Funds 9,138 -- --
---------------------------------------------
Total Investments $ 3,443,979 $ -- $ --
=============================================
* See Portfolio of Investments for industry breakout.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
----------------------------------------------------------
United States Dollar 94.1%
Euro 3.2
Japanese Yen 1.5
Swedish Krona 1.2
--------
Total 100.0%
========
See Notes to Financial Statements Page 43
<PAGE>
FIRST TRUST EXPANDED TECHNOLOGY ETF (XPND)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS -- 99.9%
COMMUNICATIONS EQUIPMENT
-- 0.9%
405 Arista Networks, Inc. (a) $ 149,660
-------------
ELECTRONIC EQUIPMENT,
INSTRUMENTS & COMPONENTS
-- 3.8%
210 CDW Corp. 42,128
4,695 Corning, Inc. 187,753
1,005 Keysight Technologies, Inc. (a) 180,277
465 Trimble, Inc. (a) 43,812
285 Zebra Technologies Corp.,
Class A (a) 167,344
-------------
621,314
-------------
ENTERTAINMENT -- 2.2%
4,290 Activision Blizzard, Inc. 353,367
-------------
INTERACTIVE MEDIA & SERVICES
-- 9.4%
270 Alphabet, Inc., Class A (a) 781,366
2,010 Facebook, Inc., Class A (a) 762,554
-------------
1,543,920
-------------
INTERNET & DIRECT MARKETING
RETAIL -- 2.0%
3,765 eBay, Inc. 288,926
195 Etsy, Inc. (a) 42,171
-------------
331,097
-------------
IT SERVICES -- 14.0%
2,340 Automatic Data Processing, Inc. 489,154
300 EPAM Systems, Inc. (a) 189,843
150 Gartner, Inc. (a) 46,311
1,800 Mastercard, Inc., Class A 623,214
1,980 Paychex, Inc. 226,651
2,520 PayPal Holdings, Inc. (a) 727,423
-------------
2,302,596
-------------
MEDIA -- 1.7%
1,035 Altice USA, Inc., Class A (a) 28,400
795 DISH Network Corp., Class A (a) 34,654
1,410 News Corp., Class A 31,683
435 Omnicom Group, Inc. 31,851
3,585 ViacomCBS, Inc., Class B 148,598
-------------
275,186
-------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 29.0%
4,755 Applied Materials, Inc. 642,543
1,395 Broadcom, Inc. 693,608
255 Enphase Energy, Inc. (a) 44,301
315 Entegris, Inc. 37,844
840 KLA Corp. 285,566
780 Lam Research Corp. 471,760
90 Monolithic Power Systems, Inc. 44,544
3,900 NVIDIA Corp. 873,015
930 ON Semiconductor Corp. (a) 41,255
195 Qorvo, Inc. (a) 36,666
4,950 QUALCOMM, Inc. 726,115
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT (CONTINUED)
900 Skyworks Solutions, Inc. $ 165,114
270 Teradyne, Inc. 32,789
3,465 Texas Instruments, Inc. 661,503
-------------
4,756,623
-------------
SOFTWARE -- 31.7%
1,320 Adobe, Inc. (a) 876,084
1,200 Autodesk, Inc. (a) 372,108
1,530 Cadence Design Systems, Inc. (a) 250,124
705 Dynatrace, Inc. (a) 48,455
900 Fortinet, Inc. (a) 283,626
1,485 Intuit, Inc. 840,673
2,670 Microsoft Corp. 806,020
8,250 Oracle Corp. 735,322
270 PTC, Inc. (a) 35,548
840 Synopsys, Inc. (a) 279,082
2,550 Trade Desk (The), Inc.,
Class A (a) 204,128
1,620 Zoom Video Communications,
Inc., Class A (a) 468,990
-------------
5,200,160
-------------
TECHNOLOGY HARDWARE, STORAGE
& PERIPHERALS -- 5.2%
5,295 Apple, Inc. 803,940
465 NetApp, Inc. 41,352
-------------
845,292
-------------
TOTAL COMMON STOCKS -- 99.9% 16,379,215
(Cost $15,557,719) -------------
MONEY MARKET FUNDS -- 0.1%
22,784 Morgan Stanley Institutional Liquidity
Funds - Treasury Portfolio -
Institutional Class -
0.01% (b) 22,784
(Cost $22,784) -------------
TOTAL INVESTMENTS -- 100.0% 16,401,999
(Cost $15,580,503) (c)
NET OTHER ASSETS AND
LIABILITIES -- (0.0)% (2,813)
-------------
NET ASSETS -- 100.0% $ 16,399,186
=============
(a) Non-income producing security.
(b) Rate shown reflects yield as of August 31, 2021.
(c) Aggregate cost for federal income tax purposes is $15,580,503. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$1,186,818 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$365,322. The net unrealized appreciation was $821,496.
Page 44 See Notes to Financial Statements
<PAGE>
FIRST TRUST EXPANDED TECHNOLOGY ETF (XPND)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 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* $ 16,379,215 $ -- $ --
Money Market Funds 22,784 -- --
---------------------------------------------
Total Investments $ 16,401,999 $ -- $ --
=============================================
* See Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 45
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 2021
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST FIRST TRUST
LOW DURATION ACTIVE FACTOR ACTIVE FACTOR
STRATEGIC FOCUS LARGE CAP ETF MID CAP ETF
ETF (LDSF) (AFLG) (AFMC)
--------------- --------------- ---------------
<S> <C> <C> <C>
ASSETS:
Investments, at value - Affiliated............................... $ 156,217,249 $ -- $ --
Investments, at value - Unaffiliated............................. 27,881,555 4,002,986 1,305,590
--------------- --------------- ---------------
Total investments, at value...................................... 184,098,804 4,002,986 1,305,590
Cash............................................................. -- -- --
Dividends receivable............................................. 4,306 6,313 1,175
--------------- --------------- ---------------
Total Assets.................................................. 184,103,110 4,009,299 1,306,765
--------------- --------------- ---------------
LIABILITIES:
Investment advisory fees payable................................. 31,180 1,844 709
--------------- --------------- ---------------
Total Liabilities............................................. 31,180 1,844 709
--------------- --------------- ---------------
NET ASSETS....................................................... $ 184,071,930 $ 4,007,455 $ 1,306,056
=============== =============== ===============
NET ASSETS CONSIST OF:
Paid-in capital.................................................. $ 186,601,295 $ 3,985,011 $ 1,420,934
Par value........................................................ 91,000 1,500 500
Accumulated distributable earnings (loss)........................ (2,620,365) 20,944 (115,378)
--------------- --------------- ---------------
NET ASSETS....................................................... $ 184,071,930 $ 4,007,455 $ 1,306,056
=============== =============== ===============
NET ASSET VALUE, per share....................................... $ 20.23 $ 26.72 $ 26.12
=============== =============== ===============
Number of shares outstanding (unlimited number of shares
authorized, par value $0.01 per share)........................ 9,100,002 150,002 50,002
=============== =============== ===============
Investments, at cost - Affiliated................................ $ 156,811,021 $ -- $ --
=============== =============== ===============
Investments, at cost - Unaffiliated.............................. $ 27,632,659 $ 3,729,428 $ 1,179,390
=============== =============== ===============
Total investments, at cost....................................... $ 184,443,680 $ 3,729,428 $ 1,179,390
=============== =============== ===============
</TABLE>
Page 46 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST FIRST TRUST
ACTIVE FACTOR INNOVATION EXPANDED
SMALL CAP ETF LEADERS ETF TECHNOLOGY ETF
(AFSM) (ILDR) (XPND)
--------------- --------------- ---------------
<S> <C> <C>
$ -- $ -- $ --
2,671,449 3,443,979 16,401,999
--------------- --------------- ---------------
2,671,449 3,443,979 16,401,999
-- 33 --
1,613 1,281 6,094
--------------- --------------- ---------------
2,673,062 3,445,293 16,408,093
--------------- --------------- ---------------
1,232 2,120 8,907
--------------- --------------- ---------------
1,232 2,120 8,907
--------------- --------------- ---------------
$ 2,671,830 $ 3,443,173 $ 16,399,186
=============== =============== ===============
$ 2,865,541 $ 3,115,357 $ 15,570,190
1,000 1,500 7,500
(194,711) 326,316 821,496
--------------- --------------- ---------------
$ 2,671,830 $ 3,443,173 $ 16,399,186
=============== =============== ===============
$ 26.72 $ 22.95 $ 21.87
=============== =============== ===============
100,002 150,002 750,002
=============== =============== ===============
$ -- $ -- $ --
=============== =============== ===============
$ 2,536,275 $ 3,122,696 $ 15,580,503
=============== =============== ===============
$ 2,536,275 $ 3,122,696 $ 15,580,503
=============== =============== ===============
</TABLE>
See Notes to Financial Statements Page 47
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED AUGUST 31, 2021
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST FIRST TRUST
LOW DURATION ACTIVE FACTOR ACTIVE FACTOR
STRATEGIC FOCUS LARGE CAP ETF MID CAP ETF
ETF (LDSF) (AFLG) (AFMC)
--------------- --------------- ---------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends - Affiliated........................................... $ 2,703,166 $ -- $ --
Dividends - Unaffiliated......................................... 553,628 85,362 26,959
Foreign withholding tax.......................................... -- -- (28)
--------------- --------------- ---------------
Total investment income....................................... 3,256,794 85,362 26,931
--------------- --------------- ---------------
EXPENSES:
Investment advisory fees......................................... 318,181 28,106 12,002
--------------- --------------- ---------------
Total expenses................................................ 318,181 28,106 12,002
--------------- --------------- ---------------
NET INVESTMENT INCOME (LOSS)..................................... 2,938,613 57,256 14,929
--------------- --------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments - Affiliated...................................... 295,984 -- --
Investments - Unaffiliated.................................... (32,417) (136,023) (21,852)
In-kind redemptions - Affiliated.............................. 1,153,419 -- --
In-kind redemptions - Unaffiliated............................ 70,342 1,374,831 636,223
Distribution of capital gains from investment
companies - Affiliated..................................... 261,464 -- --
Distribution of capital gains from investment
companies - Unaffiliated................................... 4,257 -- --
Foreign currency transactions................................. -- -- --
--------------- --------------- ---------------
Net realized gain (loss)......................................... 1,753,049 1,238,808 614,371
--------------- --------------- ---------------
Net change in unrealized appreciation (depreciation) on :
Investments - Affiliated...................................... (2,118,583) -- --
Investments - Unaffiliated.................................... (130,233) 84,230 138,549
--------------- --------------- ---------------
Net change in unrealized appreciation (depreciation)............. (2,248,816) 84,230 138,549
--------------- --------------- ---------------
NET REALIZED AND UNREALIZED GAIN (LOSS).......................... (495,767) 1,323,038 752,920
--------------- --------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS............................................... $ 2,442,846 $ 1,380,294 $ 767,849
=============== =============== ===============
</TABLE>
(a) Inception date is May 25, 2021, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
(b) Inception date is June 14, 2021, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
Page 48 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST FIRST TRUST
ACTIVE FACTOR INNOVATION EXPANDED
SMALL CAP ETF LEADERS ETF TECHNOLOGY ETF
(AFSM) (ILDR) (a) (XPND) (b)
--------------- --------------- ---------------
<S> <C> <C>
$ -- $ -- $ --
20,127 1,996 16,570
(25) (11) --
--------------- --------------- ---------------
20,102 1,985 16,570
--------------- --------------- ---------------
14,709 5,655 17,440
--------------- --------------- ---------------
14,709 5,655 17,440
--------------- --------------- ---------------
5,393 (3,670) (870)
--------------- --------------- ---------------
-- -- --
(41,767) 8,728 --
-- -- --
773,543 -- --
-- -- --
-- -- --
-- (25) --
--------------- --------------- ---------------
731,776 8,703 --
--------------- --------------- ---------------
-- -- --
89,504 321,283 821,496
--------------- --------------- ---------------
89,504 321,283 821,496
--------------- --------------- ---------------
821,280 329,986 821,496
--------------- --------------- ---------------
$ 826,673 $ 326,316 $ 820,626
=============== =============== ===============
</TABLE>
See Notes to Financial Statements Page 49
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST
LOW DURATION ACTIVE FACTOR
STRATEGIC FOCUS ETF LARGE CAP ETF
(LDSF) (AFLG)
--------------------------------- ---------------------------------
Year Ended Year Ended Year Ended Period Ended
8/31/2021 8/31/2020 8/31/2021 8/31/2020 (a)
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)............................ $ 2,938,613 $ 2,539,741 $ 57,256 $ 23,037
Net realized gain (loss)................................ 1,753,049 (2,893,988) 1,238,808 (91,727)
Net change in unrealized appreciation (depreciation).... (2,248,816) 1,656,771 84,230 189,328
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets resulting from
operations........................................... 2,442,846 1,302,524 1,380,294 120,638
--------------- --------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations................................... (3,935,676) (2,633,376) (53,635) (17,680)
--------------- --------------- --------------- ---------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold............................... 106,710,761 118,598,581 8,097,356 3,045,020
Cost of shares redeemed................................. (51,846,837) (36,794,658) (7,515,991) (1,048,547)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets resulting from
shareholder transactions............................. 54,863,924 81,803,923 581,365 1,996,473
--------------- --------------- --------------- ---------------
Total increase (decrease) in net assets................. 53,371,094 80,473,071 1,908,024 2,099,431
NET ASSETS:
Beginning of period..................................... 130,700,836 50,227,765 2,099,431 --
--------------- --------------- --------------- ---------------
End of period........................................... $ 184,071,930 $ 130,700,836 $ 4,007,455 $ 2,099,431
=============== =============== =============== ===============
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period................. 6,400,002 2,450,002 100,002 --
Shares sold............................................. 5,250,000 5,800,000 350,000 150,002
Shares redeemed......................................... (2,550,000) (1,850,000) (300,000) (50,000)
--------------- --------------- --------------- ---------------
Shares outstanding, end of period....................... 9,100,002 6,400,002 150,002 100,002
=============== =============== =============== ===============
</TABLE>
(a) Inception date is December 3, 2019, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(b) Inception date is May 25, 2021, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
(c) Inception date is June 14, 2021, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
Page 50 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST FIRST TRUST FIRST TRUST
ACTIVE FACTOR ACTIVE FACTOR INNOVATION EXPANDED
MID CAP ETF SMALL CAP ETF LEADERS ETF TECHNOLOGY ETF
(AFMC) (AFSM) (ILDR) (XPND)
--------------------------------- --------------------------------- --------------- ---------------
Year Ended Period Ended Year Ended Period Ended Period Ended Period Ended
8/31/2021 8/31/2020 (a) 8/31/2021 8/31/2020 (a) 8/31/2021 (b) 8/31/2021 (c)
--------------- --------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
$ 14,929 $ 17,733 $ 5,393 $ 11,974 $ (3,670) $ (870)
614,371 (152,076) 731,776 (210,183) 8,703 --
138,549 (12,349) 89,504 45,670 321,283 821,496
--------------- --------------- --------------- --------------- --------------- ---------------
767,849 (146,692) 826,673 (152,539) 326,316 820,626
--------------- --------------- --------------- --------------- --------------- ---------------
(17,180) (14,061) (8,250) (9,970) -- --
--------------- --------------- --------------- --------------- --------------- ---------------
1,175,597 3,032,718 2,572,524 3,026,068 3,116,857 15,578,560
(2,457,585) (1,034,590) (2,563,922) (1,018,754) -- --
--------------- --------------- --------------- --------------- --------------- ---------------
(1,281,988) 1,998,128 8,602 2,007,314 3,116,857 15,578,560
--------------- --------------- --------------- --------------- --------------- ---------------
(531,319) 1,837,375 827,025 1,844,805 3,443,173 16,399,186
1,837,375 -- 1,844,805 -- -- --
--------------- --------------- --------------- --------------- --------------- ---------------
$ 1,306,056 $ 1,837,375 $ 2,671,830 $ 1,844,805 $ 3,443,173 $ 16,399,186
=============== =============== =============== =============== =============== ===============
100,002 -- 100,002 -- -- --
50,000 150,002 100,000 150,002 150,002 750,002
(100,000) (50,000) (100,000) (50,000) -- --
--------------- --------------- --------------- --------------- --------------- ---------------
50,002 100,002 100,002 100,002 150,002 750,002
=============== =============== =============== =============== =============== ===============
</TABLE>
See Notes to Financial Statements Page 51
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST LOW DURATION STRATEGIC FOCUS ETF (LDSF)
<TABLE>
<CAPTION>
YEAR YEAR PERIOD
ENDED ENDED ENDED
8/31/2021 8/31/2020 8/31/2019 (a)
-------------- -------------- --------------
<S> <C> <C> <C>
Net asset value, beginning of period........................... $ 20.42 $ 20.50 $ 20.03
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... 0.38 0.49 0.43
Net realized and unrealized gain (loss)........................ (0.06) (0.07) 0.47
---------- ---------- ----------
Total from investment operations............................... 0.32 0.42 0.90
---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income.......................................... (0.51) (0.50) (0.43)
---------- ---------- ----------
Net asset value, end of period................................. $ 20.23 $ 20.42 $ 20.50
========== ========== ==========
TOTAL RETURN (b)............................................... 1.57% 2.09% 4.52%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 184,072 $ 130,701 $ 50,228
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets (c).............. 0.20% 0.20% 0.20% (d)
Ratio of net investment income (loss) to average net assets.... 1.85% 2.36% 3.16% (d)
Portfolio turnover rate (e).................................... 54% 71% 14%
</TABLE>
FIRST TRUST ACTIVE FACTOR LARGE CAP ETF (AFLG)
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
8/31/2021 8/31/2020 (a)
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period........................... $ 20.99 $ 19.87
---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... 0.27 0.23
Net realized and unrealized gain (loss)........................ 5.72 1.07
---------- ----------
Total from investment operations............................... 5.99 1.30
---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income.......................................... (0.26) (0.18)
---------- ----------
Net asset value, end of period................................. $ 26.72 $ 20.99
========== ==========
TOTAL RETURN (b)............................................... 28.74% 6.67%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 4,007 $ 2,099
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.55% 0.55% (d)
Ratio of net investment income (loss) to average net assets.... 1.12% 1.62% (d)
Portfolio turnover rate (e).................................... 70% 55%
</TABLE>
(a) Inception dates for LDSF and AFLG are January 3, 2019 and December 3,
2019, respectively, which are consistent with the respective Fund's
commencement of investment operations and are the dates the initial
creation units were established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) The Fund indirectly bears its proportionate share of fees and expenses
incurred by the underlying funds in which the Fund invests. This ratio
does not include these indirect fees and expenses.
(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 52 See Notes to Financial Statements
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST ACTIVE FACTOR MID CAP ETF (AFMC)
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
8/31/2021 8/31/2020 (a)
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period........................... $ 18.37 $ 19.88
---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... 0.19 0.18
Net realized and unrealized gain (loss)........................ 7.76 (1.55)
---------- ----------
Total from investment operations............................... 7.95 (1.37)
---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income.......................................... (0.20) (0.14)
---------- ----------
Net asset value, end of period................................. $ 26.12 $ 18.37
========== ==========
TOTAL RETURN (b)............................................... 43.52% (6.86)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 1,306 $ 1,837
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.65% 0.65% (c)
Ratio of net investment income (loss) to average net assets.... 0.81% 1.34% (c)
Portfolio turnover rate (d).................................... 80% 66%
</TABLE>
FIRST TRUST ACTIVE FACTOR SMALL CAP ETF (AFSM)
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
8/31/2021 8/31/2020 (a)
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period........................... $ 18.45 $ 19.95
---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... 0.05 0.12
Net realized and unrealized gain (loss)........................ 8.30 (1.52)
---------- ----------
Total from investment operations............................... 8.35 (1.40)
---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income.......................................... (0.08) (0.10)
---------- ----------
Net asset value, end of period................................. $ 26.72 $ 18.45
========== ==========
TOTAL RETURN (b)............................................... 45.40% (7.03)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 2,672 $ 1,845
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets (e).............. 0.75% 0.75% (c)
Ratio of net investment income (loss) to average net assets.... 0.27% 0.91% (c)
Portfolio turnover rate (d).................................... 86% 65%
</TABLE>
(a) Inception date for AFMC and AFSM is December 3, 2019, which is consistent
with the commencement of investment operations and is the date the initial
creation units were established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
(e) The Fund indirectly bears its proportionate share of fees and expenses
incurred by the underlying securities in which the Fund invests. This
ratio does not include these indirect fees and expenses.
See Notes to Financial Statements Page 53
<PAGE>
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST INNOVATION LEADERS ETF (ILDR)
<TABLE>
<CAPTION>
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 20.07
----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.02)
Net realized and unrealized gain (loss)........................ 2.90
----------
Total from investment operations............................... 2.88
----------
Net asset value, end of period................................. $ 22.95
==========
TOTAL RETURN (b)............................................... 14.35%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 3,443
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.75% (c)
Ratio of net investment income (loss) to average net assets.... (0.49)% (c)
Portfolio turnover rate (d).................................... 9%
</TABLE>
FIRST TRUST EXPANDED TECHNOLOGY ETF (XPND)
<TABLE>
<CAPTION>
PERIOD
ENDED
8/31/2021 (a)
--------------
<S> <C>
Net asset value, beginning of period........................... $ 20.18
----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.00) (e)
Net realized and unrealized gain (loss)........................ 1.69
----------
Total from investment operations............................... 1.69
----------
Net asset value, end of period................................. $ 21.87
==========
TOTAL RETURN (b)............................................... 8.37%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 16,399
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.65% (c)
Ratio of net investment income (loss) to average net assets.... (0.03)% (c)
Portfolio turnover rate (d).................................... 0%
</TABLE>
(a) Inception dates for ILDR and XPND are May 25, 2021 and June 14, 2021,
respectively, which are consistent with the respective Fund's commencement
of investment operations and are the dates the initial creation units were
established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The return presented does not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
(e) Amount is less than $0.01.
Page 54 See Notes to Financial Statements
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
1. ORGANIZATION
First Trust Exchange-Traded Fund VIII (the "Trust") is an open-end management
investment company organized as a Massachusetts business trust on February 22,
2016, 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 forty-nine funds that are offering shares. This
report covers the six funds (each a "Fund" and collectively, the "Funds") listed
below:
First Trust Low Duration Strategic Focus ETF- (The Nasdaq Stock Market
LLC ("Nasdaq") ticker "LDSF")
First Trust Active Factor Large Cap ETF - (NYSE Arca, Inc. ("NYSE Arca")
ticker "AFLG")
First Trust Active Factor Mid Cap ETF - (NYSE Arca ticker "AFMC")
First Trust Active Factor Small Cap ETF - (NYSE Arca ticker "AFSM")
First Trust Innovation Leaders ETF - (NYSE Arca ticker "ILDR")(1)
First Trust Expanded Technology ETF - (NYSE Arca ticker "XPND")(2)
(1) Commenced investment operations on May 25, 2021.
(2) Commenced investment operations on June 14, 2021
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."
Each Fund is an actively managed exchange-traded fund. Each Fund's investment
objective seeks to provide capital appreciation, with the exception of LDSF and
XPND. LDSF's primary investment objective seeks to generate current income, with
a secondary objective of preservation of capital. XPND's investment objective
seeks to provide long-term capital appreciation.
Under normal market conditions, LDSF will invest at least 80% of its net assets
(including investment borrowings) in a portfolio of U.S.-listed exchange-traded
funds ("ETFs") that principally invest in income-generating securities that
provide the Fund with an effective portfolio duration of three years or less. A
significant portion of the ETFs in which the Fund invests may be advised by
First Trust. The Fund may invest in ETFs that invest principally in corporate
bonds, floating rate loans and fixed-to-floating rate loans, senior loans,
mortgage-backed securities, hybrid income securities (including convertible,
contingent convertible and preferred securities), government debt and other
fixed income securities. The securities to which the Fund may have exposure may
be issued by both U.S. and non-U.S. issuers, including both corporate and
governmental issuers located in countries considered to be emerging markets. The
Fund may also invest up to 40% of its net assets in ETFs that have exposure to
U.S. corporate high yield securities (also known as "junk bonds") and senior
loans. The Fund may invest up to 20% of its net assets in bonds issued by
non-U.S. government and corporate issuers, including up to 10% of its net assets
in ETFs holding debt of issuers located in countries considered to be emerging
markets. The Fund may also invest up to 10% of its net assets in ETFs holding
preferred securities and up to 10% of its net assets in ETFs holding convertible
securities.
Under normal market conditions, AFLG will invest at least 80% of its net assets
(including investment borrowings) in U.S.-listed equity securities issued by
large capitalization companies.
Under normal market conditions, AFMC will invest at least 80% of its net assets
(including investment borrowings) in U.S.-listed equity securities issued by mid
capitalization companies.
Under normal market conditions, AFSM will invest at least 80% of its net assets
(including investment borrowings) in U.S.-listed equity securities issued by
small capitalization companies.
Under normal market conditions, ILDR will invest at least 80% of its net assets
(including investment borrowings) in common stock and depository receipts issued
by U.S. and non-U.S. companies that may benefit from the development or
application of scientific and technological innovation.
Under normal market conditions, XPND will invest at least 80% of its net assets
(including investment borrowings) in the common stocks of companies identified
by the Fund's investment advisor as either information technology companies or
consumer discretionary and communication services companies whose operations are
principally derived from and/or dependent upon technology (such companies are
collectively referred to herein as "Expanded Technology Companies").
There can be no assurance that a Fund will achieve its investment objective. The
Funds may not be appropriate for all investors.
Page 55
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
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. Each Fund's NAV is calculated by dividing the
value of all assets of the Fund (including accrued interest and dividends), less
all liabilities (including accrued expenses and dividends declared but unpaid),
by the total number of shares outstanding.
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.
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.
Shares of open-end funds are valued at fair value which is based on NAV
per share.
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;
Page 56
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
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.
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 August 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. AFFILIATED TRANSACTIONS
LDSF invests in securities of affiliated funds. The Fund's investment
performance and risks are directly related to the investment performance and
risks of the affiliated funds. Dividend income, realized gains and losses, and
change in appreciation (depreciation) from affiliated funds are presented on the
Statements of Operations.
Page 57
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
Amounts related to these investments at August 31, 2021 and for the fiscal year
then ended are as follows:
<TABLE>
<CAPTION>
CHANGE IN
UNREALIZED REALIZED
SHARES AT VALUE AT APPRECIATION GAIN VALUE AT DIVIDEND
SECURITY NAME 8/31/2021 8/31/2020 PURCHASES SALES (DEPRECIATION) (LOSS) 8/31/2021 INCOME
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
First Trust
Emerging
Markets
Local
Currency
Bond ETF 131,585 $ 3,325,789 $ 3,029,940 $ (2,073,892) $ 171,669 $ 62,491 $ 4,515,997 $ (88,392)
First Trust
Enhanced
Short
Maturity ETF 307,407 12,981,008 16,031,047 (10,559,751) (17,693) (8,635) 18,425,976 50,754
First Trust
Low Duration
Opportunities
ETF 448,343 38,996,208 48,542,466 (13,183,819) (871,417) 19,969 73,503,407 967,164
First Trust
Senior Loan
Fund 671,805 6,685,589 37,108,836 (11,651,491) (120,191) 163,434 32,186,177 446,207
First Trust
Tactical
High Yield
ETF 189,796 6,753,583 22,050,163 (20,142,224) 30,874 493,730 9,186,126 868,457
First Trust TCW
Opportunistic
Fixed Income
ETF -- 35,966,995 16,631,446 (52,301,307) (1,277,924) 980,790(a) -- 391,066
First Trust TCW
Unconstrained
Plus Bond
ETF 691,713 -- 19,041,019 (606,640) (33,901) (912) 18,399,566 67,910
------------ ------------ -------------- -------------- ----------- ------------ -----------
$104,709,172 $162,434,917 $ (110,519,124) $ (2,118,583) $ 1,710,867 $156,217,249 $ 2,703,166
============ ============ ============== ============== =========== ============ ===========
</TABLE>
(a) Includes $261,464 of capital gain distributions.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income of each Fund, if any, are declared and paid
quarterly, with the exception of LDSF which declares and pays monthly, 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 portfolio securities held by the Funds and
have no impact on net assets or NAV per share. Temporary differences, which
arise from recognizing certain items of income, expense and gain/loss in
different periods for financial statement and tax purposes, will reverse at some
time in the future.
The tax character of distributions paid by each Fund during the fiscal period
ended August 31, 2021, 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 Low Duration Strategic Focus ETF $ 3,935,676 $ -- $ --
First Trust Active Factor Large Cap ETF 53,635 -- --
First Trust Active Factor Mid Cap ETF 17,180 -- --
First Trust Active Factor Small Cap ETF 8,250 -- --
First Trust Innovation Leaders ETF -- -- --
First Trust Expanded Technology ETF -- -- --
</TABLE>
Page 58
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
The tax character of distributions paid by each Fund during the fiscal period
ended August 31, 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 Low Duration Strategic Focus ETF $ 2,633,376 $ -- $ --
First Trust Active Factor Large Cap ETF 17,680 -- --
First Trust Active Factor Mid Cap ETF 14,061 -- --
First Trust Active Factor Small Cap ETF 9,970 -- --
</TABLE>
As of August 31, 2021, 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 Low Duration Strategic Focus ETF $ -- $ (2,126,627) $ (493,738)
First Trust Active Factor Large Cap ETF 8,978 (246,427) 258,393
First Trust Active Factor Mid Cap ETF 1,421 (237,064) 120,265
First Trust Active Factor Small Cap ETF -- (313,865) 119,154
First Trust Innovation Leaders ETF 5,081 -- 321,235
First Trust Expanded Technology ETF -- -- 821,496
</TABLE>
E. INCOME TAXES
Each Fund intends to qualify or continue to qualify as a regulated investment
company by complying with the requirements under Subchapter M of the Internal
Revenue Code of 1986, as amended, which includes distributing substantially all
of its net investment income and net realized gains to shareholders.
Accordingly, no provision has been made for federal and state income taxes.
However, due to the timing and amount of distributions, each Fund may be subject
to an excise tax of 4% of the amount by which approximately 98% of each Fund's
taxable income exceeds the distributions from such taxable income for the
calendar year.
The Funds are subject to accounting standards that establish a minimum threshold
for recognizing, and a system for measuring, the benefits of a tax position
taken or expected to be taken in a tax return. For LDSF, the taxable years ended
2019, 2020, and 2021 remain open to federal and state audit. For AFLG, AFMC and
AFSM, the taxable years ended 2020 and 2021 remain open to federal and state
audit. For ILDR and XPND, the taxable year ended 2021 remains open to federal
and state audit. As of August 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 August 31, 2021, for
federal income tax purposes, the Funds 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 the Funds' shareholders.
Non-Expiring
Capital Loss
Carryforwards
---------------
First Trust Low Duration Strategic Focus ETF $ 2,126,627
First Trust Active Factor Large Cap ETF 246,427
First Trust Active Factor Mid Cap ETF 237,064
First Trust Active Factor Small Cap ETF 313,865
First Trust Innovation Leaders ETF --
First Trust Expanded Technology ETF --
Page 59
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
During the taxable year ended August 31, 2021, the following Fund utilized
non-expiring capital loss carryforwards in the following amount:
Capital Loss
Carryforwards
Utilized
---------------
First Trust Low Duration Strategic Focus ETF $ 350,288
Certain losses realized during the current fiscal year may be deferred and
treated as occurring on the first day of the following fiscal year for federal
income tax purposes. For the fiscal period ended August 31, 2021, the Funds had
no net late year ordinary or capital losses.
In order to present paid-in capital and accumulated distributable earnings
(loss) (which consists of accumulated net investment income (loss), accumulated
net realized gain (loss) on investments and net unrealized appreciation
(depreciation) on investments) on the Statements of Assets and Liabilities that
more closely represent their tax character, certain adjustments have been made
to paid-in capital, accumulated net investment income (loss) and accumulated net
realized gain (loss) on investments. These adjustments are primarily due to the
difference between book and tax treatments of income and gains on various
investment securities held by the Funds and in-kind transactions. The results of
operations and net assets were not affected by these adjustments. For the fiscal
period ended August 31, 2021, the adjustments for each Fund were as follows:
<TABLE>
<CAPTION>
Accumulated
Accumulated Net Realized
Net Investment Gain (Loss) Paid-in
Income (Loss) on Investments Capital
-------------- -------------- -------------
<S> <C> <C> <C>
First Trust Low Duration Strategic Focus ETF $ 997,063 $ (1,403,551) $ 406,488
First Trust Active Factor Large Cap ETF -- (1,316,665) 1,316,665
First Trust Active Factor Mid Cap ETF -- (613,812) 613,812
First Trust Active Factor Small Cap ETF 853 (746,803) 745,950
First Trust Innovation Leaders ETF 3,670 (3,670) --
First Trust Expanded Technology ETF 870 -- (870)
</TABLE>
F. EXPENSES
Expenses, other than the investment advisory fee and other excluded expenses,
are paid by the Advisor (see Note 3).
3. INVESTMENT ADVISORY FEE, AFFILIATED TRANSACTIONS AND OTHER FEE ARRANGEMENTS
First Trust, the investment advisor to the 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 supervising 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 each Fund's assets and is
responsible for the expenses of each Fund, including the cost of transfer
agency, custody, fund administration, legal, audit, license fees and other
services, but excluding fee payments under the Investment Management Agreement,
interest, taxes, pro rata share of fees and expenses attributable to investments
in other investment companies ("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. Each Fund has agreed to pay First
Trust an annual unitary management fee based on each Fund's average daily net
assets at a rate set forth below:
Rate
--------------
First Trust Low Duration Strategic Focus ETF 0.20%
First Trust Active Factor Large Cap ETF 0.55%
First Trust Active Factor Mid Cap ETF 0.65%
First Trust Active Factor Small Cap ETF 0.75%
First Trust Innovation Leaders ETF 0.75%
First Trust Expanded Technology ETF 0.65%
Page 60
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
In addition, LDSF incurs acquired fund fees and expenses. The total of the
unitary management fee and acquired fund fees and expenses represents the fund's
total annual operating expenses.
The Trust has multiple service agreements with The Bank of New York Mellon
("BNYM"). Under the service agreements, BNYM performs custodial, fund
accounting, certain administrative services and transfer agency services for
each Fund. As custodian, BNYM is responsible for custody of each Fund's assets.
As fund accountant and administrator, BNYM is responsible for maintaining the
books and records of each Fund's securities and cash. As transfer agent, BNYM is
responsible for maintaining shareholder records for each Fund. BNYM is a
subsidiary of The Bank of New York Mellon Corporation, a financial holding
company.
Each Trustee who is not an officer or employee of First Trust, any sub-advisor
or any of their affiliates ("Independent Trustees") is paid a fixed annual
retainer that is allocated equally among each fund in the First Trust Fund
Complex. Each Independent Trustee is also paid an annual per fund fee that
varies based on whether the fund is a closed-end or other actively managed fund,
a defined-outcome fund or is an index fund.
Additionally, the Lead Independent Trustee and the Chairmen of the Audit
Committee, Nominating and Governance Committee and Valuation Committee are paid
annual fees to serve in such capacities, with such compensation allocated pro
rata among each fund in the First Trust Fund Complex based on net assets.
Independent Trustees are reimbursed for travel and out-of-pocket expenses in
connection with all meetings. The Lead Independent Trustee and Committee
Chairmen rotate every three years. The officers and "Interested" Trustee receive
no compensation from the Trust for acting in such capacities.
4. PURCHASES AND SALES OF SECURITIES
For the fiscal period ended August 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 Low Duration Strategic Focus ETF $ 85,016,547 $ 85,521,055
First Trust Active Factor Large Cap ETF 3,403,945 3,396,604
First Trust Active Factor Mid Cap ETF 1,404,228 1,402,868
First Trust Active Factor Small Cap ETF 1,644,775 1,644,693
First Trust Innovation Leaders ETF 348,920 231,789
First Trust Expanded Technology ETF -- --
</TABLE>
For the fiscal period ended August 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 Low Duration Strategic Focus ETF $ 106,640,490 $ 51,761,469
First Trust Active Factor Large Cap ETF 8,080,185 7,504,648
First Trust Active Factor Mid Cap ETF 1,172,267 2,453,198
First Trust Active Factor Small Cap ETF 2,566,497 2,557,779
First Trust Innovation Leaders ETF 2,987,781 --
First Trust Expanded Technology ETF 15,557,719 --
</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.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021
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 December 31, 2022 for
LDSF, AFLG, AFMC and AFSM, May 24, 2023 for ILDR, and June 8, 2023 for XPND.
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 September 20, 2021, FT Cboe Vest International Equity Buffer ETF - September
and FT Cboe Vest Nasdaq-100(R) Buffer ETF - September, each an additional series
of the Trust, began trading under the symbols "YSEP" and "QSPT," respectively,
on Cboe BZX Exchange, Inc.
On September 21, 2021, First Trust SkyBridge Crypto Industry and Digital Economy
ETF, an additional series of the Trust, began trading under the symbol "CRPT" on
NYSE Arca.
On October 14, 2021, First Trust Multi-Manager Small Cap Opportunities ETF, an
additional series of the Trust, began trading under the symbol "MMSC" on NYSE
Arca.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF FIRST TRUST EXCHANGE-TRADED FUND
VIII:
OPINION ON THE FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS
We have audited the accompanying statements of assets and liabilities of First
Trust Low Duration Strategic Focus ETF, First Trust Active Factor Large Cap ETF,
First Trust Active Factor Mid Cap ETF, First Trust Active Factor Small Cap ETF,
First Trust Innovation Leaders ETF, and First Trust Expanded Technology ETF (the
"Funds"), each a series of the First Trust Exchange-Traded Fund VIII, including
the portfolios of investments, as of August 31, 2021, the related statements of
operations, the statements of changes in net assets, and the financial
highlights for the periods indicated in the table below, and the related notes.
In our opinion, the financial statements and financial highlights present
fairly, in all material respects, the financial position of the Funds as of
August 31, 2021, and the results of their operations, the changes in their net
assets, and the financial highlights for the periods listed in the table below
in conformity with accounting principles generally accepted in the United States
of America.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
INDIVIDUAL FUNDS STATEMENTS OF STATEMENTS OF FINANCIAL
INCLUDED IN THE TRUST OPERATIONS CHANGES IN NET ASSETS HIGHLIGHTS
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
First Trust Low Duration Strategic For the year ended For the years ended For the years ended August
Focus ETF (LDSF) August 31, 2021 August 31, 2021 and 2020 31, 2021 and 2020 and the
period from January 3, 2019
(commencement of
operations) through
August 31, 2019
-----------------------------------------------------------------------------------------------------------------------
First Trust Active Factor Large Cap ETF For the year ended For the year ended August 31, 2021 and the period from
(AFLG) August 31, 2021 December 3, 2019 (commencement of operations)
through August 31, 2020
First Trust Active Factor Mid Cap ETF
(AFMC)
First Trust Active Factor Small Cap ETF
(AFSM)
-----------------------------------------------------------------------------------------------------------------------
First Trust Innovation Leaders ETF For the period from May 25, 2021 (commencement of operations) through
(ILDR) August 31, 2021
-----------------------------------------------------------------------------------------------------------------------
First Trust Expanded Technology ETF For the period from June 14, 2021 (commencement of operations) through
(XPND) August 31, 2021
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
BASIS FOR OPINION
These financial statements and financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an opinion on the Funds'
financial statements and financial highlights based on our audits. We are a
public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to
the Funds in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement, whether due to error or fraud. The Funds are not
required to have, nor were we engaged to perform, an audit of their internal
control over financial reporting. As part of our audits we are required to
obtain an understanding of internal control over financial reporting but not for
the purpose of expressing an opinion on the effectiveness of the Funds' internal
control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material
misstatement of the financial statements and financial highlights, whether due
to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the financial statements and financial highlights. Our
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (CONTINUED)
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audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of August 31, 2021, by correspondence with
the custodian and brokers. We believe that our audits provide a reasonable basis
for our opinion.
/s/ Deloitte & Touche LLP
Chicago, Illinois
October 22, 2021
We have served as the auditor of one or more First Trust investment companies
since 2001.
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ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 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.
FEDERAL TAX INFORMATION
For the taxable period ended August 31, 2021, the following percentages of
income dividend paid by the Funds qualify for the dividends received deduction
available to corporations:
Dividends Received Deduction
----------------------------
First Trust Low Duration Strategic Focus ETF 0.00%
First Trust Active Factor Large Cap ETF 100.00%
First Trust Active Factor Mid Cap ETF 100.00%
First Trust Active Factor Small Cap ETF 100.00%
First Trust Innovation Leaders ETF 0.00%
First Trust Expanded Technology ETF 0.00%
For the taxable period ended August 31, 2021, the following percentages of
income dividend paid by the Funds are hereby designated as qualified dividend
income:
Qualified Dividend Income
----------------------------
First Trust Low Duration Strategic Focus ETF 0.00%
First Trust Active Factor Large Cap ETF 100.00%
First Trust Active Factor Mid Cap ETF 100.00%
First Trust Active Factor Small Cap ETF 100.00%
First Trust Innovation Leaders ETF 0.00%
First Trust Expanded Technology ETF 0.00%
A portion of each of the Funds' 2021 ordinary dividends (including short-term
capital gains) paid to its shareholders during the fiscal period ended August
31, 2021, may be eligible for the Qualified Business Income Deduction (QBI)
under Internal Revenue Code of 1986, as amended, Section 199A for the aggregate
dividends each Fund received from the underlying Real Estate Investment Trusts
(REITs) these Funds invest in.
Distributions paid to foreign shareholders for the taxable year ended August 31,
2021, that were properly designated by LDSF as "interest-related dividends" or
"short-term capital gain dividends," may not be subject to federal income tax
provided that the income was earned directly by such foreign shareholders.
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.
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
CONCENTRATION RISK. To the extent that a fund is able to invest a significant
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
more broadly diversified.
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.
DEFINED OUTCOME FUNDS RISK. To the extent a fund's investment strategy is
designed to deliver returns tied to the price performance of an underlying ETF,
an investor may not realize the returns the fund seeks to achieve if that
investor does not hold shares for the entire target outcome period. In the event
an investor purchases shares after the first day of the target outcome period or
sells shares prior to the end of the target outcome period, the buffer that the
fund seeks to provide against a decline in the value of the underlying ETF may
not be available, the enhanced returns that the fund seeks to provide (if any)
may not be available and the investor may not participate in a gain in the value
of the underlying ETF up to the cap for the investor's investment period.
Additionally, the fund will not participate in gains of the underlying ETF above
the cap and a shareholder may lose their entire investment. If the fund seeks
enhanced returns, there are certain time periods when the value of the fund may
fall faster than the value of the underlying ETF, and it is very unlikely that,
on any given day during which the underlying ETF share price increases in value,
the fund's share price will increase at the same rate as the enhanced returns
sought by the fund, which is designed for an entire target outcome period.
Trading flexible exchange options involves risks different from, or possibly
greater than, the risks associated with investing directly in securities, such
as less liquidity and correlation and valuation risks. A fund may experience
substantial downside from specific flexible exchange option positions and
certain positions may expire worthless.
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
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,
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
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 OR MODEL CONSTITUENT RISK. Certain funds may be a constituent of one or
more indices or ETF models. 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 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. In addition, index rebalances may potentially result in increased
trading activity in a fund's shares.
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. While the development of
vaccines has slowed the spread of the virus and allowed for the resumption of
"reasonably" normal business activity in the United States, many countries
continue to impose lockdown measures in an attempt to slow the spread.
Additionally, there is no guarantee that vaccines will be effective against
emerging variants of the disease.
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;
capital controls; lack of liquidity; currency exchange rates; excessive
taxation; government seizure of assets; the imposition of sanctions by foreign
governments; different legal or accounting standards; and less government
supervision and regulation of exchanges in foreign countries. Investments in
non-U.S. securities may involve higher costs than investments in U.S.
securities, including higher transaction and custody costs, as well as
additional taxes imposed by non-U.S. governments. These risks may be heightened
for securities of companies located, or with significant operations, in emerging
market countries.
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
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. Each fund relies on third-parties for a range of services, including
custody. Any delay or failure relating to engaging or maintaining such service
providers may affect a fund's ability to meet its investment objective. Although
the funds and the funds' investment 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
ADVISORY AGREEMENT
BOARD CONSIDERATIONS REGARDING CONTINUATION OF INVESTMENT MANAGEMENT AGREEMENT
FOR FIRST TRUST LOW DURATION STRATEGIC FOCUS ETF
The Board of Trustees of First Trust Exchange-Traded Fund VIII (the "Trust"),
including the Independent Trustees, unanimously approved the continuation of the
Investment Management Agreement (the "Agreement") with First Trust Advisors L.P.
(the "Advisor"), on behalf of the First Trust Low Duration Strategic Focus ETF
(the "Fund"). The Board approved the continuation of the Agreement for a
one-year period ending June 30, 2022 at a meeting held on June 6-7, 2021. The
Board determined that the continuation of the Agreement is in the best interests
of the Fund in light of the nature, extent and quality of the services provided
and such other matters as the Board considered to be relevant in the exercise of
its business judgment.
To reach this determination, the Board considered its duties under the
Investment Company Act of 1940, as amended (the "1940 Act"), as well as under
the general principles of state law, in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; the fiduciary duty
of investment advisors with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Board in voting
on such agreements. At meetings held on April 26, 2021 and June 6-7, 2021, the
Board, including the Independent Trustees, reviewed materials provided by the
Advisor responding to requests for information from counsel to the Independent
Trustees, submitted on behalf of the Independent Trustees, that, among other
things, outlined: the services provided by the Advisor to the Fund (including
the relevant personnel responsible for these services and their experience); the
unitary fee rate payable by the Fund as compared to fees charged to a peer group
of funds (the "Expense Group") and a broad peer universe of funds (the "Expense
Universe"), each assembled by Broadridge Financial Solutions, Inc.
("Broadridge"), an independent source, and as compared to fees charged to other
clients of the Advisor, including other exchange-traded funds ("ETFs") managed
by the Advisor; the expense ratio of the Fund as compared to expense ratios of
the funds in the Fund's Expense Group and Expense Universe; performance
information for the Fund, including comparisons of the Fund's performance to
that of one or more relevant benchmark indexes; the nature of expenses incurred
in providing services to the Fund and the potential for the Advisor to realize
economies of scale, if any; profitability and other financial data for the
Advisor; any fall-out benefits to the Advisor and its affiliate, First Trust
Portfolios L.P. ("FTP"); and information on the Advisor's compliance program.
The Board reviewed initial materials with the Advisor at the meeting held on
April 26, 2021, prior to which the Independent Trustees and their counsel met
separately to discuss the information provided by the Advisor. Following the
April meeting, counsel to the Independent Trustees, on behalf of the Independent
Trustees, requested certain clarifications and supplements to the materials
provided, and the information provided in response to those requests was
considered at an executive session of the Independent Trustees and their counsel
held prior to the June 6-7, 2021 meeting, as well as at the June meeting. The
Board applied its business judgment to determine whether the arrangement between
the Trust and the Advisor continues to be a reasonable business arrangement from
the Fund's perspective. The Board determined that, given the totality of the
information provided with respect to the Agreement, the Board had received
sufficient information to renew the Agreement. The Board considered that
shareholders chose to invest or remain invested in the Fund knowing that the
Advisor manages the Fund and knowing the Fund's unitary fee.
In reviewing the Agreement, the Board considered the nature, extent and quality
of the services provided by the Advisor under the Agreement. The Board
considered that the Advisor is responsible for the overall management and
administration of the Trust and the Fund and reviewed all of the services
provided by the Advisor to the Fund, as well as the background and experience of
the persons responsible for such services. The Board noted that the Fund is an
actively-managed ETF and noted that the Advisor's Investment Committee is
responsible for the day-to-day management of the Fund's investments. The Board
considered the background and experience of the members of the Investment
Committee, including the Board's prior meetings with members of the Investment
Committee. In reviewing the services provided, the Board noted the compliance
program that had been developed by the Advisor and considered that it includes
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
a robust program for monitoring the Advisor's and the Fund's compliance with the
1940 Act, as well as the Fund's compliance with its investment objectives,
policies and restrictions. The Board also considered a report from the Advisor
with respect to its risk management functions related to the operation of the
Fund. Finally, as part of the Board's consideration of the Advisor's services,
the Advisor, in its written materials and at the April 26, 2021 meeting,
described to the Board the scope of its ongoing investment in additional
personnel and infrastructure to maintain and improve the quality of services
provided to the Fund and the other funds in the First Trust Fund Complex. In
light of the information presented and the considerations made, the Board
concluded that the nature, extent and quality of the services provided to the
Trust and the Fund by the Advisor under the Agreement have been and are expected
to remain satisfactory and that the Advisor has managed the Fund consistent with
its investment objectives, policies and restrictions.
The Board considered the unitary fee rate payable by the Fund under the
Agreement for the services provided. The Board considered that as part of the
unitary fee the Advisor is responsible for the Fund's expenses, including the
cost of transfer agency, custody, fund administration, legal, audit and other
services and license fees, if any, but excluding the fee payment under the
Agreement and interest, taxes, acquired fund fees and expenses, if any,
brokerage commissions and other expenses connected with the execution of
portfolio transactions, distribution and service fees pursuant to a Rule 12b-1
plan, if any, and extraordinary expenses, if any. The Board noted that, because
the Fund invests in underlying ETFs, including ETFs in the First Trust Fund
Complex, the Fund incurs acquired fund fees and expenses, which are not payable
out of the unitary fee, and that such acquired fund fees and expenses will
change over time as assets are reallocated among the underlying ETFs. The Board
received and reviewed information showing the advisory fee rates and expense
ratios of the peer funds in the Expense Group, as well as advisory and unitary
fee rates charged by the Advisor to other fund (including ETFs) and non-fund
clients, as applicable. Because the Fund pays a unitary fee, the Board
determined that expense ratios were the most relevant comparative data point.
Based on the information provided, the Board noted that the unitary fee rate for
the Fund was below the median total (net) expense ratio (excluding acquired fund
fees and expenses, as applicable) of the peer funds in its Expense Group. The
Board also noted that the Fund's total (net) expense ratio (including acquired
fund fees and expenses) was above the median total (net) expense ratio
(including acquired fund fees and expenses, as applicable) of the peer funds in
the Expense Group. With respect to the Expense Group, the Board, at the April
26, 2021 meeting, discussed with the Advisor limitations in creating peer groups
for actively-managed ETFs, including that the Expense Group contained both
actively-managed ETFs and open-end mutual funds, and different business models
that may affect the pricing of services among ETF sponsors. The Board took these
limitations and differences into account in considering the peer data. With
respect to fees charged to other non-ETF clients, the Board considered
differences between the Fund and other non-ETF clients that limited their
comparability. In considering the unitary fee rate overall, the Board also
considered the Advisor's statement that it seeks to meet investor needs through
innovative and value-added investment solutions and the Advisor's demonstrated
long-term commitment to the Fund and the other funds in the First Trust Fund
Complex.
The Board considered performance information for the Fund. The Board noted the
process it has established for monitoring the Fund's performance and portfolio
risk on an ongoing basis, which includes quarterly performance reporting from
the Advisor for the Fund. The Board determined that this process continues to be
effective for reviewing the Fund's performance. The Board received and reviewed
information comparing the Fund's performance for the one-year period ended
December 31, 2020 to the performance of the funds in the Performance Universe
and to that of a blended benchmark index. Based on the information provided, the
Board noted that the Fund underperformed the Performance Universe median and the
blended benchmark index for the one-year period ended December 31, 2020.
On the basis of all the information provided on the unitary fee for the Fund and
the ongoing oversight by the Board, the Board concluded that the unitary fee for
the Fund continues to be reasonable and appropriate in light of the nature,
extent and quality of the services provided by the Advisor to the Fund under the
Agreement.
The Board considered information and discussed with the Advisor whether there
were any economies of scale in connection with providing advisory services to
the Fund and noted the Advisor's statement that it believes its expenses will
likely increase during the next twelve months as the Advisor continues to hire
personnel and build infrastructure, including technology, to improve the
services to the Fund. The Board noted that any reduction in fixed costs
associated with the management of the Fund would benefit the Advisor, but that
the unitary fee structure provides a level of certainty in expenses for the
Fund. The Board considered the revenues and allocated costs (including the
allocation methodology) of the Advisor in serving as investment advisor to the
Fund for the twelve months ended December 31, 2020 and the estimated
profitability level for the Fund calculated by the Advisor based on such data,
as well as complex-wide and product-line profitability data, for the same
period. The Board noted the inherent limitations in the profitability analysis
and concluded that, based on the information provided, the Advisor's
profitability level for the Fund was not unreasonable. In addition, the Board
considered fall-out benefits described by the Advisor that may be realized from
its relationship with the Fund. The Board considered that the Advisor had
identified as a fall-out benefit to the Advisor and FTP their exposure to
investors and brokers who, absent their exposure to the Fund, may have had no
dealings with the Advisor or FTP, and noted that the Advisor does not utilize
soft dollars in connection with the Fund. In addition, the Board considered that
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
the Advisor, as the investment advisor to certain of the underlying ETFs in
which the Fund invests, will recognize additional revenue from such underlying
ETFs if investment by the Fund causes the assets of the underlying ETFs to grow.
The Board concluded that the character and amount of potential fall-out benefits
to the Advisor were not unreasonable.
Based on all of the information considered and the conclusions reached, the
Board, including the Independent Trustees, unanimously determined that the terms
of the Agreement continue to be fair and reasonable and that the continuation of
the Agreement is in the best interests of the Fund. No single factor was
determinative in the Board's analysis.
BOARD CONSIDERATIONS REGARDING CONTINUATION OF INVESTMENT MANAGEMENT
AGREEMENT FOR
FIRST TRUST ACTIVE FACTOR LARGE CAP ETF
FIRST TRUST ACTIVE FACTOR MID CAP ETF
FIRST TRUST ACTIVE FACTOR SMALL CAP ETF
The Board of Trustees of First Trust Exchange-Traded Fund VIII (the "Trust"),
including the Independent Trustees, unanimously approved the continuation of the
Investment Management Agreement (the "Agreement") with First Trust Advisors L.P.
(the "Advisor"), on behalf of the following three series of the Trust (each a
"Fund" and collectively, the "Funds"):
First Trust Active Factor Large Cap ETF (AFLG)
First Trust Active Factor Mid Cap ETF (AFMC)
First Trust Active Factor Small Cap ETF (AFSM)
The Board approved the continuation of the Agreement for each Fund for a
one-year period ending June 30, 2022 at a meeting held on June 6-7, 2021. The
Board determined for each Fund that the continuation of the Agreement is in the
best interests of the Fund in light of the nature, extent and quality of the
services provided and such other matters as the Board considered to be relevant
in the exercise of its business judgment.
To reach this determination for each Fund, the Board considered its duties under
the Investment Company Act of 1940, as amended (the "1940 Act"), as well as
under the general principles of state law, in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; the fiduciary duty
of investment advisors with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Board in voting
on such agreements. At meetings held on April 26, 2021 and June 6-7, 2021, the
Board, including the Independent Trustees, reviewed materials provided by the
Advisor responding to requests for information from counsel to the Independent
Trustees, submitted on behalf of the Independent Trustees, that, among other
things, outlined: the services provided by the Advisor to each Fund (including
the relevant personnel responsible for these services and their experience); the
unitary fee rate payable by each Fund as compared to fees charged to a peer
group of funds (the "Expense Group") and a broad peer universe of funds (the
"Expense Universe"), each assembled by Broadridge Financial Solutions, Inc.
("Broadridge"), an independent source, and as compared to fees charged to other
clients of the Advisor, including other exchange-traded funds ("ETFs") managed
by the Advisor; the expense ratio of each Fund as compared to expense ratios of
the funds in the Fund's Expense Group and Expense Universe; performance
information for each Fund, including comparisons of each Fund's performance to
that of one or more relevant benchmark indexes and to that of a performance
group of funds and a broad performance universe of funds (the "Performance
Universe"), each assembled by Broadridge; the nature of expenses incurred in
providing services to each Fund and the potential for the Advisor to realize
economies of scale, if any; profitability and other financial data for the
Advisor; any fall-out benefits to the Advisor and its affiliate, First Trust
Portfolios L.P. ("FTP"); and information on the Advisor's compliance program.
The Board reviewed initial materials with the Advisor at the meeting held on
April 26, 2021, prior to which the Independent Trustees and their counsel met
separately to discuss the information provided by the Advisor. Following the
April meeting, counsel to the Independent Trustees, on behalf of the Independent
Trustees, requested certain clarifications and supplements to the materials
provided, and the information provided in response to those requests was
considered at an executive session of the Independent Trustees and their counsel
held prior to the June 6-7, 2021 meeting, as well as at the June meeting. The
Board applied its business judgment to determine whether the arrangement between
the Trust and the Advisor continues to be a reasonable business arrangement from
each Fund's perspective. The Board determined that, given the totality of the
information provided with respect to the Agreement, the Board had received
sufficient information to renew the Agreement. The Board considered that
shareholders chose to invest or remain invested in a Fund knowing that the
Advisor manages the Fund and knowing the Fund's unitary fee.
In reviewing the Agreement for each Fund, the Board considered the nature,
extent and quality of the services provided by the Advisor under the Agreement.
The Board considered that the Advisor is responsible for the overall management
and administration of the Trust and each Fund and reviewed all of the services
provided by the Advisor to the Funds, as well as the background and experience
of the persons responsible for such services. The Board noted that each Fund is
an actively-managed ETF and noted that the Advisor's Investment Committee is
responsible for the day-to-day management of each Fund's investments. The Board
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
considered the background and experience of the members of the Investment
Committee, including the Board's prior meetings with members of the Investment
Committee. In reviewing the services provided, the Board noted the compliance
program that had been developed by the Advisor and considered that it includes a
robust program for monitoring the Advisor's and each Fund's compliance with the
1940 Act, as well as each Fund's compliance with its investment objective,
policies and restrictions. The Board also considered a report from the Advisor
with respect to its risk management functions related to the operation of the
Funds. Finally, as part of the Board's consideration of the Advisor's services,
the Advisor, in its written materials and at the April 26, 2021 meeting,
described to the Board the scope of its ongoing investment in additional
personnel and infrastructure to maintain and improve the quality of services
provided to the Funds and the other funds in the First Trust Fund Complex. In
light of the information presented and the considerations made, the Board
concluded that the nature, extent and quality of the services provided to the
Trust and each Fund by the Advisor under the Agreement have been and are
expected to remain satisfactory and that the Advisor has managed each Fund
consistent with its investment objective, policies and restrictions.
The Board considered the unitary fee rate payable by each Fund under the
Agreement for the services provided. The Board considered that as part of the
unitary fee the Advisor is responsible for each Fund's expenses, including the
cost of transfer agency, custody, fund administration, legal, audit and other
services and license fees, if any, but excluding the fee payment under the
Agreement and interest, taxes, acquired fund fees and expenses, brokerage
commissions and other expenses connected with the execution of portfolio
transactions, distribution and service fees pursuant to a Rule 12b-1 plan, if
any, and extraordinary expenses, if any. The Board received and reviewed
information showing the advisory or unitary fee rates and expense ratios of the
peer funds in the Expense Groups, as well as advisory and unitary fee rates
charged by the Advisor to other fund (including ETFs) and non-fund clients, as
applicable. Because each Fund pays a unitary fee, the Board determined that
expense ratios were the most relevant comparative data point. Based on the
information provided, the Board noted that the unitary fee rate for each of AFLG
and AFMC was above the median total (net) expense ratio of the peer funds in its
respective Expense Group and that the unitary fee rate for AFSM was below the
median total (net) expense ratio of the peer funds in its Expense Group. With
respect to the Expense Groups, the Board, at the April 26, 2021 meeting,
discussed with the Advisor limitations in creating peer groups for
actively-managed ETFs and different business models that may affect the pricing
of services among ETF sponsors. The Board took these limitations and differences
into account in considering the peer data. With respect to fees charged to other
non-ETF clients, the Board considered differences between the Funds and other
non-ETF clients that limited their comparability. In considering the unitary fee
rates overall, the Board also considered the Advisor's statement that it seeks
to meet investor needs through innovative and value-added investment solutions
and the Advisor's demonstrated long-term commitment to each Fund and the other
funds in the First Trust Fund Complex.
The Board considered performance information for each Fund. The Board noted the
process it has established for monitoring each Fund's performance and portfolio
risk on an ongoing basis, which includes quarterly performance reporting from
the Advisor for the Funds. The Board determined that this process continues to
be effective for reviewing each Fund's performance. The Board received and
reviewed information comparing each Fund's performance for the one-year period
ended December 31, 2020 to the performance of the funds in its Performance
Universe and to that of a benchmark index. Based on the information provided,
the Board noted that each Fund underperformed its Performance Universe median
and benchmark index for the one-year period ended December 31, 2020.
On the basis of all the information provided on the unitary fee and performance
of each Fund and the ongoing oversight by the Board, the Board concluded that
the unitary fee for each Fund continues to be reasonable and appropriate in
light of the nature, extent and quality of the services provided by the Advisor
to each Fund under the Agreement.
The Board considered information and discussed with the Advisor whether there
were any economies of scale in connection with providing advisory services to
the Funds and noted the Advisor's statement that it believes its expenses will
likely increase during the next twelve months as the Advisor continues to hire
personnel and build infrastructure, including technology, to improve the
services to the Funds. The Board noted that any reduction in fixed costs
associated with the management of the Funds would benefit the Advisor, but that
the unitary fee structure provides a level of certainty in expenses for the
Funds. The Board considered the revenues and allocated costs (including the
allocation methodology) of the Advisor in serving as investment advisor to each
Fund for the twelve months ended December 31, 2020 and the estimated
profitability level for each Fund calculated by the Advisor based on such data,
as well as complex-wide and product-line profitability data, for the same
period. The Board noted the inherent limitations in the profitability analysis
and concluded that, based on the information provided, the Advisor's
profitability level for each Fund was not unreasonable. In addition, the Board
considered fall-out benefits described by the Advisor that may be realized from
its relationship with the Funds. The Board considered that the Advisor had
identified as a fall-out benefit to the Advisor and FTP their exposure to
investors and brokers who, absent their exposure to the Funds, may have had no
dealings with the Advisor or FTP, and noted that the Advisor does not utilize
soft dollars in connection with the Funds. The Board concluded that the
character and amount of potential fall-out benefits to the Advisor were not
unreasonable.
Based on all of the information considered and the conclusions reached, the
Board, including the Independent Trustees, unanimously determined that the terms
of the Agreement continue to be fair and reasonable and that the continuation of
the Agreement is in the best interests of each Fund. No single factor was
determinative in the Board's analysis.
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
BOARD CONSIDERATIONS REGARDING APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT FOR
FIRST TRUST INNOVATION LEADERS ETF
The Board of Trustees of First Trust Exchange-Traded Fund VIII (the "Trust"),
including the Independent Trustees, approved the Investment Management Agreement
(the "Agreement") with First Trust Advisors L.P. (the "Advisor"), on behalf of
First Trust Innovation Leaders ETF (the "Fund"), for an initial two-year term at
a meeting held on April 26, 2021. The Board determined that the Agreement is in
the best interests of the Fund in light of the nature, extent and quality of the
services expected to be provided and such other matters as the Board considered
to be relevant in the exercise of its business judgment.
To reach this determination, the Board considered its duties under the
Investment Company Act of 1940, as amended (the "1940 Act"), as well as under
the general principles of state law, in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; the fiduciary duty
of investment advisors with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Board in voting
on such agreements. To assist the Board in its evaluation of the Agreement for
the Fund, the Independent Trustees received a report from the Advisor in advance
of the Board meeting responding to a request for information from counsel to the
Independent Trustees, submitted on behalf of the Independent Trustees, that,
among other things, outlined: the services to be provided by the Advisor to the
Fund (including the relevant personnel responsible for these services and their
experience); the proposed unitary fee rate payable by the Fund as compared to
fees charged to a peer group of funds (the "Expense Group") and a broad peer
universe of funds (the "Expense Universe"), each assembled by Broadridge
Financial Solutions, Inc. ("Broadridge"), an independent source, and as compared
to fees charged to other exchange-traded funds ("ETFs") managed by the Advisor;
the estimated expense ratio of the Fund as compared to expense ratios of the
funds in the Fund's Expense Group and Expense Universe; the nature of expenses
to be incurred in providing services to the Fund and the potential for the
Advisor to realize economies of scale, if any; profitability and other financial
data for the Advisor; any fall-out benefits to the Advisor and its affiliate,
First Trust Portfolios L.P. ("FTP"); and information on the Advisor's compliance
program. The Independent Trustees and their counsel also met separately to
discuss the information provided by the Advisor. The Board applied its business
judgment to determine whether the arrangement between the Trust and the Advisor
is a reasonable business arrangement from the Fund's perspective.
In evaluating whether to approve the Agreement for the Fund, the Board
considered the nature, extent and quality of the services to be provided by the
Advisor under the Agreement and considered that employees of the Advisor provide
management services to other ETFs and to other funds in the First Trust Fund
Complex with diligence and care. The Board considered that the Advisor will be
responsible for the overall management and administration of the Fund and
reviewed all of the services to be provided by the Advisor to the Fund, as well
as the background and experience of the persons responsible for such services.
The Board noted that the Fund will be an actively-managed ETF and considered
that the Advisor manages other ETFs with a similar structure in the First Trust
Fund Complex. The Board noted that the Advisor's Research Group will be
responsible for the day-to-day management of the Fund's investments and
considered the background and experience of the members of the Research Group.
The Board considered that the Advisor applies the same oversight model
internally with the Research Group as it uses for overseeing external
sub-advisors, including portfolio risk monitoring and performance review. In
reviewing the services to be provided, the Board noted the compliance program
that had been developed by the Advisor and considered that it includes a robust
program for monitoring the Advisor's and the Fund's compliance with the 1940
Act, as well as the Fund's compliance with its investment objective, policies
and restrictions. At the meeting, the Trustees received a presentation from
representatives of the Research Group and were able to ask questions about the
team and the proposed investment strategy for the Fund. Because the Fund had yet
to commence investment operations, the Board could not consider the historical
investment performance of the Fund. In light of the information presented and
the considerations made, the Board concluded that the nature, extent and quality
of the services to be provided to the Fund by the Advisor under the Agreement
are expected to be satisfactory.
The Board considered the proposed unitary fee rate payable by the Fund under the
Agreement for the services to be provided. The Board noted that, under the
unitary fee arrangement, the Fund would pay the Advisor a unitary fee equal to
an annual rate of 0.75% of its average daily net assets. The Board noted that
the Advisor would be responsible for the Fund's expenses, including the cost of
transfer agency, custody, fund administration, legal, audit and other services
and license fees, if any, but excluding the fee payment under the Agreement and
interest, taxes, acquired fund fees and expenses, if any, brokerage commissions
and other expenses connected with the execution of portfolio transactions,
distribution and service fees pursuant to a Rule 12b-1 plan, if any, and
extraordinary expenses, if any. The Board received and reviewed information
showing the advisory or unitary fee rates and expense ratios of the peer funds
in the Expense Group, as well as advisory and unitary fee rates charged by the
Advisor to other ETFs. Because the Fund will pay a unitary fee, the Board
determined that expense ratios were the most relevant comparative data point.
Based on the information provided, the Board noted that the unitary fee rate for
the Fund was above the median total (net) expense ratio of the peer funds in the
Expense Group. With respect to the Expense Group, the Board discussed with
representatives of the Advisor how the Expense Group was assembled and how the
Fund compared and differed from the peer funds. The Board took this information
into account in considering the peer data. With respect to fees charged to other
ETFs managed by the Advisor, the Board considered the Advisor's statement that
the Fund will be most comparable to three other actively-managed ETFs managed by
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
the Advisor that pay unitary fees at annual rates that range from 0.70% to 0.85%
of their respective average daily net assets, due to their shared focus on
targeted global exposures with robust investment processes and objectives to
track a given market segment. In light of the information considered and the
nature, extent and quality of the services expected to be provided to the Fund
under the Agreement, the Board determined that the proposed unitary fee was fair
and reasonable.
The Board noted that the proposed unitary fee for the Fund was not structured to
pass on to shareholders the benefits of any economies of scale as the Fund's
assets grow. The Board noted that any reduction in fixed costs associated with
the management of the Fund would benefit the Advisor, but that the unitary fee
structure provides a level of certainty in expenses for the Fund. The Board
noted that the Advisor has continued to hire personnel and build infrastructure,
including technology, to improve the services to the funds in the First Trust
Fund Complex. The Board took into consideration the types of costs to be borne
by the Advisor in connection with its services to be performed for the Fund
under the Agreement. The Board considered the Advisor's estimate of the asset
level for the Fund at which the Advisor expects the Agreement to be profitable
to the Advisor and the Advisor's estimate of the profitability of the Agreement
if the Fund's assets reach $100 million. The Board noted the inherent
limitations in the profitability analysis and concluded that, based on the
information provided, the Advisor's estimated profitability level for the Fund
was not unreasonable. In addition, the Board considered fall-out benefits
described by the Advisor that may be realized from its relationship with the
Fund. The Board considered that the Advisor had identified as a fall-out benefit
to the Advisor and FTP their exposure to investors and brokers who, absent their
exposure to the Fund, may have had no dealings with the Advisor or FTP. The
Board noted that the Advisor will not utilize soft dollars in connection with
the Fund. The Board concluded that the character and amount of potential
fall-out benefits to the Advisor were not unreasonable.
Based on all of the information considered and the conclusions reached, the
Board, including the Independent Trustees, determined that the terms of the
Agreement are fair and reasonable and that the approval of the Agreement is in
the best interests of the Fund. No single factor was determinative in the
Board's analysis.
BOARD CONSIDERATIONS REGARDING APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT FOR
FIRST TRUST EXPANDED TECHNOLOGY ETF
The Board of Trustees of First Trust Exchange-Traded Fund VIII (the "Trust"),
including the Independent Trustees, approved the Investment Management Agreement
(the "Agreement") with First Trust Advisors L.P. (the "Advisor"), on behalf of
First Trust Expanded Technology ETF (the "Fund"), for an initial two-year term
at a meeting held on June 7, 2021. The Board determined that the Agreement is in
the best interests of the Fund in light of the nature, extent and quality of the
services expected to be provided and such other matters as the Board considered
to be relevant in the exercise of its business judgment.
To reach this determination, the Board considered its duties under the
Investment Company Act of 1940, as amended (the "1940 Act"), as well as under
the general principles of state law, in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; the fiduciary duty
of investment advisors with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Board in voting
on such agreements. To assist the Board in its evaluation of the Agreement for
the Fund, the Independent Trustees received a report from the Advisor in advance
of the Board meeting responding to a request for information from counsel to the
Independent Trustees, submitted on behalf of the Independent Trustees, that,
among other things, outlined: the services to be provided by the Advisor to the
Fund (including the relevant personnel responsible for these services and their
experience); the proposed unitary fee rate payable by the Fund as compared to
fees charged to a peer group of funds (the "Expense Group") and a broad peer
universe of funds (the "Expense Universe"), each assembled by Broadridge
Financial Solutions, Inc. ("Broadridge"), an independent source, and as compared
to fees charged to other exchange-traded funds ("ETFs") managed by the Advisor;
the estimated expense ratio of the Fund as compared to expense ratios of the
funds in the Fund's Expense Group and Expense Universe; the nature of expenses
to be incurred in providing services to the Fund and the potential for the
Advisor to realize economies of scale, if any; profitability and other financial
data for the Advisor; any fall-out benefits to the Advisor and its affiliate,
First Trust Portfolios L.P. ("FTP"); and information on the Advisor's compliance
program. The Independent Trustees and their counsel also met separately to
discuss the information provided by the Advisor. The Board applied its business
judgment to determine whether the arrangement between the Trust and the Advisor
is a reasonable business arrangement from the Fund's perspective.
In evaluating whether to approve the Agreement for the Fund, the Board
considered the nature, extent and quality of the services to be provided by the
Advisor under the Agreement and considered that employees of the Advisor provide
management services to other ETFs and to other funds in the First Trust Fund
Complex with diligence and care. The Board considered that the Advisor will be
responsible for the overall management and administration of the Fund and
reviewed all of the services to be provided by the Advisor to the Fund, as well
as the background and experience of the persons responsible for such services.
The Board noted that the Fund will be an actively-managed ETF and considered
that the Advisor manages other ETFs with a similar structure in the First Trust
Fund Complex. The Board noted that the Advisor's Research Group will be
responsible for the day-to-day management of the Fund's investments and
considered the background and experience of the members of the Research Group.
The Board considered that the Advisor applies the same oversight model
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FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
internally with the Research Group as it uses for overseeing external
sub-advisors, including portfolio risk monitoring and performance review. In
reviewing the services to be provided, the Board noted the compliance program
that had been developed by the Advisor and considered that it includes a robust
program for monitoring the Advisor's and the Fund's compliance with the 1940
Act, as well as the Fund's compliance with its investment objective, policies
and restrictions. At the meeting, the Trustees received a presentation from a
representative of the Research Group and were able to ask questions about the
group and the proposed investment strategy for the Fund. Because the Fund had
yet to commence investment operations, the Board could not consider the
historical investment performance of the Fund. In light of the information
presented and the considerations made, the Board concluded that the nature,
extent and quality of the services to be provided to the Fund by the Advisor
under the Agreement are expected to be satisfactory.
The Board considered the proposed unitary fee rate payable by the Fund under the
Agreement for the services to be provided. The Board noted that, under the
unitary fee arrangement, the Fund would pay the Advisor a unitary fee equal to
an annual rate of 0.65% of its average daily net assets. The Board noted that
the Advisor would be responsible for the Fund's expenses, including the cost of
transfer agency, custody, fund administration, legal, audit and other services
and license fees, if any, but excluding the fee payment under the Agreement and
interest, taxes, acquired fund fees and expenses, if any, brokerage commissions
and other expenses connected with the execution of portfolio transactions,
distribution and service fees pursuant to a Rule 12b-1 plan, if any, and
extraordinary expenses, if any. The Board received and reviewed information
showing the advisory fee rates and expense ratios of the peer funds in the
Expense Group, as well as advisory and unitary fee rates charged by the Advisor
to other ETFs. Because the Fund will pay a unitary fee, the Board determined
that expense ratios were the most relevant comparative data point. Based on the
information provided, the Board noted that the unitary fee rate for the Fund was
below the median total (net) expense ratio of the peer funds in the Expense
Group. With respect to the Expense Group, the Board discussed with
representatives of the Advisor how the Expense Group was assembled and how the
Fund compared and differed from the peer funds. The Board took this information
into account in considering the peer data. With respect to fees charged to other
ETFs managed by the Advisor, the Board considered the Advisor's statement that
the Fund will be most comparable to three other actively-managed ETFs managed by
the Advisor that pay unitary fees at annual rates that range from 0.55% to 0.70%
of their respective average daily net assets, due to their shared focus on U.S.
equity exposures with robust investment processes and objectives to track a
given market segment. In light of the information considered and the nature,
extent and quality of the services expected to be provided to the Fund under the
Agreement, the Board determined that the proposed unitary fee was fair and
reasonable.
The Board noted that the proposed unitary fee for the Fund was not structured to
pass on to shareholders the benefits of any economies of scale as the Fund's
assets grow. The Board noted that any reduction in fixed costs associated with
the management of the Fund would benefit the Advisor, but that the unitary fee
structure provides a level of certainty in expenses for the Fund. The Board
noted that the Advisor has continued to hire personnel and build infrastructure,
including technology, to improve the services to the funds in the First Trust
Fund Complex. The Board took into consideration the types of costs to be borne
by the Advisor in connection with its services to be performed for the Fund
under the Agreement. The Board considered the Advisor's estimate of the asset
level for the Fund at which the Advisor expects the Agreement to be profitable
to the Advisor and the Advisor's estimate of the profitability of the Agreement
if the Fund's assets reach $100 million. The Board noted the inherent
limitations in the profitability analysis and concluded that, based on the
information provided, the Advisor's estimated profitability level for the Fund
was not unreasonable. In addition, the Board considered fall-out benefits
described by the Advisor that may be realized from its relationship with the
Fund. The Board considered that the Advisor had identified as a fall-out benefit
to the Advisor and FTP their exposure to investors and brokers who, absent their
exposure to the Fund, may have had no dealings with the Advisor or FTP. The
Board noted that the Advisor will not utilize soft dollars in connection with
the Fund. The Board concluded that the character and amount of potential
fall-out benefits to the Advisor were not unreasonable.
Based on all of the information considered and the conclusions reached, the
Board, including the Independent Trustees, determined that the terms of the
Agreement are fair and reasonable and that the approval of the Agreement is in
the best interests of the Fund. No single factor was determinative in the
Board's analysis.
LIQUIDITY RISK MANAGEMENT PROGRAM
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as
amended (the "1940 Act"), the Funds and each other fund in the First Trust Fund
Complex, other than the closed-end funds, have adopted and implemented a
liquidity risk management program (the "Program") reasonably designed to assess
and manage the funds' liquidity risk, i.e., the risk that a fund could not meet
requests to redeem shares issued by the fund without significant dilution of
remaining investors' interests in the fund. The Board of Trustees of the First
Trust Funds has appointed First Trust Advisors, L.P. (the "Advisor") as the
person designated to administer the Program, and in this capacity the Advisor
performs its duties primarily through the activities and efforts of the First
Trust Liquidity Committee (the "Liquidity Committee").
Page 74
<PAGE>
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
Pursuant to the Program, the Liquidity Committee classifies the liquidity of
each fund's portfolio investments into one of the four liquidity categories
specified by Rule 22e-4: highly liquid investments, moderately liquid
investments, less liquid investments and illiquid investments. The Liquidity
Committee determines certain of the inputs for this classification process,
including reasonably anticipated trade sizes and significant investor dilution
thresholds. The Liquidity Committee also determines and periodically reviews a
highly liquid investment minimum for certain funds, monitors the funds' holdings
of assets classified as illiquid investments to seek to ensure they do not
exceed 15% of a fund's net assets and establishes policies and procedures
regarding redemptions in kind.
At the April 26, 2021 meeting of the Board of Trustees, as required by Rule
22e-4 and the Program, the Advisor provided the Board with a written report
prepared by the Advisor that addressed the operation of the Program during the
period from March 20, 2020 through the Liquidity Committee's annual meeting held
on March 16, 2021 and assessed the Program's adequacy and effectiveness of
implementation during this period, including the operation of the highly liquid
investment minimum for each fund that is required under the Program to have one,
and any material changes to the Program. Note that because the Funds primarily
hold assets that are highly liquid investments, the Funds have not adopted any
highly liquid investment minimums.
As stated in the written report, during the review period, no fund breached the
15% limitation on illiquid investments, no fund with a highly liquid investment
minimum breached that minimum and no fund filed a Form N-LIQUID. The Advisor
concluded that each fund's investment strategy is appropriate for an open-end
fund; that the Program operated effectively in all material respects during the
review period; and that the Program is reasonably designed to assess and manage
the liquidity risk of each fund and to maintain compliance with Rule 22e-4.
Page 75
<PAGE>
--------------------------------------------------------------------------------
BOARD OF TRUSTEES AND OFFICERS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
The following tables identify the Trustees and Officers of the Trust. Unless
otherwise indicated, the address of all persons is 120 East Liberty Drive, Suite
400, Wheaton, IL 60187.
The Trust's statement of additional information includes additional information
about the Trustees and is available, without charge, upon request, by calling
(800) 988-5891.
<TABLE>
<CAPTION>
NUMBER OF OTHER
PORTFOLIOS IN TRUSTEESHIPS OR
TERM OF OFFICE THE FIRST TRUST DIRECTORSHIPS
NAME, AND YEAR FIRST FUND COMPLEX HELD BY TRUSTEE
YEAR OF BIRTH AND ELECTED OR PRINCIPAL OCCUPATIONS OVERSEEN BY DURING PAST
POSITION WITH THE TRUST APPOINTED DURING PAST 5 YEARS TRUSTEE 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard E. Erickson, Trustee o Indefinite Term Physician, Officer, Wheaton Orthopedics; 210 None
(1951) Limited Partner, Gundersen Real Estate
o Since Inception Limited Partnership (June 1992 to
December 2016)
Thomas R. Kadlec, Trustee o Indefinite Term President, ADM Investors Services, Inc. 210 Director of ADM
(1957) (Futures Commission Merchant) Investor Services,
o Since Inception Inc., ADM
Investor Services
International,
Futures Industry
Association, and
National Futures
Association
Robert F. Keith, Trustee o Indefinite Term President, Hibs Enterprises (Financial 210 Director of Trust
(1956) and Management Consulting) Company of
o Since Inception Illinois
Niel B. Nielson, Trustee o Indefinite Term Senior Advisor (August 2018 to Present), 210 None
(1954) Managing Director and Chief Operating
o Since Inception Officer (January 2015 to August 2018),
Pelita Harapan Educational Foundation
(Educational Products and Services)
------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
James A. Bowen(1), Trustee, o Indefinite Term Chief Executive Officer, First Trust 210 None
Chairman of the Board Advisors L.P. and First Trust
(1955) o Since Inception Portfolios L.P.; Chairman of the
Board of Directors, BondWave LLC
(Software Development Company)
and Stonebridge Advisors LLC
(Investment Advisor)
</TABLE>
-----------------------------
(1) Mr. Bowen is deemed an "interested person" of the Trust due to his
position as Chief Executive Officer of First Trust Advisors L.P.,
investment advisor of the Trust.
Page 76
<PAGE>
--------------------------------------------------------------------------------
BOARD OF TRUSTEES AND OFFICERS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
POSITION AND TERM OF OFFICE
NAME OFFICES AND LENGTH OF PRINCIPAL OCCUPATIONS
AND YEAR OF BIRTH WITH TRUST SERVICE DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS(2)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
James M. Dykas President and Chief o Indefinite Term Managing Director and Chief Financial Officer
(1966) Executive Officer (January 2016 to Present), Controller (January 2011
o Since Inception to January 2016), Senior Vice President (April 2007
to January 2016), First Trust Advisors L.P. and First
Trust Portfolios L.P.; Chief Financial Officer
(January 2016 to Present), BondWave LLC
(Software Development Company) and Stonebridge
Advisors LLC (Investment Advisor)
Donald P. Swade Treasurer, Chief Financial o Indefinite Term Senior Vice President (July 2016 to Present), Vice
(1972) Officer and Chief President (April 2012 to July 2016), First Trust
Accounting Officer o Since Inception Advisors L.P. and First Trust Portfolios L.P.
W. Scott Jardine Secretary and Chief o Indefinite Term General Counsel, First Trust Advisors L.P. and
(1960) Legal Officer First Trust Portfolios L.P.; Secretary and General
o Since Inception Counsel, BondWave LLC; Secretary, Stonebridge
Advisors LLC
Daniel J. Lindquist Vice President o Indefinite Term Managing Director, First Trust Advisors L.P. and
(1970) First Trust Portfolios L.P.
o Since Inception
Kristi A. Maher Chief Compliance Officer o Indefinite Term Deputy General Counsel, First Trust Advisors L.P.
(1966) and Assistant Secretary and First Trust Portfolios L.P.
o Since Inception
Roger F. Testin Vice President o Indefinite Term Senior Vice President, First Trust Advisors L.P.
(1966) and First Trust Portfolios L.P.
o Since Inception
Stan Ueland Vice President o Indefinite Term Senior Vice President, First Trust Advisors L.P.
(1970) and First Trust Portfolios L.P.
o Since Inception
</TABLE>
-----------------------------
(2) The term "officer" means the president, vice president, secretary,
treasurer, controller or any other officer who performs a policy making
function.
Page 77
<PAGE>
--------------------------------------------------------------------------------
PRIVACY POLICY
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
AUGUST 31, 2021 (UNAUDITED)
PRIVACY POLICY
First Trust values our relationship with you and considers your privacy an
important priority in maintaining that relationship. We are committed to
protecting the security and confidentiality of your personal information.
SOURCES OF INFORMATION
We collect nonpublic personal information about you from the following sources:
o Information we receive from you and your broker-dealer, investment
professional or financial representative through interviews,
applications, agreements or other forms;
o Information about your transactions with us, our affiliates or
others;
o Information we receive from your inquiries by mail, e-mail or
telephone; and
o Information we collect on our website through the use of "cookies".
For example, we may identify the pages on our website that your
browser requests or visits.
INFORMATION COLLECTED
The type of data we collect may include your name, address, social security
number, age, financial status, assets, income, tax information, retirement and
estate plan information, transaction history, account balance, payment history,
investment objectives, marital status, family relationships and other personal
information.
DISCLOSURE OF INFORMATION
We do not disclose any nonpublic personal information about our customers or
former customers to anyone, except as permitted by law. In addition to using
this information to verify your identity (as required under law), the permitted
uses may also include the disclosure of such information to unaffiliated
companies for the following reasons:
o In order to provide you with products and services and to effect
transactions that you request or authorize, we may disclose your
personal information as described above to unaffiliated financial
service providers and other companies that perform administrative or
other services on our behalf, such as transfer agents, custodians
and trustees, or that assist us in the distribution of investor
materials such as trustees, banks, financial representatives, proxy
services, solicitors and printers.
o We may release information we have about you if you direct us to do
so, if we are compelled by law to do so, or in other legally limited
circumstances (for example to protect your account from fraud).
In addition, in order to alert you to our other financial products and services,
we may share your personal information within First Trust.
USE OF WEBSITE ANALYTICS
We currently use third party analytics tools, Google Analytics and AddThis to
gather information for purposes of improving First Trust's website and marketing
our products and services to you. These tools employ cookies, which are small
pieces of text stored in a file by your web browser and sent to websites that
you visit, to collect information, track website usage and viewing trends such
as the number of hits, pages visited, videos and PDFs viewed and the length of
user sessions in order to evaluate website performance and enhance navigation of
the website. We may also collect other anonymous information, which is generally
limited to technical and web navigation information such as the IP address of
your device, internet browser type and operating system for purposes of
analyzing the data to make First Trust's website better and more useful to our
users. The information collected does not include any personal identifiable
information such as your name, address, phone number or email address unless you
provide that information through the website for us to contact you in order to
answer your questions or respond to your requests. To find out how to opt-out of
these services click on: Google Analytics and AddThis.
CONFIDENTIALITY AND SECURITY
With regard to our internal security procedures, First Trust restricts access to
your nonpublic personal information to those First Trust employees who need to
know that information to provide products or services to you. We maintain
physical, electronic and procedural safeguards to protect your nonpublic
personal information.
POLICY UPDATES AND INQUIRIES
As required by federal law, we will notify you of our privacy policy annually.
We reserve the right to modify this policy at any time, however, if we do change
it, we will tell you promptly. For questions about our policy, or for additional
copies of this notice, please go to www.ftportfolios.com, or contact us at
1-800-621-1675 (First Trust Portfolios) or 1-800-222-6822 (First Trust
Advisors).
March 2021
Page 78
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<PAGE>
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<PAGE>
FIRST TRUST
First Trust Exchange-Traded Fund VIII
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 VIII
--------------------------------------------------------------------------------
First Trust Multi-Manager Large Growth ETF (MMLG)
----------------------------
Annual Report
For the Year Ended
August 31, 2021
----------------------------
<PAGE>
--------------------------------------------------------------------------------
TABLE OF CONTENTS
--------------------------------------------------------------------------------
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
ANNUAL REPORT
AUGUST 31, 2021
Shareholder Letter........................................................... 1
Fund Performance Overview.................................................... 2
Portfolio Commentary......................................................... 4
Understanding Your Fund Expenses............................................. 6
Portfolio of Investments..................................................... 7
Statement of Assets and Liabilities.......................................... 10
Statement of Operations...................................................... 11
Statements of Changes in Net Assets.......................................... 12
Financial Highlights......................................................... 13
Notes to Financial Statements................................................ 14
Report of Independent Registered Public Accounting Firm...................... 19
Additional Information....................................................... 20
Board of Trustees and Officers............................................... 26
Privacy Policy............................................................... 28
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/or Wellington Management Company LLP ("Wellington")
and/or Sands Capital Management, LLC ("Sands Capital") (each, a "Sub-Advisor"
and together, "Sub-Advisors") and their respective 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
the series of First Trust Exchange-Traded Fund VIII (the "Trust") described in
this report (First Trust Multi-Manager Large Growth ETF; hereinafter referred to
as the "Fund") 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/or Sub-Advisors and their respective 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 the Fund will achieve its investment objective. The
Fund is subject to market risk, which is the possibility that the market values
of securities owned by the Fund will decline and that the value of the Fund's
shares may therefore be less than what you paid for them. Accordingly, you can
lose money investing in the Fund. See "Risk Considerations" in the Additional
Information section of this report for a discussion of certain other risks of
investing in the Fund.
Performance data quoted represents past performance, which is no guarantee of
future results, and current performance may be lower or higher than the figures
shown. For the most recent month-end performance figures, please visit
www.ftportfolios.com or speak with your financial advisor. Investment returns,
net asset value and share price will fluctuate and Fund shares, when sold, may
be worth more or less than their original cost.
The Advisor may also periodically provide additional information on Fund
performance on the Fund's webpage at www.ftportfolios.com.
HOW TO READ THIS REPORT
This report contains information that may help you evaluate your investment in
the Fund. It includes details about the Fund and presents data and analysis that
provide insight into the Fund's performance and investment approach.
By reading the portfolio commentary from the portfolio management team of the
Fund, you may obtain an understanding of how the market environment affected the
Fund's performance. The statistical information that follows may help you
understand the 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 and/or Sub-Advisors 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 the Fund are spelled out in the prospectus, the statement of
additional information, and other Fund regulatory filings.
<PAGE>
--------------------------------------------------------------------------------
SHAREHOLDER LETTER
--------------------------------------------------------------------------------
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
ANNUAL LETTER FROM THE CHAIRMAN AND CEO
AUGUST 31, 2021
Dear Shareholders:
First Trust is pleased to provide you with the annual report for the First Trust
Multi-Manager Large Growth ETF (the "Fund"), which contains detailed information
about the Fund for the twelve months ended August 31, 2021.
The coronavirus ("COVID-19") pandemic has proven to be as stubborn as
advertised. We were warned by the scientific community early on that we would
have to coexist with this virus from here on out, and that appears to be the
case some 19 months after its onset. While the three main vaccines have proven
to be effective at keeping those people who have gotten all the required shots
out of the hospital, the U.S., unfortunately, had only achieved a 54% fully
vaccinated rate as of September 9, 2021, according to the Centers for Disease
Control and Prevention. If you add in the people ages 18 and older who have
received just one of the two-dose vaccines, it jumps to 75.3%. The U.S. and
global economies continue to underperform due to the pandemic. The U.S. alone
had a record high 10.9 million job openings at the end of July 2021, according
to the latest Job Openings and Labor Turnover Survey from the Department of
Labor. It appears that many people do not seem to want to work right now. An
estimated 7.5 million unemployment recipients in the U.S. were scheduled to lose
their benefits on September 6, 2021. Perhaps that will be enough to incentivize
people to go back to work.
The Federal Reserve (the "Fed") continues to play a major role in the U.S.
economy. It has kept short-term interest rates artificially low for the better
part of the past 13 years. The Federal Funds target rate (upper bound), while
held at 0.25% for roughly nine of those 13 years, reached as high as 2.50% in
the same 13-year period, but only for a few months and that was just prior to
the COVID-19 pandemic, according to data from the Fed. For comparative purposes,
the target rate averaged 2.56% for the 30-year period ended September 21, 2021.
It currently stands at 0.25%. In addition to keeping rates low, the Fed has been
buying assets, specifically Treasuries and mortgage-backed securities. It has
been buying a combined $120 billion of these securities every month. This has
helped keep bond yields artificially low as well. As of February 26, 2020, the
value of the assets on the Fed's balance sheet totaled $4.16 trillion, according
to its own data. As of September 15, 2021, the assets were valued at $8.45
trillion. Keep in mind, the balance sheet stood at $1 trillion on September 17,
2008. That was during the 2007-2008 Financial Crisis. Due to the reopening of
the U.S. economy and a bigger-than-expected rise in inflation this year, the Fed
has signaled that it could begin to taper its bond buying program by the end of
2021. With respect to the Federal Funds rate, the Fed continues to say it
intends to leave short-term rates where they are until 2023. In other words, the
Fed is poised to maintain its accommodative stance towards monetary policy. They
are not looking to get tight - just less loose. We will monitor this scenario
closely in the months ahead to see if the Fed's actions impact the direction of
interest rates and bond yields.
Overall, I am pleased to report that the securities markets have performed well
in this tumultuous climate. It appears, in our opinion, that the extremely low
interest rates offered on savings vehicles has motivated many investors to
assume more risk to potentially generate higher returns. The S&P 500(R) Index
(the "Index") posted a total return of 31.17% for the 12-month period ended
August 31, 2021, according to Bloomberg. For comparative purposes, from 1926
through 2020 (95 years), the Index returned an average of 10.28% per year on a
total return basis, according to Morningstar/Ibbotson Associates. Should
interest rates and bond yields eventually trend higher, investors should be
prepared for a bit of turbulence as stocks and bonds may be subjected to some
potential short-term profit taking, in my opinion. Having said that, I encourage
investors to stay the course. I remain optimistic due in large part to the
trillions of dollars in government stimulus money already circulating in the
economy as well as the potential for trillions of additional dollars from
President Joe Biden's infrastructure and "human infrastructure" bills still
weaving their way through Congress. It's hard to bet against growth in the
current climate.
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 Fund
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 1
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED)
--------------------------------------------------------------------------------
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
The First Trust Multi-Manager Large Growth ETF (the "Fund") seeks to provide
long-term capital appreciation. Under normal market conditions, the Fund will
invest at least 80% of its net assets (including investment borrowings) in
equity securities issued by large capitalization companies. The Fund considers
large capitalization companies to be those companies with market capitalizations
within the market capitalization range of the companies comprising the Russell
1000(R) Growth Index (as of the index's most recent reconstitution). The Fund's
portfolio is principally composed of common stocks issued by companies domiciled
in the United States, common stocks issued by non-U.S. companies that are
principally traded in the United States and American Depositary Receipts. The
Fund utilizes a multi-manager approach to provide exposure to the large
capitalization growth segment of the equity market through the blending of
multiple portfolio management teams. The Fund lists and principally trades its
shares on NYSE Arca, Inc. under the ticker symbol "MMLG."
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
1 Year Ended Inception (7/21/20) Inception (7/21/20)
8/31/21 to 8/31/21 to 8/31/21
<S> <C> <C> <C>
FUND PERFORMANCE
NAV 29.65% 37.80% 42.85%
Market Price 29.49% 37.75% 42.80%
INDEX PERFORMANCE
Russell 1000(R) Index 32.25% 37.61% 42.64%
Russell 1000(R) Growth Index 28.53% 38.72% 43.92%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
Total returns for the period since inception are calculated from the inception
date of the Fund. "Average Annual Total Returns" represent the average annual
change in value of an investment over the period indicated. "Cumulative Total
Returns" represent the total change in value of an investment over the period
indicated.
The 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. Since shares of the
Fund did not trade in the secondary market until after its inception, for the
period from inception to the first day of secondary market trading in shares of
the Fund, the NAV of the 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 the Fund at NAV and Market Price,
respectively.
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. 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 index. 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 the
Fund will vary with changes in market conditions. Shares of the Fund may be
worth more or less than their original cost when they are redeemed or sold in
the market. The Fund's past performance is no guarantee of future performance.
Page 2
<PAGE>
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG) (CONTINUED)
----------------------------------------------------------
% OF TOTAL
LONG-TERM
SECTOR CLASSIFICATION INVESTMENTS
----------------------------------------------------------
Information Technology 39.3%
Communication Services 25.1
Consumer Discretionary 13.5
Health Care 11.7
Industrials 6.3
Consumer Staples 1.7
Financials 1.0
Real Estate 0.9
Materials 0.5
--------
Total 100.0%
========
----------------------------------------------------------
% OF TOTAL
LONG-TERM
TOP TEN HOLDINGS INVESTMENTS
----------------------------------------------------------
Sea Ltd., ADR 6.5%
Facebook, Inc., Class A 4.8
Netflix, Inc. 4.5
Amazon.com, Inc. 4.2
Microsoft Corp. 4.0
ServiceNow, Inc. 3.8
Square, Inc., Class A 3.5
Visa, Inc., Class A 3.1
Alphabet, Inc., Class A 3.0
Apple, Inc. 2.9
--------
Total 40.3%
========
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
JULY 21, 2020 - AUGUST 31, 2021
First Trust Multi-Manager Russell 1000(R) Russell 1000(R)
Large Growth ETF Index Growth Index
<S> <C> <C> <C>
1/3/19 $10,000 $10,000 $10,000
8/31/20 11,018 10,785 11,198
2/28/21 12,233 12,056 11,796
8/31/21 14,285 14,264 14,392
</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 does 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 3
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY
--------------------------------------------------------------------------------
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
ADVISOR
First Trust Advisors L.P. ("First Trust" or the "Advisor") is the investment
advisor to the First Trust Multi-Manager Large Growth ETF ("MMLG" or the
"Fund"). The following serve as investment sub-advisors (each, a "Sub-Advisor")
to the Fund: Wellington Management Company LLP ("Wellington") and Sands Capital
Management, LLC ("Sands Capital"). First Trust is responsible for the ongoing
monitoring of the Fund's investment portfolio, selecting and overseeing the
investment sub-advisors, managing the Fund's business affairs and providing
certain administrative services necessary for the management of the Fund.
PORTFOLIO MANAGEMENT TEAM
THE ADVISOR'S INVESTMENT COMMITTEE, WHICH MANAGES THE FUND'S INVESTMENTS,
CONSISTS OF:
o Daniel J. Lindquist, Managing Director of First Trust
o Jon C. Erickson, Senior Vice President of First Trust
o David G. McGarel, Chief Investment Officer, Chief Operating Officer and
Managing Director of First Trust
o Roger F. Testin, Senior Vice President of First Trust
o Stan Ueland, Senior Vice President of First Trust
o Chris A. Peterson, CFA, Senior Vice President of First Trust
SUB-ADVISOR PORTFOLIO MANAGERS
WELLINGTON
o Douglas W. McLane, CFA, Senior Managing Director, Partner and Equity
Portfolio Manager
SANDS CAPITAL
o Frank M. Sands, CFA, Chief Investment Officer and Chief Executive Officer
o Michael A. Sramek, CFA, Senior Portfolio Manager, Research Analyst and
Managing Director
o Wesley A. Johnston, CFA, Portfolio Manager and Senior Research Analyst
o Thomas H. Trentman, CFA, Portfolio Manager and Senior Research Analyst
COMMENTARY
MARKET RECAP
U.S. equities, as measured by the S&P 500(R) Index and the Russell 1000(R)
Growth Index (the "Benchmark"), posted outsized total returns for the 12-month
period ended August 31, 2021. Returns for the period were nearly three times
that of an average calendar year for the S&P 500(R) Index. From 1926-2020, the
average annual total return on the S&P 500(R) Index was 10.28%, according to
Morningstar/Ibbotson Associates. Growth stocks, particularly with respect to
technology companies, benefited from 2020's "work from home" trade as the
coronavirus ("COVID-19") pandemic-induced social distancing and lockdowns
boosted shares of businesses delivering digital services. In the fourth quarter
of 2020, a sharp escalation in COVID-19 infections in the U.S. and renewed
government restrictions were eventually overshadowed by the development of
COVID-19 vaccines. Growth stocks took a pause in early 2021 relative to value
stocks (cyclicals) as the "reflation" trade took hold amid a reopening economy.
In the U.S., the Consumer Price Index ("CPI") increased from a paltry 1.3%
(trailing 12-month basis) in August 2020 to a robust 5.3% in August 2021. Over
the past 12 months, the yield on the Benchmark 10-Year Treasury Note rose from
0.71% to 1.31%, but reached as high as 1.74% in March 2021 due, in part, to the
spike in inflation. Despite the ongoing battle with the COVID-19 virus and the
related economic fallout, markets have been buoyed by robust corporate earnings,
accelerating stock buybacks and extremely accommodative monetary policy from the
Federal Reserve (the "Fed").
PERFORMANCE ANALYSIS
For the 12-month period ended August 31, 2021, the Fund returned 29.65% while
the Benchmark returned 28.53%, according to Bloomberg.
The outperformance of the Fund of 112 basis points was driven primarily by
strong returns in the Communication Services sector especially on the back of an
off-Benchmark position in Sea Ltd., a global consumer internet company, which
returned 121.4% for the period and was approximately 4.8% of the Fund.
Offsetting some of the gains was an underweight to Alphabet Inc., which was up
approximately 78% for the period. Another contributor was the Consumer
Discretionary sector where the Fund was underweight as the sector underperformed
the overall benchmark. Additionally, security selection in the Consumer
Discretionary sector contributed as the Fund returns in this sector outperformed
the Benchmark.
Page 4
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
ANNUAL REPORT
AUGUST 31, 2021 (UNAUDITED)
On the flip side, Information Technology was the largest detractor from
performance with an underweight versus the Benchmark as the sector outperformed
in addition to securities in the portfolio within the sector returning less than
the Benchmark. Though on a relative basis the sector detracted from performance,
Information Technology was one of the top contributors to the Fund's total
returns from an absolute basis.
MARKET AND FUND OUTLOOK
The shifts in market leadership over the 12-month period ended August 31, 2021
illustrate how unpredictable markets can be in the short-term. Exogenous factors
can have an outsized influence in short-term price movements, and these factors
are impossible to correctly predict, we believe, with any repeatable process.
Over longer time periods, history shows us that stock prices tend to follow
compounded earnings growth, and that most value creation accrues to a select
group of businesses. One of the ways in which earnings grow over time is through
capital spending. With respect to the infrastructure bills circulating through
Congress, the impetus for new spending is to extend the robust growth rates well
into the next year while at the same time improving physical infrastructure in
the U.S. Details on investments that have been leaked suggest that it will
extend the robust construction cycle, but it will be important to know the
extent to which corporate tax rates are raised to help fund the spending.
Investors should monitor the comments from the Fed moving forward. The Fed's
most recent forecast still has the first round of interest rate hikes occurring
sometime in 2023. Keep in mind, projections are subject to change and could be
influenced by events such as inflation trending higher.
Page 5
<PAGE>
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
UNDERSTANDING YOUR FUND EXPENSES
AUGUST 31, 2021 (UNAUDITED)
As a shareholder of First Trust Multi-Manager Large Growth ETF (the "Fund"), 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 of investing in the Fund 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 August 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 the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the 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 Fund 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
MARCH 1, 2021 AUGUST 31, 2021 PERIOD PERIOD (a)
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
Actual $1,000.00 $1,167.70 0.85% $4.64
Hypothetical (5% return before expenses) $1,000.00 $1,020.92 0.85% $4.33
</TABLE>
(a) Expenses are equal to the annualized expense ratio as indicated in the
table multiplied by the average account value over the period (March 1,
2021 through August 31, 2021), multiplied by 184/365 (to reflect the
six-month period).
Page 6
<PAGE>
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS -- 98.0%
AEROSPACE & DEFENSE -- 0.4%
8,948 Raytheon Technologies Corp. $ 758,433
-------------
AIR FREIGHT & LOGISTICS -- 0.4%
2,442 FedEx Corp. 648,815
-------------
BEVERAGES -- 0.9%
3,527 Constellation Brands, Inc., Class A 744,691
8,155 Monster Beverage Corp. (a) 795,683
-------------
1,540,374
-------------
BIOTECHNOLOGY -- 1.1%
17,108 Sarepta Therapeutics, Inc. (a) 1,336,477
3,622 Seagen, Inc. (a) 607,047
-------------
1,943,524
-------------
BUILDING PRODUCTS -- 0.4%
6,971 Fortune Brands Home &
Security, Inc. 678,766
-------------
CHEMICALS -- 0.5%
2,810 Sherwin-Williams (The) Co. 853,313
-------------
COMMERCIAL SERVICES & SUPPLIES
-- 0.3%
4,707 Republic Services, Inc. 584,280
-------------
C OMMUNICATIONS EQUIPMENT
-- 0.7%
4,783 Motorola Solutions, Inc. 1,168,104
-------------
CONSUMER FINANCE -- 0.6%
5,982 American Express Co. 992,773
-------------
ELECTRONIC EQUIPMENT,
INSTRUMENTS & COMPONENTS
-- 1.3%
4,743 CDW Corp. 951,493
7,579 Cognex Corp. 671,651
13,918 Corning, Inc. 556,581
-------------
2,179,725
-------------
ENTERTAINMENT -- 12.2%
13,387 Netflix, Inc. (a) 7,619,747
32,445 Sea Ltd., ADR (a) 10,976,792
3,802 Walt Disney (The) Co. (a) 689,303
43,049 Warner Music Group Corp.,
Class A 1,635,862
-------------
20,921,704
-------------
EQUITY REAL ESTATE INVESTMENT
TRUSTS -- 0.9%
3,062 Alexandria Real Estate Equities,
Inc. 631,905
10,332 Equity LifeStyle Properties, Inc. 878,943
-------------
1,510,848
-------------
FOOD & STAPLES RETAILING -- 0.2%
13,261 Grocery Outlet Holding Corp. (a) 345,184
-------------
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
HEALTH CARE EQUIPMENT
& SUPPLIES -- 6.6%
5,581 Align Technology, Inc. (a) $ 3,956,929
9,877 Baxter International, Inc. 752,825
2,809 Danaher Corp. 910,565
3,350 Dexcom, Inc. (a) 1,773,557
14,245 Edwards Lifesciences Corp. (a) 1,669,229
9,140 Hologic, Inc. (a) 723,431
1,335 Teleflex, Inc. 527,939
2,101 West Pharmaceutical Services, Inc. 948,854
-------------
11,263,329
-------------
HEALTH CARE PROVIDERS & SERVICES
-- 1.1%
2,541 Laboratory Corp. of America
Holdings (a) 770,889
2,900 UnitedHealth Group, Inc. 1,207,183
-------------
1,978,072
-------------
HOTELS, RESTAURANTS & LEISURE
-- 2.8%
13,308 Airbnb, Inc., Class A (a) 2,062,607
462 Booking Holdings, Inc. (a) 1,062,448
659 Chipotle Mexican Grill, Inc. (a) 1,254,294
1,692 McDonald's Corp. 401,782
-------------
4,781,131
-------------
HOUSEHOLD PRODUCTS -- 0.6%
6,959 Procter & Gamble (The) Co. 990,892
-------------
INSURANCE -- 0.3%
3,323 Chubb Ltd. 611,166
-------------
INTERACTIVE MEDIA & SERVICES
-- 11.0%
1,721 Alphabet, Inc., Class A (a) 4,980,488
533 Alphabet, Inc., Class C (a) 1,550,625
21,272 Facebook, Inc., Class A (a) 8,070,171
19,841 Match Group, Inc. (a) 2,726,947
14,876 Zillow Group, Inc., Class C (a) 1,424,675
-------------
18,752,906
-------------
INTERNET & DIRECT MARKETING
RETAIL -- 5.7%
2,038 Amazon.com, Inc. (a) 7,073,470
8,309 DoorDash, Inc., Class A (a) 1,590,343
5,734 Fiverr International Ltd. (a) 1,029,310
-------------
9,693,123
-------------
IT SERVICES -- 14.9%
1,741 EPAM Systems, Inc. (a) 1,101,722
4,072 Fidelity National Information
Services, Inc. 520,279
2,827 FleetCor Technologies, Inc. (a) 744,293
4,721 Global Payments, Inc. 767,823
7,799 GoDaddy, Inc., Class A (a) 571,745
5,228 Mastercard, Inc., Class A 1,810,090
6,069 PayPal Holdings, Inc. (a) 1,751,878
1,272 Shopify, Inc., Class A (a) 1,939,520
5,485 Snowflake, Inc., Class A (a) 1,669,360
See Notes to Financial Statements Page 7
<PAGE>
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
IT SERVICES (CONTINUED)
21,732 Square, Inc., Class A (a) $ 5,825,697
9,954 Twilio, Inc., Class A (a) 3,553,180
22,567 Visa, Inc., Class A 5,170,100
-------------
25,425,687
-------------
LIFE SCIENCES TOOLS & SERVICES
-- 0.6%
1,912 Thermo Fisher Scientific, Inc. 1,061,064
-------------
MACHINERY -- 0.6%
2,607 Deere & Co. 985,524
-------------
MEDIA -- 1.4%
2,976 Charter Communications, Inc.,
Class A (a) 2,430,380
-------------
PHARMACEUTICALS -- 2.0%
5,808 Eli Lilly and Co. 1,500,148
9,177 Zoetis, Inc. 1,877,247
-------------
3,377,395
-------------
PROFESSIONAL SERVICES -- 2.4%
2,053 CACI International, Inc.,
Class A (a) 528,729
22,878 CoStar Group, Inc. (a) 1,938,682
3,150 Equifax, Inc. 857,619
8,192 Leidos Holdings, Inc. 803,717
-------------
4,128,747
-------------
ROAD & RAIL -- 1.6%
71,564 Uber Technologies, Inc. (a) 2,801,015
-------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 2.7%
9,201 Advanced Micro Devices, Inc. (a) 1,018,735
6,318 Entegris, Inc. 759,044
14,067 Marvell Technology, Inc. 860,760
2,697 NVIDIA Corp. 603,723
7,259 Texas Instruments, Inc. 1,385,816
-------------
4,628,078
-------------
SOFTWARE -- 15.7%
3,801 Adobe, Inc. (a) 2,522,724
7,190 Atlassian Corp. PLC, Class A (a) 2,639,161
1,717 DocuSign, Inc. (a) 508,644
6,547 Intuit, Inc. 3,706,322
22,295 Microsoft Corp. 6,730,415
1,445 Paycom Software, Inc. (a) 706,461
6,847 salesforce.com, Inc. (a) 1,816,304
9,914 ServiceNow, Inc. (a) 6,381,047
7,046 SS&C Technologies Holdings,
Inc. 533,100
4,538 Workday, Inc., Class A (a) 1,239,600
-------------
26,783,778
-------------
SPECIALTY RETAIL -- 3.1%
2,076 Burlington Stores, Inc. (a) 621,741
3,946 Carvana Co. (a) 1,294,525
15,321 Floor & Decor Holdings, Inc.,
Class A (a) 1,889,079
SHARES DESCRIPTION VALUE
---------------------------------------------------------------------
ASPECIALTY RETAIL (CONTINUED)
20,019 TJX (The) Cos., Inc. $ 1,455,782
-------------
5,261,127
-------------
TECHNOLOGY HARDWARE, STORAGE
& PERIPHERALS -- 3.3%
32,430 Apple, Inc. 4,923,847
8,890 NetApp, Inc. 790,588
-------------
5,714,435
-------------
TEXTILES, APPAREL & LUXURY GOODS
-- 1.7%
2,129 Lululemon Athletica, Inc. (a) 851,962
8,164 NIKE, Inc., Class B 1,344,937
8,942 V.F. Corp. 683,795
-------------
2,880,694
-------------
TOTAL COMMON STOCKS -- 98.0% 167,674,386
(Cost $152,282,989) -------------
MONEY MARKET FUNDS -- 2.0%
3,392,712 Morgan Stanley Institutional Liquidity
Funds - Treasury Portfolio -
Institutional Class -
0.01% (b) 3,392,712
(Cost $3,392,712) -------------
TOTAL INVESTMENTS -- 100.0% 171,067,098
(Cost $155,675,701) (c)
NET OTHER ASSETS AND
LIABILITIES -- (0.0)% (62,261)
-------------
NET ASSETS -- 100.0% $ 171,004,837
=============
(a) Non-income producing security.
(b) Rate shown reflects yield as of August 31, 2021.
(c) Aggregate cost for federal income tax purposes is $155,980,010. As of
August 31, 2021, the aggregate gross unrealized appreciation for all
investments in which there was an excess of value over tax cost was
$18,270,745 and the aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost over value was
$3,183,657. The net unrealized appreciation was $15,087,088.
ADR - American Depositary Receipt
Page 8 See Notes to Financial Statements
<PAGE>
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2021
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 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* $167,674,386 $ -- $ --
Money Market Funds 3,392,712 -- --
---------------------------------------------
Total Investments $171,067,098 $ -- $ --
=============================================
* See Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 9
<PAGE>
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 2021
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments, at value.................................................. $ 171,067,098
Dividends receivable................................................... 59,245
---------------
Total Assets........................................................ 171,126,343
---------------
LIABILITIES:
Investment advisory fees payable....................................... 121,506
---------------
Total Liabilities................................................... 121,506
---------------
NET ASSETS............................................................. $ 171,004,837
===============
NET ASSETS CONSIST OF:
Paid-in capital........................................................ $ 156,178,541
Par value.............................................................. 60,500
Accumulated distributable earnings (loss).............................. 14,765,796
---------------
NET ASSETS............................................................. $ 171,004,837
===============
NET ASSET VALUE, per share............................................. $ 28.27
===============
Number of shares outstanding (unlimited number of shares
authorized, par value $0.01 per share).............................. 6,050,002
===============
Investments, at cost................................................... $ 155,675,701
===============
</TABLE>
Page 10 See Notes to Financial Statements
<PAGE>
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 2021
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Dividends.............................................................. $ 139,647
---------------
Total investment income............................................. 139,647
---------------
EXPENSES:
Investment advisory fees............................................... 332,094
---------------
Total expenses...................................................... 332,094
---------------
NET INVESTMENT INCOME (LOSS)........................................... (192,447)
---------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments......................................................... (509,133)
In-kind redemptions................................................. 1,928,235
---------------
Net realized gain (loss) on investments................................ 1,419,102
---------------
Net change in unrealized appreciation (depreciation) on investments.... 15,190,009
---------------
NET REALIZED AND UNREALIZED GAIN (LOSS)................................ 16,609,111
---------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS..................................................... $ 16,416,664
===============
</TABLE>
See Notes to Financial Statements Page 11
<PAGE>
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
8/31/2021 8/31/2020 (a)
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss)......................................................... $ (192,447) $ (491)
Net realized gain (loss)............................................................. 1,419,102 632
Net change in unrealized appreciation (depreciation)................................. 15,190,009 201,388
--------------- ---------------
Net increase (decrease) in net assets resulting from operations...................... 16,416,664 201,529
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations................................................................ (6,060) --
--------------- ---------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold............................................................ 164,222,162 1,984,028
Cost of shares redeemed.............................................................. (11,813,486) --
--------------- ---------------
Net increase (decrease) in net assets resulting from shareholder transactions........ 152,408,676 1,984,028
--------------- ---------------
Total increase (decrease) in net assets.............................................. 168,819,280 2,185,557
NET ASSETS:
Beginning of period.................................................................. 2,185,557 --
--------------- ---------------
End of period........................................................................ $ 171,004,837 $ 2,185,557
=============== ===============
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period.............................................. 100,002 --
Shares sold.......................................................................... 6,400,000 100,002
Shares redeemed...................................................................... (450,000) --
--------------- ---------------
Shares outstanding, end of period.................................................... 6,050,002 100,002
=============== ===============
</TABLE>
(a) Inception date is July 21, 2020, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
Page 12 See Notes to Financial Statements
<PAGE>
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
8/31/2021 8/31/2020 (a)
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period........................... $ 21.86 $ 19.84
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... 0.01 (0.00) (b)
Net realized and unrealized gain (loss)........................ 6.46 2.02
-------- --------
Total from investment operations............................... 6.47 2.02
-------- --------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income.......................................... (0.04) --
Net realized gain.............................................. (0.02) --
-------- --------
Total distributions............................................ (0.06) --
-------- --------
Net asset value, end of period................................. $ 28.27 $ 21.86
======== ========
TOTAL RETURN (c)............................................... 29.65% 10.18%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $171,005 $ 2,186
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.85% 0.85% (d)
Ratio of net investment income (loss) to average net assets.... (0.49)% (0.21)% (d)
Portfolio turnover rate (e).................................... 21% 2%
</TABLE>
(a) Inception date is July 21, 2020, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
(b) Amount is less than $0.01.
(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.
See Notes to Financial Statements Page 13
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
AUGUST 31, 2021
1. ORGANIZATION
First Trust Exchange-Traded Fund VIII (the "Trust") is an open-end management
investment company organized as a Massachusetts business trust on February 22,
2016, 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 forty-nine funds that are offering shares. This
report covers the First Trust Multi-Manager Large Growth ETF (the "Fund"), which
trades under the ticker "MMLG" on NYSE Arca, Inc ("NYSE Arca"). The Fund
represents a separate series of shares of beneficial interest in the Trust.
Unlike conventional mutual funds, the Fund issues and redeems shares on a
continuous basis, at net asset value ("NAV"), only in large blocks of shares
known as "Creation Units."
The Fund is an actively managed exchange-traded fund. The Fund seeks to provide
long-term capital appreciation. Under normal market conditions, the Fund invests
at least 80% of its net assets (including investment borrowings) in equity
securities issued by large capitalization companies. The Fund considers large
capitalization companies to be those companies with market capitalizations
within the market capitalization range of the companies comprising the Russell
1000(R) Growth Index (as of the index's most recent reconstitution). The Fund's
portfolio is principally composed of common stocks issued by companies domiciled
in the United States, common stocks issued by non-U.S. companies that are
principally traded in the United States and American Depositary Receipts. The
Fund utilizes a multi-manager approach to provide exposure to the large
capitalization growth segment of the equity market through the blending of
multiple portfolio management teams. There can be no assurance that the Fund
will achieve its investment objective. The Fund may not be appropriate for all
investors.
2. SIGNIFICANT ACCOUNTING POLICIES
The Fund is considered an investment company and follows accounting and
reporting guidance under Financial Accounting Standards Board Accounting
Standards Codification Topic 946, "Financial Services-Investment Companies." The
following is a summary of significant accounting policies consistently followed
by the Fund 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
The Fund's NAV is determined daily as of the close of regular trading on the New
York Stock Exchange ("NYSE"), normally 4:00 p.m. Eastern time, on each day the
NYSE is open for trading. If the NYSE closes early on a valuation day, the NAV
is determined as of that time. The Fund's NAV is calculated by dividing the
value of all assets of the Fund (including accrued interest and dividends), less
all liabilities (including accrued expenses and dividends declared but unpaid),
by the total number of shares outstanding.
The Fund's investments are valued daily at market value or, in the absence of
market value with respect to any portfolio securities, at fair value. Market
value prices represent 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 Advisor's Pricing Committee 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. The Fund's investments are valued as follows:
Common stocks and other equity securities listed on any national or
foreign exchange (excluding The Nasdaq Stock Market LLC ("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 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.
Shares of open-end funds are valued at fair value which is based on NAV
per share.
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
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
AUGUST 31, 2021
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 the 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.
The Fund is subject to fair value accounting standards that define fair value,
establish the framework for measuring fair value and provide a three-level
hierarchy for fair valuation based upon the inputs to the valuation as of the
measurement date. The three levels of the fair value hierarchy are as follows:
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 the Fund's investments as of August 31, 2021, is
included with the 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.
C. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income, if any, are declared and paid quarterly by
the Fund, or as the Board of Trustees may determine from time to time.
Distributions of net realized gains earned by the 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 portfolio securities held by the Fund and
have no impact on net assets or NAV per share. Temporary differences, which
arise from recognizing certain items of income, expense and gain/loss in
different periods for financial statement and tax purposes, will reverse at some
time in the future.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
AUGUST 31, 2021
The tax character of distributions paid by the Fund during the fiscal year ended
August 31, 2021 was as follows:
Distributions paid from:
Ordinary income............................... $ 6,060
Capital gains................................. --
Return of capital............................. --
The Fund did not pay a distribution during its fiscal period ended August 31,
2020.
As of August 31, 2021, the components of distributable earnings on a tax basis
for the Fund were as follows:
Undistributed ordinary income................. $ (189,729)
Accumulated capital and other gain (loss)..... (131,563)
Net unrealized appreciation (depreciation).... 15,087,088
D. INCOME TAXES
The Fund intends to continue to qualify as a regulated investment company by
complying with the requirements under Subchapter M of the Internal Revenue Code
of 1986, as amended, which includes distributing substantially all of its net
investment income and net realized gains to shareholders. Accordingly, no
provision has been made for federal and state income taxes. However, due to the
timing and amount of distributions, the Fund may be subject to an excise tax of
4% of the amount by which approximately 98% of the Fund's taxable income exceeds
the distributions from such taxable income for the calendar year.
The Fund is subject to accounting standards that establish a minimum threshold
for recognizing, and a system for measuring, the benefits of a tax position
taken or expected to be taken in a tax return. The taxable years ended 2020 and
2021 remain open to federal and state audit. As of August 31, 2021, management
has evaluated the application of these standards to the Fund and has determined
that no provision for income tax is required in the Fund's financial statements
for uncertain tax positions.
The Fund intends to utilize provisions of the federal income tax laws, which
allow it to carry a realized capital loss forward indefinitely following the
year of the loss and offset such loss against any future realized capital gains.
The Fund is subject to certain limitations under U.S. tax rules on the use of
capital loss carryforwards and net unrealized built-in losses. These limitations
apply when there has been a 50% change in ownership. At August 31, 2021, the
Fund had no capital loss carryforwards for federal income tax purposes.
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 August 31, 2021, the Fund
incurred and elected to defer net late year ordinary or capital losses as
follows:
Qualified Late Year Losses
-----------------------------------------
Ordinary Losses Capital Losses
---------------- --------------
$ 189,729 $ 131,563
In order to present paid-in capital and accumulated distributable earnings
(loss) (which consists of accumulated net investment income (loss), accumulated
net realized gain (loss) on investments and net unrealized appreciation
(depreciation) on investments) on the Statement of Assets and Liabilities that
more closely represent their tax character, certain adjustments have been made
to paid-in capital, accumulated net investment income (loss) and accumulated net
realized gain (loss) on investments. These adjustments are primarily due to the
difference between book and tax treatments of income and gains on various
investment securities held by the Fund and in-kind transactions. The results of
operations and net assets were not affected by these adjustments. For the fiscal
year ended August 31, 2021, the adjustments for the Fund were as follows:
Accumulated
Accumulated Net Realized
Net Investment Gain (Loss) Paid-in
Income (Loss) on Investments Capital
-------------- -------------- --------------
$6,292 $(1,852,629) $1,846,337
E. EXPENSES
Expenses, other than the investment advisory fee and other excluded expenses,
are paid by the Advisor (see Note 3).
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
AUGUST 31, 2021
3. INVESTMENT ADVISORY FEE, AFFILIATED TRANSACTIONS AND OTHER FEE ARRANGEMENTS
First Trust, the investment advisor to the Fund, is a limited partnership with
one limited partner, Grace Partners of DuPage L.P., and one general partner, The
Charger Corporation. The Charger Corporation is an Illinois corporation
controlled by James A. Bowen, Chief Executive Officer of First Trust. First
Trust is responsible for ongoing monitoring of the securities in the Fund's
portfolio, managing the Fund's business affairs and providing certain
administrative services necessary for the management of the Fund.
Pursuant to the Investment Management Agreement between the Trust and the
Advisor, First Trust manages the Fund's portfolio based on recommendations
provided by the Sub-Advisors (defined below) and is responsible for the expenses
of the Fund including the cost of transfer agency, sub-advisory, 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, if any, brokerage commissions and other
expenses connected with the execution of portfolio transactions, distribution
and service fees payable pursuant to a Rule 12b-1 plan, if any, and
extraordinary expenses, which are paid by the Fund. The Fund has agreed to pay
First Trust an annual management fee equal to 0.85% of its average daily net
assets.
The Fund utilizes a multi-manager structure. The Trust, on behalf of the Fund,
and First Trust have retained Wellington Management Company LLP ("Wellington")
and Sands Capital Management, LLC ("Sands Capital") (each, a "Sub-Advisor" and
together, "Sub-Advisors"), to serve as non-discretionary investment sub-advisors
to the Fund pursuant to sub-advisory agreements (the "Sub-Advisory Agreements").
In this capacity, Wellington and Sands Capital are each responsible for
providing recommendations to First Trust regarding the selection and allocation
of the securities in the portion of the Fund's portfolio they have been
allocated by First Trust. Pursuant to the Sub-Advisory Agreements, First Trust
has agreed to pay for the services and facilities provided by the Sub-Advisors
through sub-advisory fees equal in the aggregate to an annual rate of 0.30% of
the average daily net assets of the Fund (i.e., for each sub-advisor, 0.30% of
the average daily net assets of the portion of the Fund's assets allocated to
that sub-advisor). Each Sub-Advisor's fees are paid by First Trust out of First
Trust's management fee.
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
the Fund. As custodian, BNYM is responsible for custody of the Fund's assets. As
fund accountant and administrator, BNYM is responsible for maintaining the books
and records of the Fund's securities and cash. As transfer agent, BNYM is
responsible for maintaining shareholder records for the 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 will rotate every three years. The officers and "Interested" Trustee
receive no compensation from the Trust for acting in such capacities.
4. PURCHASES AND SALES OF SECURITIES
For the fiscal year ended August 31, 2021, the cost of purchases and proceeds
from sales of investments, excluding short-term investments and in-kind
transactions, were $9,176,962 and $9,367,208, respectively.
For the fiscal year ended August 31, 2021, the cost of in-kind purchases and
proceeds from in-kind sales were $160,825,753 and $11,732,810, respectively.
5. CREATIONS, REDEMPTIONS AND TRANSACTION FEES
The Fund generally issues and redeems its shares in primary market transactions
through a creation and redemption mechanism and does not sell or redeem
individual shares. Instead, financial entities known as "Authorized
Participants" have contractual arrangements with the Fund or one of the Fund's
service providers to purchase and redeem Fund shares directly with the Fund in
large blocks of shares known as "Creation Units." Prior to the start of trading
on every business day, the 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 the Fund's shares
deposits with the Fund the "basket" of securities, cash or other assets
identified by the Fund that day, and then receives the Creation Unit of the
Fund's shares in return for those assets. After purchasing a Creation Unit, the
Authorized Participant may continue to hold the Fund's shares or sell them in
the secondary market. The redemption process is the reverse of the purchase
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
AUGUST 31, 2021
process: the Authorized Participant redeems a Creation Unit of the Fund's shares
for a basket of securities, cash or other assets. The combination of the
creation and redemption process with secondary market trading in the Fund's
shares and underlying securities provides arbitrage opportunities that are
designed to help keep the market price of the Fund's shares at or close to the
NAV per share of the Fund.
The Fund imposes fees in connection with the purchase of Creation Units. These
fees may vary based upon various fact-based circumstances, including, but not
limited to, the composition of the securities included in the Creation Unit or
the countries in which the transactions are settled. The price for each Creation
Unit will equal the daily NAV per share of the Fund times the number of shares
in a Creation Unit, plus the fees described above and, if applicable, any
operational processing and brokerage costs, transfer fees, stamp taxes and part
or all of the spread between the expected bid and offer side of the market
related to the securities comprising the creation basket.
The Fund also imposes fees in connection with the redemption of Creation Units.
These fees may vary based upon various fact-based circumstances, including, but
not limited to, the composition of the securities included in the Creation Unit
or the countries in which the transactions are settled. The price received for
each Creation Unit will equal the daily NAV per share of the Fund times the
number of shares in a Creation Unit, minus the fees described above and, if
applicable, any operational processing and brokerage costs, transfer fees, stamp
taxes and part or all of the spread between the expected bid and offer side of
the market related to the securities comprising the redemption basket. Investors
who use the services of a broker or other such intermediary in addition to an
Authorized Participant to effect a redemption of a Creation Unit may also be
assessed an amount to cover the cost of such services. The redemption fee
charged by the Fund will comply with Rule 22c-2 of the 1940 Act which limits
redemption fees to no more than 2% of the value of the shares redeemed.
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 Fund is
authorized to pay an amount up to 0.25% of its average daily net assets each
year to reimburse First Trust Portfolios L.P. ("FTP"), the distributor of the
Fund, for amounts expended to finance activities primarily intended to result in
the sale of Creation Units or the provision of investor services. FTP may also
use this amount to compensate securities dealers or other persons that are
Authorized Participants for providing distribution assistance, including
broker-dealer and shareholder support and educational and promotional services.
No 12b-1 fees are currently paid by the Fund, and pursuant to a contractual
arrangement, no 12b-1 fees will be paid any time before December 31, 2022.
7. INDEMNIFICATION
The Trust, on behalf of the Fund, has a variety of indemnification obligations
under contracts with its service providers. The Trust's maximum exposure under
these arrangements is unknown. However, the Trust has not had prior claims or
losses pursuant to these contracts and expects the risk of loss to be remote.
8. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Fund through
the date the financial statements were issued, and has determined that there
were the following subsequent events:
On September 20, 2021, FT Cboe Vest International Equity Buffer ETF - September
and FT Cboe Vest Nasdaq-100(R) Buffer ETF - September, each an additional series
of the Trust, began trading under the symbols "YSEP" and "QSPT," respectively,
on Cboe BZX Exchange, Inc.
On September 21, 2021, First Trust SkyBridge Crypto Industry and Digital Economy
ETF, an additional series of the Trust, began trading under the symbol "CRPT" on
NYSE Arca.
On October 14, 2021, First Trust Multi-Manager Small Cap Opportunities ETF, an
additional series of the Trust, began trading under the symbol "MMSC" on NYSE
Arca.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF FIRST TRUST EXCHANGE-TRADED
FUND VIII:
OPINION ON THE FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS
We have audited the accompanying statement of assets and liabilities of First
Trust Multi-Manager Large Growth ETF (the "Fund"), a series of the First Trust
Exchange-Traded Fund VIII, including the portfolio of investments, as of August
31, 2021, the related statement of operations for the year then ended, and the
statement of changes in net assets and the financial highlights for the year
ended August 31, 2021 and the period from July 21, 2020 (commencement of
operations) through August 31, 2020, and the related notes. In our opinion, the
financial statements and financial highlights present fairly, in all material
respects, the financial position of the Fund as of August 31, 2021, and the
results of its operations for the year then ended, and the changes in its net
assets and financial highlights for the year ended August 31, 2021 and for the
period from July 21, 2020 (commencement of operations) through August 31, 2020,
in conformity with accounting principles generally accepted in the United States
of America.
BASIS FOR OPINION
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on the Fund's
financial statements and financial highlights based on our audits. We are a
public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to
the Fund in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement, whether due to error or fraud. The Fund is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. As part of our audits, we are required to
obtain an understanding of internal control over financial reporting but not for
the purpose of expressing an opinion on the effectiveness of the Fund's internal
control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material
misstatement of the financial statements and financial highlights, whether due
to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the financial statements and financial highlights. Our audits
also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of August 31, 2021, by correspondence with
the custodian and brokers. We believe that our audits provide a reasonable basis
for our opinion.
/s/ Deloitte & Touche LLP
Chicago, Illinois
October 26, 2021
We have served as the auditor of one or more First Trust investment companies
since 2001.
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ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
AUGUST 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 the 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
the Fund's website at www.ftportfolios.com; and (3) on the Securities and
Exchange Commission's ("SEC") website at www.sec.gov.
PORTFOLIO HOLDINGS
The 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. The 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 the Fund is available to investors within 60 days after the
period to which it relates. The Fund's Forms N-PORT and Forms N-CSR are
available on the SEC's website listed above.
FEDERAL TAX INFORMATION
For the taxable year ended August 31, 2021, the following percentages of income
dividend paid by the Fund qualify for the dividends received deduction available
to corporations and are hereby designated as qualified dividend income:
Dividends Qualified
Received Dividend
Deduction Income
------------ ----------
100.00% 100.00%
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 significant
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
more broadly diversified.
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.
DEFINED OUTCOME FUNDS RISK. To the extent a fund's investment strategy is
designed to deliver returns tied to the price performance of an underlying ETF,
an investor may not realize the returns the fund seeks to achieve if that
investor does not hold shares for the entire target outcome period. In the event
an investor purchases shares after the first day of the target outcome period or
sells shares prior to the end of the target outcome period, the buffer that the
fund seeks to provide against a decline in the value of the underlying ETF may
not be available, the enhanced returns that the fund seeks to provide (if any)
may not be available and the investor may not participate in a gain in the value
of the underlying ETF up to the cap for the investor's investment period.
Additionally, the fund will not participate in gains of the underlying ETF above
the cap and a shareholder may lose their entire investment. If the fund seeks
enhanced returns, there are certain time periods when the value of the fund may
fall faster than the value of the underlying ETF, and it is very unlikely that,
on any given day during which the underlying ETF share price increases in value,
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
AUGUST 31, 2021 (UNAUDITED)
the fund's share price will increase at the same rate as the enhanced returns
sought by the fund, which is designed for an entire target outcome period.
Trading flexible exchange options involves risks different from, or possibly
greater than, the risks associated with investing directly in securities, such
as less liquidity and correlation and valuation risks. A fund may experience
substantial downside from specific flexible exchange option positions and
certain positions may expire worthless.
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
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 OR MODEL CONSTITUENT RISK. Certain funds may be a constituent of one or
more indices or ETF models. 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 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. In addition, index rebalances may potentially result in increased
trading activity in a fund's shares.
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.
Page 21
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ADDITIONAL INFORMATION (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
AUGUST 31, 2021 (UNAUDITED)
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. While the development of
vaccines has slowed the spread of the virus and allowed for the resumption of
"reasonably" normal business activity in the United States, many countries
continue to impose lockdown measures in an attempt to slow the spread.
Additionally, there is no guarantee that vaccines will be effective against
emerging variants of the disease.
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;
capital controls; lack of liquidity; currency exchange rates; excessive
taxation; government seizure of assets; the imposition of sanctions by foreign
governments; different legal or accounting standards; and less government
supervision and regulation of exchanges in foreign countries. Investments in
non-U.S. securities may involve higher costs than investments in U.S.
securities, including higher transaction and custody costs, as well as
additional taxes imposed by non-U.S. governments. These risks may be heightened
for securities of companies located, or with significant operations, in emerging
market countries.
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. Each fund relies on third-parties for a range of services, including
custody. Any delay or failure relating to engaging or maintaining such service
providers may affect a fund's ability to meet its investment objective. Although
the funds and the funds' investment 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
ADVISORY AND SUB-ADVISORY AGREEMENTS
BOARD CONSIDERATIONS REGARDING APPROVAL OF CONTINUATION OF INVESTMENT MANAGEMENT
AND SUB-ADVISORY AGREEMENTS
The Board of Trustees of First Trust Exchange-Traded Fund VIII (the "Trust"),
including the Independent Trustees, unanimously approved the continuation of the
Investment Management Agreement (the "Advisory Agreement") between the Trust, on
behalf of First Trust Multi-Manager Large Growth ETF (the "Fund"), and First
Trust Advisors L.P. (the "Advisor"); the Investment Sub-Advisory Agreement (the
"Sands Sub-Advisory Agreement") among the Trust, on behalf of the Fund, the
Advisor and Sands Capital Management, LLC ("Sands"); and the Investment
Sub-Advisory Agreement (the "Wellington Sub-Advisory Agreement") among the
Trust, on behalf of the Fund, the Advisor and Wellington Management Company LLP
("Wellington"). The Sands Sub-Advisory Agreement and the Wellington Sub-Advisory
Agreement are collectively referred to as the "Sub-Advisory Agreements." Sands
and Wellington are each referred to as a "Sub-Advisor" and collectively as the
"Sub-Advisors." The Sub-Advisory Agreements together with the Advisory Agreement
are referred to as the "Agreements." The Board approved the continuation of the
Agreements for a one-year period ending June 30, 2022 at a meeting held on June
6-7, 2021. The Board determined that the continuation of the Agreements is in
the best interests of the Fund in light of the nature, extent and quality of the
services provided and such other matters as the Board considered to be relevant
in the exercise of its business judgment.
To reach this determination, the Board considered its duties under the
Investment Company Act of 1940, as amended (the "1940 Act"), as well as under
the general principles of state law, in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; the fiduciary duty
of investment advisors with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Board in voting
on such agreements. At meetings held on April 26, 2021 and June 6-7, 2021, the
Board, including the Independent Trustees, reviewed materials provided by the
Advisor and each Sub-Advisor responding to requests for information from counsel
to the Independent Trustees, submitted on behalf of the Independent Trustees,
Page 22
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ADDITIONAL INFORMATION (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
AUGUST 31, 2021 (UNAUDITED)
that, among other things, outlined: the services provided by the Advisor and
each Sub-Advisor to the Fund (including the relevant personnel responsible for
these services and their experience); the unitary fee rate payable by the Fund
as compared to fees charged to a peer group of funds (the "Expense Group") and a
broad peer universe of funds (the "Expense Universe"), each assembled by
Broadridge Financial Solutions, Inc. ("Broadridge"), an independent source, and
as compared to fees charged to other clients of the Advisor, including other
exchange-traded funds ("ETFs") managed by the Advisor; the sub-advisory fee
rates for the Fund as compared to fees charged to other clients of the
Sub-Advisors; the expense ratio of the Fund as compared to expense ratios of the
funds in the Fund's Expense Group and Expense Universe; performance information
for the Fund; the nature of expenses incurred in providing services to the Fund
and the potential for the Advisor and each Sub-Advisor to realize economies of
scale, if any; profitability and other financial data for the Advisor; financial
data for each Sub-Advisor; any fall-out benefits to the Advisor and its
affiliate, First Trust Portfolios L.P. ("FTP"), and the Sub-Advisors; and
information on the Advisor's and each Sub-Advisor's compliance programs. The
Board reviewed initial materials with the Advisor at the meeting held on April
26, 2021, prior to which the Independent Trustees and their counsel met
separately to discuss the information provided by the Advisor and the
Sub-Advisors. Following the April meeting, counsel to the Independent Trustees,
on behalf of the Independent Trustees, requested certain clarifications and
supplements to the materials provided, and the information provided in response
to those requests was considered at an executive session of the Independent
Trustees and their counsel held prior to the June 6-7, 2021 meeting, as well as
at the June meeting. The Board applied its business judgment to determine
whether the arrangements between the Trust and the Advisor and among the Trust,
the Advisor and each Sub-Advisor continue to be reasonable business arrangements
from the Fund's perspective. The Board determined that, given the totality of
the information provided with respect to the Agreements, the Board had received
sufficient information to renew the Agreements. The Board considered that
shareholders chose to invest or remain invested in the Fund knowing that the
Advisor and the Sub-Advisors manage the Fund and knowing the Fund's unitary fee.
In reviewing the Agreements, the Board considered the nature, extent and quality
of the services provided by the Advisor and the Sub-Advisors under the
Agreements. The Board considered that the Fund is an actively-managed ETF and
employs a multi-manager structure. With respect to the Advisory Agreement, the
Board considered that the Advisor is responsible for the overall management and
administration of the Trust and the Fund and reviewed all of the services
provided by the Advisor to the Fund, including the oversight of the Sub-Advisors
and the allocation of assets between the Sub-Advisors performed by members of
the Advisor's Investment Committee, as well as the background and experience of
the persons responsible for such services. The Board considered that each
Sub-Advisor acts as a non-discretionary manager providing model portfolio
recommendations to the Advisor, and that the Advisor executes the Fund's
portfolio trades. The Board noted that the Advisor oversees management of the
Fund's investments, including portfolio risk monitoring and performance review.
In reviewing the services provided, the Board noted the compliance program that
had been developed by the Advisor and considered that it includes a robust
program for monitoring the Advisor's, each Sub-Advisor's and the Fund's
compliance with the 1940 Act, as well as the Fund's compliance with its
investment objective, policies and restrictions. The Board also considered a
report from the Advisor with respect to its risk management functions related to
the operation of the Fund. Finally, as part of the Board's consideration of the
Advisor's services, the Advisor, in its written materials and at the April 26,
2021 meeting, described to the Board the scope of its ongoing investment in
additional personnel and infrastructure to maintain and improve the quality of
services provided to the Fund and the other funds in the First Trust Fund
Complex. With respect to the Sub-Advisory Agreements, the Board noted that the
Fund is an actively-managed ETF and the Sub-Advisors actively manage the Fund's
investments. The Board reviewed the materials provided by each Sub-Advisor and
considered the services that each Sub-Advisor provides to the Fund, including
each Sub-Advisor's non-discretionary management of the portion of the Fund's
assets allocated to it. In considering each Sub-Advisor's services to the Fund,
the Board noted the background and experience of each Sub-Advisor's portfolio
management team and the Board's prior meetings with members of each portfolio
management team. In light of the information presented and the considerations
made, the Board concluded that the nature, extent and quality of the services
provided to the Trust and the Fund by the Advisor and each Sub-Advisor under the
Agreements have been and are expected to remain satisfactory and that the
Advisor and the Sub-Advisors have managed the Fund consistent with the Fund's
investment objective, policies and restrictions.
The Board considered the unitary fee rate payable by the Fund under the Advisory
Agreement for the services provided. The Board noted that the Advisor pays each
Sub-Advisor a separate sub-advisory fee from the unitary fee. The Board
considered that as part of the unitary fee the Advisor is responsible for the
Fund's expenses, including the cost of sub-advisory, transfer agency, custody,
fund administration, legal, audit and other services and license fees, if any,
but excluding the fee payment under the Advisory Agreement and interest, taxes,
acquired fund fees and expenses, brokerage commissions and other expenses
connected with the execution of portfolio transactions, distribution and service
fees pursuant to a Rule 12b-1 plan, if any, and extraordinary expenses, if any.
The Board received and reviewed information showing the advisory or unitary fee
rates and expense ratios of the peer funds in the Expense Group, as well as
advisory and unitary fee rates charged by the Advisor and the Sub-Advisors to
other fund (including ETFs) and non-fund clients, as applicable. Because the
Fund pays a unitary fee, the Board determined that expense ratios were the most
relevant comparative data point. Based on the information provided, the Board
noted that the unitary fee rate for the Fund was above the median total (net)
expense ratio of the peer funds in the Expense Group. With respect to the
Expense Group, the Board, at the April 26, 2021 meeting, discussed with the
Advisor limitations in creating peer groups for actively-managed ETFs and that
Page 23
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ADDITIONAL INFORMATION (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
AUGUST 31, 2021 (UNAUDITED)
different business models may affect the pricing of services among ETF sponsors.
The Board noted that not all peer funds employ an advisor/sub-advisor management
structure. The Board took these limitations and differences into account in
considering the peer data. With respect to fees charged to other non-ETF
clients, the Board considered differences between the Fund and other non-ETF
clients that limited their comparability. In considering the unitary fee rate
overall, the Board also considered the Advisor's statement that it seeks to meet
investor needs through innovative and value-added investment solutions and the
Advisor's demonstrated long-term commitment to the Fund and the other funds in
the First Trust Fund Complex.
The Board considered performance information for the Fund. The Board noted the
process it has established for monitoring the Fund's performance and portfolio
risk on an ongoing basis, which includes quarterly performance reporting from
the Advisor for the Fund. The Board determined that this process continues to be
effective for reviewing the Fund's performance. Because the Fund commenced
operations on July 21, 2020 and therefore has a limited performance history,
comparative performance information for the Fund was not considered.
On the basis of all the information provided on the unitary fee for the Fund and
the ongoing oversight by the Board, the Board concluded that the unitary fee for
the Fund (out of which the Sub-Advisors are compensated) continues to be
reasonable and appropriate in light of the nature, extent and quality of the
services provided by the Advisor and the Sub-Advisors to the Fund under the
Agreements.
The Board considered information and discussed with the Advisor whether there
were any economies of scale in connection with providing advisory services to
the Fund and noted the Advisor's statement that it believes its expenses will
likely increase during the next twelve months as the Advisor continues to hire
personnel and build infrastructure, including technology, to improve the
services to the Fund. The Board noted that any reduction in fixed costs
associated with the management of the Fund would benefit the Advisor, but that
the unitary fee structure provides a level of certainty in expenses for the
Fund. The Board considered the revenues and allocated costs (including the
allocation methodology) of the Advisor in serving as investment advisor to the
Fund for the period from inception through December 31, 2020 and the estimated
profitability level for the Fund calculated by the Advisor based on such data,
as well as complex-wide and product-line profitability data, for the twelve
months ended December 31, 2020. The Board noted the inherent limitations in the
profitability analysis and concluded that, based on the information provided,
the Advisor's profitability level for the Fund was not unreasonable. In
addition, the Board considered fall-out benefits described by the Advisor that
may be realized from its relationship with the Fund. The Board considered that
the Advisor had identified as a fall out benefit to the Advisor and FTP their
exposure to investors and brokers who, absent their exposure to the Fund, may
have had no dealings with the Advisor or FTP, and noted that the Advisor does
not utilize soft-dollars in connection with the Fund. The Board concluded that
the character and amount of potential fall-out benefits to the Advisor were not
unreasonable.
With respect to the Sands Sub-Advisory Agreement, the Board considered Sands'
statements that it did not believe there are any specific economies of scale in
connection with providing sub-advisory services to the Fund that will benefit
the Fund's shareholders and that Sands believes that the sub-advisory fee is
appropriate given the services provided to the Fund. The Board did not review
the profitability of Sands with respect to the Fund. The Board noted that the
Advisor pays Sands from the unitary fee, and its understanding that the Fund's
sub-advisory fee rate was the product of an arm's length negotiation. The Board
concluded that the profitability analysis for the Advisor was more relevant. The
Board considered fall-out benefits that may be realized by Sands from its
relationship with the Fund, and noted Sands' statement that there are no
additional benefits expected to be derived as part of its relationship with the
Fund given that the Advisor is responsible for trade execution. The Board noted
that Sands acts as a non-discretionary manager providing model portfolio
recommendations to the Advisor and does not provide trade execution services to
the Fund. The Board concluded that the character and amount of potential
fall-out benefits to Sands were not unreasonable.
With respect to the Wellington Sub-Advisory Agreement, the Board considered
Wellington's statement that it believes the sub-advisory fee schedule reflects
the economies of scale inherent in providing investment advice to funds similar
in size to the Fund, and that Wellington believes the fee schedule is
competitive given the nature and quality of service provided by Wellington. The
Board did not review the profitability of Wellington with respect to the Fund.
The Board noted that the Advisor pays Wellington from the unitary fee, and its
understanding that the Fund's sub-advisory fee rate was the product of an arm's
length negotiation. The Board concluded that the profitability analysis for the
Advisor was more relevant. The Board considered fall-out benefits that may be
realized by Wellington from its relationship with the Fund, and noted
Wellington's statements that it derives no ancillary economic benefits of the
type that may accrue to an adviser that also provides distribution and other
services, and that although not quantifiable Wellington recognizes the
reputational benefit that accrues from its relationship with the Fund and the
Advisor. The Board noted that Wellington acts as a non-discretionary manager
providing model portfolio recommendations to the Advisor and does not provide
trade execution services to the Fund. The Board concluded that the character and
amount of potential fall-out benefits to Wellington were not unreasonable.
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ADDITIONAL INFORMATION (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
AUGUST 31, 2021 (UNAUDITED)
Based on all of the information considered and the conclusions reached, the
Board, including the Independent Trustees, unanimously determined that the terms
of the Agreements continue to be fair and reasonable and that the continuation
of the Agreements is in the best interests of the Fund. No single factor was
determinative in the Board's analysis.
LIQUIDITY RISK MANAGEMENT PROGRAM
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as
amended (the "1940 Act"), the Fund and each other fund in the First Trust Fund
Complex, other than the closed-end funds, have adopted and implemented a
liquidity risk management program (the "Program") reasonably designed to assess
and manage the funds' liquidity risk, i.e., the risk that a fund could not meet
requests to redeem shares issued by the fund without significant dilution of
remaining investors' interests in the fund. The Board of Trustees of the First
Trust Funds has appointed First Trust Advisors, L.P. (the "Advisor") as the
person designated to administer the Program, and in this capacity the Advisor
performs its duties primarily through the activities and efforts of the First
Trust Liquidity Committee (the "Liquidity Committee").
Pursuant to the Program, the Liquidity Committee classifies the liquidity of
each fund's portfolio investments into one of the four liquidity categories
specified by Rule 22e-4: highly liquid investments, moderately liquid
investments, less liquid investments and illiquid investments. The Liquidity
Committee determines certain of the inputs for this classification process,
including reasonably anticipated trade sizes and significant investor dilution
thresholds. The Liquidity Committee also determines and periodically reviews a
highly liquid investment minimum for certain funds, monitors the funds' holdings
of assets classified as illiquid investments to seek to ensure they do not
exceed 15% of a fund's net assets and establishes policies and procedures
regarding redemptions in kind.
At the April 26, 2021 meeting of the Board of Trustees, as required by Rule
22e-4 and the Program, the Advisor provided the Board with a written report
prepared by the Advisor that addressed the operation of the Program during the
period from March 20, 2020 through the Liquidity Committee's annual meeting held
on March 16, 2021 and assessed the Program's adequacy and effectiveness of
implementation during this period, including the operation of the highly liquid
investment minimum for each fund that is required under the Program to have one,
and any material changes to the Program. Note that because the Fund primarily
holds assets that are highly liquid investments, the Fund has not adopted any
highly liquid investment minimum.
As stated in the written report, during the review period, no fund breached the
15% limitation on illiquid investments, no fund with a highly liquid investment
minimum breached that minimum and no fund filed a Form N-LIQUID. The Advisor
concluded that each fund's investment strategy is appropriate for an open-end
fund; that the Program operated effectively in all material respects during the
review period; and that the Program is reasonably designed to assess and manage
the liquidity risk of each fund and to maintain compliance with Rule 22e-4.
Page 25
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BOARD OF TRUSTEES AND OFFICERS
--------------------------------------------------------------------------------
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
AUGUST 31, 2021 (UNAUDITED)
The following tables identify the Trustees and Officers of the Trust. Unless
otherwise indicated, the address of all persons is 120 East Liberty Drive, Suite
400, Wheaton, IL 60187.
The Trust's statement of additional information includes additional information
about the Trustees and is available, without charge, upon request, by calling
(800) 988-5891.
<TABLE>
<CAPTION>
NUMBER OF OTHER
PORTFOLIOS IN TRUSTEESHIPS OR
TERM OF OFFICE THE FIRST TRUST DIRECTORSHIPS
NAME, AND YEAR FIRST FUND COMPLEX HELD BY TRUSTEE
YEAR OF BIRTH AND ELECTED OR PRINCIPAL OCCUPATIONS OVERSEEN BY DURING PAST
POSITION WITH THE TRUST APPOINTED DURING PAST 5 YEARS TRUSTEE 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard E. Erickson, Trustee o Indefinite Term Physician, Officer, Wheaton Orthopedics; 210 None
(1951) Limited Partner, Gundersen Real Estate
o Since Inception Limited Partnership (June 1992 to
December 2016)
Thomas R. Kadlec, Trustee o Indefinite Term President, ADM Investors Services, Inc. 210 Director of ADM
(1957) (Futures Commission Merchant) Investor Services,
o Since Inception Inc., ADM
Investor Services
International,
Futures Industry
Association, and
National Futures
Association
Robert F. Keith, Trustee o Indefinite Term President, Hibs Enterprises (Financial 210 Director of Trust
(1956) and Management Consulting) Company of
o Since Inception Illinois
Niel B. Nielson, Trustee o Indefinite Term Senior Advisor (August 2018 to Present), 210 None
(1954) Managing Director and Chief Operating
o Since Inception Officer (January 2015 to August 2018),
Pelita Harapan Educational Foundation
(Educational Products and Services)
------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
James A. Bowen(1), Trustee, o Indefinite Term Chief Executive Officer, First Trust 210 None
Chairman of the Board Advisors L.P. and First Trust
(1955) o Since Inception Portfolios L.P.; Chairman of the
Board of Directors, BondWave LLC
(Software Development Company)
and Stonebridge Advisors LLC
(Investment Advisor)
</TABLE>
-----------------------------
(1) Mr. Bowen is deemed an "interested person" of the Trust due to his
position as Chief Executive Officer of First Trust Advisors L.P.,
investment advisor of the Trust.
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BOARD OF TRUSTEES AND OFFICERS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
AUGUST 31, 2021 (UNAUDITED)
<TABLE>
<CAPTION>
POSITION AND TERM OF OFFICE
NAME OFFICES AND LENGTH OF PRINCIPAL OCCUPATIONS
AND YEAR OF BIRTH WITH TRUST SERVICE DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS(2)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
James M. Dykas President and Chief o Indefinite Term Managing Director and Chief Financial Officer
(1966) Executive Officer (January 2016 to Present), Controller (January 2011
o Since Inception to January 2016), Senior Vice President (April 2007
to January 2016), First Trust Advisors L.P. and First
Trust Portfolios L.P.; Chief Financial Officer
(January 2016 to Present), BondWave LLC
(Software Development Company) and Stonebridge
Advisors LLC (Investment Advisor)
Donald P. Swade Treasurer, Chief Financial o Indefinite Term Senior Vice President (July 2016 to Present), Vice
(1972) Officer and Chief President (April 2012 to July 2016), First Trust
Accounting Officer o Since Inception Advisors L.P. and First Trust Portfolios L.P.
W. Scott Jardine Secretary and Chief o Indefinite Term General Counsel, First Trust Advisors L.P. and
(1960) Legal Officer First Trust Portfolios L.P.; Secretary and General
o Since Inception Counsel, BondWave LLC; Secretary, Stonebridge
Advisors LLC
Daniel J. Lindquist Vice President o Indefinite Term Managing Director, First Trust Advisors L.P. and
(1970) First Trust Portfolios L.P.
o Since Inception
Kristi A. Maher Chief Compliance Officer o Indefinite Term Deputy General Counsel, First Trust Advisors L.P.
(1966) and Assistant Secretary and First Trust Portfolios L.P.
o Since Inception
Roger F. Testin Vice President o Indefinite Term Senior Vice President, First Trust Advisors L.P.
(1966) and First Trust Portfolios L.P.
o Since Inception
Stan Ueland Vice President o Indefinite Term Senior Vice President, First Trust Advisors L.P.
(1970) and First Trust Portfolios L.P.
o Since Inception
</TABLE>
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(2) The term "officer" means the president, vice president, secretary,
treasurer, controller or any other officer who performs a policy making
function.
Page 27
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PRIVACY POLICY
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FIRST TRUST MULTI-MANAGER LARGE GROWTH ETF (MMLG)
AUGUST 31, 2021 (UNAUDITED)
PRIVACY POLICY
First Trust values our relationship with you and considers your privacy an
important priority in maintaining that relationship. We are committed to
protecting the security and confidentiality of your personal information.
SOURCES OF INFORMATION
We collect nonpublic personal information about you from the following sources:
o Information we receive from you and your broker-dealer, investment
professional or financial representative through interviews,
applications, agreements or other forms;
o Information about your transactions with us, our affiliates or
others;
o Information we receive from your inquiries by mail, e-mail or
telephone; and
o Information we collect on our website through the use of "cookies".
For example, we may identify the pages on our website that your
browser requests or visits.
INFORMATION COLLECTED
The type of data we collect may include your name, address, social security
number, age, financial status, assets, income, tax information, retirement and
estate plan information, transaction history, account balance, payment history,
investment objectives, marital status, family relationships and other personal
information.
DISCLOSURE OF INFORMATION
We do not disclose any nonpublic personal information about our customers or
former customers to anyone, except as permitted by law. In addition to using
this information to verify your identity (as required under law), the permitted
uses may also include the disclosure of such information to unaffiliated
companies for the following reasons:
o In order to provide you with products and services and to effect
transactions that you request or authorize, we may disclose your
personal information as described above to unaffiliated financial
service providers and other companies that perform administrative or
other services on our behalf, such as transfer agents, custodians
and trustees, or that assist us in the distribution of investor
materials such as trustees, banks, financial representatives, proxy
services, solicitors and printers.
o We may release information we have about you if you direct us to do
so, if we are compelled by law to do so, or in other legally limited
circumstances (for example to protect your account from fraud).
In addition, in order to alert you to our other financial products and services,
we may share your personal information within First Trust.
USE OF WEBSITE ANALYTICS
We currently use third party analytics tools, Google Analytics and AddThis to
gather information for purposes of improving First Trust's website and marketing
our products and services to you. These tools employ cookies, which are small
pieces of text stored in a file by your web browser and sent to websites that
you visit, to collect information, track website usage and viewing trends such
as the number of hits, pages visited, videos and PDFs viewed and the length of
user sessions in order to evaluate website performance and enhance navigation of
the website. We may also collect other anonymous information, which is generally
limited to technical and web navigation information such as the IP address of
your device, internet browser type and operating system for purposes of
analyzing the data to make First Trust's website better and more useful to our
users. The information collected does not include any personal identifiable
information such as your name, address, phone number or email address unless you
provide that information through the website for us to contact you in order to
answer your questions or respond to your requests. To find out how to opt-out of
these services click on: Google Analytics and AddThis.
CONFIDENTIALITY AND SECURITY
With regard to our internal security procedures, First Trust restricts access to
your nonpublic personal information to those First Trust employees who need to
know that information to provide products or services to you. We maintain
physical, electronic and procedural safeguards to protect your nonpublic
personal information.
POLICY UPDATES AND INQUIRIES
As required by federal law, we will notify you of our privacy policy annually.
We reserve the right to modify this policy at any time, however, if we do change
it, we will tell you promptly. For questions about our policy, or for additional
copies of this notice, please go to www.ftportfolios.com, or contact us at
1-800-621-1675 (First Trust Portfolios) or 1-800-222-6822 (First Trust
Advisors).
March 2021
Page 28
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FIRST TRUST
First Trust Exchange-Traded Fund VIII
INVESTMENT ADVISOR
First Trust Advisors L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
INVESTMENT SUB-ADVISORS
Wellington Management Company LLP
280 Congress Street
Boston, MA 02210
Sands Capital Management, LLC
1000 Wilson Boulevard, Suite 3000
Arlington, Virginia 22209
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.
| (a) | | The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. |
| (c) | | There have been no amendments, during the period covered by this report, to a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics description. |
| (d) | | The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item’s instructions. |
| (f) | | A copy of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller is filed as an exhibit pursuant to Item 13(a)(1). |
Item 3. Audit Committee Financial Expert.
As of the end of the period covered by the report, the registrant’s board of trustees has determined that Thomas R. Kadlec and Robert F. Keith are qualified to serve as audit committee financial experts serving on its audit committee and that each of them is “independent,” as defined by Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
(a) Audit Fees (Registrant) -- The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were $462,750 for the fiscal year ended August 31, 2020 and $819,125 for the fiscal year ended August 31, 2021.
(b) Audit-Related Fees (Registrant) -- The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item were $0 for the fiscal year ended August 31, 2020 and $0 for the fiscal year ended August 31, 2021.
Audit-Related Fees (Investment Advisor) -- The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item were $0 for the fiscal year ended August 31, 2020 and $0 for the fiscal year ended August 31, 2021.
(c) Tax Fees (Registrant) -- The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning to the registrant were $57,862 for the fiscal year ended August 31, 2020 and $107,971 for the fiscal year ended August 31, 2021. These fees were for tax consultation and/or tax return preparation and professional services rendered for Passive Foreign Investment Company Identification.
Tax Fees (Investment Advisor) -- The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning to the registrant’s advisor were $0 for the fiscal year ended August 31, 2020 and $0 for the fiscal year ended August 31, 2021.
(d) All Other Fees (Registrant) -- The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant to the registrant, other than the services reported in paragraphs (a) through (c) of this Item were $0 for the fiscal year ended August 31, 2020 and $0 for the fiscal year ended August 31, 2021.
All Other Fees (Investment Advisor) -- The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant to the registrant’s investment advisor, other than the services reported in paragraphs (a) through (c) of this Item were $0 for the fiscal year ended August 31, 2020 and $0 for the fiscal year ended August 31, 2021.
(e)(1) Disclose the audit committee’s pre-approval policies and procedures described in paragraph (c) (7) of Rule 2-01 of Regulation S-X.
Pursuant to its charter and its Audit and Non-Audit Services Pre-Approval Policy, the Audit Committee (the “Committee”) is responsible for the pre-approval of all audit services and permitted non-audit services (including the fees and terms thereof) to be performed for the registrant by its independent auditors. The Chairman of the Committee is authorized to give such pre-approvals on behalf of the Committee up to $25,000 and report any such pre-approval to the full Committee.
The Committee is also responsible for the pre-approval of the independent auditor’s engagements for non-audit services with the registrant’s advisor (not including a sub-advisor whose role is primarily portfolio management and is sub-contracted or overseen by another investment advisor) and any entity controlling, controlled by or under common control with the investment advisor that provides ongoing services to the registrant, if the engagement relates directly to the operations and financial reporting of the registrant, subject to the de minimis exceptions for non-audit services described in Rule 2-01 of Regulation S-X. If the independent auditor has provided non-audit services to the registrant’s advisor (other than any sub-advisor whose role is primarily portfolio management and is sub-contracted with or overseen by another investment advisor) and any entity controlling, controlled by or under common control with the investment advisor that provides ongoing services to the registrant that were not pre-approved pursuant to its policies, the Committee will consider whether the provision of such non-audit services is compatible with the auditor’s independence.
(e)(2) The percentage of services described in each of paragraphs (b) through (d) for the registrant and the registrant’s investment advisor of this Item that were approved by the audit committee pursuant to the pre-approval exceptions included in paragraph (c)(7)(i)(c) or paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X are as follows:
| | Registrant: | Advisor and Distributor: | |
(f) The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was less than fifty
percent.
(g) The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment advisor (not including any sub-advisor whose role is primarily portfolio management and is subcontracted with or overseen by another investment advisor), and any entity controlling, controlled by, or under common control with the advisor that provides ongoing services to the registrant for the fiscal year ended August 31, 2020, were $57,862 for the registrant, $47,170 for the registrant’s investment advisor and $70,330 for the registrant’s distributor; and for the fiscal year ended August 31, 2021 were $107,971 for the registrant, $23,200 for the registrant’s investment advisor and $29,500 for the registrant’s distributor.
(h) The registrant’s audit committee of its Board of Trustees has determined that the provision of non-audit services that were rendered to the registrant’s investment advisor (not including any sub-advisor whose role is primarily portfolio management and is subcontracted with or overseen by another investment advisor), and any entity controlling, controlled by, or under common control with the investment advisor that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
(i) Not applicable.
(j) Not applicable.
Item 5. Audit Committee of Listed Registrants.
| (a) | | The registrant has a separately designated audit committee consisting of all the independent trustees of the registrant. The members of the audit committee are: Thomas R. Kadlec, Niel B. Nielson, Richard E. Erickson and Robert F. Keith. |
Item 6. 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 VIII |
| 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) |
* Print the name and title of each signing officer under his or her signature.
