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: November 30
Date of reporting period: November 30, 2023
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:
Annual Report |
For the Period January 1, 2023 through November 30, 2023 |
First Trust Active Global Quality Income ETF (AGQI) |
Annual Report
November 30, 2023
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Annual Letter from the Chairman and CEO
November 30, 2023
Chairman of the Board of Trustees
Chief Executive Officer of First Trust Advisors L.P.
Performance | |||||
Average Annual Total Returns | Cumulative Total Returns | ||||
1 Year Ended 11/30/23 | 5 Years Ended 11/30/23 | Inception (9/24/15) to 11/30/23 | 5 Years Ended 11/30/23 | Inception (9/24/15) to 11/30/23 | |
Fund Performance | |||||
NAV | 5.26% | 3.61% | 3.20% | 19.37% | 29.44% |
Market Price | 19.72% | 5.61% | 2.57% | 31.37% | 23.06% |
Index Performance | |||||
MSCI ACWI High Dividend Yield Index | 3.16% | 5.59% | 7.29% | 31.23% | 77.84% |
MSCI ACWI Index | 12.01% | 9.07% | 9.55% | 54.37% | 110.94% |
MSCI Europe Index | 14.20% | 7.01% | 6.12% | 40.33% | 62.60% |
Sector Allocation | % of Total Long-Term Investments |
Information Technology | 19.6% |
Consumer Staples | 15.2 |
Health Care | 15.0 |
Industrials | 14.2 |
Energy | 10.1 |
Financials | 7.2 |
Consumer Discretionary | 5.6 |
Materials | 5.6 |
Communication Services | 5.2 |
Real Estate | 2.3 |
Total | 100.0% |
Country Allocation† | % of Total Investments |
United States | 27.9% |
France | 19.3 |
United Kingdom | 12.7 |
Switzerland | 8.4 |
Ireland | 6.0 |
Japan | 5.5 |
Sweden | 4.9 |
South Korea | 4.0 |
Taiwan | 3.8 |
Canada | 2.9 |
Denmark | 2.9 |
Hong Kong | 1.7 |
Total | 100.0% |
† | Portfolio securities are categorized based upon their country of incorporation. |
Top Ten Holdings | % of Total Long-Term Investments |
Microsoft Corp. | 7.5% |
RELX PLC | 5.6 |
TotalEnergies SE | 5.4 |
Merck & Co., Inc. | 4.9 |
Shell PLC | 4.7 |
Sanofi S.A. | 4.3 |
Mondelez International, Inc., Class A | 4.1 |
Samsung Electronics Co., Ltd., GDR | 4.0 |
Coca-Cola (The) Co. | 3.9 |
Nestle S.A. | 3.8 |
Total | 48.2% |
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. |
Faizan Baig, CFA, Portfolio Manager of Janus Henderson
Charlotte Greville, CFA, Associate Portfolio Manager of Janus Henderson
Beginning Account Value June 1, 2023 | Ending Account Value November 30, 2023 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period (a) | |
First Trust Active Global Quality Income ETF (AGQI) | ||||
Actual | $1,000.00 | $1,005.50 | 3.80% | $19.10 |
Hypothetical (5% return before expenses) | $1,000.00 | $1,006.02 | 3.80% | $19.11 |
(a) | Expenses are equal to the annualized expense ratio as indicated in the table multiplied by the average account value over the period (June 1, 2023 through November 30, 2023), multiplied by 183/365 (to reflect the six-month period). This table reflects an annualized expense ratio of 3.80% because it includes expenses for a portion of the period prior to the reorganization for the Fund. |
Shares | Description | Value | |||
COMMON STOCKS (a) — 99.4% | |||||
Beverages — 7.2% | |||||
76,096 | Coca-Cola (The) Co. | $4,447,050 | |||
21,861 | Pernod Ricard S.A. (EUR) | 3,772,790 | |||
8,219,840 | |||||
Chemicals — 3.2% | |||||
13,532 | Air Products and Chemicals, Inc. | 3,661,083 | |||
Communications Equipment — 2.0% | |||||
46,071 | Cisco Systems, Inc. | 2,228,915 | |||
Diversified Telecommunication Services — 2.9% | |||||
184,814 | TELUS Corp. (CAD) | 3,306,890 | |||
Electrical Equipment — 6.0% | |||||
67,355 | nVent Electric PLC | 3,586,654 | |||
17,590 | Schneider Electric SE (EUR) | 3,228,503 | |||
6,815,157 | |||||
Electronic Equipment, Instruments & Components — 2.4% | |||||
20,412 | TE Connectivity Ltd. | 2,673,972 | |||
Food Products — 7.9% | |||||
65,376 | Mondelez International, Inc., Class A | 4,645,619 | |||
38,158 | Nestle S.A. (CHF) | 4,329,105 | |||
8,974,724 | |||||
Health Care Equipment & Supplies — 2.8% | |||||
40,572 | Medtronic PLC | 3,216,142 | |||
Household Durables — 3.4% | |||||
45,250 | Sony Group Corp. (JPY) | 3,912,755 | |||
Insurance — 7.1% | |||||
222,691 | AIA Group Ltd. (HKD) | 1,921,495 | |||
123,433 | AXA S.A. (EUR) | 3,841,914 | |||
110,940 | Dai-ichi Life Holdings, Inc. (JPY) | 2,305,451 | |||
8,068,860 | |||||
Machinery — 2.5% | |||||
147,120 | Sandvik AB (SEK) | 2,899,289 | |||
Metals & Mining — 2.3% | |||||
38,898 | Rio Tinto PLC (GBP) | 2,651,277 | |||
Oil, Gas & Consumable Fuels — 10.1% | |||||
162,955 | Shell PLC (EUR) | 5,342,554 | |||
89,908 | TotalEnergies SE (EUR) | 6,093,036 | |||
11,435,590 | |||||
Pharmaceuticals — 12.1% | |||||
54,537 | Merck & Co., Inc. | 5,588,952 |
Shares | Description | Value | |||
Pharmaceuticals (Continued) | |||||
32,232 | Novo Nordisk A/S, Class B (DKK) | $3,273,252 | |||
52,466 | Sanofi S.A. (EUR) | 4,880,531 | |||
13,742,735 | |||||
Professional Services — 5.6% | |||||
165,089 | RELX PLC (GBP) | 6,335,869 | |||
Semiconductors & Semiconductor Equipment — 3.8% | |||||
44,007 | Taiwan Semiconductor Manufacturing Co., Ltd., ADR | 4,282,321 | |||
Software — 7.4% | |||||
22,317 | Microsoft Corp. | 8,456,134 | |||
Specialized REITs — 2.2% | |||||
21,672 | Crown Castle, Inc. | 2,541,692 | |||
Technology Hardware, Storage & Peripherals — 4.0% | |||||
3,266 | Samsung Electronics Co., Ltd., GDR (b) | 4,543,006 | |||
Textiles, Apparel & Luxury Goods — 2.2% | |||||
19,622 | Cie Financiere Richemont S.A., Class A (CHF) | 2,446,868 | |||
Wireless Telecommunication Services — 2.3% | |||||
329,699 | Tele2 AB, Class B (SEK) | 2,581,997 | |||
Total Investments — 99.4% | 112,995,116 | ||||
(Cost $109,195,154) | |||||
Net Other Assets and Liabilities — 0.6% | 656,112 | ||||
Net Assets — 100.0% | $113,651,228 |
(a) | Securities are issued in U.S. dollars unless otherwise indicated in the security description. |
(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. |
Abbreviations throughout the Portfolio of Investments: | |
ADR | – American Depositary Receipt |
CAD | – Canadian Dollar |
CHF | – Swiss Franc |
DKK | – Danish Krone |
EUR | – Euro |
GBP | – British Pound Sterling |
GDR | – Global Depositary Receipt |
HKD | – Hong Kong Dollar |
JPY | – Japanese Yen |
SEK | – Swedish Krona |
Currency Exposure Diversification | % of Total Investments |
USD | 44.1% |
EUR | 24.0 |
GBP | 8.0 |
CHF | 6.0 |
JPY | 5.5 |
SEK | 4.9 |
CAD | 2.9 |
DKK | 2.9 |
HKD | 1.7 |
Total | 100.0% |
Valuation Inputs
Total Value at 11/30/2023 | Level 1 Quoted Prices | Level 2 Significant Observable Inputs | Level 3 Significant Unobservable Inputs | |
Common Stocks* | $ 112,995,116 | $ 112,995,116 | $ — | $ — |
* | See Portfolio of Investments for industry breakout. |
ASSETS: | |
Investments, at value | $112,995,116 |
Foreign currency, at value | 4,918 |
Receivables: | |
Investment securities sold | 45,666,955 |
Reclaims | 1,732,269 |
Dividends | 232,229 |
Total Assets | 160,631,487 |
LIABILITIES: | |
Due to custodian | 9,948 |
Due to authorized participant | 1,519,424 |
Payables: | |
Capital shares purchased | 44,736,350 |
Conversion expense | 425,000 |
Investment advisory fees | 186,636 |
Other liabilities | 102,901 |
Total Liabilities | 46,980,259 |
NET ASSETS | $113,651,228 |
NET ASSETS consist of: | |
Paid-in capital | $188,121,014 |
Par value | 88,819 |
Accumulated distributable earnings (loss) | (74,558,605 ) |
NET ASSETS | $113,651,228 |
NET ASSET VALUE, per share | $12.80 |
Number of shares outstanding (unlimited number of shares authorized, par value $0.01 per share) | 8,881,908 |
Investments, at cost | $109,195,154 |
Foreign currency, at cost (proceeds) | $4,794 |
Period Ended 11/30/2023 (a) | Year Ended 12/31/2022 | |
INVESTMENT INCOME: | ||
Dividends | $13,498,251 | $15,677,832 |
Interest | 433,227 | 224,581 |
Foreign withholding tax | (674,463 ) | (905,769 ) |
Other | — | 254 |
Total investment income | 13,257,015 | 14,996,898 |
EXPENSES: | ||
Investment advisory fees | 2,987,239 | 3,302,502 |
Interest and fees on loans | 2,969,729 | 1,434,564 |
Legal fees | 464,989 | 72,648 |
Conversion expense | 425,000 | — |
Shareholder reporting fees | 199,741 | 84,427 |
Accounting and administration fees | 128,262 | 133,645 |
Transfer agent fees | 29,922 | 22,728 |
Custodian fees | 27,627 | 37,990 |
Trustees’ fees and expenses | 15,907 | 18,540 |
Financial reporting fees | 8,211 | 9,250 |
Registration and filing fees | 4,499 | 29,351 |
Audit and tax fees | — | 89,005 |
Other expenses | 25,912 | 48,936 |
Total expenses | 7,287,038 | 5,283,586 |
NET INVESTMENT INCOME (LOSS) | 5,969,977 | 9,713,312 |
NET REALIZED AND UNREALIZED GAIN (LOSS): | ||
Net realized gain (loss) on: | ||
Investments | (43,682,376 ) | (2,310,937 ) |
In-kind redemptions | 10,259,264 | — |
Written options contracts | (3,035,872 ) | 878,033 |
Forward foreign currency contracts | 62 | 484,630 |
Foreign currency transactions | 3,478,647 | (195,471 ) |
Net realized gain (loss) | (32,980,275 ) | (1,143,745 ) |
Net change in unrealized appreciation (depreciation) on: | ||
Investments | 43,750,172 | (39,053,489 ) |
Written options contracts | (1,076,656 ) | 1,279,019 |
Forward foreign currency contracts | — | (7,097 ) |
Foreign currency translation | (3,619,988 ) | 2,579,064 |
Net change in unrealized appreciation (depreciation) | 39,053,528 | (35,202,503 ) |
NET REALIZED AND UNREALIZED GAIN (LOSS) | 6,073,253 | (36,346,248 ) |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $12,043,230 | $(26,632,936 ) |
(a) | Results for periods prior to November 21, 2023 are for First Trust Dynamic Europe Equity Income Fund. See Note 4 in the Notes to Financial Statements. |
Period Ended 11/30/2023 (a) | Year Ended 12/31/2022 | Year Ended 12/31/2021 | |
OPERATIONS: | |||
Net investment income (loss) | $5,969,977 | $9,713,312 | $10,714,795 |
Net realized gain (loss) | (32,980,275 ) | (1,143,745 ) | 6,829,972 |
Net change in unrealized appreciation (depreciation) | 39,053,528 | (35,202,503 ) | 20,235,701 |
Net increase (decrease) in net assets resulting from operations | 12,043,230 | (26,632,936 ) | 37,780,468 |
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||
Investment operations | (13,268,569 ) | (8,839,335 ) | (12,099,724 ) |
Return of capital | — | (3,567,639 ) | (307,250 ) |
Total distributions to shareholders | (13,268,569 ) | (12,406,974 ) | (12,406,974 ) |
SHAREHOLDER TRANSACTIONS: | |||
Proceeds from shares sold | — | — | — |
Cost of shares redeemed | (106,961,611 ) | — | — |
Net increase (decrease) in net assets resulting from shareholder transactions | (106,961,611 ) | — | — |
Total increase (decrease) in net assets | (108,186,950 ) | (39,039,910 ) | 25,373,494 |
NET ASSETS: | |||
Beginning of period | 221,838,178 | 260,878,088 | 235,504,594 |
End of period | $113,651,228 | $221,838,178 | $260,878,088 |
CHANGES IN SHARES OUTSTANDING: | |||
Shares outstanding, beginning of period | 17,231,908 | 17,231,908 | 17,231,908 |
Shares sold | — | — | — |
Shares redeemed | (8,350,000 ) | — | — |
Shares outstanding, end of period | 8,881,908 | 17,231,908 | 17,231,908 |
(a) | Results for periods prior to November 21, 2023 are for First Trust Dynamic Europe Equity Income Fund. See Note 4 in the Notes to Financial Statements. |
Cash flows from operating activities: | ||
Net increase (decrease) in net assets resulting from operations | $12,043,230 | |
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by operating activities: | ||
Purchases of investments | (204,904,763 ) | |
Sales, maturities and paydowns of investments | 337,807,873 | |
Proceeds from written options | 10,890,147 | |
Amount paid to close written options | (16,098,238 ) | |
Net realized gain/loss on investments and written options | 36,458,984 | |
Net change in unrealized appreciation/depreciation on investments and written options | (42,673,516 ) | |
Changes in assets and liabilities | ||
Decrease in reclaims receivable | 699,467 | |
Decrease in dividends receivable | 489,471 | |
Decrease in prepaid expenses | 2,666 | |
Increase in due to authorized participant | 1,519,424 | |
Decrease in interest and fees payable on loans | (557,611 ) | |
Decrease in investment advisory fees payable | (88,886 ) | |
Decrease in audit and tax fees payable | (87,682 ) | |
Decrease in legal fees payable | (1,954 ) | |
Decrease in shareholder reporting fees payable | (19,814 ) | |
Decrease in administrative fees payable | (107,421 ) | |
Decrease in custodian fees payable | (12,179 ) | |
Decrease in transfer agent fees payable | (3,060 ) | |
Decrease in trustees’ fees and expenses payable | (62 ) | |
Decrease in financial reporting fees payable | (771 ) | |
Increase in conversion expense payable | 425,000 | |
Increase other liabilities | 88,099 | |
Cash provided by operating activities | $135,868,404 | |
Cash flows from financing activities: | ||
Cost of shares redeemed | (62,225,261 ) | |
Distributions to shareholders from investment operations | (13,268,569 ) | |
Repayment of outstanding loans | (72,852,139 ) | |
Effect of exchange rate changes on Euro Loans (b) (c) | (286,995 ) | |
Cash used in financing activities | (148,632,964 ) | |
Decrease in cash, foreign currency and restricted cash | (12,764,560 ) | |
Cash, foreign currency and restricted cash at beginning of period | 12,759,530 | |
Cash, foreign currency and restricted cash at end of period | $(5,030 ) | |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest and fees | $3,527,340 | |
Cash, foreign currency and restricted cash reconciliation: | ||
Cash and foreign currency | $(5,030 ) | |
Restricted cash | — | |
Cash, foreign currency and restricted cash at end of period | $(5,030 ) |
(a) | Results for periods prior to November 21, 2023 are for First Trust Dynamic Europe Equity Income Fund. See Note 4 in the Notes to Financial Statements. |
(b) | This amount is a component of net change in unrealized appreciation (depreciation) on foreign currency translation as shown on the Statements of Operations. |
(c) | Net change in unrealized appreciation (depreciation) on foreign currency is $(3,906,983), which does not include the effect of exchange rate changes on Euro borrowings. |
Cash flows from operating activities: | ||
Net increase (decrease) in net assets resulting from operations | $(26,632,936 ) | |
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by operating activities: | ||
Purchases of investments | (63,242,939 ) | |
Sales of investments | 62,097,199 | |
Proceeds from written options | 12,135,740 | |
Amount paid to close written options | (11,256,732 ) | |
Net realized gain/loss on investments and written options | 1,432,904 | |
Net change in unrealized appreciation/depreciation on investments and written options | 37,774,470 | |
Net change in unrealized appreciation/depreciation on forward foreign currency contracts | 7,097 | |
Changes in assets and liabilities | ||
Increase in reclaims receivable | (60,939 ) | |
Increase in dividends receivable | (150,351 ) | |
Decrease in prepaid expenses | 735 | |
Increase in interest and fees payable on loans | 393,982 | |
Decrease in investment advisory fees payable | (29,391 ) | |
Increase in audit and tax fees payable | 10,324 | |
Decrease in legal fees payable | (4,500 ) | |
Decrease in shareholder reporting fees payable | (13,330 ) | |
Increase in administrative fees payable | 35,735 | |
Increase in custodian fees payable | 5,808 | |
Increase in transfer agent fees payable | 1,408 | |
Increase in trustees’ fees and expenses payable | 62 | |
Increase in other liabilities payable | 7,878 | |
Cash provided by operating activities | $12,512,224 | |
Cash flows from financing activities: | ||
Distributions to Common Shareholders from investment operations | (8,839,335 ) | |
Distributions to Common Shareholders from return of capital | (3,567,639 ) | |
Effect of exchange rate changes on Euro Loans (b) (d) | (2,742,416 ) | |
Cash used in financing activities | (15,149,390 ) | |
Decrease in cash, foreign currency and restricted cash | (2,637,166 ) | |
Cash, foreign currency and restricted cash at beginning of period | 15,396,696 | |
Cash, foreign currency and restricted cash at end of period | $12,759,530 | |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest and fees | $1,040,582 | |
Cash, foreign currency and restricted cash reconciliation: | ||
Cash and foreign currency | $3,471,530 | |
Restricted cash | 9,288,000 | |
Cash, foreign currency and restricted cash at end of period | $12,759,530 |
(d) | Includes net change in unrealized appreciation (depreciation) on foreign currency of $(163,352), which does not include the effect of exchange rate changes on Euro borrowings. |
Period Ended 11/30/23 (a) | Year Ended December 31, | |||||
2022 (a) | 2021 (a) | 2020 (a) | 2019 (a) | 2018 (a) | ||
Net asset value, beginning of period | $12.87 | $15.14 | $13.67 | $16.18 | $14.66 | $19.87 |
Income from investment operations: | ||||||
Net investment income (loss) | 0.35 (b) | 0.56 | 0.62 | 0.35 | 0.82 | 0.74 |
Net realized and unrealized gain (loss) | 0.35 | (2.11 ) | 1.57 | (1.90 ) | 2.15 | (4.50 ) |
Total from investment operations | 0.70 | (1.55 ) | 2.19 | (1.55 ) | 2.97 | (3.76 ) |
Distributions paid to shareholders from: | ||||||
Net investment income | (0.77 ) | (0.51 ) | (0.70 ) | (0.41 ) | (1.08 ) | (0.70 ) |
Net realized gain | — | — | — | — | — | (0.75 ) |
Return of capital | — | (0.21 ) | (0.02 ) | (0.55 ) | (0.37 ) | — |
Total distributions | (0.77 ) | (0.72 ) | (0.72 ) | (0.96 ) | (1.45 ) | (1.45 ) |
Net asset value, end of period | $12.80 | $12.87 | $15.14 | $13.67 | $16.18 | $14.66 |
Total return (c) | 5.67 % | (9.56 )% | 17.01 % | (7.79 )% | 22.24 % | (19.36 )% |
Ratios to average net assets/supplemental data: | ||||||
Net assets, end of period (in 000’s) | $113,651 | $221,838 | $260,878 | $235,505 | $278,738 | $252,663 |
Ratio of total expenses to average net assets | 3.46 % (d) | 2.32 % | 1.93 % | 2.15 % | 1.99 % | 1.91 % |
Ratio of total expenses to average net assets excluding interest expense | 2.05 % (d) | 1.69 % | 1.64 % | 1.71 % | 1.69 % | 1.65 % |
Ratio of net investment income (loss) to average net assets | 2.84 % (d) | 4.26 % | 4.23 % | 2.82 % | 5.37 % | 4.19 % |
Portfolio turnover rate (e) | 77 % | 22 % | 33 % | 43 % | 64 % | 44 % |
Indebtedness: | ||||||
Total loans outstanding (in 000’s) | $— | $73,139 | $75,882 | $79,232 | $100,524 | $87,650 |
Asset coverage per $1,000 of indebtedness (f) | $— | $4,033 | $4,438 | $3,972 | $3,773 | $3,883 |
(a) | Results for periods prior to November 21, 2023 are for First Trust Dynamic Europe Equity Income Fund. See Note 4 in the Notes to Financial Statements. |
(b) | Based on average shares outstanding. |
(c) | As of November 21, 2023, 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. Prior to November 21, 2023, total return based on net asset value assumed that all dividend distributions were reinvested at prices obtained by the Dividend Reinvestment Plan of First Trust Dynamic Europe Equity Income Fund. See Note 4 in the Notes to Financial Statements. 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. |
(f) | Calculated by subtracting the Fund’s total liabilities (not including the loans outstanding) from the Fund’s total assets, and dividing by the outstanding loans balance in 000’s. |
long-term. Under normal market conditions, the Fund seeks to invest primarily in income-producing equity securities. Such equity securities may include common stock, depositary receipts (including American Depositary Receipts and Global Depositary Receipts), preferred securities and real estate investment trusts. The Fund invests in U.S. and non-U.S. issuers and will typically invest at least 40% of its net assets in securities of issuers or companies that are economically tied to different countries throughout the world, excluding the United States.
Distributions paid from: | 2023* | 2022 | 2021 |
Ordinary income | $13,268,569 | $8,839,335 | $12,099,724 |
Capital gains | — | — | — |
Return of capital | — | 3,567,639 | 307,250 |
* | The tax character of distributions for 2023 is for the fiscal period January 1, 2023 to November 30, 2023. Results for periods prior to November 21, 2023 are for First Trust Dynamic Europe Equity Income Fund. See Note 4. |
Undistributed ordinary income | $— |
Accumulated capital and other gain (loss) | (78,413,853 ) |
Net unrealized appreciation (depreciation) | 3,855,248 |
Accumulated Net Investment Income (Loss) | Accumulated Net Realized Gain (Loss) on Investments | Paid-In Capital |
$7,338,525 | $(16,393,418 ) | $9,054,893 |
Tax Cost | Gross Unrealized Appreciation | Gross Unrealized (Depreciation) | Net Unrealized Appreciation (Depreciation) |
$109,215,220 | $7,492,275 | $(3,712,379 ) | $3,779,896 |
sub-advisory, custody, fund administration, legal, audit, and other services, but excluding fee payments under the Investment Management Agreement, interest, taxes, 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, acquired fund fees and expenses, and extraordinary expenses. The annual unitary management fee payable by the Fund to First Trust for these services will be reduced at certain levels of the Fund’s net assets (“breakpoints”) and calculated pursuant to the following schedule:
Breakpoints | |
Fund net assets up to and including $2.5 billion | 0.85000 % |
Fund net assets greater than $2.5 billion up to and including $5 billion | 0.82875 % |
Fund net assets greater than $5 billion up to and including $7.5 billion | 0.80750 % |
Fund net assets greater than $7.5 billion up to and including $10 billion | 0.78625 % |
Fund net assets greater than $10 billion | 0.76500 % |
sub-advisor and manages the Fund’s portfolio subject to First Trust’s supervision. Pursuant to the Investment Management Agreement, between the Trust, on behalf of the Fund, and the Advisor, and the Investment Sub-Advisory Agreement among the Trust, on behalf of the Fund, the Advisor and Janus Henderson, First Trust will supervise Janus Henderson and its management of the investment of the Fund’s assets and will pay Janus Henderson for its services as the Fund’s sub-advisor a sub-advisory fee equal to 50% the monthly unitary management fee paid to the Advisor, less Janus Henderson’s 50% share of the Fund’s expenses for that month.
Statements of Operations Location | |
Currency Risk Exposure | |
Net realized gain (loss) on forward foreign currency contracts | $62 |
Net change in unrealized appreciation (depreciation) on forward foreign currency contracts | — |
Equity Risk Exposure | |
Net realized gain (loss) on written options contracts | (3,035,872 ) |
Net change in unrealized appreciation (depreciation) on written options contracts | (1,076,656 ) |
January 23, 2024
Name, Year of Birth and Position with the Trust | Term of Office and Year First Elected or Appointed | Principal Occupations During Past 5 Years | Number of Portfolios in the First Trust Fund Complex Overseen by Trustee | Other Trusteeships or Directorships Held by Trustee During Past 5 Years |
INDEPENDENT TRUSTEES | ||||
Richard E. Erickson, Trustee (1951) | • Indefinite Term • Since Inception | Retired; Physician, Edward-Elmhurst Medical Group (2021 to September 2023); Physician and Officer, Wheaton Orthopedics (1990 to 2021) | 256 | None |
Thomas R. Kadlec, Trustee (1957) | • Indefinite Term • Since Inception | Retired; President, ADM Investors Services, Inc. (Futures Commission Merchant) (2010 to July 2022) | 256 | Director, National Futures Association and ADMIS Singapore Ltd.; Formerly, Director of ADM Investor Services, Inc., ADM Investor Services International, ADMIS Hong Kong Ltd., and Futures Industry Association |
Denise M. Keefe, Trustee (1964) | • Indefinite Term • Since 2021 | Executive Vice President, Advocate Aurora Health and President, Advocate Aurora Continuing Health Division (Integrated Healthcare System) | 256 | Director and Board Chair of Advocate Home Health Services, Advocate Home Care Products and Advocate Hospice; Director and Board Chair of Aurora At Home (since 2018); Director of Advocate Physician Partners Accountable Care Organization; Director of RML Long Term Acute Care Hospitals; Director of Senior Helpers (since 2021); and Director of MobileHelp (since 2022) |
Robert F. Keith, Trustee (1956) | • Indefinite Term • Since Inception | President, Hibs Enterprises (Financial and Management Consulting) | 256 | Formerly, Director of Trust Company of Illinois |
Niel B. Nielson, Trustee (1954) | • Indefinite Term • Since Inception | Senior Advisor (2018 to Present), Managing Director and Chief Operating Officer (2015 to 2018), Pelita Harapan Educational Foundation (Educational Products and Services) | 256 | None |
Bronwyn Wright, Trustee (1971) | • Indefinite Term • Since 2023 | Independent Director to a number of Irish collective investment funds (2009 to Present); Various roles at international affiliates of Citibank (1994 to 2009), including Managing Director, Citibank Europe plc and Head of Securities and Fund Services, Citi Ireland (2007 to 2009) | 232 | None |
Name, Year of Birth and Position with the Trust | Term of Office and Year First Elected or Appointed | Principal Occupations During Past 5 Years | Number of Portfolios in the First Trust Fund Complex Overseen by Trustee | Other Trusteeships or Directorships Held by Trustee During Past 5 Years |
INTERESTED TRUSTEE | ||||
James A. Bowen(1), Trustee, Chairman of the Board (1955) | • Indefinite Term • Since Inception | Chief Executive Officer, First Trust Advisors L.P. and First Trust Portfolios L.P., Chairman of the Board of Directors, BondWave LLC (Software Development Company) and Stonebridge Advisors LLC (Investment Advisor) | 256 | None |
Name and Year of Birth | Position and Offices with Trust | Term of Office and Length of Service | Principal Occupations During Past 5 Years |
OFFICERS(2) | |||
James M. Dykas (1966) | President and Chief Executive Officer | • Indefinite Term • Since Inception | Managing Director and Chief Financial Officer, First Trust Advisors L.P. and First Trust Portfolios L.P.; Chief Financial Officer, BondWave LLC (Software Development Company) and Stonebridge Advisors LLC (Investment Advisor) |
Derek D. Maltbie (1972) | Treasurer, Chief Financial Officer and Chief Accounting Officer | • Indefinite Term • Since 2023 | Senior Vice President, First Trust Advisors L.P. and First Trust Portfolios L.P., July 2021 to Present. Previously, Vice President, First Trust Advisors L.P. and First Trust Portfolios L.P., 2014 - 2021. |
W. Scott Jardine (1960) | Secretary and Chief Legal Officer | • Indefinite Term • Since Inception | General Counsel, First Trust Advisors L.P. and First Trust Portfolios L.P.; Secretary and General Counsel, BondWave LLC; Secretary, Stonebridge Advisors LLC |
Daniel J. Lindquist (1970) | Vice President | • Indefinite Term • Since Inception | Managing Director, First Trust Advisors L.P. and First Trust Portfolios L.P. |
Kristi A. Maher (1966) | Chief Compliance Officer and Assistant Secretary | • Indefinite Term • Since Inception | Deputy General Counsel, First Trust Advisors L.P. and First Trust Portfolios L.P. |
Roger F. Testin (1966) | Vice President | • Indefinite Term • Since Inception | Senior Vice President, First Trust Advisors L.P. and First Trust Portfolios L.P. |
Stan Ueland (1970) | Vice President | • Indefinite Term • Since Inception | Senior Vice President, First Trust Advisors L.P. and First Trust Portfolios L.P. |
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
151 Detroit Street
Denver, Colorado 80206-4805
FUND ACCOUNTANT &
TRANSFER AGENT
240 Greenwich Street
New York, NY 10286
PUBLIC ACCOUNTING FIRM
111 South Wacker Drive
Chicago, IL 60606
320 South Canal Street
Chicago, IL 60606
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. |
(b) | Not applicable. |
(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. |
(e) | Not applicable. |
(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, Robert F. Keith and Bronwyn Wright 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 $41,500 for the fiscal year ended November 30, 2022 and $25,500 for the fiscal year ended November 30, 2023.
(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 November 30, 2022 and $0 for the fiscal year ended November 30, 2023.
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 November 30, 2022 and $0 for the fiscal year ended November 30, 2023.
(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 $39,000 for the fiscal year ended November 30, 2022 and $26,576 for the fiscal year ended November 30, 2023. These fees were for tax consultation and/or tax return preparation and professional services rendered for PFIC (Passive Foreign Investment Company) Identification Services.
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 November 30, 2022 and $0 for the fiscal year ended November 30, 2023.
(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 November 30, 2022 and $0 for the fiscal year ended November 30, 2023.
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 November 30, 2022 and $0 for the fiscal year ended November 30, 2023.
(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: | |
(b) 0% | (b) 0% | |
(c) 0% | (c) 0% | |
(d) 0% | (d) 0% |
(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 November 30, 2022, were $39,000 for the registrant and $0 for the registrant’s investment advisor; and for the fiscal year ended November 30, 2023 were $26,576 for the registrant and $44,000 for the registrant’s investment advisor.
(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 standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 consisting of all the independent directors of the registrant. The audit committee of the registrant is comprised of: Richard E. Erickson, Thomas R. Kadlec, Denise M. Keefe, Robert F. Keith, Niel B. Nielson and Bronwyn Wright. |
(b) | Not applicable. |
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. |
(b) | Not applicable. |
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.
(a) | Not applicable. |
(b) | Not applicable. |
Item 13. Exhibits.
(a)(1) | Code of ethics, or any amendment thereto, that is the subject of disclosure required by Item 2 is attached hereto. |
(a)(2) | Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
(a)(3) | Not applicable. |
(a)(4) | Not applicable. |
(b) | Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes- Oxley Act of 2002 are attached hereto. |
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) |
Date: | February 5, 2024 |
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) |
Date: | February 5, 2024 |
By (Signature and Title)* | /s/ Derek D. Maltbie | |
Derek D. Maltbie, Treasurer, Chief Financial Officer and Chief Accounting Officer (principal financial officer) |
Date: | February 5, 2024 |
* Print the name and title of each signing officer under his or her signature.