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 811-09235
----------------------
FIRST DEFINED PORTFOLIO FUND, LLC
-------------------------------------------------------
(Exact name of registrant as specified in charter)
1001 Warrenville Road, Suite 300
LISLE, IL 60532
-------------------------------------------------------
(Address of principal executive offices) (Zip code)
Corporation Service Company
1013 Centre Road
WILMINGTON, DE 19805
-------------------------------------------------------
(Name and address of agent for service)
registrant's telephone number, including area code: 630-241-4141
-------------
Date of fiscal year end: DECEMBER 31
------------
Date of reporting period: DECEMBER 31, 2004
------------------
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, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 2004
Shareholder Letter .............................................................................. 1
Market Overview ................................................................................. 2
Performance Summaries ........................................................................... 3
Understanding Your Expenses ..................................................................... 25
Portfolio of Investments ........................................................................ 26
Statements of Assets and Liabilities ............................................................ 44
Statements of Operations ........................................................................ 46
Statements of Changes in Net Assets ............................................................. 48
Statements of Changes in Net Assets - Capital Stock Activity .................................... 50
Financial Highlights ............................................................................ 52
Notes to Financial Statements ................................................................... 63
Report of Independent Registered Public Accounting Firm ......................................... 67
Proxy Voting Policies and Procedures ............................................................ 68
Portfolio Holdings .............................................................................. 68
Management ...................................................................................... 69
HOW TO READ THIS REPORT
This report contains information that can help you evaluate your investment. It
includes details about each portfolio and presents data and analysis that
provide insight into each portfolio's performance and investment approach.
By reading the letter from the Fund's President, James A. Bowen, together with
the market overview and discussion of each portfolio's performance, you will
obtain an understanding of how the market environment affected its performance.
The statistical information that follows can help you understand a portfolio's
performance compared to that of relevant market benchmarks.
It is important to keep in mind that the opinions expressed by Mr. Bowen and
First Trust Advisors L.P. personnel 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. Of
course, the risks of investing in the portfolios are spelled out in the
prospectus.
- --------------------------------------------------------------------------------
SHAREHOLDER LETTER
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
DECEMBER 31, 2004
Dear Shareholders:
In 2004, nine out of the eleven equity portfolios in the First Defined Portfolio
Fund, LLC (the "Fund") generated positive total returns. We are particularly
pleased that seven out of eleven posted returns that outpaced the S&P 500 Index.
The bull market in stocks is now two years old and we believe that the U.S.
economic expansion, now three years old, is strong and sustainable despite some
formidable obstacles.
According to the latest estimate from the Blue Chip Economic Indicators, 2004
GDP growth in the U.S. should come in around 4.4%, up from 3.1% in 2003. In our
opinion, this is very encouraging considering the ongoing war in Iraq and its
role in pushing energy prices higher. Crude oil futures reached a high of $55.17
in 2004, according to data from Bloomberg. The average for the year was $41.43.
Economists estimate that for every $10 change in the price of a barrel of crude
oil, GDP growth adjusts approximately 0.5% up or down, and in the case of 2004
it was down. High energy prices act as a tax on the consumer and businesses. The
more we pay for our energy, the less discretionary dollars are available to be
pumped into the economy.
One of the top stories in the economy throughout 2004 was the strong showing by
the manufacturing sector. If you recall, it was consumer spending, particularly
in the housing market, that kept the U.S. economy propped up during the shallow
recession of 2001. According to the Institute for Supply Management, the
manufacturing sector grew for the 19th consecutive month in December. The ISM
Index of manufacturing activity averaged a reading above 60 for all of 2004. A
reading above 50 indicates that activity is expanding. As good of a decade as
the 1990s was for Corporate America, the index never registered a reading of 60
even for a single month. The index actually traded above 60 for nine consecutive
months from November 2003 through July 2004. That was the longest period of
growth above 60 since the 12-month stretch from July 1972 through June 1973.
Over the past 16 months, the U.S. has added nearly 2.5 million people to the
workforce. Since consumer spending accounts for roughly two-thirds of our annual
GDP in the U.S., which is currently in the vicinity of $11.6 trillion, having
more workers on the payrolls, in our opinion, is a positive for Corporate
America.
As always, our approach to investing on behalf of the Fund is based on the
belief that a disciplined buy-and-hold philosophy best suits the long-term
investor. The companies selected for our defined sector portfolios are
researched and evaluated using database screening techniques, fundamental
analysis, and the judgement of our research analysts. We believe that financial
markets set the price of securities based upon expectations for future cash
flows. It is our contention that successful investors tend to select stocks of
companies where management is able to exceed cash flow expectations. Likewise,
portfolios derived from indexes will continue to employ unique quantitative
strategies that combine historical evidence with common sense to give investors
an opportunity to obtain returns greater than that of the actual indexes.
Thank you for your continued interest in the portfolios within our Fund.
Sincerely,
/S/ JAMES A. BOWEN
James A. Bowen
President of the First Defined
Portfolio Fund, LLC
February 18, 2005
Page 1
- --------------------------------------------------------------------------------
OVERVIEW OF THE MARKET
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
MARKET OVERVIEW
- ---------------
Based on the first ten months of the year, it looked as though large-cap stocks
were going to net investors very little in the way of gains in 2004.
Year-to-date through October, the DJIA, S&P 500 and Nasdaq 100 Indexes had
generated total returns of -2.5%, +3.1% and +1.5%, respectively. The performance
of the DJIA Index was negatively impacted by the sharp sell-off in Merck in late
September over the Vioxx scare and its voluntary recall. Thanks to a
post-election rally, the DJIA, S&P 500 and Nasdaq 100 Indexes posted total
returns of +5.3%, +10.9% and +10.7%, respectively, in 2004. The return on the
S&P 500 Index was slightly better than the +10.4% average annual total return
posted by "Large Company" stocks between 1926 and 2004, according to data from
Ibbotson Associates.
But large-cap stocks aren't the only option for investors. In fact, both small
and mid-cap stocks have outperformed large-caps over the past six calendar
years. From 1999-2004, the S&P 500 Index posted an average annual total return
of +1.3%, vs. +10.4% for the S&P 400 Index (Mid Cap) and +11.7% for the S&P 600
Index (Small Cap). In 2004, the S&P 400 and S&P 600 Indexes returned +16.5% and
+22.7%, respectively, easily outpacing the S&P 500 Index's +10.9% return. It
should be noted that the estimated earnings growth for small and mid-cap stocks
was higher than that of large-caps in 2004. According to Thomson First Call,
year-end estimates showed 19% earnings growth for the firms in the S&P 500
Index, vs. 20% for those in the S&P 400 Index and 26% for those in the S&P 600
Index.
Due primarily to the ongoing weakness in the U.S. dollar, which began its slide
in 2002, investors poured $57.9 billion into international equity funds and
another $15.6 billion into global equity funds in 2004, according to AMG Data
Services. That is a huge jump in inflows over last year's take. In 2003,
investors allocated $25.4 billion to international equity funds and just $2.9
billion to global equity funds. The Morgan Stanley Capital International
Developed Markets World Index posted a respectable total return of +14.7% in
2004.
One theme gaining some momentum in the market is stock dividends. If you recall
back in May 2003, President Bush signed into law the Jobs & Growth Tax Relief
Reconciliation Act of 2003. One of the provisions in the law lowered the tax
rate on qualified stock dividends to a maximum rate of 15% through 2008. Today,
as a result of this tax reform, we are seeing more and more companies either
initiating a dividend or increasing the amount of an existing dividend. Of the
roughly 7,000 publicly traded companies who report dividend payments to Standard
& Poor's Corporation, 167 companies increased their payout in December, a 22.8%
increase over the 136 posted in December 2003, according to Standard & Poor's
Corporation. In 2004, there were 1,745 dividend increases, up 7.1% from the
1,630 increases in 2003. It was the largest number of dividend increases for a
calendar year since 1998. Companies still have room for more increases moving
forward. The dividend yield on the S&P 500 Index has been below 2.0% since the
end of 1996. It was above 3.0% as recently as 1991.
In addition to dividends, we saw a bit of a revival in the IPO market. As of
mid-December, there had been 252 common stock IPOs brought to market in the U.S.
in 2004, totaling $46.8 billion. This was up substantially from the 80 deals
that raised $14 billion in 2003, according to CBSMarketWatch.com. With respect
to mergers, in the fourth quarter of 2004, $250 billion worth of mergers were
completed, pushing the year's total to $809 billion, a 49% jump over 2003,
according to Thomson Financial. Close to 60% of the deals in 2004 were paid for
with cash, versus about 35% in 2000, according to Bank of America.
Perhaps the most encouraging sign that Corporate America is healthy heading into
2005 is the fact that, including financial firms, the companies in the S&P 500
Index are currently holding a record $2 trillion in cash and cash equivalents.
Page 2
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
DEFINED TARGET PORTFOLIOS
TARGET MANAGED VIP PORTFOLIO
The Target Managed VIP Portfolio posted a total return of +12.3% in 2004, which
slightly outperformed the Russell 3000 Index's total return of +12.0%. The Net
Asset Value (NAV) increased from $8.73 to $9.80 during the calendar year. One
hundred and two stocks advanced and twenty-two declined. The top performing
stocks were the following: Urban Outfitters (+139.7%), Advanced Medical Optics
(+109.4%), Cognizant Technology Solutions (+85.5%), Ameristar Casinos (+78.9%)
and Pacificare Health Systems (+67.2%). The worst performing stocks were the
following: Foundry Networks (-51.8%), Hot Topic (-41.6%), Applied Films
(-34.7%), United Online (-31.3%) and Intel (-26.6%).
The Target Managed VIP portfolio was helped by strong performance from the
consumer discretionary and financial services holdings in the portfolio. The
consumer discretionary holdings, which had a neutral weighting relative to the
benchmark to start the year, benefited from the strength in consumer spending as
Coach, Electronic Arts and Urban Outfitters were the greatest contributors to
performance on a weighted basis. The financial services holdings benefited from
solid performance across the board as all 14 holdings posted positive returns
for the year with 11 of those beating the relevant sector benchmark return. The
portfolio return was negatively impacted by the auto & transportation sector
holdings, which underperformed and were overweighted relative to the benchmark
index. General Motors, a large weighting for the portfolio, lagged the market
due to fierce competition and questions about its financial health which
resulted in a downgrade of its debt toward the end of the year. Two of the
portfolios largest holdings, Intel and Cisco, also lagged the market
significantly as investors questioned their long-term growth prospects.
All of the data on this page represents past performance, which cannot be used
to predict future returns that may be achieved by this investment fund. Total
return and share price will fluctuate, so an investor's shares, when redeemed,
may be worth more or less than when purchased. Returns assume reinvestment of
dividends.
- --------------------------------------------------------------------------------
ANNUAL INVESTMENT RETURNS
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
1999*
Target Managed VIP Portfolio -19.6%
Dow Jones Industrial Avg.** 9.0%
Russell 3000 Index*** 12.6%
2000
Target Managed VIP Portfolio 7.2%
Dow Jones Industrial Avg.** -4.7%
Russell 3000 Index*** -7.5%
2001
Target Managed VIP Portfolio -5.0%
Dow Jones Industrial Avg.** -5.5%
Russell 3000 Index*** -11.4%
2002
Target Managed VIP Portfolio -21.0%
Dow Jones Industrial Avg.** -15.0%
Russell 3000 Index*** -21.5%
2003
Target Managed VIP Portfolio 34.9%
Dow Jones Industrial Avg.** 28.3%
Russell 3000 Index*** 31.1%
2004
Target Managed VIP Portfolio 12.3%
Dow Jones Industrial Avg.** 5.3%
Russell 3000 Index*** 12.0%
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INITIAL INVESTMENT
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
10/6/99 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
------- -------- -------- -------- -------- -------- --------
Target Managed VIP Portfolio $10,000 $8,040 $8,620 $8,190 $6,470 $8,730 $9,800
Dow Jones Industrial Avg.** 10,000 10,896 10,382 9,816 8,343 10,700 11,271
Russell 3000 Index*** 10,000 11,262 10,420 9,229 7,241 9,500 10,631
- ------------------------------------------------------------------------------------------------------------------------------------
Page 3
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
TARGET MANAGED VIP PORTFOLIO (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
RETURN COMPARISON PERIODS ENDED DEC. 31, 2004
CUMULATIVE AVERAGE ANNUAL 5 YEAR 1 YEAR
INCEPTION TOTAL TOTAL RETURN AVERAGE ANNUAL ANNUAL
DATE RETURN (SINCE INCEPTION) TOTAL RETURN TOTAL RETURN
- ------------------------------------------------------------------------------------------------------------------------------------
Target Managed VIP Portfolio 10/6/99 -2.0% -0.4% 4.0% 12.3%
Dow Jones Industrial Avg.** 12.7 2.3 0.7 5.3
Russell 3000 Index*** 6.3 1.2 -1.2 12.0
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
*The 1999 return applies to the time period from 10/6/1999 to 12/31/1999.
**The Dow Jones Industrial Average is a price-weighted average of 30
blue-chip stocks that are generally the leaders in their industry. It has
been a widely followed indicator of the stock market since October 1, 1928.
(Bloomberg)
***The Russell 3000 Index is composed of 3,000 large U.S. companies, as
determined by market capitalization. This portfolio represents
approximately 98% of the investable U.S. equity market. (Bloomberg)
</FN>
1. Effective April 30, 2002, based upon the determination of the Fund's Board of
Trustees, the Fund changed its name from the DowSM Target 5 Portfolio to the
Target Managed VIP Portfolio. The Fund's primary investment strategy was also
changed. The performance figures provided reflect the Fund's performance prior
to the name change and the change of the primary investment strategy.
PORTFOLIO COMPONENTS+
December 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
DIVERSIFIED TELECOMMUNICATION SERVICES ...................... 7.1%
HOUSEHOLD DURABLES .......................................... 6.8%
WIRELESS TELECOMMUNICATION SERVICES ......................... 6.5%
DIVERSIFIED FINANCIAL SERVICES .............................. 5.9%
COMMUNICATIONS EQUIPMENT .................................... 5.2%
SOFTWARE .................................................... 5.1%
OIL & GAS ................................................... 5.1%
COMMERCIAL BANKS ............................................ 5.1%
SPECIALTY RETAIL ............................................ 4.4%
HEALTH CARE PROVIDERS & SERVICES ............................ 4.2%
HEALTH CARE EQUIPMENT & SUPPLIES ............................ 4.0%
CONSUMER FINANCE ............................................ 3.4%
AUTOMOBILES ................................................. 3.4%
CAPITAL MARKETS ............................................. 2.7%
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT .................... 2.7%
TEXTILES, APPAREL & LUXURY GOODS ............................ 2.4%
HOTELS, RESTAURANTS & LEISURE ............................... 2.2%
ELECTRIC UTILITIES .......................................... 2.2%
MULTI-UTILITIES & UNREGULATED POWER ......................... 2.2%
TOBACCO ..................................................... 2.2%
COMMERCIAL SERVICES & SUPPLIES .............................. 2.0%
MACHINERY ................................................... 1.8%
IT SERVICES ................................................. 1.7%
BEVERAGES ................................................... 1.6%
INDUSTRIAL CONGLOMERATES .................................... 1.3%
MULTILINE RETAIL ............................................ 1.0%
AEROSPACE & DEFENSE ......................................... 0.9%
INSURANCE ................................................... 0.8%
ELECTRONIC EQUIPMENT & INSTRUMENTS .......................... 0.6%
HOUSEHOLD PRODUCTS .......................................... 0.5%
PHARMACEUTICALS ............................................. 0.5%
CHEMICALS ................................................... 0.5%
THRIFTS & MORTGAGE FINANCE .................................. 0.5%
COMPUTERS & PERIPHERALS ..................................... 0.5%
BUILDING PRODUCTS ........................................... 0.4%
AIR FREIGHT & LOGISTICS ..................................... 0.4%
INTERNET SOFTWARE & SERVICES ................................ 0.4%
REAL ESTATE ................................................. 0.4%
ENERGY EQUIPMENT & SERVICES ................................. 0.3%
PERSONAL PRODUCTS ........................................... 0.3%
ROAD & RAIL ................................................. 0.3%
CONSTRUCTION MATERIALS ...................................... 0.2%
BIOTECHNOLOGY ............................................... 0.1%
ELECTRICAL EQUIPMENT ........................................ 0.1%
AUTO COMPONENTS ............................................. 0.1%
+ Percentages are based upon total investments. Please note that the percentages
shown on the Portfolio of Investments are based on net assets.
Page 4
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
DOWSM DART 10 PORTFOLIO
The DowSM Dart 10 Portfolio posted a total return of +3.8% in 2004, which lagged
the Dow Jones Industrial Average's total return of +5.3%. The Net Asset Value
(NAV) increased from $8.37 to $8.69 during the calendar year. Seven stocks
advanced and three declined. The top performing stocks were the following:
Eastman Kodak (+27.9%), Home Depot (+21.5%), Altria Group (+18.4%) and American
Express (+17.6%). The worst performing stocks were the following: Merck (-27.8%)
and General Motors (-21.5%).
The Dow DART 10 Portfolio underperformed the Dow Jones Industrial Average in
2004. While the portfolio had a higher weighting in the consumer discretionary
sector, its performance reflected a top performer (Eastman Kodak) and a bottom
performer (General Motors) and lagged its peers in the S&P 500 Consumer
Discretionary Index. Also, the telecommunications service sector allocation in
the portfolio held two lagging performers (SBC & AT&T) relative to the telecom
sector as a whole which outperformed the Dow Jones Industrial Average and the
S&P 500 Index. Lastly, while the only health care position in the Dow DART 10
looked to be moving flat through most the year, late September news on possible
health risks due to a Merck drug dropped the stock price 26.8% in one day. It
did not recover from the drop by the close of the year.
All of the data on this page represents past performance, which cannot be used
to predict future returns that may be achieved by this investment fund. Total
return and share price will fluctuate, so an investor's shares, when redeemed,
may be worth more or less than when purchased. Returns assume reinvestment of
dividends.
- --------------------------------------------------------------------------------
ANNUAL INVESTMENT RETURNS
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
1999*
DowSM DART 10 Portfolio -7.8%
Dow Jones Industrial Avg.** 9.0%
2000
DowSM DART 10 Portfolio 8.7%
Dow Jones Industrial Avg.** -4.7%
2001
DowSM DART 10 Portfolio -14.8%
Dow Jones Industrial Avg.** -5.5%
2002
DowSM DART 10 Portfolio -18.3%
Dow Jones Industrial Avg.** -15.0%
2003
DowSM DART 10 Portfolio 19.9%
Dow Jones Industrial Avg.** 28.3%
2004
DowSM DART 10 Portfolio 3.8%
Dow Jones Industrial Avg.** 5.3%
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INITIAL INVESTMENT
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
10/6/99 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
------- -------- -------- -------- -------- -------- --------
DowSM DART 10 Portfolio $10,000 $9,220 $10,020 $8,540 $6,980 $8,370 $8,690
Dow Jones Industrial Avg.** 10,000 10,896 10,382 9,816 8,348 10,700 11,271
- ------------------------------------------------------------------------------------------------------------------------------------
Page 5
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
DOWSM DART 10 PORTFOLIO (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
RETURN COMPARISON PERIODS ENDED DEC. 31, 2004
CUMULATIVE AVERAGE ANNUAL 5 YEAR 1 YEAR
INCEPTION TOTAL TOTAL RETURN AVERAGE ANNUAL ANNUAL
DATE RETURN (SINCE INCEPTION) TOTAL RETURN TOTAL RETURN
- ------------------------------------------------------------------------------------------------------------------------------------
DowSMDART 10 Portfolio 10/6/99 -13.1% -2.6% -1.2% 3.8%
Dow Jones Industrial Avg.** 12.7 2.3 0.7 5.3
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
*The 1999 return applies to the time period from 10/6/1999 to 12/31/1999.
**The Dow Jones Industrial Average is a price-weighted average of 30
blue-chip stocks that are generally the leaders in their industry. It has
been a widely followed indicator of the stock market since October 1, 1928.
(Bloomberg)
</FN>
PORTFOLIO COMPONENTS+
December 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Diversified Telecommunication Services ......... 18.8%
Leisure Equipment & Products ................... 12.3%
Specialty Retail ............................... 11.7%
Consumer Finance ............................... 11.3%
Tobacco ........................................ 11.0%
Chemicals ...................................... 10.4%
Diversified Financial Services ................. 10.3%
Automobiles .................................... 7.3%
Pharmaceuticals ................................ 6.9%
+ Percentages are based upon total investments. Please note that the percentages
shown on the Portfolio of Investments are based on net assets.
Page 6
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
GLOBAL TARGET 15 PORTFOLIO
The Global Target 15 Portfolio posted a total return of +25.4% in 2004, which
significantly outperformed the Morgan Stanley Capital International Developed
Markets World Index's total return of +14.7%. The Net Asset Value (NAV)
increased from $11.05 to $13.86 during the calendar year. Fourteen stocks
advanced and one declined. All five of the sectors in both the Financial Times
Industrial Ordinary Share Index and Hang Seng Index advanced. The top performing
stocks were the following: EMI Group (+86.3%), Tate & Lyle (+73.0%), Cosco
Pacific (+60.7%), BAE Systems (+54.0%) and P&O DFD (+47.1%). The only stock that
fell was AT&T Corp. (-0.6%).
Performance in 2004 was driven by the portfolio's FT 30 holdings, which
benefited from both strong underlying business fundamentals and the British
pound's 7.4% rise relative to the U.S. dollar over the course of the year. The
five Financial Times Stock Exchange 30 Index ("FTSE 30") holdings were up on
average 63.2% in 2004, greatly outperforming the FTSE 30 return of 20.6%. The
portfolio also benefited from strong performance in transportation
infrastructure stocks, an overweight position for the portfolio. The DJIA
components of the portfolio gained an average of 6.1% for 2004, slightly beating
the DJIA return of 5.2% but trailing the portfolio as a whole. The portfolio was
held back by underperformance in telecommunication services stocks (AT&T and
SBC), an overweight position in the portfolio.
*All returns are in U.S. dollars.
All of the data on this page represents past performance, which cannot be used
to predict future returns that may be achieved by this investment fund. Total
return and share price will fluctuate, so an investor's shares, when redeemed,
may be worth more or less than when purchased. Returns assume reinvestment of
dividends.
- --------------------------------------------------------------------------------
ANNUAL INVESTMENT RETURNS
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
1999*
Global Target 15 Portfolio -2.9%
MSCI Developed Markets World Index** 14.1%
2000
Global Target 15 Portfolio 2.00%
MSCI Developed Markets World Index** -13.2%
2001
Global Target 15 Portfolio -2.4%
MSCI Developed Markets World Index** -16.8%
2002
Global Target 15 Portfolio -14.7%
MSCI Developed Markets World Index** -19.9%
2003
Global Target 15 Portfolio 34.1%
MSCI Developed Markets World Index** 33.1%
2004
Global Target 15 Portfolio 25.4%
MSCI Developed Markets World Index** 14.7%
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INITIAL INVESTMENT
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
10/6/99 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
------- -------- -------- -------- -------- -------- --------
Global Target 15 Portfolio $10,000 $9,710 $9,900 $9,660 $8,240 $11,050 $13,860
MSCI Developed Markets 10,000 11,411 9,908 8,241 6,602 8,788 10,081
World Index**
- ------------------------------------------------------------------------------------------------------------------------------------
Page 7
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
GLOBAL TARGET 15 PORTFOLIO (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
RETURN COMPARISON PERIODS ENDED DEC. 31, 2004
CUMULATIVE AVERAGE ANNUAL 5 YEAR 1 YEAR
INCEPTION TOTAL TOTAL RETURN AVERAGE ANNUAL ANNUAL
DATE RETURN (SINCE INCEPTION) TOTAL RETURN TOTAL RETURN
- ------------------------------------------------------------------------------------------------------------------------------------
Global Target 15 Portfolio 10/6/99 38.6% 6.4% 7.4% 25.4%
MSCI Developed Markets World Index** -0.7 -0.1 -2.4 14.7
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
*The 1999 return applies to the time period from 10/6/1999 to 12/31/1999.
**The Morgan Stanley Capital International Developed Markets World Index
("MSCI Developed Markets World Index") is based on the share prices of
approximately 1,600 companies listed on stock exchanges in the twenty-two
countries that make up the MSCI National Indices. (Bloomberg)
</FN>
PORTFOLIO COMPONENTS+
December 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Industrial Conglomerates ........................ 18.9%
Transportation Infrastructure ................... 15.2%
Diversified Telecommunication Services .......... 10.3%
Media ........................................... 9.4%
Food Products ................................... 8.6%
Aerospace & Defense ............................. 7.8%
Oil & Gas ....................................... 6.7%
Road & Rail ..................................... 6.3%
Real Estate ..................................... 6.2%
Diversified Financial Services .................. 5.6%
Auto Components ................................. 5.0%
+ Percentages are based upon total investments. Please note that the percentages
shown on the Portfolio of Investments are based on net assets.
Page 8
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
S&P TARGET 24 PORTFOLIO
The S&P Target 24 Portfolio posted a total return of +13.7% in 2004, which
outperformed the S&P 500 Index's total return of +10.9%. The Net Asset Value
(NAV) increased from $7.62 to $8.66 during the calendar year. Twenty-one stocks
advanced and three declined. The top performing stocks were the following:
Burlington Resources (+58.5%), UnitedHealth Group (+51.4%), Moody's (+44.1%),
Occidental Petroleum (+41.3%) and Waters Corp. (+41.1%). The worst performing
stock was Cisco (-20.3%).
The S&P Target 24 slightly outperformed the S&P 500 Index. Financials, health
care, and energy, making up almost half of the portfolio's weighting, led the
way for the S&P Target 24's performance. Each of the three sectors outperformed
their peer group as a whole as measured by their respective S&P 500 sector
indexes' performance. The highly weighted information technology sector produced
a flat return within the S&P 500, but outperformed the S&P Target 24's
technology allocation due to Cisco Systems poor performance and heavy weighting
in the sector and portfolio. Industrials' and telecommunications services'
performance within the S&P Target 24 also underperformed their peers within the
S&P 500 Index.
All of the data on this page represents past performance, which cannot be used
to predict future returns that may be achieved by this investment fund. Total
return and share price will fluctuate, so an investor's shares, when redeemed,
may be worth more or less than when purchased. Returns assume reinvestment of
dividends.
- --------------------------------------------------------------------------------
ANNUAL INVESTMENT RETURNS
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
1999*
S&P Target 24 Portfolio 18.3%
S&P 500 Index** 11.2%
2000
S&P Target 24 Portfolio -19.4%
S&P 500 Index** -9.1%
2001
S&P Target 24 Portfolio -24.6%
S&P 500 Index** -11.9%
2002
S&P Target 24 Portfolio -14.6%
S&P 500 Index** -22.1%
2003
S&P Target 24 Portfolio 24.1%
S&P 500 Index** 28.7%
2004
S&P Target 24 Portfolio 13.7%
S&P 500 Index** 10.9%
- ----------------------------------------------------------
GROWTH OF A $10,000 INITIAL INVESTMENT
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
10/6/99 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
------- -------- -------- -------- -------- -------- --------
S&P Target 24 Portfolio $10,000 $11,830 $9,540 $7,190 $6,140 $7,260 $8,660
S&P 500 Index** 10,000 11,115 10,104 8,903 6,935 8,920 9,895
- ------------------------------------------------------------------------------------------------------------------------------------
Page 9
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
S&P TARGET 24 PORTFOLIO (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
RETURN COMPARISON PERIODS ENDED DEC. 31, 2004
CUMULATIVE AVERAGE ANNUAL 5 YEAR 1 YEAR
INCEPTION TOTAL TOTAL RETURN AVERAGE ANNUAL ANNUAL
DATE RETURN (SINCE INCEPTION) TOTAL RETURN TOTAL RETURN
- ------------------------------------------------------------------------------------------------------------------------------------
S&P Target 24 Portfolio 10/6/99 -13.4% -2.7% -6.0% 13.7%
S&P 500 Index** -1.1 -0.2 -2.3 10.9
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
*The 1999 return applies to the time period from 10/6/1999 to 12/31/1999.
**The Standard & Poor's 500 Index is a capitalization-weighted index of 500
stocks. The index is designed to measure performance of the broad domestic
economy through changes in the aggregate market value of 500 stocks
representing all major industries. (Bloomberg)
</FN>
1. Effective April 30, 2002, based upon the determination of the Fund's Board of
Trustees, the Fund changed its name from the S&P Target 10 Portfolio to the S&P
Target 24 Portfolio. The Fund's primary investment strategy was also changed.
The performance figures provided reflect the Fund's performance prior to the
name change and the change of the primary investment strategy.
PORTFOLIO COMPONENTS+
December 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Capital Markets ................................ 16.0%
Communications Equipment ....................... 12.0%
Health Care Providers & Services ............... 10.5%
Diversified Financial Services ................. 9.8%
Beverages ...................................... 9.6%
Industrial Conglomerates ....................... 7.7%
Oil & Gas ...................................... 7.4%
Health Care Equipment & Supplies ............... 7.3%
Textiles, Apparel & Luxury Goods ............... 4.9%
Hotels, Restaurants & Leisure .................. 4.0%
Diversified Telecommunication Services ......... 2.3%
Personal Products .............................. 1.9%
Specialty Retail ............................... 1.8%
Commercial Services & Supplies ................. 1.7%
Software ....................................... 1.6%
Wireless Telecommunications Services ........... 1.1%
Machinery ...................................... 0.4%
+ Percentages are based upon total investments. Please note that the percentages
shown on the Portfolio of Investments are based on net assets.
Page 10
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
NASDAQ(R) TARGET 15 PORTFOLIO
The Nasdaq(R) Target 15 Portfolio posted a total return of -2.7% in 2004, which
significantly under-performed the Nasdaq 100 Index's total return of +10.7%. The
Net Asset Value (NAV) fell from $9.29 to $9.04 during the calendar year. Nine
stocks advanced and six declined. The top performing stocks were the following:
Adobe Systems (+60.8%), PETsMART (+49.9%), Symantec (+49.3%), Patterson
Companies (+35.6%) and Electronic Arts (+29.4%). The worst performing stocks
were the following: Intel (-26.6%), Cisco (-20.3%), SanDisk (-18.4%), Gentex
(-14.8%) and American Power Conversion (-11.0%).
Last year was a disappointing year for the NASDAQ Target 15 portfolio. Strong
performance from the portfolio's software holdings (25.4% of the portfolio at
12/31/04) was unable to make up for the poor performance of the portfolio's two
largest holdings (Cisco & Intel). The portfolio's software holdings returned on
average 38%, led by a 60.8% gain in Adobe. Both Cisco and Intel finished 2004 in
the bottom quintile of performance for all NASDAQ 100 constituents.
All of the data on this page represents past performance, which cannot be used
to predict future returns that may be achieved by this investment fund. Total
return and share price will fluctuate, so an investor's shares, when redeemed,
may be worth more or less than when purchased. Returns assume reinvestment of
dividends.
- --------------------------------------------------------------------------------
ANNUAL INVESTMENT RETURNS
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
1999*
NASDAQ(R) Target 15 Portfolio 46.0%
NASDAQ 100 Index*** 46.4%
2000
NASDAQ(R) Target 15 Portfolio -11.8%
NASDAQ 100 Index*** -36.8%
2001
NASDAQ(R) Target 15 Portfolio -28.2%
NASDAQ 100 Index*** -32.6%
2002
NASDAQ(R) Target 15 Portfolio -26.2%
NASDAQ 100 Index*** -37.5%
2003
NASDAQ(R) Target 15 Portfolio 36.0%
NASDAQ 100 Index*** 49.5%
2004
NASDAQ(R) Target 15 Portfolio -2.7%
NASDAQ 100 Index*** 10.7%
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INITIAL INVESTMENT
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
10/6/99 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
------- -------- -------- -------- -------- -------- --------
Nasdaq(R)Target 15 Portfolio $10,000 $14,600 $12,880 $9,250 $6,830 $9,290 $9,040
Nasdaq 100 Index*** 10,000 14,644 9,251 6,234 3,894 5,820 6,447
- ------------------------------------------------------------------------------------------------------------------------------------
Page 11
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
NASDAQ(R) TARGET 15 PORTFOLIO (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
RETURN COMPARISON PERIODS ENDED DEC. 31, 2004
CUMULATIVE AVERAGE ANNUAL 5 YEAR 1 YEAR
INCEPTION TOTAL TOTAL RETURN AVERAGE ANNUAL ANNUAL
DATE RETURN (SINCE INCEPTION) TOTAL RETURN TOTAL RETURN
- ------------------------------------------------------------------------------------------------------------------------------------
Nasdaq(R)Target 15 Portfolio 10/6/99 -9.6% -1.9% -9.1% -2.7%
Nasdaq 100 Index*** -35.5 -8.0 -15.1 10.7
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
*The 1999 return applies to the time period from 10/6/1999 to 12/31/1999.
***The Nasdaq 100 Index is a modified capitalization-weighted index of the 100
largest and most active non-financial domestic and international issues
listed on the NASDAQ. (Bloomberg)
</FN>
PORTFOLIO COMPONENTS+
December 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Software ....................................... 25.8%
Communications Equipment ....................... 20.2%
Semiconductors & Semiconductor Equipment ....... 18.4%
Wireless Telecommunication Services ............ 16.3%
Specialty Retail ............................... 9.8%
Household Durables ............................. 3.4%
Computers & Peripherals ........................ 2.0%
Health Care - Providers & Services ............. 1.4%
Biotechnology .................................. 1.0%
Electrical Equipment ........................... 0.9%
Auto Components ................................ 0.8%
+ Percentages are based upon total investments. Please note that the percentages
shown on the Portfolio of Investments are based on net assets.
Page 12
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
FIRST TRUST 10 UNCOMMON VALUES PORTFOLIO
The First Trust 10 Uncommon Values Portfolio posted a total return of +11.4% in
2004, which outperformed the S&P 500 Index's total return of +10.9%. The Net
Asset Value (NAV) increased from $4.67 to $5.20 during the calendar year. In the
first half of 2004, five stocks advanced and five declined. In the second half
of 2004, which began with the 2004 selections on June 25th, six stocks advanced
and four declined.
The top performing stocks in the FIRST HALF of 2004 were the following:
Burlington Resources (+31.7%), Teva Pharmaceutical Industries (+19.3%) and
Jetblue Airways (+9.0%). The worst performing stocks were the following: Amgen
(-12.4%), Hewlett-Packard (-8.7%), Nextel Communications (-4.4%) and U.S.
Bancorp (-4.3%). The top performing stocks in the SECOND HALF of 2004 were the
following: UnitedHealth Group (+42.6%), Phelps Dodge (+27.9%), EchoStar
Communications (+15.2%), MBNA (+10.5%) and Tyco Int'l (+10.5%). The worst
performing stocks were the following: Teva Pharmaceutical Industries (-11.2%),
Cendant (-2.5%) and Illinois Tool Works (-2.2%).
First half performance was boosted by Burlington Resources as rising crude oil
prices pushed the stock to all-time highs. Results were tempered by poor
performance from the portfolio's three technology and telecommunication holdings
(Cisco, Nextel & Hewlett-Packard). Following the mid-year portfolio update and
rebalance, second half performance benefited from UnitedHealth Group and Phelps
Dodge. UnitedHealth reached all-time highs by the end of the year following a
temporary setback after New York Attorney General Elliot Spitzer announced an
investigation of the insurance industry. Phelps Dodge benefited from rising
commodity prices due to continued global economic growth, especially in Asia.
Second half performance was hurt by the portfolio's one pharmaceutical holding
(Teva Pharmaceuticals) as generic drug stocks lost investor favor due to
increased competition and pricing concerns.
All of the data on this page represents past performance, which cannot be used
to predict future returns that may be achieved by this investment fund. Total
return and share price will fluctuate, so an investor's shares, when redeemed,
may be worth more or less than when purchased. Returns assume reinvestment of
dividends.
- --------------------------------------------------------------------------------
ANNUAL INVESTMENT RETURNS
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
1999*
First Trust 10 Uncommon Values 14.0%
S&P 500 Index** 11.2%
2000
First Trust 10 Uncommon Values -26.4%
S&P 500 Index** -9.1%
2001
First Trust 10 Uncommon Values -35.6%
S&P 500 Index** -11.9%
2002
First Trust 10 Uncommon Values -36.9%
S&P 500 Index** -22.1%
2003
First Trust 10 Uncommon Values 37.0%
S&P 500 Index** 28.7%
2004
First Trust 10 Uncommon Values 11.4%
S&P 500 Index** 10.9%
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INITIAL INVESTMENT
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
10/6/99 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
------- -------- -------- -------- -------- -------- --------
First Trust 10 Uncommon Values $10,000 $11,400 $8,390 $5,400 $3,410 $4,670 $5,200
S&P500 Index** 10,000 11,115 10,104 8,903 6,935 8,920 9,895
- ------------------------------------------------------------------------------------------------------------------------------------
Page 13
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
FIRST TRUST 10 UNCOMMON VALUES PORTFOLIO (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
RETURN COMPARISON PERIODS ENDED DEC. 31, 2004
CUMULATIVE AVERAGE ANNUAL 5 YEAR 1 YEAR
INCEPTION TOTAL TOTAL RETURN AVERAGE ANNUAL ANNUAL
DATE RETURN (SINCE INCEPTION) TOTAL RETURN TOTAL RETURN
- ------------------------------------------------------------------------------------------------------------------------------------
First Trust 10 Uncommon Values Portfolio 10/6/99 -48.0% -11.7% -14.5% 11.4%
S&P 500 Index** -1.1 -0.2 -2.3 10.9
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
*The 1999 return applies to the time period from 10/6/1999 to 12/31/1999.
**The Standard & Poor's 500 Index is a capitalization-weighted index of 500
stocks. The index is designed to measure performance of the broad domestic
economy through changes in the aggregate market value of 500 stocks
representing all major industries. (Bloomberg)
</FN>
PORTFOLIO COMPONENTS+
December 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Health Care - Providers & Services ............. 13.1%
Metals & Mining ................................ 11.9%
Media .......................................... 10.2%
Consumer Finance ............................... 10.2%
Industrial Conglomerates ....................... 9.9%
Food & Staples Retailing ....................... 9.9%
Insurance ...................................... 9.0%
Machinery ...................................... 8.9%
Commercial Services & Supplies ................. 8.8%
Pharmaceuticals ................................ 8.1%
+ Percentages are based upon total investments. Please note that the percentages
shown on the Portfolio of Investments are based on net assets.
Page 14
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
VALUE LINE(R) TARGET 25 PORTFOLIO
The Value Line(R) Target 25 Portfolio posted a total return of +21.6% in 2004,
which significantly outperformed the Russell 3000 Index's total return of 12.0%.
The Net Asset Value (NAV) increased from $3.34 to $4.06 during the calendar
year. Twenty-three stocks advanced and four declined. There were two spin-offs
during the year. The top performing stocks were the following: Urban Outfitters
(+139.7%), Cognizant Technology Solutions (+85.5%), Pacificare Health Systems
(+67.2%), Eagle Materials (+61.2%) and Patina Oil & Gas (+54.3%). The worst
performing stocks were the following: Foundry Networks (-51.8%), Hot Topic
(-41.6%), AAR (-8.9%) and eResearch Technology (-6.5%).
The Value Line Target 25 outperformed the S&P 500 Index due to an overweighting
in consumer discretionary sector (more than half the portfolio). This high
weighting of the consumer discretionary sector in the Value Line Target 25 was
mostly due to homebuilders (one-third of the portfolio) and apparel retail,
accessories & luxury (one-sixth of the portfolio). The consumer discretionary
holdings within the portfolio more than doubled the performance of its peers as
measured by the S&P 500 Consumer Discretionary Indexes' performance. This
outperformance and overweighting of consumer discretionary (homebuilders &
apparel), coupled with the outperformance of the lower weighted sectors of
information technology, health care, and energy where more than enough to
overcome the highly weighted, lagging return of Nextel Communications to produce
a high return relative to the S&P 500 Index.
All of the data on this page represents past performance, which cannot be used
to predict future returns that may be achieved by this investment fund. Total
return and share price will fluctuate, so an investor's shares, when redeemed,
may be worth more or less than when purchased. Returns assume reinvestment of
dividends.
- --------------------------------------------------------------------------------
ANNUAL INVESTMENT RETURNS
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
1999*
Value Line(R) Target 25 Portfolio 63.3%
Russell 3000 Index**** 12.6%
2000
Value Line(R) Target 25 Portfolio -42.9%
Russell 3000 Index**** -7.5%
2001
Value Line(R) Target 25 Portfolio -55.5%
Russell 3000 Index**** -11.4%
2002
Value Line(R) Target 25 Portfolio -42.9%
Russell 3000 Index**** -21.5%
2003
Value Line(R) Target 25 Portfolio 40.9%
Russell 3000 Index**** 31.1%
2004
Value Line(R) Target 25 Portfolio 21.6%
Russell 3000 Index**** 12.0%
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INITIAL INVESTMENT
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
10/6/99 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
------- -------- -------- -------- -------- -------- --------
Value Line(R)Target 25 Portfolio $10,000 $16,330 $9,320 $4,150 $2,370 $3,340 $4,060
Russell 3000 Index**** 10,000 11,262 10,420 9,229 7,241 9,500 10,631
- ------------------------------------------------------------------------------------------------------------------------------------
Page 15
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
VALUE LINE(R) TARGET 25 PORTFOLIO (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
RETURN COMPARISON PERIODS ENDED DEC. 31, 2004
CUMULATIVE AVERAGE ANNUAL 5 YEAR 1 YEAR
INCEPTION TOTAL TOTAL RETURN AVERAGE ANNUAL ANNUAL
DATE RETURN (SINCE INCEPTION) TOTAL RETURN TOTAL RETURN
- ------------------------------------------------------------------------------------------------------------------------------------
Value Line(R)Target 25 Portfolio 10/6/99 -59.4% -15.8% -24.3% 21.6%
Russell 3000 Index **** 6.3 1.2 -1.2 12.0
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
*The 1999 return applies to the time period from 10/6/1999 to 12/31/1999.
****The Russell 3000 Index is composed of 3000 large U.S. companies, as
determined by market capitalization. This portfolio represents
approximately 98% of the investable U.S. equity market. (Bloomberg)
</FN>
1. Effective April 30, 2002, based upon the determination of the Fund's Board of
Trustees, the Fund changed its name from the First Trust Internet Portfolio to
the Value Line(R) Target 25 Portfolio. The Fund's primary investment strategy
was also changed. The performance figures provided reflect the Fund's
performance prior to the name change and the change of the primary investment
strategy.
PORTFOLIO COMPONENTS+
December 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Household Durables .............................. 24.3%
Wireless Telecommunication Services ............. 21.8%
Specialty Retail ................................ 12.3%
Textiles, Apparel & Luxury Goods ................ 10.7%
Multiline Retail ................................ 6.6%
Health Care Providers & Services ................ 5.8%
IT Services ..................................... 5.5%
Commercial Services ............................. 3.6%
Oil & Gas ....................................... 2.6%
Aerospace & Defense ............................. 2.3%
Automobiles ..................................... 2.2%
Communications Equipment ........................ 1.7%
Construction Materials .......................... 0.6%
+ Percentages are based upon total investments. Please note that the percentages
shown on the Portfolio of Investments are based on net assets.
Page 16
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
FIRST TRUST ENERGY PORTFOLIO
The First Trust Energy Portfolio posted a total return of +32.0% in 2004, which
outperformed the Russell 1000 Integrated Oil Index's total return of +28.8%, but
lagged the Russell 1000 Other Energy Index's total return of +39.7%. The Net
Asset Value (NAV) increased from $14.20 to $18.75 during the calendar year.
Twenty-four stocks advanced and one declined.
The following S&P group returns reflect how energy stocks fared in 2004: Oil &
Gas Drilling (+45.1%), Oil-Exploration & Production (+34.9%), Oil & Gas
Equipment & Services (+31.9%) and Integrated Oil & Gas (+28.8%).
The year-over-year estimated earnings growth rate for the companies in the S&P
ENERGY INDEX rose by 50% in 2004, according to Thomson First Call. Actual
earnings growth rates were +63% and -35% for 2003 and 2002, respectively.
The top performing stocks were the following: Valero Energy (+97.6%), Canadian
Natural Resources (+71.2%), Cal Dive Int'l (+68.9%), National-Oilwell (+57.8%)
and Maverick Tube (+57.4%). The only stock that fell was PetroChina (-1.4%).
Crude oil futures in New York closed 2004 at $43.45 per barrel, up significantly
from $32.52 at the end of 2003, according to Bloomberg. During the year the
price was as high as $55.17 (10/26) and as low as $32.48 (2/6). The average for
2004 was $41.43. Natural Gas futures in New York closed 2004 at $6.15 per mmBtu
(10,000 million British thermal units), down slightly from $6.19 at the end of
2003. During the year the price was as high as $8.75 (11/3) and as low as $4.57
(9/10). The average for 2004 was $6.17.
OPEC has announced that it has abandoned its oil trading range of $22-$28 per
barrel, held steady for several years, in favor of a $40 price target. The high
price of oil has been a boon for oil companies all over the globe as the world's
10 largest oil companies earned in the vicinity of $100 billion in profits in
2004, according to the New York Times. Some oil companies have announced they
intend to distribute a percentage of their windfalls in the form of dividends,
while others may buy back stock or pare down debt.
All of the data on this page represents past performance, which cannot be used
to predict future returns that may be achieved by this investment fund. Total
return and share price will fluctuate, so an investor's shares, when redeemed,
may be worth more or less than when purchased. Returns assume reinvestment of
dividends.
- --------------------------------------------------------------------------------
ANNUAL INVESTMENT RETURNS
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
1999*
FirstTrust Energy Portfolio 12.3%
Russell 1000 Integrated Oil Index+ 3.1%
Russell 1000 Other Energy Index++ 6.2%
2000
FirstTrust Energy Portfolio 41.3%
Russell 1000 Integrated Oil Index+ 12.6%
Russell 1000 Other Energy Index++ 69.1%
2001
FirstTrust Energy Portfolio -28.9%
Russell 1000 Integrated Oil Index+ -10.6%
Russell 1000 Other Energy Index++ -43.3%
2002
FirstTrust Energy Portfolio -4.5%
Russell 1000 Integrated Oil Index+ -12.7%
Russell 1000 Other Energy Index++ -20.6%
2003
FirstTrust Energy Portfolio 31.7%
Russell 1000 Integrated Oil Index+ 26.9%
Russell 1000 Other Energy Index++ 26.1%
2004
FirstTrust Energy Portfolio 32.0%
Russell 1000 Integrated Oil Index+ 28.8%
Russell 1000 Other Energy Index++ 39.7%
Page 17
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
FIRST TRUST ENERGY PORTFOLIO (CONTINUED)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INITIAL INVESTMENT
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
10/6/99 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
------- -------- -------- -------- -------- -------- --------
First Trust Energy Portfolio $10,000 $11,230 $15,870 $11,290 $10,780 $14,200 $18,750
Russell 1000 Integrated Oil Index+ 10,000 10,307 11,601 10,377 9,061 11,500 14,812
Russell 1000 Other Energy Index++ 10,000 10,617 17,953 10,174 8,082 10,190 14,238
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RETURN COMPARISON PERIODS ENDED DEC. 31, 2004
CUMULATIVE AVERAGE ANNUAL 5 YEAR 1 YEAR
INCEPTION TOTAL TOTAL RETURN AVERAGE ANNUAL ANNUAL
DATE RETURN (SINCE INCEPTION) TOTAL RETURN TOTAL RETURN
- ------------------------------------------------------------------------------------------------------------------------------------
First Trust Energy Portfolio 10/6/99 87.5% 12.7% 10.8% 32.0%
Russell 1000 Integrated Oil Index+ 48.1 7.8 7.5 28.8
Russell 1000 Other Energy Index++ 42.4 7.0 6.0 39.7
<FN>
* The 1999 return applies to the time period from 10/6/1999 to 12/31/1999.
+ The Russell 1000 Integrated Oil Index is a capitalization-weighted index of
companies involved in all parts of the exploration, production, and
refining process. (Bloomberg)
++ The Russell 1000 Other Energy Index is a capitalization-weighted index of
companies in the energy-related businesses other than integrated oils.
(Bloomberg)
</FN>
PORTFOLIO COMPONENTS+
December 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Oil & Gas ...................................... 67.9%
Energy Equipment & Services .................... 32.1%
+ Percentages are based upon total investments. Please note that the percentages
shown on the Portfolio of Investments are based on net assets.
Page 18
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
FIRST TRUST FINANCIAL SERVICES PORTFOLIO
The First Trust Financial Services Portfolio posted a total return of +15.5% in
2004, which outperformed the Russell 1000 Financial Services Index's total
return of +13.2%. The Net Asset Value (NAV) increased from $13.30 to $15.36
during the calendar year. Twenty-eight stocks advanced and two declined.
The following S&P group returns reflect how financial stocks fared in 2004:
Banks (+14.4%), Property & Casualty (+10.5%), Diversified Financials (+8.2%) and
Insurance Brokers (-22.5%).
The year-over-year earnings growth rate for the companies in the S&P FINANCIAL
INDEX was 12% in 2004, according to Thomson First Call. Actual earnings growth
rates were 18% and 17% for 2003 and 2002, respectively.
The top performing stocks were the following: Countrywide Financial (+48.1%),
Manulife Financial (+45.7%), Capital One Financial (+37.6%), ING Group (+36.1%)
and Popular, Inc. (+31.9%). The two stocks that fell were Morgan Stanley (-2.2%)
and American Int'l Group (-0.5%).
Though the numbers are not officially in yet for 2004, the Securities Industry
Association has reported that the securities industry will raise an estimated
$2.9 trillion for U.S. companies in 2004 via the underwriting of stocks and
bonds. It marks the second consecutive year of nearly $3 trillion raised. To
place this level of activity into perspective, over the past five years the
securities industry has raised approximately $12.8 trillion for U.S. companies,
an amount that surpasses the $12.4 trillion raised for the 30-year period from
1970-1999.
The banking industry experienced some pressure on profits in 2004 due to a 26%
decline in mortgage activity, according to the Mortgage Banker Association. The
insurance industry appears to be on solid footing despite enduring four
hurricanes in 2004 that generated claims totaling $20.5 billion. It appears as
though premium increases are only averaging about 3% to 4%. According to the
Insurance Information Institute, the insurance industry generated its first
underwriting profit in 2004 since 1978 and its best return on equity since 1997.
All of the data on this page represents past performance, which cannot be used
to predict future returns that may be achieved by this investment fund. Total
return and share price will fluctuate, so an investor's shares, when redeemed,
may be worth more or less than when purchased. Returns assume reinvestment of
dividends.
- --------------------------------------------------------------------------------
ANNUAL INVESTMENT RETURNS
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
1999*
FirstTrust Financial Services Portfolio 4.9%
Russell 1000 Financial Services Index**** 3.9%
2000
FirstTrust Financial Services Portfolio 24.8%
Russell 1000 Financial Services Index**** 26.2%
2001
FirstTrust Financial Services Portfolio -10.8%
Russell 1000 Financial Services Index**** -14.1%
2002
FirstTrust Financial Services Portfolio -14.4%
Russell 1000 Financial Services Index**** -15.3%
2003
FirstTrust Financial Services Portfolio 33.0%
Russell 1000 Financial Services Index**** 30.5%
2004
FirstTrust Financial Services Portfolio 15.5%
Russell 1000 Financial Services Index**** 13.2%
Page 19
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
FIRST TRUST FINANCIAL SERVICES PORTFOLIO (CONTINUED)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INITIAL INVESTMENT
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
10/6/99 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
------- -------- -------- -------- -------- -------- --------
First Trust Financial Services Portfolio $10,000 $10,490 $13,090 $11,680 $10,000 $13,300 $15,350
Russell 1000 Financial Services Index**** 10,000 10,389 13,115 11,268 9,544 12,454 14,098
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RETURN COMPARISON PERIODS ENDED DEC. 31, 2004
CUMULATIVE AVERAGE ANNUAL 5 YEAR 1 YEAR
INCEPTION TOTAL TOTAL RETURN AVERAGE ANNUAL ANNUAL
DATE RETURN (SINCE INCEPTION) TOTAL RETURN TOTAL RETURN
- ------------------------------------------------------------------------------------------------------------------------------------
First Trust Financial Services Portfolio 10/6/99 53.5% 8.5% 7.9% 15.5%
Russell 1000 Financial Services Index**** 44.1 7.2 6.3 13.2
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
*The 1999 return applies to the time period from 10/6/1999 to 12/31/1999.
****The Russell 1000 Financial Services Index is a capitalization-weighted
index of companies that provide financial services. (Bloomberg)
</FN>
PORTFOLIO COMPONENTS+
December 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Insurance ...................................... 29.7%
Commercial Banks ............................... 30.7%
Capital Markets ................................ 17.2%
Diversified Financial Services ................. 8.3%
Consumer Finance ............................... 7.2%
Thrifts & Mortgage Finance ..................... 6.9%
+ Percentages are based upon total investments. Please note that the percentages
shown on the Portfolio of Investments are based on net assets.
Page 20
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
FIRST TRUST PHARMACEUTICAL PORTFOLIO
The First Trust Pharmaceutical Portfolio posted a total return of -0.7% in 2004,
which lagged the Russell 1000 Healthcare Index's total return of +2.4%. The Net
Asset Value (NAV) fell from $10.35 to $10.28 during the calendar year. Eleven
stocks advanced and nine declined.
The following S&P group returns reflect how health care stocks fared in 2004:
Biotechnology (+7.6%) and Pharmaceuticals (-7.4%).
The year-over-year earnings growth rate for the companies in the S&P HEALTH CARE
INDEX was 10% in 2004, according to Thomson First Call. Actual earnings growth
rates were 11% and 8% for 2003 and 2002, respectively.
The top performing stocks were the following: Biogen (+81.5%), Novo Nordisk A/S
(+34.6%), Johnson & Johnson (+25.2%), Novartis (+12.0%) and Abbott Laboratories
(+9.7%). The worst performing stocks were the following: Mylan Laboratories
(-29.6%), Merck (-27.8%), Forest Laboratories (-27.4%), AstraZeneca PLC (-23.4%)
and Pfizer (-22.3%).
The U.S. spent nearly $1.8 trillion on health care in 2004, which amounts to
about 15.5% of our annual gross domestic product (GDP), according to UBS
Securities. For comparative purposes, other industrialized nations spend more
like 8% to 10% of annual GDP on health care costs.
IMS Health reported that drug sales increased 9% to about $234 billion in 2004.
It marked the first year since 1994 that drug sales posted a single-digit gain.
Despite the fact that drug costs account for about 10%-11% of overall health
care costs, a great deal of focus continues to be placed on the industry by
politicians and the media. The issue of importing drugs from Canada and Europe
is part of the ongoing debate over runaway costs.
With R&D spending on new drugs rising to $33.2 billion in 2003, more and more
pharmaceutical companies are forging collaborations with biotechnology
companies. As of early December 2004, pharmaceutical companies had entered into
451 licensing and investment deals with biotechnology companies, up from 314
such deals in 2003, according to Biotechnology Industry Association.
All of the data on this page represents past performance, which cannot be used
to predict future returns that may be achieved by this investment fund. Total
return and share price will fluctuate, so an investor's shares, when redeemed,
may be worth more or less than when purchased. Returns assume reinvestment of
dividends.
- --------------------------------------------------------------------------------
ANNUAL INVESTMENT RETURNS
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
1999*
First Trust Phamaceutical Portfolio 3.7%
Russell 1000 Healthcare Index**** -2.2%
2000
First Trust Phamaceutical Portfolio 30.6%
Russell 1000 Healthcare Index**** 34.2%
2001
First Trust Phamaceutical Portfolio -10.9%
Russell 1000 Healthcare Index**** -12.1%
2002
First Trust Phamaceutical Portfolio -28.3%
Russell 1000 Healthcare Index**** -20.4%
2003
First Trust Phamaceutical Portfolio 19.7%
Russell 1000 Healthcare Index**** 17.6%
2004
First Trust Phamaceutical Portfolio -0.7%
Russell 1000 Healthcare Index**** 2.4%
Page 21
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
FIRST TRUST PHARMACEUTICAL PORTFOLIO (CONTINUED)
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
10/6/99 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
------- -------- -------- -------- -------- -------- --------
First Trust Pharmaceutical Portfolio $10,000 $10,370 $13,540 $12,060 $8,650 $10,350 $10,280
Russell 1000 Healthcare Index**** 10,000 9,776 13,121 11,535 9,178 10,794 11,056
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RETURN COMPARISON PERIODS ENDED DEC. 31, 2004
CUMULATIVE AVERAGE ANNUAL 5 YEAR 1 YEAR
INCEPTION TOTAL TOTAL RETURN AVERAGE ANNUAL ANNUAL
DATE RETURN (SINCE INCEPTION) TOTAL RETURN TOTAL RETURN
- ------------------------------------------------------------------------------------------------------------------------------------
First Trust Pharmaceutical Portfolio 10/6/99 2.8% 0.5% -0.2% -0.7%
Russell 1000 Healthcare Index**** 8.2 1.5 2.5 2.4
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
*The 1999 return applies to the time period from 10/6/1999 to 12/31/1999.
****The Russell 1000 Healthcare Index is a capitalization-weighted index of
companies involved in medical services or health care. (Bloomberg)
</FN>
PORTFOLIO COMPONENTS+
December 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Pharmaceuticals ................................ 89.1%
Biotechnology .................................. 10.9%
+ Percentages are based upon total investments. Please note that the percentages
shown on the Portfolio of Investments are based on net assets.
Page 22
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
FIRST TRUST TECHNOLOGY PORTFOLIO
The First Trust Technology Portfolio posted a total return of +1.2% in 2004,
which slightly lagged the Russell 1000 Technology Index's total return of +1.9%.
The Net Asset Value (NAV) increased from $4.97 to $5.03 during the calendar
year. Seventeen stocks advanced and eight declined.
The following S&P group returns reflect how technology stocks fared in 2004:
Computers & Peripherals (+15.5%), Software & Services (+11.0%) and
Communications-Equipment (+3.0%).
The year-over-year earnings growth rate for the companies in the S&P INFORMATION
TECHNOLOGY INDEX rose an estimated +43% in 2004, according to Thompson First
Call. Actual earnings growth rates were +120% and -1% for 2003 and 2002,
respectively.
The top performing stocks were the following: Adobe Systems (+60.8%), QUALCOMM
(+58.2%), Symantec (+49.3%), Check Point Software (+46.1%) and Juniper Network
(+45.6%). The worst performing stocks were the following: Intel (-26.6%),
Applied Materials (-23.8%), Veritas Software (-22.9%), Cisco Systems (-20.3%)
and SanDisk (-18.4%).
U.S. spending on information technology rose 12.3% in 2004, to $484.3 billion,
according to the Commerce Department. It was a level not seen since 2000 when
$467.6 billion was spent on tech products and services at the height of the
dot-com craze. Spending probably would not have been quite this robust had it
not been for the incentives provided by the Bush tax cuts in 2003. In
particular, businesses were given the opportunity to accelerate the depreciation
on equipment purchased by the end of 2004.
Semiconductors, a good barometer of tech demand, saw worldwide sales of
semiconductors rise to a record $213 billion in 2004, a year-on-year increase of
28% percent from the $166.4 billion recorded in 2003, according to the
Semiconductor Industry Association. Worldwide sales for computer hardware (PCs,
servers, storage, networking and peripherals) rose 4.8% to around $362 billion
in 2004, according to International Data Corp. Worldwide sales of new software
licenses and technical support were just shy of $137 billion in 2004, according
to Gartner Inc.
All of the data on this page represents past performance, which cannot be used
to predict future returns that may be achieved by this investment fund. Total
return and share price will fluctuate, so an investor's shares, when redeemed,
may be worth more or less than when purchased. Returns assume reinvestment of
dividends.
- --------------------------------------------------------------------------------
ANNUAL INVESTMENT RETURNS
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
1999*
First Trust Technology Portfolio 34.1%
Russell 1000 Technology Index**** 32.2%
2000
First Trust Technology Portfolio -23.6%
Russell 1000 Technology Index**** -34.0%
2001
First Trust Technology Portfolio -43.5%
Russell 1000 Technology Index**** -29.9%
2002
First Trust Technology Portfolio -41.5%
Russell 1000 Technology Index**** -38.7%
2003
First Trust Technology Portfolio 46.6%
Russell 1000 Technology Index**** 49.0%
2004
First Trust Technology Portfolio 1.2%
Russell 1000 Technology Index**** 1.9%
Page 23
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
2004 ANNUAL REPORT
FIRST TRUST TECHNOLOGY PORTFOLIO (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
GROWTH OF A $10,000 INITIAL INVESTMENT
Oct. 6, 1999-Dec. 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
10/6/99 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
------- -------- -------- -------- -------- -------- --------
First Trust Technology Portfolio $10,000 $13,410 $10,250 $5,790 $3,390 $4,970 $5,030
Russell 1000 Technology Index**** 10,000 13,216 8,721 6,118 3,750 5,590 5,691
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RETURN COMPARISON PERIODS ENDED DEC. 31, 2004
CUMULATIVE AVERAGE ANNUAL 5 YEAR 1 YEAR
INCEPTION TOTAL TOTAL RETURN AVERAGE ANNUAL ANNUAL
DATE RETURN (SINCE INCEPTION) TOTAL RETURN TOTAL RETURN
- ------------------------------------------------------------------------------------------------------------------------------------
First Trust Technology Portfolio 10/6/99 -49.7% -12.3% -17.8% 1.2%
Russell 1000 Technology Index**** -43.1 -10.2 -15.5 1.9
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
*The 1999 return applies to the time period from 10/6/1999 to 12/31/1999.
****The Russell 1000 Technology Index is a capitalization-weighted index of
companies that serve the electronics and computer industries or that
manufacture products based on the latest applied science. (Bloomberg)
</FN>
PORTFOLIO COMPONENTS+
December 31, 2004
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Software ....................................... 38.1%
Communications Equipment ....................... 17.5%
Computers & Peripherals ........................ 16.3%
Semiconductors & Semiconductor Equipment ....... 15.0%
IT Services .................................... 10.1%
Internet Services & Software ................... 3.0%
+ Percentages are based upon total investments. Please note that the percentages
shown on the Portfolio of Investments are based on net assets.
Page 24
FIRST DEFINED PORTFOLIO FUND, LLC
UNDERSTANDING YOUR FUND EXPENSES
As a shareholder of the Target Managed VIP Portfolio, The DowSM DART 10
Portfolio, Global Target 15 Portfolio, S&P Target 24 Portfolio, NASDAQ(R) Target
15 Portfolio, First Trust 10 Uncommon Values Portfolio, Value Line (R) Target 25
Portfolio, First Trust Energy Portfolio, First Trust Financial Services
Portfolio, First Trust Pharmaceutical Portfolio, and First Trust Technology
Portfolio (the "Funds"), you incur two types of costs: (1) transaction costs;
and (2) ongoing costs, including management fees, distribution and/or service
fees, and other Fund expenses. This Example is intended to help you understand
your ongoing costs (in dollars) of investing in the Funds and to compare these
costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period of July 1, 2004 to December 31, 2004.
ACTUAL EXPENSES
The first three colums of the table below provide information about actual
account values and actual expenses. You may use the information in these
columns, 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 third colum under the heading entitled "Expenses
Paid During Period" to estimate the expenses you paid on your account during
this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The next three colums of the table below provide 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 sales
charges (loads). Therefore, the hypothetical section of the table is useful in
comparing ongoing costs only, and will not help you compare the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
HYPOTHETICAL
ACTUAL (5% RETURN BEFORE EXPENSES)
----------------------------------------- --------------------------------------
EXPENSES EXPENSES
BEGINNING ENDING PAID DURING BEGINNING ENDING PAID DURING
ACCOUNT ACCOUNT PERIOD* ACCOUNT ACCOUNT PERIOD*
VALUE VALUE 07/01/2004- VALUE VALUE 07/01/2004- EXPENSE
07/01/2004 12/31/2004 12/31/2004 07/01/2004 12/31/2004 12/31/2004 RATIO
------------ ------------ ------------ ----------- ------------ ------------ --------
Target Managed VIP Portfolio ......... $1,000 $1,110 $7.80 $1,000 $1,018 $7.46 1.47%
The DowSM DART 10 Portfolio .......... 1,000 1,077 7.67 1,000 1,018 7.46 1.47
Global Target 15 Portfolio ........... 1,000 1,187 8.08 1,000 1,018 7.46 1.47
S&P Target 24 Portfolio .............. 1,000 1,072 7.66 1,000 1,018 7.46 1.47
NASDAQ(R)Target 15 Portfolio ......... 1,000 1,006 7.41 1,000 1,018 7.46 1.47
First Trust 10 Uncommon Values
Portfolio .......................... 1,000 1,083 7.17 1,000 1,018 6.95 1.37
Value Line(R)Target 25 Portfolio ..... 1,000 1,194 8.11 1,000 1,018 7.46 1.47
First Trust Energy Portfolio ......... 1,000 1,169 8.01 1,000 1,018 7.46 1.47
First Trust Financial Services
Portfolio .......................... 1,000 1,108 7.79 1,000 1,018 7.46 1.47
First Trust Pharmaceutical Portfolio . 1,000 1,005 7.41 1,000 1,018 7.46 1.47
First Trust Technology Portfolio ..... 1,000 1,008 7.42 1,000 1,018 7.46 1.47
<FN>
* Expenses are equal to each Fund's annualized expense ratio, multiplied by the
average account value over the period, multiplied by the 184 days in the most
recent fiscal half-year, divided by 366 days in the year (to reflect the
one-half year period).
</FN>
Page 25
TARGET MANAGED VIP PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004
MARKET
SHARES VALUE
- ------------ ------------
COMMON STOCKS - 98.3%
DIVERSIFIED TELECOMMUNICATION SERVICES - 6.9%
1,831 ALLTEL Corp. .................................... $ 107,590
156,412 AT&T Corp. ...................................... 2,981,212
11,078 BellSouth Corp. ................................. 307,858
25,845 BT Group PLC, Sponsored ADR ..................... 1,021,653
120,218 SBC Communications, Inc. ........................ 3,098,018
-------------
7,516,331
-------------
HOUSEHOLD DURABLES - 6.7%
20,014 Centex Corp. .................................... 1,192,434
38,181 D.R. Horton, Inc. ............................... 1,539,076
8,512 Garmin Ltd. ..................................... 517,870
7,291 Hovnanian Enterprises, Inc., Class A* ........... 361,050
20,256 Lennar Corp., Class A ........................... 1,148,110
5,137 M.D.C. Holdings, Inc. ........................... 444,042
19,969 Pulte Homes, Inc. ............................... 1,274,022
5,455 Standard Pacific Corp. .......................... 349,884
8,023 The Ryland Group, Inc. .......................... 461,644
-------------
7,288,132
-------------
WIRELESS TELECOMMUNICATION SERVICES - 6.4%
231,635 Nextel Communications, Inc., Class A* ........... 6,949,050
-------------
DIVERSIFIED FINANCIAL SERVICES - 5.8%
37,639 ING Group NV, Sponsored ADR ..................... 1,138,580
85,597 JPMorgan Chase & Company ........................ 3,339,139
20,501 Moody's Corp. ................................... 1,780,512
-------------
6,258,231
-------------
COMMUNICATIONS EQUIPMENT - 5.1%
275,123 Cisco Systems, Inc.* ............................ 5,309,874
20,170 Foundry Networks, Inc.* ......................... 265,437
-------------
5,575,311
-------------
SOFTWARE - 5.0%
18,565 Adobe Systems, Inc. ............................. 1,164,768
7,270 Citrix Systems, Inc.* ........................... 178,333
27,810 Electronic Arts, Inc.* .......................... 1,715,321
47,845 Informatica Corp.* .............................. 388,501
16,921 JDA Software Group, Inc.* ....................... 230,464
20,573 Progress Software Corp.* ........................ 480,380
47,981 Symantec Corp.* ................................. 1,235,991
-------------
5,393,758
-------------
OIL & GAS - 5.0%
7,780 Apache Corp. .................................... 393,435
9,603 Burlington Resources, Inc. ...................... 417,731
9,191 ENI SPA, Sponsored ADR .......................... 1,156,595
39,806 Magnum Hunter Resources, Inc.* .................. 513,497
9,217 Occidental Petroleum Corp. ...................... 537,904
10,846 Patina Oil & Gas Corp. .......................... 406,725
16,656 Royal Dutch Petroleum Company ................... 955,721
19,505 Shell Transport & Trading Company PLC,
Sponsored ADR ................................ 1,002,557
-------------
5,384,165
-------------
Page 26 See Notes to Financial Statements.
TARGET MANAGED VIP PORTFOLIO - (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004
MARKET
SHARES VALUE
- ------------ ------------
COMMON STOCKS - (CONTINUED)
COMMERCIAL BANKS - 5.0%
37,340 ABN AMRO Holding NV, Sponsored ADR .............. $ 993,244
24,066 Barclays PLC, Sponsored ADR ..................... 1,099,335
43,845 Fortis, Sponsored ADR ........................... 1,212,783
22,202 HBOS PLC, Sponsored ADR ......................... 1,084,397
26,941 Lloyds TSB Group PLC, Sponsored ADR ............. 991,159
-------------
5,380,918
-------------
SPECIALTY RETAIL - 4.3%
13,673 Chico's FAS, Inc.* .............................. 622,532
26,692 CSK Auto Corp.* ................................. 446,824
22,630 Foot Locker, Inc. ............................... 609,426
11,137 GameStop Corp., Class A* ........................ 249,023
7,365 Hot Topic, Inc.* ................................ 126,604
7,664 Jos. A. Bank Clothiers, Inc.* ................... 216,891
6,499 PETsMART, Inc. .................................. 230,909
9,886 RadioShack Corp. ................................ 325,052
38,362 Staples, Inc. ................................... 1,293,183
12,494 Urban Outfitters, Inc.* ......................... 554,734
-------------
4,675,178
-------------
HEALTH CARE PROVIDERS & SERVICES - 4.1%
9,082 eResearch Technology, Inc.* ..................... 143,950
13,317 PacifiCare Health Systems, Inc.* ................ 752,677
4,858 Patterson Companies, Inc.* ...................... 210,789
17,455 Per-Se Technologies, Inc.* ...................... 276,313
27,946 Province Healthcare Company* .................... 624,593
11,529 Sunrise Senior Living, Inc.* .................... 534,484
21,545 UnitedHealth Group, Inc. ........................ 1,896,606
-------------
4,439,412
-------------
HEALTH CARE EQUIPMENT & SUPPLIES - 4.0%
17,011 Advanced Medical Optics, Inc.* .................. 699,832
15,075 Integra LifeSciences Holdings* .................. 556,720
14,730 PolyMedica Corp. ................................ 549,282
12,503 St. Jude Medical, Inc.* ......................... 524,251
9,681 Ventana Medical Systems, Inc.* .................. 619,487
1,966 Waters Corp.* ................................... 91,989
19,331 Wright Medical Group, Inc.* ..................... 550,933
8,874 Zimmer Holdings, Inc.* .......................... 710,985
-------------
4,303,479
-------------
CONSUMER FINANCE - 3.4%
64,873 American Express Company ........................ 3,656,891
-------------
AUTOMOBILES - 3.3%
18,918 DaimlerChrysler AG .............................. 909,010
58,502 General Motors Corp. ............................ 2,343,590
9,147 Thor Industries, Inc. ........................... 338,896
-------------
3,591,496
-------------
CAPITAL MARKETS - 2.7%
15,061 Federated Investors, Inc., Class B .............. 457,855
34,934 Franklin Resources, Inc. ........................ 2,433,153
-------------
2,891,008
-------------
See Notes to Financial Statements. Page 27
TARGET MANAGED VIP PORTFOLIO - (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004
MARKET
SHARES VALUE
- ------------ ------------
COMMON STOCKS - (CONTINUED)
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT - 2.6%
122,179 Intel Corp. ..................................... $ 2,857,767
-------------
TEXTILES, APPAREL & LUXURY GOODS - 2.4%
29,554 Coach, Inc.* .................................... 1,666,846
9,811 NIKE, Inc., Class B ............................. 889,759
-------------
2,556,605
-------------
HOTELS, RESTAURANTS & LEISURE - 2.2%
15,645 Ameristar Casinos, Inc. ......................... 674,456
12,238 IHOP Corp. ...................................... 512,650
20,900 International Game Technology ................... 718,542
17,192 Isle of Capri Casinos, Inc.* .................... 440,975
-------------
2,346,623
-------------
ELECTRIC UTILITIES - 2.2%
45,827 Endesa SA, Sponsored ADR ........................ 1,066,394
25,667 Enel SPA, Sponsored ADR ......................... 1,268,977
-------------
2,335,371
-------------
MULTI-UTILITIES & UNREGULATED POWER - 2.1%
24,066 National Grid Transco PLC, Sponsored ADR ........ 1,154,927
43,401 Suez SA, ADR .................................... 1,160,977
-------------
2,315,904
-------------
TOBACCO - 2.1%
31,538 British American Tobacco PLC, Sponsored
ADR .......................................... 1,092,792
22,125 Imperial Tobacco Group PLC, ADR ................. 1,222,406
-------------
2,315,198
-------------
COMMERCIAL SERVICES & SUPPLIES - 1.9%
6,503 Apollo Group, Inc., Class A* .................... 524,857
20,121 Corrections Corp. of America* ................... 813,895
7,148 ITT Educational Services, Inc.* ................. 339,887
10,897 School Specialty, Inc.* ......................... 420,188
-------------
2,098,827
-------------
MACHINERY - 1.7%
13,843 Actuant Corp., Class A* ......................... 721,912
13,263 Barnes Group, Inc. .............................. 351,602
2,737 Pall Corp. ...................................... 79,236
18,754 Reliance Steel & Aluminum Company ............... 730,656
-------------
1,883,406
-------------
IT SERVICES - 1.7%
36,642 CIBER, Inc.* .................................... 353,229
20,234 Cognizant Technology Solutions Corp.* ........... 856,505
9,794 SRA International, Inc., Class A* ............... 628,775
-------------
1,838,509
-------------
Page 28 See Notes to Financial Statements.
TARGET MANAGED VIP PORTFOLIO - (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004
MARKET
SHARES VALUE
- ------------ ------------
COMMON STOCKS - (CONTINUED)
BEVERAGES - 1.6%
1,201 Brown-Forman Corp., Class B ..................... $ 58,465
32,045 PepsiCo, Inc. ................................... 1,672,749
-------------
1,731,214
-------------
INDUSTRIAL CONGLOMERATES - 1.3%
17,080 3M Company ...................................... 1,401,756
-------------
MULTILINE RETAIL - 0.9%
21,771 Nordstrom, Inc. ................................. 1,017,359
-------------
AEROSPACE & DEFENSE - 0.9%
9,703 AAR Corp.* ...................................... 132,155
3,881 Engineered Support Systems, Inc. ................ 229,833
12,802 Moog, Inc., Class A* ............................ 580,570
-------------
942,558
-------------
INSURANCE - 0.8%
51,590 Prudential PLC, Sponsored ADR ................... 897,666
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.6%
12,078 Dionex Corp.* ................................... 684,460
-------------
HOUSEHOLD PRODUCTS - 0.6%
19,168 Rayovac Corp.* .................................. 585,774
-------------
PHARMACEUTICALS - 0.5%
9,449 Able Laboratories, Inc.* ........................ 214,965
10,985 Bentley Pharmaceuticals, Inc.* .................. 118,089
13,161 Noven Pharmaceuticals, Inc.* .................... 224,526
-------------
557,580
-------------
CHEMICALS - 0.5%
18,495 Symyx Technologies, Inc.* ....................... 556,330
-------------
THRIFTS & MORTGAGE FINANCE - 0.5%
16,333 BankUnited Financial Corp., Class A* ............ 521,839
-------------
COMPUTERS & PERIPHERALS - 0.5%
8,583 Applied Films Corp.* ............................ 185,050
12,628 SanDisk Corp.* .................................. 315,321
-------------
500,371
-------------
BUILDING PRODUCTS - 0.4%
17,124 Griffon Corp.* .................................. 462,348
-------------
AIR FREIGHT & LOGISTICS - 0.4%
21,439 Pacer International, Inc.* ...................... 455,793
-------------
INTERNET SOFTWARE & SERVICES - 0.4%
36,897 United Online, Inc.* ............................ 425,422
-------------
REAL ESTATE - 0.4%
16,771 Saxon Capital, Inc. ............................. 402,336
-------------
ENERGY EQUIPMENT & SERVICES - 0.3%
12,663 Tetra Technologies, Inc.* ....................... 358,363
-------------
PERSONAL PRODUCTS - 0.3%
8,837 Avon Products, Inc. ............................. 341,992
-------------
See Notes to Financial Statements. Page 29
TARGET MANAGED VIP PORTFOLIO - (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004
MARKET
SHARES VALUE
- ------------ ------------
COMMON STOCKS - (CONTINUED)
ROAD & RAIL - 0.3%
12,073 Genesee & Wyoming Inc., Class A* ................ $ 339,614
-------------
CONSTRUCTION MATERIALS - 0.2%
510 Eagle Materials, Inc. ........................... 44,039
1,528 Eagle Materials, Inc., Class B .................. 128,810
-------------
172,849
-------------
BIOTECHNOLOGY - 0.1%
2,222 Invitrogen Corp.* ............................... 149,163
-------------
ELECTRICAL EQUIPMENT - 0.1%
6,457 American Power Conversion Corp. ................. 138,180
-------------
AUTO COMPONENTS - 0.1%
3,501 Gentex Corp. .................................... 129,607
-------------
TOTAL COMMON STOCKS ............................. 106,624,144
-------------
(Cost $94,067,968)
TOTAL INVESTMENTS - 98.3% ....................... 106,624,144
(Cost $94,067,968)
NET OTHER ASSETS & LIABILITIES - 1.7% ........... 1,848,796
-------------
NET ASSETS - 100.0% ............................. $108,472,940
=============
- --------------------------------------------------------------------------------
* Non-income producing security.
ADR American Depository Receipt
Page 30 See Notes to Financial Statements.
THE DOW SM DART 10 PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004
MARKET
SHARES VALUE
- ------------ ------------
COMMON STOCKS - 97.0%
DIVERSIFIED TELECOMMUNICATION SERVICES - 18.2%
59,821 AT&T Corp. ...................................... $ 1,140,188
45,983 SBC Communications, Inc. ........................ 1,184,982
-------------
2,325,170
-------------
LEISURE EQUIPMENT & PRODUCTS - 12.0%
47,292 Eastman Kodak Company ........................... 1,525,167
-------------
SPECIALTY RETAIL - 11.4%
33,959 The Home Depot, Inc. ............................ 1,451,408
-------------
CONSUMER FINANCE - 11.0%
24,815 American Express Company ........................ 1,398,821
-------------
TOBACCO - 10.6%
22,186 Altria Group, Inc. .............................. 1,355,565
-------------
CHEMICALS - 10.1%
26,188 E.I. du Pont de Nemours and Company ............. 1,284,521
-------------
DIVERSIFIED FINANCIAL SERVICES - 10.0%
32,741 JPMorgan Chase & Company ........................ 1,277,226
-------------
AUTOMOBILES - 7.0%
22,380 General Motors Corp. ............................ 896,543
-------------
PHARMACEUTICALS - 6.7%
26,342 Merck & Company, Inc. ........................... 846,632
-------------
TOTAL COMMON STOCKS ............................. 12,361,053
-------------
(Cost $11,633,962)
TOTAL INVESTMENTS - 97.0% ....................... 12,361,053
(Cost $11,633,962)
NET OTHER ASSETS & LIABILITIES - 3.0% ........... 387,622
-------------
NET ASSETS - 100.0% ............................. $ 12,748,675
=============
- --------------------------------------------------------------------------------
See Notes to Financial Statements. Page 31
GLOBAL TARGET 15 PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004
MARKET
SHARES VALUE
- ------------ ------------
COMMON STOCKS - 97.9%
UNITED KINGDOM - 37.1%
388,534 BAE Systems PLC ................................. $ 1,719,407
409,782 EMI Group PLC ................................... 2,084,863
244,419 GKN PLC ......................................... 1,109,801
210,647 Tate & Lyle PLC ................................. 1,911,902
275,771 The Peninsular & Oriental Steam Navigation
Company ...................................... 1,575,123
-------------
8,401,096
-------------
HONG KONG - 32.7%
516,019 Cheung Kong Infrastructure Holdings Ltd. ........ 1,490,420
464,000 Citic Pacific Ltd. .............................. 1,319,280
863,000 Cosco Pacific Ltd. .............................. 1,787,571
891,680 Hang Lung Properties Ltd. ....................... 1,376,629
880,000 MTR Corp. Ltd. .................................. 1,409,544
-------------
7,383,444
-------------
UNITED STATES - 28.1%
58,205 AT&T Corp. ...................................... 1,109,387
28,652 Exxon Mobil Corp. ............................... 1,468,702
37,942 General Electric Company ........................ 1,384,883
31,841 JPMorgan Chase & Company ........................ 1,242,118
44,733 SBC Communications, Inc. ........................ 1,152,769
-------------
6,357,859
-------------
TOTAL COMMON STOCKS ............................. 22,142,399
-------------
(Cost $19,622,203)
TOTAL INVESTMENTS - 97.9% ....................... 22,142,399
(Cost $19,622,203)
NET OTHER ASSETS & LIABILITIES - 2.1% ........... 475,407
-------------
NET ASSETS - 100.0% ............................. $ 22,617,806
=============
- --------------------------------------------------------------------------------
INDUSTRY DIVERSIFICATION AS A PERCENTAGE OF NET ASSETS:
Industrial Conglomerates ........................ 18.5%
Transportation Infrastructure ................... 14.9
Diversified Telecommunication Services .......... 10.1
Media ........................................... 9.2
Food Products ................................... 8.4
Aerospace & Defense ............................. 7.6
Oil & Gas ....................................... 6.5
Road & Rail ..................................... 6.2
Real Estate ..................................... 6.1
Diversified Financial Services .................. 5.5
Auto Components ................................. 4.9
Net Other Assets and Liabilities ................ 2.1
-----------
100.0%
===========
Page 32 See Notes to Financial Statements.
S&P TARGET 24 PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004
MARKET
SHARES VALUE
- ------------ ------------
COMMON STOCKS - 98.6%
CAPITAL MARKETS - 15.7%
11,618 Federated Investors, Inc., Class B .............. $ 353,187
26,923 Franklin Resources, Inc. ........................ 1,875,187
-------------
2,228,374
-------------
COMMUNICATIONS EQUIPMENT - 11.9%
86,939 Cisco Systems, Inc.* ............................ 1,677,923
-------------
HEALTH CARE PROVIDERS & SERVICES - 10.3%
16,603 UnitedHealth Group, Inc. ........................ 1,461,562
-------------
DIVERSIFIED FINANCIAL SERVICES - 9.7%
15,805 Moody's Corp. ................................... 1,372,664
-------------
BEVERAGES - 9.4%
933 Brown-Forman Corp., Class B ..................... 45,418
24,705 PepsiCo, Inc. ................................... 1,289,601
-------------
1,335,019
-------------
INDUSTRIAL CONGLOMERATES - 7.6%
13,162 3M Company ...................................... 1,080,205
-------------
OIL & GAS - 7.3%
5,994 Apache Corp. .................................... 303,117
7,412 Burlington Resources, Inc. ...................... 322,422
7,086 Occidental Petroleum Corp. ...................... 413,539
-------------
1,039,078
-------------
HEALTH CARE EQUIPMENT & SUPPLIES - 7.2%
9,653 St. Jude Medical, Inc.* ......................... 404,750
1,501 Waters Corp.* ................................... 70,232
6,845 Zimmer Holdings, Inc.* .......................... 548,422
-------------
1,023,404
-------------
TEXTILES, APPAREL & LUXURY GOODS - 4.8%
7,554 NIKE, Inc., Class B ............................. 685,072
-------------
HOTELS, RESTAURANTS & LEISURE - 3.9%
16,100 International Game Technology ................... 553,518
-------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 2.3%
1,398 ALLTEL Corp. .................................... 82,147
8,533 BellSouth Corp. ................................. 237,132
-------------
319,279
-------------
PERSONAL PRODUCTS - 1.9%
6,832 Avon Products, Inc. ............................. 264,398
-------------
SPECIALTY RETAIL - 1.8%
7,603 RadioShack Corp. ................................ 249,987
-------------
COMMERCIAL SERVICES & SUPPLIES - 1.7%
2,983 Apollo Group, Inc., Class A* .................... 240,758
-------------
SOFTWARE - 1.6%
3,658 Electronic Arts, Inc.* .......................... 225,625
3,764 Seagate Technology, Inc. (Escrow Shares)*+ ...... 0
-------------
225,625
-------------
See Notes to Financial Statements. Page 33
S&P TARGET 24 PORTFOLIO - (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004
MARKET
SHARES VALUE
- ------------ ------------
COMMON STOCKS - (CONTINUED)
WIRELESS TELECOMMUNICATION SERVICES - 1.1%
4,955 Nextel Communications, Inc., Class A* ........... $ 148,650
-------------
MACHINERY - 0.4%
2,116 Pall Corp. ...................................... 61,258
-------------
TOTAL COMMON STOCKS ............................. 13,966,774
-------------
(Cost $12,770,809)
TOTAL INVESTMENTS - 98.6% ....................... 13,966,774
(Cost $12,770,809)
NET OTHER ASSETS & LIABILITIES - 1.4% ........... 191,252
-------------
NET ASSETS - 100.0% ............................. $ 14,158,026
=============
- --------------------------------------------------------------------------------
* Non-income producing security.
+ Security is fair valued and market value is determined in accordance
with procedures established by the Board of Trustees.
Page 34 See Notes to Financial Statements.
NASDAQ(R) TARGET 15 PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004
MARKET
SHARES VALUE
- ------------ ------------
COMMON STOCKS - 98.4%
SOFTWARE - 25.4%
8,291 Adobe Systems, Inc. ............................. $ 520,177
3,244 Citrix Systems, Inc.* ........................... 79,575
10,294 Electronic Arts, Inc.* .......................... 634,934
21,404 Symantec Corp.* ................................. 551,367
-------------
1,786,053
-------------
COMMUNICATIONS EQUIPMENT - 19.9%
72,409 Cisco Systems, Inc.* ............................ 1,397,494
-------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT - 18.1%
54,507 Intel Corp. ..................................... 1,274,919
-------------
WIRELESS TELECOMMUNICATION SERVICES - 16.0%
37,565 Nextel Communications, Inc., Class A* ........... 1,126,950
-------------
SPECIALTY RETAIL - 9.7%
2,899 PETsMART, Inc. .................................. 103,002
17,102 Staples, Inc. ................................... 576,508
-------------
679,510
-------------
HOUSEHOLD DURABLES - 3.3%
3,802 Garmin Ltd. ..................................... 231,314
-------------
COMPUTERS & PERIPHERALS - 2.0%
5,625 SanDisk Corp.* .................................. 140,456
-------------
HEALTH CARE PROVIDERS & SERVICES - 1.3%
2,172 Patterson Companies, Inc.* ...................... 94,243
-------------
BIOTECHNOLOGY - 1.0%
992 Invitrogen Corp.* ............................... 66,593
-------------
ELECTRICAL EQUIPMENT - 0.9%
2,883 American Power Conversion Corp. ................. 61,696
-------------
AUTO COMPONENTS - 0.8%
1,563 Gentex Corp. .................................... 57,862
-------------
TOTAL COMMON STOCKS ............................. 6,917,090
-------------
(Cost $6,663,255)
TOTAL INVESTMENTS - 98.4% ....................... 6,917,090
(Cost $6,663,255)
NET OTHER ASSETS & LIABILITIES - 1.6% ........... 110,918
-------------
NET ASSETS - 100.0% ............................. $ 7,028,008
=============
- --------------------------------------------------------------------------------
* Non-income producing security.
See Notes to Financial Statements. Page 35
FIRST TRUST 10 UNCOMMON VALUES PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004
MARKET
SHARES VALUE
- ------------ ------------
COMMON STOCKS - 100.0%
HEALTH CARE PROVIDERS & SERVICES - 13.1%
14,588 UnitedHealth Group, Inc. ........................ $ 1,284,182
-------------
METALS & MINING - 11.9%
11,757 Phelps Dodge Corp. .............................. 1,163,002
-------------
MEDIA - 10.2%
30,023 EchoStar Communications Corp., Class A .......... 997,964
-------------
CONSUMER FINANCE - 10.2%
35,308 MBNA Corp. ...................................... 995,333
-------------
INDUSTRIAL CONGLOMERATES - 9.9%
27,243 Tyco International Ltd. ......................... 973,665
-------------
FOOD & STAPLES RETAILING - 9.9%
21,545 CVS Corp. ....................................... 971,033
-------------
INSURANCE - 9.0%
10,443 The Progressive Corp. ........................... 885,984
-------------
MACHINERY - 8.9%
9,435 Illinois Tool Works, Inc. ....................... 874,436
` -------------
COMMERCIAL SERVICES & SUPPLIES - 8.8%
36,894 Cendant Corp. ................................... 862,582
-------------
PHARMACEUTICALS - 8.1%
26,562 Teva Pharmaceutical Industries Ltd.,
Sponsored ADR ................................ 793,141
-------------
TOTAL COMMON STOCKS ............................. 9,801,322
-------------
(Cost $8,960,122)
TOTAL INVESTMENTS - 100.0% ...................... 9,801,322
(Cost $8,960,122)
NET OTHER ASSETS & LIABILITIES - 0.0% ........... 1,544
-------------
NET ASSETS - 100.0% ............................. $ 9,802,866
=============
- --------------------------------------------------------------------------------
ADR American Depository Receipt
Page 36 See Notes to Financial Statements.
VALUE LINE(R) TARGET 25 PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004
MARKET
SHARES VALUE
- ------------ ------------
COMMON STOCKS - 94.3%
HOUSEHOLD DURABLES - 22.9%
14,772 Centex Corp. .................................... $ 880,116
28,202 D.R. Horton, Inc. ............................... 1,136,822
5,363 Hovnanian Enterprises, Inc., Class A* ........... 265,576
14,923 Lennar Corp., Class A ........................... 845,836
3,795 M.D.C. Holdings, Inc. ........................... 328,040
14,727 Pulte Homes, Inc. ............................... 939,582
4,019 Standard Pacific Corp. .......................... 257,779
5,917 The Ryland Group, Inc. .......................... 340,464
-------------
4,994,215
-------------
WIRELESS TELECOMMUNICATION SERVICES - 20.5%
148,786 Nextel Communications, Inc., Class A* ........... 4,463,580
-------------
SPECIALTY RETAIL - 11.6%
18,106 Chico's FAS, Inc.* .............................. 824,366
29,938 Foot Locker, Inc. ............................... 806,230
9,768 Hot Topic, Inc.* ................................ 167,912
16,506 Urban Outfitters, Inc.* ......................... 732,867
-------------
2,531,375
-------------
TEXTILES, APPAREL & LUXURY GOODS- 10.1%
39,089 Coach, Inc.* .................................... 2,204,620
-------------
MULTILINE RETAIL - 6.2%
28,808 Nordstrom, Inc. ................................. 1,346,198
-------------
HEALTH CARE PROVIDERS & SERVICES - 5.5%
12,018 eResearch Technology, Inc.* ..................... 190,485
17,632 PacifiCare Health Systems, Inc.* ................ 996,561
-------------
1,187,046
-------------
IT SERVICES - 5.2%
26,812 Cognizant Technology Solutions Corp.* ........... 1,134,952
-------------
COMMERCIAL SERVICES - 3.3%
3,478 Apollo Group, Inc., Class A* .................... 280,709
9,442 ITT Educational Services, Inc.* ................. 448,967
-------------
729,676
-------------
OIL & GAS - 2.5%
14,311 Patina Oil & Gas Corp. .......................... 536,662
-------------
AEROSPACE & DEFENSE - 2.2%
12,850 AAR Corp.* ...................................... 175,017
5,142 Engineered Support Systems, Inc. ................ 304,509
-------------
479,526
-------------
AUTOMOBILES - 2.1%
12,142 Thor Industries, Inc. ........................... 449,861
-------------
COMMUNICATIONS EQUIPMENT - 1.6%
26,667 Foundry Networks, Inc.* ......................... 350,938
-------------
See Notes to Financial Statements. Page 37
VALUE LINE(R) TARGET 25 PORTFOLIO - (CONTINUED)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004
MARKET
SHARES VALUE
- ------------ ------------
COMMON STOCKS - (CONTINUED)
CONSTRUCTION MATERIALS - 0.6%
326 Eagle Materials, Inc. ........................... $ 28,150
1,129 Eagle Materials, Inc., Class B .................. 95,175
-------------
123,325
-------------
TOTAL COMMON STOCKS ............................. 20,531,974
-------------
(Cost $17,431,970)
TOTAL INVESTMENTS - 94.3% ....................... 20,531,974
(Cost $17,431,970)
NET OTHER ASSETS & LIABILITIES - 5.7% ........... 1,232,530
-------------
NET ASSETS - 100.0% ............................. $ 21,764,504
=============
- --------------------------------------------------------------------------------
* Non-income producing security.
ADR American Depository Receipt
Page 38 See Notes to Financial Statements.
FIRST TRUST ENERGY PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004
MARKET
SHARES VALUE
- ------------ ------------
COMMON STOCKS - 98.2%
OIL & GAS - 66.7%
2,817 Apache Corp. .................................... $ 142,456
3,822 Canadian Natural Resources Ltd. ................. 163,467
2,597 ChevronTexaco Corp. ............................. 136,369
1,722 ConocoPhillips .................................. 149,521
3,980 Devon Energy Corp. .............................. 154,902
1,304 ENI SPA, Sponsored ADR .......................... 164,095
3,005 Exxon Mobil Corp. ............................... 154,036
3,471 Marathon Oil Corp. .............................. 130,544
2,797 Petro-Canada .................................... 142,703
2,652 PetroChina Company Ltd., ADR .................... 142,386
3,728 Pioneer Natural Resources Company ............... 130,853
2,374 Royal Dutch Petroleum Company ................... 136,220
4,558 Suncor Energy, Inc. ............................. 161,353
2,355 The Houston Exploration Company* ................ 132,610
1,274 Total SA, Sponsored ADR ......................... 139,936
3,546 Valero Energy Corp. ............................. 160,989
4,390 XTO Energy, Inc. ................................ 155,318
-------------
2,497,758
-------------
ENERGY EQUIPMENT & SERVICES - 31.5%
2,647 BJ Services Company ............................. 123,191
3,688 Cal Dive International, Inc.* ................... 150,286
4,768 Maverick Tube Corp.* ............................ 144,470
3,998 National-Oilwell, Inc.* ......................... 141,090
3,236 Noble Corp.* .................................... 160,959
7,756 Patterson-UTI Energy, Inc. ...................... 150,854
2,541 Precision Drilling Corp.* ....................... 159,575
2,920 Weatherford International Ltd.* ................. 149,796
-------------
1,180,221
-------------
TOTAL COMMON STOCKS ............................. 3,677,979
-------------
(Cost $2,523,698)
TOTAL INVESTMENTS - 98.2% ....................... 3,677,979
(Cost $2,523,698)
NET OTHER ASSETS & LIABILITIES - 1.8% ........... 68,781
-------------
NET ASSETS - 100.0% ............................. $ 3,746,760
=============
- --------------------------------------------------------------------------------
* Non-income producing security.
ADR American Depository Receipt
See Notes to Financial Statements. Page 39
FIRST TRUST FINANCIAL SERVICES PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004
MARKET
SHARES VALUE
- ------------ ------------
COMMON STOCKS - 99.1%
COMMERCIAL BANKS - 30.4%
3,302 Bank of America Corp. ........................... $ 155,161
3,005 Compass Bancshares, Inc. ........................ 146,253
3,142 First Horizon National Corp. .................... 135,452
5,103 North Fork Bancorporation, Inc. ................. 147,221
6,794 Popular, Inc. ................................... 195,871
4,778 TCF Financial Corp. ............................. 153,565
5,060 U.S. Bancorp .................................... 158,479
3,108 Wachovia Corp. .................................. 163,481
2,524 Wells Fargo & Company ........................... 156,867
-------------
1,412,350
-------------
INSURANCE - 29.5%
3,622 AFLAC, Inc. ..................................... 144,300
1,949 Ambac Financial Group, Inc. ..................... 160,071
1,953 American International Group, Inc. .............. 128,254
1,821 Everest Re Group, Ltd. .......................... 163,089
3,208 Manulife Financial Corp. ........................ 148,210
2,440 MBIA, Inc. ...................................... 154,403
4,092 MetLife, Inc. ................................... 165,767
5,943 Old Republic International Corp. ................ 150,358
2,969 The Allstate Corp. .............................. 153,557
-------------
1,368,009
-------------
CAPITAL MARKETS - 17.1%
1,676 Bear Stearns Companies, Inc. .................... 171,472
1,371 Goldman Sachs Group, Inc. ....................... 142,639
1,854 Lehman Brothers Holdings, Inc. .................. 162,188
2,739 Merrill Lynch & Company, Inc. ................... 163,710
2,758 Morgan Stanley .................................. 153,124
-------------
793,133
-------------
DIVERSIFIED FINANCIAL SERVICES - 8.2%
3,143 Citigroup, Inc. ................................. 151,430
4,141 ING Group NV, Sponsored ADR ..................... 125,265
2,659 JPMorgan Chase & Company ........................ 103,727
-------------
380,422
-------------
CONSUMER FINANCE - 7.1%
2,005 Capital One Financial Corp. ..................... 168,841
5,701 MBNA Corp. ...................................... 160,711
-------------
329,552
-------------
THRIFTS & MORTGAGE FINANCE - 6.8%
4,208 Countrywide Financial Corp. ..................... 155,738
2,614 Golden West Financial Corp. ..................... 160,552
-------------
316,290
-------------
TOTAL COMMON STOCKS ............................. 4,599,756
-------------
(Cost $3,542,489)
TOTAL INVESTMENTS - 99.1% ....................... 4,599,756
(Cost $3,542,489)
NET OTHER ASSETS & LIABILITIES - 0.9% ........... 43,187
-------------
NET ASSETS - 100.0% ............................. $ 4,642,943
=============
- --------------------------------------------------------------------------------
Page 40 See Notes to Financial Statements.
FIRST TRUST PHARMACEUTICAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004
MARKET
SHARES VALUE
- ------------ ------------
COMMON STOCKS - 98.5%
PHARMACEUTICALS - 87.8%
4,368 Abbott Laboratories ............................. $ 203,767
3,830 AstraZeneca PLC, Sponsored ADR .................. 139,374
5,133 Barr Pharmaceuticals, Inc.* ..................... 233,757
7,300 Bristol-Myers Squibb Company .................... 187,026
7,321 Endo Pharmaceuticals Holdings, Inc.* ............ 153,887
3,043 Forest Laboratories, Inc.* ...................... 136,509
4,239 GlaxoSmithKline PLC, Sponsored ADR .............. 200,886
3,150 Johnson & Johnson ............................... 199,773
7,629 K-V Pharmaceutical Company, Class A* ............ 168,219
2,474 Lilly (Eli) & Company ........................... 140,400
3,271 Merck & Company, Inc. ........................... 105,130
8,543 Mylan Laboratories, Inc. ........................ 151,040
3,916 Novartis AG, ADR ................................ 197,915
3,380 Novo Nordisk A/S, Sponsored ADR ................. 183,399
5,025 Pfizer, Inc. .................................... 135,122
5,386 Sanofi-Synthelabo SA, Sponsored ADR ............. 215,709
5,144 Teva Pharmaceutical Industries Ltd.,
Sponsored ADR ................................ 153,600
4,633 Wyeth ........................................... 197,320
-------------
3,102,833
-------------
BIOTECHNOLOGY - 10.7%
3,043 Amgen, Inc.* .................................... 195,208
2,765 Biogen Idec, Inc.* .............................. 184,177
-------------
379,385
-------------
TOTAL COMMON STOCKS ............................. 3,482,218
-------------
(Cost $3,363,748)
TOTAL INVESTMENTS - 98.5% ....................... 3,482,218
(Cost $3,363,748)
NET OTHER ASSETS & LIABILITIES - 1.5% ........... 52,603
-------------
NET ASSETS - 100.0% ............................. $ 3,534,821
=============
- --------------------------------------------------------------------------------
* Non-income producing security.
ADR American Depository Receipt
See Notes to Financial Statements. Page 41
FIRST TRUST TECHNOLOGY PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2004
MARKET
SHARES VALUE
- ------------ ------------
COMMON STOCKS - 97.1%
SOFTWARE - 37.0%
1,452 Adobe Systems, Inc. ............................. $ 91,099
2,788 Check Point Software Technologies Ltd.* ......... 68,668
1,100 Cognos, Inc.* ................................... 48,466
1,444 Electronic Arts, Inc.* .......................... 89,066
2,144 Microsoft Corp. ................................. 57,266
4,293 Oracle Corp.* ................................... 58,900
1,631 SAP AG, Sponsored ADR ........................... 72,107
3,140 Symantec Corp.* ................................. 80,886
2,086 VERITAS Software Corp.* ......................... 59,555
-------------
626,013
-------------
COMMUNICATIONS EQUIPMENT - 17.0%
3,298 Cisco Systems, Inc.* ............................ 63,651
3,000 Juniper Networks, Inc.* ......................... 81,570
3,281 Nokia Corp., Sponsored ADR ...................... 51,413
2,132 QUALCOMM, Inc. .................................. 90,397
-------------
287,031
-------------
COMPUTERS & PERIPHERALS - 15.8%
1,645 Dell, Inc.* ..................................... 69,321
5,529 EMC Corp.* ...................................... 82,216
792 Lexmark International, Inc.* .................... 67,320
1,962 SanDisk Corp.* .................................. 48,991
-------------
267,848
-------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT - 14.5%
3,584 Applied Materials, Inc.* ........................ 61,286
1,865 Broadcom Corp., Class A* ........................ 60,202
2,646 Intel Corp. ..................................... 61,890
1,476 Maxim Integrated Products, Inc. ................. 62,568
-------------
245,946
-------------
IT SERVICES - 9.8%
1,500 Accenture Ltd.* ................................. 40,500
1,171 Affiliated Computer Services, Inc., Class A* .... 70,483
1,949 SunGard Data Systems, Inc.* ..................... 55,215
-------------
166,198
-------------
INTERNET SERVICES & SOFTWARE - 3.0%
2,500 Open Text Corp.* ................................ 50,125
-------------
TOTAL COMMON STOCKS ............................. 1,643,161
-------------
(Cost $1,351,557)
TOTAL INVESTMENTS - 97.1% ....................... 1,643,161
(Cost $1,351,557)
NET OTHER ASSETS & LIABILITIES - 2.9% ........... 49,823
-------------
NET ASSETS - 100.0% ............................. $ 1,692,984
=============
- --------------------------------------------------------------------------------
* Non-income producing security.
ADR American Depository Receipt
Page 42 See Notes to Financial Statements.
This Page Left Blank Intentionally.
FIRST DEFINED PORTFOLIO FUND, LLC
STATEMENTS OF ASSETS AND LIABILITIES
FOR THE YEAR ENDED DECEMBER 31, 2004
TARGET THE DOWSM GLOBAL S&P
MANAGED VIP DART 10 TARGET 15 TARGET 24
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------ ------------ ------------
ASSETS:
Investments, at market value
(See portfolios of investments)(a): ................................ $106,624,144 $12,361,053 $22,142,399 $13,966,774
------------- ------------ ------------ ------------
Cash .................................................................. 2,773,770 351,359 594,156 181,275
Dividends receivable .................................................. 117,684 41,902 41,290 15,259
Interest receivable ................................................... 1,958 163 1,023 409
Receivable for Membership Interest sold ............................... 485,009 23,519 65,694 25,138
Other assets .......................................................... -- -- 2,185 --
Receivable from advisor ............................................... -- -- 4,047 201
------------- ------------ ------------ ------------
Total Assets ..................................................... 110,002,565 12,777,996 22,850,794 14,189,056
------------- ------------ ------------ ------------
LIABILITIES:
Payable for Membership Interest redeemed .............................. -- -- -- --
Payable for investment securities purchased ........................... 1,351,876 -- 191,082 --
Investment advisory fee payable ....................................... 39,718 497 -- --
Payable to adminstrator ............................................... 2,191 284 463 301
Distribution fees payable ............................................. 21,069 2,735 4,448 2,892
Accrued audit fees .................................................... 9,818 9,818 9,818 9,818
Membership Interest servicing fee payable ............................. 70,806 9,511 14,200 9,845
Printing fees payable ................................................. 2,139 2,139 2,138 2,139
Custodian fee payable ................................................. 22,783 1,347 6,835 2,884
Accrued legal fees .................................................... 1,765 1,765 1,765 1,765
Accrued expenses and other payables ................................... 7,460 1,225 2,239 1,386
------------- ------------ ------------ ------------
Total Liabilities ................................................ 1,529,625 29,321 232,988 31,030
------------- ------------ ------------ ------------
NET ASSETS ............................................................ $108,472,940 $12,748,675 $22,617,806 $14,158,026
============= ============ ============ ============
(a) Investments, at cost .............................................. $ 94,067,968 $11,633,962 $19,622,203 $12,770,809
============= ============ ============ ============
NET ASSETS CONSIST OF:
Undistributed net investment income/(accumulated net investment loss) . $ 150,630 $ 329,736 $ 438,268 $ (34,231)
Accumulated net realized gain/(loss) on investments sold and
foreign currency transactions ...................................... 2,678,116 (856,559) 514,902 (491,110)
Net unrealized appreciation of investments and foreign
currency transactions .............................................. 12,556,176 727,091 2,521,001 1,195,965
Paid-in capital ....................................................... 93,088,018 12,548,407 19,143,635 13,487,402
------------- ------------ ------------ ------------
Net Assets ............................................................ $108,472,940 $12,748,675 $22,617,806 $14,158,026
============= ============ ============ ============
NET ASSET VALUE, offering price and redemption price of
Membership Interest outstanding .................................... $ 9.80 $ 8.69 $ 13.86 $ 8.66
============= ============ ============ ============
Number of Membership Interests outstanding ............................ 11,072,237 1,467,706 1,632,318 1,634,196
============= ============ ============ ============
FIRST TRUST
NASDAQ(R) 10 UNCOMMON VALUE LINE(R) FIRST TRUST
TARGET 15 VALUES TARGET 25 ENERGY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- ------------- ------------
ASSETS:
Investments, at market value
(See portfolios of investments)(a): ................................ $ 6,917,090 $ 9,801,322 $ 20,531,974 $ 3,677,979
------------- ------------- ------------- ------------
Cash .................................................................. 113,253 8,774 1,006,612 69,067
Dividends receivable .................................................. 104 9,625 1,541 1,013
Interest receivable ................................................... 141 20 611 79
Receivable for Membership Interest sold ............................... 15,360 5,410 265,296 14,057
Other assets .......................................................... -- -- -- --
Receivable from advisor ............................................... 4,415 3,307 -- 2,798
------------ ------------- ------------- ------------
Total Assets ..................................................... 7,050,363 9,828,458 21,806,034 3,764,993
------------ ------------- ------------- ------------
LIABILITIES:
Payable for Membership Interest redeemed .............................. -- -- -- --
Payable for investment securities purchased ........................... -- -- -- --
Investment advisory fee payable ....................................... -- -- 7,379 --
Payable to adminstrator ............................................... 152 214 414 81
Distribution fees payable ............................................. 1,461 2,054 3,986 --
Accrued audit fees .................................................... 9,818 9,818 9,818 9,818
Membership Interest servicing fee payable ............................. 5,174 7,813 11,691 3,151
Printing fees payable ................................................. 2,139 2,139 2,139 2,139
Custodian fee payable ................................................. 1,067 769 2,868 519
Accrued legal fees .................................................... 1,765 1,765 1,765 1,765
Accrued expenses and other payables ................................... 779 1,020 1,470 760
------------ ------------- ------------- ------------
Total Liabilities ................................................ 22,355 25,592 41,530 18,233
------------ ------------- ------------- ------------
NET ASSETS ............................................................ $ 7,028,008 $ 9,802,866 $ 21,764,504 $ 3,746,760
============ ============= ============= ============
(a) Investments, at cost .............................................. $ 6,663,255 $ 8,960,122 $ 17,431,970 $ 2,523,698
============ ============= ============= ============
NET ASSETS CONSIST OF:
Undistributed net investment income/(accumulated net investment loss) . $ (265,123) $ (371,594) $ (164,630) $ (15,058)
Accumulated net realized gain/(loss) on investments sold and
foreign currency transactions ...................................... (2,330,901) (16,737,104) (155,842) 156,532
Net unrealized appreciation of investments and foreign
currency transactions .............................................. 253,835 841,200 3,100,004 1,154,281
Paid-in capital ....................................................... 9,370,197 26,070,364 18,984,972 2,451,005
------------ ------------- ------------- ------------
Net Assets ............................................................ $ 7,028,008 $ 9,802,866 $ 21,764,504 $ 3,746,760
============ ============= ============= ============
NET ASSET VALUE, offering price and redemption price of
Membership Interest outstanding .................................... $ 9.04 $ 5.20 $ 4.06 $ 18.75
============ ============= ============= ============
Number of Membership Interests outstanding ............................ 777,015 1,886,248 5,360,659 199,799
============ ============= ============= ============
FIRST TRUST
FINANCIAL FIRST TRUST FIRST TRUST
SERVICES PHARMACEUTICAL TECHNOLOGY
PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- ------------
ASSETS:
Investments, at market value
(See portfolios of investments)(a): ................................ $ 4,599,756 $ 3,482,218 $ 1,643,161
------------ ------------- ------------
Cash .................................................................. 44,219 70,842 61,994
Dividends receivable .................................................. 6,888 3,047 167
Interest receivable ................................................... 81 77 98
Receivable for Membership Interest sold ............................... 6,745 -- --
Other assets .......................................................... -- -- --
Receivable from advisor ............................................... 4,255 4,005 4,245
------------ ------------- ------------
Total Assets ..................................................... 4,661,944 3,560,189 1,709,665
------------ ------------- ------------
LIABILITIES:
Payable for Membership Interest redeemed .............................. -- 7,491 382
Payable for investment securities purchased ........................... -- -- --
Investment advisory fee payable ....................................... -- -- --
Payable to adminstrator ............................................... 101 76 37
Distribution fees payable ............................................. -- -- --
Accrued audit fees .................................................... 9,818 9,818 9,818
Membership Interest servicing fee payable ............................. 3,714 2,812 1,379
Printing fees payable ................................................. 2,139 2,139 2,139
Custodian fee payable ................................................. 537 511 493
Accrued legal fees .................................................... 1,765 1,765 1,765
Accrued expenses and other payables ................................... 927 756 668
------------ ------------- ------------
Total Liabilities ................................................ 19,001 25,368 16,681
------------ ------------- ------------
NET ASSETS ............................................................ $ 4,642,943 $ 3,534,821 $ 1,692,984
============ ============= ============
(a) Investments, at cost .............................................. $ 3,542,489 $ 3,363,748 $ 1,351,557
============ ============= ============
NET ASSETS CONSIST OF:
Undistributed net investment income/(accumulated net investment loss) . $ 42,966 $ (46,310) $ (89,433)
Accumulated net realized gain/(loss) on investments sold and
foreign currency transactions ...................................... 23,182 (841,050) (1,661,482)
Net unrealized appreciation of investments and foreign
currency transactions .............................................. 1,057,267 118,470 291,604
Paid-in capital ....................................................... 3,519,528 4,303,711 3,152,295
------------ ------------- ------------
Net Assets ............................................................ $ 4,642,943 $ 3,534,821 $ 1,692,984
============ ============= ============
NET ASSET VALUE, offering price and redemption price of
Membership Interest outstanding .................................... $ 15.36 $ 10.28 $ 5.03
============ ============= ============
Number of Membership Interests outstanding ............................ 302,369 343,984 336,870
============ ============= ============
Page 44-45 See Notes to Financial Statements.
FIRST DEFINED PORTFOLIO FUND, LLC
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2004
TARGET THE DOWSM GLOBAL S&P
MANAGED VIP DART 10 TARGET 15 TARGET 24
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- ------------- ------------
INVESTMENT INCOME:
Dividends ........................................................ $ 721,836 $ 223,018 $ 333,323 $ 77,295
Foreign withholding tax on dividend income ....................... -- -- (14,293) --
Interest income .................................................. 9,177 1,581 3,648 1,609
------------- ------------- ------------- ------------
Total investment income .......................................... 731,013 224,599 322,678 78,904
------------- ------------- ------------- ------------
EXPENSES:
Investment advisory fee .......................................... 273,869 40,744 53,074 49,650
Administration fee ............................................... 44,509 11,804 14,024 13,030
Fund accounting fee .............................................. 95,296 25,420 30,182 28,041
Distribution fee ................................................. 96,758 13,577 19,405 16,091
Trustees' fees and expenses ...................................... 13,858 (2,158) (122) 92
Legal fees ....................................................... 6,671 6,556 6,565 6,547
Audit fees ....................................................... 10,842 10,842 10,842 10,842
Custodian fees ................................................... 195,679 13,082 52,852 26,513
Membership Interest servicing fee ................................ 185,622 33,628 40,794 39,636
Printing fees .................................................... 3,691 3,565 3,575 3,556
Other ............................................................ 15,569 1,197 5,051 2,518
Fees waived by administrator ..................................... (84,048) (17,952) (22,479) (20,173)
Fees waived and expenses reimbursed by investment advisor ........ (190,272) (40,668) (84,049) (54,844)
------------- ------------- ------------- ------------
Total expenses ................................................... 668,044 99,637 129,714 121,499
------------- ------------- ------------- ------------
NET INVESTMENT INCOME/(LOSS) ..................................... 62,969 124,962 192,964 (42,595)
------------- ------------- ------------- ------------
NET REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS ANDFOREIGNCURRENCY:
Realized gain/(loss) from:
Securities .................................................... 3,850,128 222,237 718,348 1,013,900
Foreign currency transactions ................................. -- -- (2,197) --
Change in unrealized appreciation/(depreciation) of:
Securities .................................................... 7,898,114 398,814 2,022,611 368,516
Foreign currency translation of other assets and liabilities in
foreign currencies .......................................... -- -- 805 --
------------- ------------- ------------- ------------
Net realized and unrealized gain/(loss) on investments ........... 11,748,242 621,051 2,739,567 1,382,416
------------- ------------- ------------- ------------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ..................................... $ 11,811,211 $ 746,013 $ 2,932,531 $ 1,339,821
============= ============= ============= ============
NASDAQ(R) 10 UNCOMMON VALUE LINE(R) FIRST TRUST
TARGET 15 VALUES TARGET 25 ENERGY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ----------- ------------ ----------
INVESTMENT INCOME:
Dividends ........................................................ $ 13,530 $ 117,512 $ 26,094 $ 42,104
Foreign withholding tax on dividend income ....................... -- -- -- --
Interest income .................................................. 744 319 2,523 414
------------ ----------- ------------ ----------
Total investment income .......................................... 14,274 117,831 28,617 42,518
------------ ----------- ------------ ----------
EXPENSES:
Investment advisory fee .......................................... 31,429 56,226 50,512 20,263
Administration fee ............................................... 10,152 12,650 13,096 8,845
Fund accounting fee .............................................. 21,890 27,230 28,178 19,097
Distribution fee ................................................. 9,175 23,561 17,103 --
Trustees' fees and expenses ...................................... (2,638) (38,425) (2,735) 465
Legal fees ....................................................... 6,547 6,552 6,562 6,543
Audit fees ....................................................... 10,842 10,842 10,842 10,842
Custodian fees ................................................... 11,680 10,480 26,005 5,989
Membership Interest servicing fee ................................ 28,055 40,492 37,921 19,011
Printing fees .................................................... 3,556 3,561 3,572 3,551
Other ............................................................ 1,681 (1,981) 1,256 2,687
Fees waived by administrator ..................................... (14,445) (19,364) (20,148) (11,944)
Fees waived and expenses reimbursed by investment advisor ........ (40,847) (3,200) (48,615) (35,718)
------------ ----------- ------------ ----------
Total expenses ................................................... 77,077 128,624 123,549 49,631
------------ ----------- ------------ ----------
NET INVESTMENT INCOME/(LOSS) ..................................... (62,803) (10,793) (94,932) (7,113)
------------ ----------- ------------ ----------
NET REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS ANDFOREIGNCURRENCY:
Realized gain/(loss) from:
Securities .................................................... 1,217,686 1,287,409 1,329,992 438,155
Foreign currency transactions ................................. -- -- -- --
Change in unrealized appreciation/(depreciation) of:
Securities .................................................... (1,138,148) (389,901) 1,766,601 525,558
Foreign currency translation of other assets and liabilities in
foreign currencies .......................................... -- -- -- --
------------ ----------- ------------ ----------
Net realized and unrealized gain/(loss) on investments ........... 79,538 897,508 3,096,593 963,713
------------ ----------- ------------ ----------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ..................................... $ 16,735 $ 886,715 $ 3,001,661 $ 956,600
============ =========== ============ ==========
FIRST TRUST
FINANCIAL FIRST TRUST FIRST TRUST
SERVICES PHARMACEUTICAL TECHNOLOGY
PORTFOLIO PORTFOLIO PORTFOLIO
---------- ---------- ---------
INVESTMENT INCOME:
Dividends ........................................................ $ 88,969 $ 56,087 $ 10,140
Foreign withholding tax on dividend income ....................... -- -- --
Interest income .................................................. 344 366 450
---------- ---------- ---------
Total investment income .......................................... 89,313 56,453 10,590
---------- ---------- ---------
EXPENSES:
Investment advisory fee .......................................... 27,658 22,650 10,752
Administration fee ............................................... 9,479 8,855 7,529
Fund accounting fee .............................................. 20,452 19,119 16,286
Distribution fee ................................................. -- -- --
Trustees' fees and expenses ...................................... 819 (1,784) (2,605)
Legal fees ....................................................... 6,544 6,542 6,540
Audit fees ....................................................... 10,842 10,842 10,842
Custodian fees ................................................... 6,413 6,091 5,773
Membership Interest servicing fee ................................ 25,098 21,151 12,592
Printing fees .................................................... 3,552 3,550 3,548
Other ............................................................ 1,403 444 1,089
Fees waived by administrator ..................................... (13,132) (11,882) (9,295)
Fees waived and expenses reimbursed by investment advisor ........ (31,339) (29,959) (36,607)
---------- ---------- ---------
Total expenses ................................................... 67,789 55,619 26,444
---------- ---------- ---------
NET INVESTMENT INCOME/(LOSS) ..................................... 21,524 834 (15,854)
---------- ---------- ---------
NET REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS ANDFOREIGNCURRENCY:
Realized gain/(loss) from:
Securities .................................................... 376,567 17,826 48,786
Foreign currency transactions ................................. -- -- --
Change in unrealized appreciation/(depreciation) of:
Securities .................................................... 245,375 (58,479) (33,439)
Foreign currency translation of other assets and liabilities in
foreign currencies .......................................... -- -- --
---------- ---------- ---------
Net realized and unrealized gain/(loss) on investments ........... 621,942 (40,653) 15,347
---------- ---------- ---------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ..................................... $ 643,466 $ (39,819) $ (507)
========== ========== =========
Page 46-47 See Notes to Financial Statements.
FIRST DEFINED PORTFOLIO FUND, LLC
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 2004
TARGET THE DOWSM GLOBAL S&P
MANAGED VIP DART 10 TARGET 15 TARGET 24
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
Net investment income/(loss) ..................................... $ 62,969 $ 124,962 $ 192,964 $ (42,595)
Net realized gain from investments sold and foreign currency
transactions ................................................... 3,850,128 222,237 716,151 1,013,900
Net change in unrealized appreciation/(depreciation) of securities
and foreign currency transactions during the year .............. 7,898,114 398,814 2,023,416 368,516
------------ ------------ ------------ ------------
Net increase/(decrease) in net assets resulting from operations .. 11,811,211 746,013 2,932,531 1,339,821
Net increase/(decrease) in net assets from Membership
Interest transactions .......................................... 76,173,503 7,734,570 16,635,527 7,264,076
------------ ------------ ------------ ------------
Net increase/(decrease) in net assets ............................ 87,984,714 8,480,583 19,568,058 8,603,897
NET ASSETS:
Beginning of year ................................................ 20,488,226 4,268,092 3,049,748 5,554,129
------------ ------------ ------------ ------------
End of year ...................................................... $108,472,940 $ 12,748,675 $ 22,617,806 $ 14,158,026
============ ============ ============ ============
Undistributed net investment income/(accumulated net
investment loss) at end of year ................................ $ 150,630 $ 329,736 $ 438,268 $ (34,231)
============ ============ ============ ============
FIRST TRUST
NASDAQ(R) 10 UNCOMMON VALUE LINE(R) FIRST TRUST
TARGET 15 VALUES TARGET 25 ENERGY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
Net investment income/(loss) ..................................... $ (62,803) $ (10,793) $ (94,932) $ (7,113)
Net realized gain from investments sold and foreign currency
transactions ................................................... 1,217,686 1,287,409 1,329,992 438,155
Net change in unrealized appreciation/(depreciation) of securities
and foreign currency transactions during the year .............. (1,138,148) (389,901) 1,766,601 525,558
------------ ------------ ------------ ------------
Net increase/(decrease) in net assets resulting from operations .. 16,735 886,715 3,001,661 956,600
Net increase/(decrease) in net assets from Membership
Interest transactions .......................................... 1,938,438 (570,612) 13,827,303 (48,851)
------------ ------------ ------------ ------------
Net increase/(decrease) in net assets ............................ 1,955,173 316,103 16,828,964 907,749
NET ASSETS:
Beginning of year ................................................ 5,072,835 9,486,763 4,935,540 2,839,011
------------ ------------ ------------ ------------
End of year ...................................................... $ 7,028,008 $ 9,802,866 $ 21,764,504 $ 3,746,760
============ ============ ============ ============
Undistributed net investment income/(accumulated net
investment loss) at end of year ................................ $ (265,123) $ (371,594) $ (164,630) $ (15,058)
============ ============ ============ ============
FIRST TRUST
FINANCIAL FIRST TRUST FIRST TRUST
SERVICES PHARMACEUTICAL TECHNOLOGY
PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------
Net investment income/(loss) ..................................... $ 21,524 $ 834 $ (15,854)
Net realized gain from investments sold and foreign currency
transactions ................................................... 376,567 17,826 48,786
Net change in unrealized appreciation/(depreciation) of securities
and foreign currency transactions during the year .............. 245,375 (58,479) (33,439)
------------ ------------ ------------
Net increase/(decrease) in net assets resulting from operations .. 643,466 (39,819) (507)
Net increase/(decrease) in net assets from Membership
Interest transactions .......................................... (763,476) (546,265) (379,666)
------------ ------------ ------------
Net increase/(decrease) in net assets ............................ (120,010) (586,084) (380,173)
NET ASSETS:
Beginning of year ................................................ 4,762,953 4,120,905 2,073,157
------------ ------------ ------------
End of year ...................................................... $ 4,642,943 $ 3,534,821 $ 1,692,984
============ ============ ============
Undistributed net investment income/(accumulated net
investment loss) at end of year ................................ $ 42,966 $ (46,310) $ (89,433)
============ ============ ============
FIRST DEFINED PORTFOLIO FUND, LLC
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 2003
TARGET THE DOWSM GLOBAL S&P
MANAGED VIP DART 10 TARGET 15 TARGET 24
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
Net investment income/(loss) ...................................... $ 63,954 $ 94,571 $ 85,674 $ 22,288
Net realized gain/(loss) from investments sold and foreign currency
transactions .................................................... (797,463) (668,362) (285,078) (785,702)
Net change in unrealized appreciation of securities
and foreign currency transactions during the year ............... 5,670,826 1,279,321 977,124 1,820,713
------------ ------------ ------------ ------------
Net increase in net assets resulting from operations .............. 4,937,317 705,530 777,720 1,057,299
Net increase/(decrease) in net assets from Membership
Interest transactions ........................................... 3,494,703 (655,981) (69,364) (270,588)
------------ ------------ ------------ ------------
Net increase in net assets ........................................ 8,432,020 49,549 708,356 786,711
NET ASSETS:
Beginning of year ................................................. 12,056,206 4,218,543 2,341,392 4,767,418
------------ ------------ ------------ ------------
End of year ....................................................... $ 20,488,226 $ 4,268,092 $ 3,049,748 $ 5,554,129
============ ============ ============ ============
Undistributed net investment income/(accumulated net
investment loss) at end of year ................................. $ 87,661 $ 204,774 $ 245,304 $ 8,364
============ ============ ============ ============
FIRST TRUST
NASDAQ(R) 10 UNCOMMON VALUE LINE(R) FIRST TRUST
TARGET 15 VALUES TARGET 25 ENERGY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
Net investment income/(loss) ...................................... $ (62,474) $ (21,576) $ (35,165) $ (140)
Net realized gain/(loss) from investments sold and foreign currency
transactions .................................................... (1,113,734) (795,708) (312,578) 38,188
Net change in unrealized appreciation of securities
and foreign currency transactions during the year ............... 2,580,780 3,165,923 1,711,467 650,877
------------ ------------ ------------ ------------
Net increase in net assets resulting from operations .............. 1,404,572 2,348,639 1,363,724 688,925
Net increase/(decrease) in net assets from Membership
Interest transactions ........................................... (436,823) 386,444 595,660 (236,606)
------------ ------------ ------------ ------------
Net increase in net assets ........................................ 967,749 2,735,083 1,959,384 452,319
NET ASSETS:
Beginning of year ................................................. 4,105,086 6,751,680 2,976,156 2,386,692
------------ ------------ ------------ ------------
End of year ....................................................... $ 5,072,835 $ 9,486,763 $ 4,935,540 $ 2,839,011
============ ============ ============ ============
Undistributed net investment income/(accumulated net
investment loss) at end of year ................................. $ (202,320) $ (360,801) $ (69,698) $ (7,945)
============ ============ ============ ============
FIRST TRUST
FINANCIAL FIRST TRUST FIRST TRUST
SERVICES PHARMACEUTICAL TECHNOLOGY
PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------
Net investment income/(loss) ...................................... $ 15,588 $ (10,679) $ (21,512)
Net realized gain/(loss) from investments sold and foreign currency
transactions .................................................... (229,418) (290,592) (32,819)
Net change in unrealized appreciation of securities
and foreign currency transactions during the year ............... 1,354,540 937,548 728,464
------------ ------------ ------------
Net increase in net assets resulting from operations .............. 1,140,710 636,277 674,133
Net increase/(decrease) in net assets from Membership
Interest transactions ........................................... (73,592) 28,590 (77,913)
------------ ------------ ------------
Net increase in net assets ........................................ 1,067,118 664,867 596,220
NET ASSETS:
Beginning of year ................................................. 3,695,835 3,456,038 1,476,937
------------ ------------ ------------
End of year ....................................................... $ 4,762,953 $ 4,120,905 $ 2,073,157
============ ============ ============
Undistributed net investment income/(accumulated net
investment loss) at end of year ................................. $ 21,442 $ (47,144) $ (73,579)
============ ============ ============
Page 48-49 See Notes to Financial Statements.
FIRST DEFINED PORTFOLIO FUND, LLC
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY
FOR THE YEAR ENDED DECEMBER 31, 2004
FIRST TRUST
TARGET THE DOWSM GLOBAL S&P NASDAQ(R) 10 UNCOMMON
MANAGED VIP DART 10 TARGET 15 TARGET 24 TARGET 15 VALUES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------ ------------ ------------
AMOUNT:
Sold .................. $ 80,458,450 $ 10,624,832 $ 20,757,500 $ 11,706,039 $ 3,978,443 $ 4,004,676
Redeemed .............. (4,284,947) (2,890,262) (4,121,973) (4,441,963) (2,040,005) (4,575,288)
------------ ------------ ------------ ------------ ------------ ------------
Net increase/(decrease) $ 76,173,503 $ 7,734,570 $ 16,635,527 $ 7,264,076 $ 1,938,438 $ (570,612)
============ ============ ============ ============ ============ ============
MEMBERSHIP INTERESTS:
Sold .................. 9,224,929 1,304,860 1,695,923 1,462,599 468,229 843,053
Redeemed .............. (500,613) (347,269) (339,561) (557,152) (237,002) (988,150)
------------ ------------ ------------ ------------ ------------ ------------
Net increase/(decrease) 8,724,316 957,591 1,356,362 905,447 231,227 (145,097)
============ ============ ============ ============ ============ ============
FIRST TRUST
VALUE LINE(R) FIRST TRUST FINANCIAL FIRST TRUST FIRST TRUST
TARGET 25 ENERGY SERVICES PHARMACEUTICAL TECHNOLOGY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------ ------------
AMOUNT:
Sold .................. $ 17,491,384 $ 797,410 $ 413,133 $ 307,293 $ 83,027
Redeemed .............. (3,664,081) (846,261) (1,176,609) (853,558) (462,693)
------------ ------------ ------------ ------------ ------------
Net increase/(decrease) $ 13,827,303 $ (48,851) $ (763,476) $ (546,265) $ (379,666)
============ ============ ============ ============ ============
MEMBERSHIP INTERESTS:
Sold .................. 4,977,806 50,618 29,368 30,038 17,012
Redeemed .............. (1,093,931) (50,725) (84,982) (84,045) (97,252)
------------ ------------ ------------ ------------ ------------
Net increase/(decrease) 3,883,875 (107) (55,614) (54,007) (80,240)
============ ============ ============ ============ ============
FIRST DEFINED PORTFOLIO FUND, LLC
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY
FOR THE YEAR ENDED DECEMBER 31, 2003
FIRST TRUST
FIRST TRUST FINANCIAL FIRST TRUST FIRST TRUST
ENERGY SERVICES PHARMACEUTICAL TECHNOLOGY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ----------- -----------
AMOUNT:
Sold .................. $ 501,970 $ 752,422 $ 743,179 $ 221,143
Redeemed .............. (738,576) (826,014) (714,589) (299,056)
----------- ----------- ----------- -----------
Net increase/(decrease) $ (236,606) $ (73,592) $ 28,590 $ (77,913)
=========== =========== =========== ===========
MEMBERSHIP INTERESTS:
Sold .................. 43,452 64,632 77,273 53,103
Redeemed .............. (64,944) (76,407) (78,898) (72,099)
----------- ----------- ----------- -----------
Net increase/(decrease) (21,492) (11,775) (1,625) (18,996)
=========== =========== =========== ===========
FIRST TRUST
FIRST TRUST FINANCIAL FIRST TRUST FIRST TRUST
ENERGY SERVICES PHARMACEUTICAL TECHNOLOGY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ----------- -----------
AMOUNT:
Sold .................. $ 501,970 $ 752,422 $ 743,179 $ 221,143
Redeemed .............. (738,576) (826,014) (714,589) (299,056)
----------- ----------- ----------- -----------
Net increase/(decrease) $ (236,606) $ (73,592) $ 28,590 $ (77,913)
=========== =========== =========== ===========
MEMBERSHIP INTERESTS:
Sold .................. 43,452 64,632 77,273 53,103
Redeemed .............. (64,944) (76,407) (78,898) (72,099)
----------- ----------- ----------- -----------
Net increase/(decrease) (21,492) (11,775) (1,625) (18,996)
=========== =========== =========== ===========
Page 50-51 See Notes to Financial Statements.
TARGET MANAGED VIP PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH YEAR.
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/04 12/31/03 12/31/02(A) 12/31/01 12/31/00
----------- ---------- ----------- ---------- ----------
Net asset value, beginning of year ............ $ 8.73 $ 6.47 $ 8.19 $ 8.62 $ 8.04
----------- ---------- ----------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income/(loss) .................. 0.01++ 0.02 0.00++# 0.18++ 0.06
Net realized and unrealized gain/(loss) on
investments ................................. 1.06 2.24 (1.72) (0.61) 0.52
----------- ---------- ----------- ---------- ----------
Total from investment operations .............. 1.07 2.26 (1.72) (0.43) 0.58
----------- ---------- ----------- ---------- ----------
Net asset value, end of year .................. $ 9.80 $ 8.73 $ 6.47 $ 8.19 $ 8.62
=========== ========== =========== ========== ==========
TOTAL RETURN+ ................................. 12.26% 34.93% (21.00)% (4.99)% 7.21%
=========== ========== =========== ========== ==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's) ............ $ 108,473 $ 20,488 $ 12,056 $ 2,126 $ 262
Ratio of operating expenses to average
net assets .................................. 1.47% 1.47% 1.47% 1.47% 1.47%
Ratio of net investment income to average
net assets .................................. 0.14% 0.41% 0.06% 2.20% 2.45%
Portfolio turnover rate ....................... 42.60% 72.28% 78.53% 47.95% 54.04%
Ratio of operating expenses to average
net assets without fee waivers and
expenses reimbursed ......................... 2.07% 1.69% 2.73% 12.69% 74.48%
<FN>
- --------------------------------------------------
+ The total return would have been lower if certain fees had not been waived
and expenses reimbursed by the investment advisor and administrator.
++ Per share values have been calculated using the average share method.
# Amount represents less than $0.01 per share.
(a) Effective April 30, 2002, based upon the determination of the Fund's Board
of Trustees, the Fund changed its name from the DowSM Target 5 Portfolio to
the Target Managed VIP Portfolio. The Fund's primary investment strategy
was also changed. The performance figures provided reflect the Fund's
performance prior to the name change and the change of the primary
investment strategy.
</FN>
Page 52 See Notes to Financial Statements.
THE DOWSM DART 10 PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH YEAR.
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/04 12/31/03 12/31/02 12/31/01 12/31/00
----------- ---------- ----------- ---------- ----------
Net asset value, beginning of year ............ $ 8.37 $ 6.98 $ 8.54 $ 10.02 $ 9.22
----------- ---------- ----------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ......................... 0.15 ++ 0.22 0.12 ++ 0.14 ++ 0.05
Net realized and unrealized gain/(loss) on
investments ................................... 0.17 1.17 (1.68) (1.62) 0.75
----------- ---------- ----------- ---------- ----------
Total from investment operations .............. 0.32 1.39 (1.56) (1.48) 0.80
----------- ---------- ----------- ---------- ----------
Net asset value, end of year .................. $ 8.69 $ 8.37 $ 6.98 $ 8.54 $ 10.02
=========== ========== =========== ========== ==========
TOTAL RETURN+ ................................. 3.82% 19.91% (18.27)% (14.77)% 8.68%
=========== ========== =========== ========== ==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's) ............ $ 12,749 $ 4,268 $ 4,219 $ 4,064 $ 1,110
Ratio of operating expenses to average
net assets .................................. 1.47% 1.47% 1.47% 1.47% 1.47%
Ratio of net investment income to average
net assets .................................. 1.84% 2.37% 1.52% 1.53% 1.19%
Portfolio turnover rate ....................... 56.97% 78.12% 76.19% 38.16% 33.59%
Ratio of operating expenses to average
net assets without fee waivers and
expenses reimbursed ......................... 2.33% 3.27% 3.13% 5.59% 14.84%
<FN>
- --------------------------------------------------
+ The total return would have been lower if certain fees had not been waived
and expenses reimbursed by the investment advisor and administrator.
++ Per share values have been calculated using the average share method.
</FN>
See Notes to Financial Statements. Page 53
GLOBAL TARGET 15 PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH YEAR.
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/04 12/31/03 12/31/02 12/31/01 12/31/00
----------- ---------- ----------- ---------- ----------
Net asset value, beginning of year ............ $ 11.05 $ 8.24 $ 9.66 $ 9.90 $ 9.71
----------- ---------- ----------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ......................... 0.27 ++ 0.33 0.25++ 0.26++ 0.15
Net realized and unrealized gain/(loss) on
investments ................................. 2.54 2.48 (1.67) (0.50) 0.04
----------- ---------- ----------- ---------- ----------
Total from investment operations .............. 2.81 2.81 (1.42) (0.24) 0.19
----------- ---------- ----------- ---------- ----------
Net asset value, end of year .................. $ 13.86 $ 11.05 $ 8.24 $ 9.66 $ 9.90
=========== ========== =========== ========== ==========
TOTAL RETURN+ ................................. 25.43% 34.10% (14.70)% (2.42)% 1.96%
=========== ========== =========== ========== ==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's) ............ $ 22,618 $ 3,050 $ 2,341 $ 2,291 $ 1,853
Ratio of operating expenses to average
net assets .................................. 1.47% 1.47% 1.47% 1.47% 1.47%
Ratio of net investment income to average
net assets .................................. 2.18% 3.36% 2.73% 2.77% 5.93%
Portfolio turnover rate ....................... 48.66% 65.57% 56.92% 105.85% 20.39%
Ratio of operating expenses to average
net assets without fee waivers and
expenses reimbursed ......................... 2.67% 4.51% 4.50% 6.73% 14.89%
<FN>
- --------------------------------------------------
+ The total return would have been lower if certain fees had not been waived
and expenses reimbursed by the investment advisor and administrator.
++ Per share values have been calculated using the average share method.
</FN>
Page 54 See Notes to Financial Statements.
S&P TARGET 24 PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH YEAR.
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/04 12/31/03 12/31/02(A) 12/31/01 12/31/00
----------- ----------- ----------- ---------- ----------
Net asset value, beginning of year ............ $ 7.62 $ 6.14 $ 7.19 $ 9.54 $ 11.83
----------- ----------- ----------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income/(loss) .................. (0.03) 0.03 (0.01) (0.01)++ (0.03)
Net realized and unrealized gain/(loss) on
investments ................................. 1.07 1.45 (1.04) (2.34) (2.26)
----------- ----------- ----------- ---------- ----------
Total from investment operations .............. 1.04 1.48 (1.05) (2.35) (2.29)
----------- ----------- ----------- ---------- ----------
Net asset value, end of year .................. $ 8.66 $ 7.62 $ 6.14 $ 7.19 $ 9.54
=========== =========== =========== ========== ==========
TOTAL RETURN+ ................................. 13.65% 24.10% (14.60)% (24.63)% (19.36)%
=========== =========== =========== ========== ==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's) ............ $ 14,158 $ 5,554 $ 4,767 $ 3,461 $ 1,501
Ratio of operating expenses to average
net assets .................................. 1.47% 1.47% 1.47% 1.47% 1.47%
Ratio of net investment income/(loss) to
average net assets .......................... (0.51)% 0.46% (0.10)% (0.07)% (0.71)%
Portfolio turnover rate ....................... 103.63% 84.37% 199.84% 95.30% 64.22%
Ratio of operating expenses to average
net assets without fee waivers and
expenses reimbursed ......................... 2.37% 2.89% 2.96% 5.67% 10.85%
<FN>
- --------------------------------------------------
+ The total return would have been lower if certain fees had not been waived
and expenses reimbursed by the investment advisor and administrator.
++ Per share values have been calculated using the average share method.
(a) Effective April 30, 2002, based upon the determination of the Fund's Board
of Trustees, the Fund changed its name from the S&P Target 10 Portfolio to
the S&P Target 24 Portfolio. The Fund's primary investment strategy was
also changed. The performance figures provided reflect the Fund's
performance prior to the name change and the change of the primary
investment strategy.
</FN>
See Notes to Financial Statements. Page 55
NASDAQ(R) TARGET 15 PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH YEAR.
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/04 12/31/03 12/31/02 12/31/01 12/31/00
----------- ---------- ----------- ---------- ----------
Net asset value, beginning of year ............ $ 9.29 $ 6.83 $ 9.25 $ 12.88 $ 14.60
----------- ---------- ----------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ........................... (0.10)++ (0.14) (0.08) (0.13)++ (0.16)
Net realized and unrealized gain/(loss) on
investments ................................. (0.15) 2.60 (2.34) (3.50) (1.56)
----------- ---------- ----------- ---------- ----------
Total from investment operations .............. (0.25) 2.46 (2.42) (3.63) (1.72)
----------- ---------- ----------- ---------- ----------
Net asset value, end of year .................. $ 9.04 $ 9.29 $ 6.83 $ 9.25 $ 12.88
=========== ========== =========== ========== ==========
TOTAL RETURN+ ................................. (2.69)% 36.02% (26.16)% (28.18)% (11.78)%
=========== ========== =========== ========== ==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's) ............ $ 7,028 $ 5,073 $ 4,105 $ 4,793 $ 2,688
Ratio of operating expenses to average
net assets .................................. 1.47% 1.47% 1.47% 1.47% 1.47%
Ratio of net investment loss to average
net assets .................................. (1.20)% (1.34)% (1.25)% (1.31)% (1.46)%
Portfolio turnover rate ....................... 116.88% 83.41% 97.68% 63.71% 72.40%
Ratio of operating expenses to average
net assets without fee waivers and
expenses reimbursed ......................... 2.52% 2.96% 3.03% 4.32% 5.47%
<FN>
- --------------------------------------------------
+ The total return would have been lower if certain fees had not been waived
and expenses reimbursed by the investment advisor and administrator.
++ Per share values have been calculated using the average share method.
</FN>
Page 56 See Notes to Financial Statements.
FIRST TRUST 10 UNCOMMON VALUES PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH YEAR.
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/04 12/31/03 12/31/02 12/31/01 12/31/00
----------- ---------- ----------- ---------- ----------
Net asset value, beginning of year ............ $ 4.67 $ 3.41 $ 5.40 $ 8.39 $ 11.40
----------- ---------- ----------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ........................... (0.02) (0.01) (0.03)++ (0.07) (0.02)
Net realized and unrealized gain/(loss) on
investments ................................. 0.55 1.27 (1.96) (2.92) (2.99)
----------- ---------- ----------- ---------- ----------
Total from investment operations .............. 0.53 1.26 (1.99) (2.99) (3.01)
----------- ---------- ----------- ---------- ----------
Net asset value, end of year .................. $ 5.20 $ 4.67 $ 3.41 $ 5.40 $ 8.39
=========== ========== =========== ========== ==========
TOTAL RETURN+ 11.35% 36.95% (36.85)% (35.64)% (26.40)%
=========== ========== =========== ========== ==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's) ............ $ 9,803 $ 9,487 $ 6,752 $ 13,270 $ 22,123
Ratio of operating expenses to average
net assets .................................. 1.37% 1.37% 1.37% 1.37% 1.37%
Ratio of net investment loss to average
net assets .................................. (0.11)% (0.29)% (0.78)% (1.00)% (1.15)%
Portfolio turnover rate ....................... 123.18% 117.04% 105.51% 149.77% 98.80%
Ratio of operating expenses to average
net assets without fee waivers and
expenses reimbursed ......................... 1.61% 2.36% 2.29% 2.28% 2.47%
<FN>
- --------------------------------------------------
+ The total return would have been lower if certain fees had not been waived
and expenses reimbursed by the investment advisor and administrator.
++ Per share values have been calculated using the average share method.
</FN>
See Notes to Financial Statements. Page 57
VALUE LINE(R) TARGET 25 PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH YEAR.
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/04 12/31/03 12/31/02(A) 12/31/01 12/31/00
----------- ---------- ----------- ---------- ----------
Net asset value, beginning of year ............ $ 3.34 $ 2.37 $ 4.15 $ 9.32 $ 16.33
----------- ---------- ----------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ........................... (0.04)++ (0.02) (0.03)++ (0.06) (0.03)
Net realized and unrealized gain/(loss) on
investments ................................. 0.76 0.99 (1.75) (5.11) (6.98)
----------- ---------- ----------- ---------- ----------
Total from investment operations .............. 0.72 0.97 (1.78) (5.17) (7.01)
----------- ---------- ----------- ---------- ----------
Net asset value, end of year .................. $ 4.06 $ 3.34 $ 2.37 $ 4.15 $ 9.32
=========== ========== =========== ========== ==========
TOTAL RETURN+ ................................. 21.56% 40.93% (42.89)% (55.47)% (42.93)%
=========== ========== =========== ========== ==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's) ............ $ 21,765 $ 4,936 $ 2,976 $ 499 $ 1,131
Ratio of operating expenses to average
net assets .................................. 1.47% 1.47% 1.47% 1.47% 1.47%
Ratio of net investment loss to average
net assets .................................. (1.13)% (0.92)% (1.22)% (1.42)% (1.40)%
Portfolio turnover rate ....................... 86.74% 74.04% 48.99% 209.84% 71.51%
Ratio of operating expenses to average
net assets without fee waivers and
expenses reimbursed ......................... 2.28% 3.36% 6.72% 19.43% 16.73%
<FN>
- --------------------------------------------------
+ The total return would have been lower if certain fees had not been waived
and expenses reimbursed by the investment advisor and administrator.
++ Per share values have been calculated using the average share method.
(a) Effective April 30, 2002, based upon the determination of the Fund's Board
of Trustees, the Fund changed its name from the First Trust Internet
Portfolio to the Value Line(R) Target 25 Portfolio. The Fund's primary
investment strategy was also changed. The performance figures provided
include the Fund's performance prior to the name change and the change of
the primary investment strategy.
</FN>
Page 58 See Notes to Financial Statements.
FIRST TRUST ENERGY PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH YEAR.
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/04 12/31/03 12/31/02 12/31/01 12/31/00
----------- ---------- ----------- ---------- ----------
Net asset value, beginning of year ............ $ 14.20 $ 10.78 $ 11.29 $ 15.87 $ 11.23
----------- ---------- ----------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income/(loss) .................. (0.04) (0.00)# (0.02)++ (0.04)++ (0.02)
Net realized and unrealized gain/(loss) on
investments ................................. 4.59 3.42 (0.49) (4.54) 4.66
----------- ---------- ----------- ---------- ----------
Total from investment operations .............. 4.55 3.42 (0.51) (4.58) 4.64
----------- ---------- ----------- ---------- ----------
Net asset value, end of year .................. $ 18.75 $ 14.20 $ 10.78 $ 11.29 $ 15.87
=========== ========== =========== ========== ==========
TOTAL RETURN+ ................................. 32.04% 31.73% (4.52)% (28.86)% 41.32%
=========== ========== =========== ========== ==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's) ............ $ 3,747 $ 2,839 $ 2,387 $ 2,069 $ 498
Ratio of operating expenses to average
net assets .................................. 1.47% 1.47% 1.47% 1.47% 1.47%
Ratio of net investment income/(loss) to
average net assets .......................... (0.21)% (0.01)% (0.16)% (0.29)% (0.50)%
Portfolio turnover rate ....................... 39.90% 32.18% 55.39% 113.79% 28.14%
Ratio of operating expenses to average
net assets without fee waivers and
expenses reimbursed ......................... 2.88% 4.69% 4.66% 10.87% 44.00%
<FN>
- --------------------------------------------------
+ The total return would have been lower if certain fees had not been waived
and expenses reimbursed by the investment advisor and administrator.
++ Per share values have been calculated using the average share method.
# Amount represents less than $0.01 per share.
</FN>
See Notes to Financial Statements. Page 59
FIRST TRUST FINANCIAL SERVICES PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH YEAR.
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/04 12/31/03 12/31/02 12/31/01 12/31/00
----------- ---------- ----------- ---------- ----------
Net asset value, beginning of year ............ $ 13.30 $ 10.00 $ 11.68 $ 13.09 $ 10.49
----------- ---------- ----------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income/(loss) .................. 0.08 0.04 0.02 (0.00)++# (0.01)
Net realized and unrealized gain/(loss) on
investments ................................. 1.98 3.26 (1.70) (1.41) 2.61
----------- ---------- ----------- ---------- ----------
Total from investment operations .............. 2.06 3.30 (1.68) (1.41) 2.60
----------- ---------- ----------- ---------- ----------
Net asset value, end of year .................. $ 15.36 $ 13.30 $ 10.00 $ 11.68 $ 13.09
=========== ========== =========== ========== ==========
TOTAL RETURN+ ................................. 15.49% 33.00% (14.38)% (10.77)% 24.79%
=========== ========== =========== ========== ==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's) ............ $ 4,643 $ 4,763 $ 3,696 $ 3,122 $ 1,031
Ratio of operating expenses to average
net assets .................................. 1.47% 1.47% 1.47% 1.47% 1.47%
Ratio of net investment income/(loss) to
average net assets .......................... 0.47% 0.39% 0.18% (0.01)% (0.17)%
Portfolio turnover rate ....................... 30.00% 52.32% 29.62% 127.11% 154.13%
Ratio of operating expenses to average
net assets without fee waivers and
expenses reimbursed ......................... 2.43% 3.29% 3.37% 6.72% 13.62%
<FN>
- --------------------------------------------------
+ The total return would have been lower if certain fees had not been waived
and expenses reimbursed by the investment advisor and administrator.
++ Per share values have been calculated using the average share method.
# Amount represents less than $0.01 per share.
</FN>
Page 60 See Notes to Financial Statements.
FIRST TRUST PHARMACEUTICAL PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH YEAR.
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/04 12/31/03 12/31/02 12/31/01 12/31/00
----------- ----------- ----------- ----------- -----------
Net asset value, beginning of year ........... $ 10.35 $ 8.65 $ 12.06 $ 13.54 $ 10.37
----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income/(loss) ................. 0.00++# (0.03) (0.03) (0.09)++ (0.03)
Net realized and unrealized gain/(loss) on
investments ................................ (0.07) 1.73 (3.38) (1.39) 3.20
----------- ----------- ----------- ----------- -----------
Total from investment operations ............. (0.07) 1.70 (3.41) (1.48) 3.17
----------- ----------- ----------- ----------- -----------
Net asset value, end of year ................. $ 10.28 $ 10.35 $ 8.65 $ 12.06 $ 13.54
=========== ========== =========== ========== ===========
TOTAL RETURN+ ................................ (0.68)% 19.65% (28.28)% (10.93)% 30.57%
=========== ========== =========== ========== ===========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's) ........... $ 3,535 $ 4,121 $ 3,456 $ 3,777 $ 1,267
Ratio of operating expenses to average
net assets ................................. 1.47% 1.47% 1.47% 1.47% 1.47%
Ratio of net investment income/(loss)
to average net assets ...................... 0.02% (0.29)% (0.49)% (0.73)% (0.61)%
Portfolio turnover rate ...................... 23.21% 44.85% 72.48% 50.46% 88.46%
Ratio of operating expenses to average
net assets without fee waivers and
expenses reimbursed ........................ 2.57% 3.48% 3.64% 5.96% 13.46%
<FN>
- --------------------------------------------------
+ The total return would have been lower if certain fees had not been waived
and expenses reimbursed by the investment advisor and administrator.
++ Per share values have been calculated using the average shares method.
# Amount represents less than $0.01 per share.
</FN>
See Notes to Financial Statements. Page 61
FIRST TRUST TECHNOLOGY PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH YEAR.
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/04 12/31/03 12/31/02 12/31/01 12/31/00
----------- ---------- ----------- ---------- -----------
Net asset value, beginning of year ........... $ 4.97 $ 3.39 $ 5.79 $ 10.25 $ 13.41
----------- ---------- ----------- ---------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss .......................... (0.04)++ (0.06) (0.06)++ (0.09)++ (0.10)
Net realized and unrealized gain/(loss)
on investments ............................. 0.10 1.64 (2.34) (4.37) (3.06)
----------- ---------- ----------- ---------- -----------
Total from investment operations ............. 0.06 1.58 (2.40) (4.46) (3.16)
----------- ---------- ----------- ---------- -----------
Net asset value, end of year ................. $ 5.03 $ 4.97 $ 3.39 $ 5.79 $ 10.25
=========== ========== =========== ========== ===========
TOTAL RETURN+ ................................ 1.21% 46.61% (41.45)% (43.51)% (23.56)%
=========== ========== =========== ========== ===========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's) ........... $ 1,693 $ 2,073 $ 1,477 $ 1,739 $ 1,046
Ratio of operating expenses to average
net assets ................................. 1.47% 1.47% 1.47% 1.47% 1.47%
Ratio of net investment loss to average
net assets ................................. (0.88)% (1.22)% (1.37)% (1.38)% (1.42)%
Portfolio turnover rate ...................... 21.87% 33.81% 60.86% 185.60% 98.66%
Ratio of operating expenses to average
net assets without fee waivers and
expenses reimbursed ........................ 4.03% 5.96% 6.23% 9.38% 11.39%
<FN>
- --------------------------------------------------
+ The total return would have been lower if certain fees had not been waived
and expenses reimbursed by the investment advisor and administrator.
++ Per share values have been calculated using the average shares method.
</FN>
Page 62 See Notes to Financial Statements.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 2004
1. FUND DESCRIPTION
First Defined Portfolio Fund, LLC (the "Registrant") was organized as a Delaware
limited liability company on January 8, 1999 under the laws of the State of
Delaware. The Registrant is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended (the "1940
Act"), as a non-diversified, open-end management investment company. The
Registrant offers eleven managed investment portfolios that may be divided into
two general categories: Target Managed VIP Portfolio, The DowSM DART 10
Portfolio, Global Target 15 Portfolio, S&P Target 24 Portfolio, NASDAQ(R) Target
15 Portfolio, First Trust 10 Uncommon Values Portfolio, and Value Line(R) Target
25 Portfolio (the "Strategy Funds"); and First Trust Energy Portfolio, First
Trust Financial Services Portfolio, First Trust Pharmaceutical Portfolio, and
First Trust Technology Portfolio (the "Sector Funds"), (each, a "Fund,"
collectively, the "Funds"). Under Delaware law, a limited liability company does
not issue shares of stock. Instead, ownership rights are contained in membership
interests (each, an "Interest," collectively, the "Interests"). Each Interest
represents an undivided interest in the net assets of a Fund's portfolio. Fund
Interests are not offered directly to the public. Fund Interests are sold only
to American Skandia Life Assurance Corporation Variable Account B ("Account B"),
a Prudential Financial Company ("American Skandia"), to fund the benefits of
variable annuity policies (the "Policies") issued by American Skandia. Account B
is the sole member of the Registrant. Account B's variable annuity owners who
have Policy values allocated to any of the Funds have indirect rights to the
Registrant's Interests.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
preparation of financial statements in accordance with U.S. generally accepted
accounting principles 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.
PORTFOLIO VALUATION:
Generally, a Fund's investments are valued at market value or, in the absence of
market value with respect to any portfolio securities, at fair value as
determined in accordance with procedures adopted by the Board of Trustees of the
Registrant. Portfolio securities for which the primary market is a domestic or
foreign exchange, or which are traded over-the-counter and quoted on the NASDAQ
System, are valued at the last sale price or the NASDAQ Official Closing Price
on the day of valuation or, if there was no sale that day, at the mean between
the most recent bid and ask prices. Portfolio securities not quoted on the
NASDAQ System that are actively traded in the over-the-counter market, including
listed securities for which the primary market is believed to be
over-the-counter, are valued at the closing bid price provided by the principal
market makers. Securities for which quotations are not readily available are
valued at fair value as determined in accordance with provisions adopted by the
Board of Trustees. Short-term investments that mature in 60 days or less are
valued at amortized cost.
Foreign securities traded outside the United States are generally valued as of
the time their trading is complete, which is usually different from the close of
the New York Stock Exchange. Occasionally, events affecting the value of such
securities may occur between such times and the close of the New York Stock
Exchange that will not be reflected in the quoted market price of a portfolio
security. If events materially affecting the quoted market price of such
securities occur during such period, these securities will be valued at their
fair value according to procedures adopted by the Board of Trustees. All
securities and other assets of a Fund initially expressed in foreign currencies
will be converted to U.S. dollars using exchange rates in effect at the time of
valuation.
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
recognized and recorded on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date; interest income is not accrued
until settlement date. Each Fund instructs the custodian to segregate assets of
the Fund with a current value at least equal to the amount of its when-issued
purchase commitments.
Page 63
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 2004
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 investment securities and items of income and expense are
translated on the respective dates of such transactions. Unrealized gains and
losses which result from changes in foreign currency exchange rates have been
included in the unrealized appreciation/(depreciation) of investments and net
other assets. 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. The portion of foreign currency gains and losses related to
fluctuation in exchange rates between the initial purchase trade date and
subsequent sale trade date is included in realized gains and losses on
investment securities sold.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income and net realized long-term and short-term
capital gains of all Funds may be paid with such frequency (monthly or
otherwise) as the Board of Trustees may determine from time to time. Currently
all dividends paid by a Fund will be reinvested by the Fund.
INCOME TAXES:
The Registrant is a limited liability company with all of its Interests owned by
a single entity (Account B). Accordingly, the Registrant is treated as part of
the operations of American Skandia and is not taxed separately. The Registrant
intends to comply with the provisions of Section 817(h) of the Internal Revenue
Code, which imposes certain diversification requirements upon variable contracts
that are based on segregated asset accounts. Under current tax law, interest,
dividend income, and capital gains of the Registrant are not currently taxable
when left to accumulate within a variable annuity contract. As such, no federal
or state income tax provision is required.
EXPENSES:
Expenses that are directly related to one of the Funds are charged directly to
that Fund. Effective June 1, 2004, general expenses of the Registrant with the
exception of audit, legal and printing fees, which are allocated evenly among
the Funds, are allocated to all the Funds based upon the average net assets of
each Fund. Prior to June 1, 2004, all general expenses of the Registrant were
allocated evenly between each Fund.
3. INVESTMENT ADVISORY FEE AND OTHER AFFILIATED TRANSACTIONS
FirstTrust Advisors L.P. ("First Trust") is a limited partnership with one
limited partner, Grace Partners of DuPage L.P., and one general partner, The
Charger Corporation. First Trust serves as investment advisor to the Funds
pursuant to an Investment Advisory and Management Agreement. First Trust
provides each Fund with discretionary investment services and certain
administrative services necessary for the management of the portfolios. For its
investment advisory and management services, First Trust is entitled to a
monthly fee calculated at an annual rate of 0.60% of each Fund's average daily
net assets.
For the period September 30, 2004 through December 31, 2007, First Trust has
contractually agreed to waive fees and reimburse expenses of the Funds to limit
the total annual fund operating expenses (excluding brokerage expense and
extraordinary expenses) to 1.37% for the 10 Uncommon Values Portfolio and 1.47%
for each of the other Funds' average daily net assets. First Trust has entered
into an agreement with the Registrant that will allow First Trust to recover
from the Funds any fees waived or reimbursed during the three year period of
January 1, 2005 through December 31, 2007. However, First Trust's ability to
recover such amounts is limited to the extent that it would not exceed the
amount reimbursed or waived during such period. The fees waived and expenses
reimbursed for the year ended December 31, 2004, by First Trust, are as follows:
FEES WAIVED EXPENSES REIMBURSED
----------- -------------------
Target Managed VIP Portfolio .................................... $190,272 $ --
The DowSM DART 10 Portfolio ..................................... 40,668 --
Global Target 15 Portfolio ...................................... 53,074 30,975
S&P Target 24 Portfolio ......................................... 49,650 5,194
NASDAQ(R)Target 15 Portfolio .................................... 31,429 9,418
First Trust 10 Uncommon Values Portfolio ........................ 3,200 --
Page 64
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 2004
FEES WAIVED EXPENSES REIMBURSED
----------- -------------------
Value Line(R) Target 25 Portfolio ............................... $48,615 $ --
First Trust Energy Portfolio .................................... 20,263 15,455
First Trust Financial Services Portfolio ........................ 27,658 3,681
First Trust Pharmaceutical Portfolio ............................ 22,650 7,309
First Trust Technology Portfolio ................................ 10,752 25,855
PFPC Inc. ("PFPC"), serves as the Registrant's administrator. In addition, PFPC
also provides certain fund accounting, custody administration and transfer
agency services in accordance with certain fee arrangements. Beginning in 2003,
PFPC agreed to an initial 30% reduction in the minimum fees for administrative,
accounting and transfer agency services charged to the First Defined Portfolio
Fund, LLC. This was agreed to because of the extent of business generated by
First Trust during the year, for which PFPC also provided these services. As of
December 31, 2004, these minimum fees have been eliminated.
PFPC Trust Company serves as the custodian to the Funds.
No officer or employee of First Trust or First Trust Portfolios L.P. ("FTP"), a
wholly owned subsidiary of First Trust, receives any compensation from the
Registrant for serving as an officer or Trustee of the Registrant. Effective
June 7, 2004, the Trustees of the Registrant approved a revised compensation
plan. Under the revised plan, the Registrant pays each Trustee who is not an
officer or employee of First Trust or any of their affiliates an annual retainer
of $10,000 which includes compensation for all regular quarterly board meetings
and regular committee meetings. No additional meeting fees are paid in
connection with regular quarterly board meetings or regular committee meetings.
Additional fees of $1,000 and $500 are paid to non-interested Trustees for
special board meetings and non-regular committee meetings, respectively. These
additional fees are shared by these Funds and by other funds in the First Trust
fund complex, not part of this Registrant, that participate in the particular
meeting and are not per fund fees. Trustees are also reimbursed for travel and
out-of-pocket expenses in connection with all meetings. The Trustees adopted the
revised plan because the increase in the number of funds not included in this
Registrant in the First Trust fund complex had the effect of rapidly increasing
their compensation under the previous arrangements. Prior to June 7, 2004, the
Registrant paid each Trustee who was not an officer or employee of First Trust
or FTP or any of their affiliates $15,000 per annum plus $125 per portfolio per
regularly scheduled meeting attended, $500 per committee meeting attended and
reimbursement for travel and out-of-pocket expenses.
4. DISTRIBUTION PLAN
The Registrant, on behalf of each Fund, has adopted a 12b-1 Service Plan (the
"Plan") pursuant to Rule 12b-1 under the 1940 Act, which provides that Interests
of each of the Funds will be subject to an annual service fee.
FTP serves as the selling agent and distributor of Interests of the Funds. In
this capacity, FTP manages the offering of the Funds' Interests and is
responsible for all sales and promotional activities. The Plan reimburses FTP
for its costs in connection with these activities. FTP also uses the service fee
to compensate American Skandia for providing account services to policy owners.
These services include establishing and maintaining policy owner accounts,
answering inquiries, and providing personal services to policy owners. Each Fund
may spend up to 0.25% per year, of the average daily net assets of its
Interests, as a service fee under the Plan. In addition, the Plan permits First
Trust to use a portion of its advisory fee to compensate FTP for expenses
incurred in connection with the sales and distribution of a Fund's Interests
including, without limitation, expenses of preparing, printing and distributing
prospectuses to persons other than Interest holders or policy owners, as well as
compensating its sales force, printing and distributing advertising and sales
literature and reports to Interest holders and policy owners used in connection
with the sale of a Fund's Interests, certain other expenses associated with the
distribution of the Funds, and any distribution-related expenses that may be
authorized by the Board of Trustees.
Payments under the Plan were suspended on May 1, 2003 for all the Funds with the
exception of the First Trust 10 Uncommon Values Portfolio. On May 1, 2004,
payments were reinstated for all Funds with the exceptions of the First Trust
Energy Portfolio, the First Trust Financial Services Portfolio, the First Trust
Pharmaceutical Portfolio and the First Trust Technology Portfolio. During the
year ended December 31, 2004, all service fees received by FTP were paid to
American Skandia, with no portion of such fees retained by FTP. The Plan may be
renewed from year to year if approved by a vote of the Board of Trustees and a
vote of the non-interested Trustees, who have no direct or indirect financial
interest in the Plan, cast in person at a meeting called for the purpose of
voting on the Plan.
Page 65
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 2004
5. PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of securities, excluding U.S.
Government and short-term investments, for the year ended December 31, 2004,
were as follows:
PURCHASES SALES
----------- ------------
Target Managed VIP Portfolio .......................................... $93,860,627 $19,802,873
The DowSM DART 10 Portfolio ........................................... 11,316,992 3,849,437
Global Target 15 Portfolio ............................................ 20,581,442 4,204,715
S&P Target 24 Portfolio ............................................... 15,588,927 8,540,313
NASDAQ(R)Target 15 Portfolio .......................................... 7,843,996 6,118,793
First Trust 10 Uncommon Values Portfolio .............................. 11,626,249 12,264,773
Value Line(R)Target 25 Portfolio ...................................... 20,045,220 7,523,423
First Trust Energy Portfolio .......................................... 1,329,964 1,454,423
First Trust Financial Services Portfolio .............................. 1,377,077 2,130,371
First Trust Pharmaceutical Portfolio .................................. 867,603 1,441,768
First Trust Technology Portfolio ...................................... 382,779 821,021
6. MEMBERSHIP INTERESTS
The Registrant has authorized an unlimited number of Membership Interests
without par value of one or more series.
7. CONCENTRATION OF RISK
The Funds may invest in foreign securities. Investing in securities of foreign
companies and foreign governments involves special risks and considerations not
typically associated with investing in the securities of U.S. companies and the
U.S. government. These risks include re-valuation of currencies and future
adverse political and economic developments. These risks are heightened for
investments in emerging market countries. Moreover, securities of many foreign
companies and foreign governments and their markets may be less liquid and their
prices more volatile than those of securities of comparable U.S. companies and
the U.S. government.
Each Fund may invest up to 15% of its net assets in illiquid securities,
including securities that are not readily marketable, securities that are
restricted as to disposition under Federal securities law or otherwise,
repurchase agreements maturing in more than seven days, certain options traded
in the over-the-counter market and the securities to which such options relate.
In purchasing securities, which cannot be sold by a Fund without registration
under the Securities Act of 1933, as amended, a Fund will endeavor to obtain the
right to registration at the expense of the issuer. There generally will be a
lapse of time between the decision by a Fund to sell any such security and the
registration of the security permitting the sale. During any such period, the
security will be subject to market fluctuations.
Each Fund is classified as "non-diversified" and is limited as to the percentage
of its assets which may be invested in securities of any one issuer only by its
own investment restrictions and diversification requirements. A Fund may
therefore invest a relatively high percentage of its assets in a limited number
of issuers. This does expose each Fund to greater market fluctuations than is
experienced by a diversified fund. Each Fund is more susceptible to any single
economic, political or regulatory occurrence and to the financial conditions of
the issuer in which it invests.
Page 66
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
TO THE INTEREST HOLDERS AND BOARD OF TRUSTEES OF FIRST DEFINED PORTFOLIO FUND,
LLC:
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of the First Defined Portfolio Fund, LLC (the
"Funds", comprising respectively, Target Managed VIP Portfolio, The DowSM DART
10 Portfolio, Global Target 15 Portfolio, S&P Target 24 Portfolio, NASDAQ(R)
Target 15 Portfolio, First Trust 10 Uncommon Values Portfolio, Value Line(R)
Target 25 Portfolio, First Trust Energy Portfolio, First Trust Financial
Services Portfolio, First Trust Pharmaceutical Portfolio, and First Trust
Technology Portfolio) as of December 31, 2004, and 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, and the financial highlights for
each of the five years in the period then ended. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). 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. An audit
includes consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, 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. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements and financial
highlights, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
Our procedures included confirmation of securities owned as of December 31,
2004, by correspondence with the custodian and brokers. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting the First Defined Portfolio Fund, LLC
as of December 31, 2004, 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 each of the five years in the
period then ended in conformity with U.S. generally accepted accounting
principles.
[GRAPHIC OMITTED]
ERNST & YOUNG LLP
Boston, Massachusetts
February 4, 2005
Page 67
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION (UNAUDITED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 2004
- --------------------------------------------------------------------------------
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Registrant uses to
determine how to vote proxies relating to portfolio securities and information
regarding how each portfolio voted proxies relating to 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 Registrant's website
located at http://www.ftportfolios.com and (3) on the Securities and Exchange
Commission's ("SEC") website located at http://www.sec.gov.
PORTFOLIO HOLDINGS
The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Registrant's Form
N-Q is available (1) by calling (800) 988-5891; (2) on the Registrant's website
located at http://www.ftportfolios.com; (3) on the SEC's website at
http://www.sec.gov; and (4) for review and copying at the SEC's Public Reference
Room ("PRR") in Washington, DC. Information regarding the operation of the PRR
may be obtained by calling 1-800-SEC-0330.
Page 68
- --------------------------------------------------------------------------------
MANAGEMENT
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 2004 (UNAUDITED)
BOARD OF TRUSTEES AND OFFICERS
Information pertaining to the Trustees and officers* of the Registrant is set
forth below. The Statement of Additional Information (SAI) includes additional
information about the Trustees and is available without charge, upon request, by
calling (800) 988-5891.
NUMBER OF OTHER
PORTFOLIOS TRUSTEESHIPS/
NAME, D.O.B., ADDRESS AND TERM OF OFFICE AND PRINCIPAL OCCUPATION(S) IN FUND COMPLEX DIRECTORSHIPS
POSITION(S) WITH THE REGISTRANT LENGTH OF TIME SERVED DURING PAST 5 YEARS OVERSEEN BY TRUSTEE HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
DISINTERESTED TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
Richard E. Erickson, Trustee o Indefinite term Physician, Sportsmed/ 20 portfolios None
D.O.B. 04/51 o 5 years served Wheaton Orthopedics
c/o First Trust Advisors L.P.
1001 Warrenville Road
Suite 300
Lisle, IL 60532
Niel B. Nielson, Trustee o Indefinite term President, Covenant 20 portfolios Director of Good
D.O.B. 03/54 o 5 years served College (June 2002 to News Publisher-
c/o First Trust Advisors L.P. present); Pastor, College Crossway Books;
1001 Warrenville Road Church in Wheaton Covenant Transport
Suite 300 (1997 to June 2002) Inc.
Lisle, IL 60532
Thomas R. Kadlec, Trustee o Indefinite term Vice President and Chief 20 portfolios None
D.O.B. 11/57 o 9 months served Financial Officer (1990
c/o First Trust Advisors L.P. to present) ADM
1001 Warrenville Road Investor Services, Inc.
Suite 300 (Futures Commission
Lisle, IL 60532 Merchant); Registered
Representative (2000 to
present) Segerdahl &
Company, Inc., a NASD
member (Broker-Dealer)
- ------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
James A. Bowen, Trustee o Indefinite term President, First Trust 20 portfolios None
President, Chairman of the o 5 years served Advisors L.P. and First
Board and CEO Trust Portfolios L.P.;
D.O.B. 09/55 Chairman of the Board,
1001 Warrenville Road BondWave LLC and
Suite 300 Stonebridge Advisors
Lisle, IL 60532 LLC
Page 69
- --------------------------------------------------------------------------------
MANAGEMENT - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 2004 (UNAUDITED)
BOARD OF TRUSTEES AND OFFICERS (CONTINUED)
NUMBER OF OTHER
PORTFOLIOS TRUSTEESHIPS/
NAME, D.O.B., ADDRESS AND TERM OF OFFICE AND PRINCIPAL OCCUPATION(S) IN FUND COMPLEX DIRECTORSHIPS
POSITION(S) WITH THE REGISTRANT LENGTH OF TIME SERVED DURING PAST 5 YEARS OVERSEEN BY TRUSTEE HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS WHO ARE NOT TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
Robert F. Carey, Vice o Indefinite term Senior Vice President, N/A N/A
President o 5 years served First Trust Advisors L.P.
D.O.B. 07/63 and First Trust
1001 Warrenville Road Portfolios L.P.
Suite 300
Lisle, IL 60532
Mark R. Bradley, Treasurer, o Indefinite term Chief Financial Officer, N/A N/A
Controller, Chief Financial o 5 years served Managing Director, First
Officer, Chief Accounting Trust Advisors L.P. and
Officer First Trust Portfolios
D.O.B. 11/57 L.P.; Chief Financial
1001 Warrenville Road Officer, BondWave LLC
Suite 300 and Stonebridge
Lisle, IL 60532 Advisors LLC
W. Scott Jardine, Chief o Indefinite term General Counsel, First N/A N/A
Compliance Officer and o 5 years served Trust Advisors L.P. and
Secretary First Trust Portfolios
D.O.B. 05/60 L.P.; Secretary,
1001 Warrenville Road BondWave LLC and
Suite 300 Stonebridge Advisors
Lisle, IL 60532 LLC
Page 70
- --------------------------------------------------------------------------------
MANAGEMENT - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 2004 (UNAUDITED)
BOARD OF TRUSTEES AND OFFICERS (CONTINUED)
NUMBER OF OTHER
PORTFOLIOS TRUSTEESHIPS/
NAME, D.O.B., ADDRESS AND TERM OF OFFICE AND PRINCIPAL OCCUPATION(S) IN FUND COMPLEX DIRECTORSHIPS
POSITION(S) WITH THE REGISTRANT LENGTH OF TIME SERVED DURING PAST 5 YEARS OVERSEEN BY TRUSTEE HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS WHO ARE NOT TRUSTEES - (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
Roger Testin o Indefinite term Senior Vice President, N/A N/A
Vice President o 3 years served First Trust Advisors L.P.
D.O.B. 06/66 (August 2001 to
1001 Warrenville Road present); Analyst, Dolan
Suite 300 Capital Management
Lisle, IL 60532 (1998-2001)
Susan M. Brix o Indefinite term Representative, First N/A N/A
Assistant Vice President o 5 years served Trust Portfolios L.P.;
D.O.B. 01/60 Assistant Portfolio
1001 Warrenville Road Manager, First Trust
Suite 300 Advisors L.P.
Lisle, IL 60532
Kristi A. Maher o Indefinite term Assistant General N/A N/A
Assistant Secretary o 6 months served Counsel, First Trust
D.O.B. 12/66 Portfolios L.P. (March
1001 Warrenville Road 2004 to present);
Suite 300 Associate, Chapman and
Lisle, IL 60532 Cutler LLP (1995-2004)
<FN>
- ------------------
* The term "officer" means the president, vice president, secretary,
treasurer, controller or any other officer who performs a policy making
function.
</FN>
Page 71
This Page Left Blank Intentionally.
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 definition enumerated in paragraph (b) of this Item.
(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.
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 is qualified to serve as an audit
committee financial expert serving on its audit committee and that he is
"independent," as defined by Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
AUDIT FEES
- ----------
(a) The aggregate fees billed for each of the last two fiscal years ending
December 31, 2004 and 2003, 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 are $108,000 and $115,000, respectively.
AUDIT-RELATED FEES
- ------------------
(b) The aggregate fees billed in each of the last two fiscal years ending
December 31, 2004 and 2003, 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 are $0 and $0, respectively.
TAX FEES
- --------
(c) The aggregate fees billed in each of the last two fiscal years ending
December 31, 2004 and 2003 for professional services rendered by the
principal accountant for tax compliance, tax advice, and tax planning
are $0 and $0, respectively.
ALL OTHER FEES
- --------------
(d) The aggregate fees billed in each of the last two fiscal years
ending December 31, 2004 and 2003 for products and services
provided by the principal accountant, other than the services
reported in paragraphs (a) through (c) of this Item are $0 and $0,
respectively.
(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, 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 Fund by
its independent auditors. The Chairman of the Committee is authorized to give
such pre-approvals on behalf of the Committee and shall report any such
pre-approval to the full Committee.
The Committee is also responsible for the approval of the independent
auditor's engagements for non-audit services with the Fund's management (not
including a sub-adviser whose role is primarily portfolio management and is
sub-contracted or overseen by another investment adviser) and any entity
controlling, controlled by or under common control with the investment adviser
that provides ongoing services to the Fund, if the engagement relates directly
to the operations and financial reporting of the Fund, 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 Fund's management
(other than any sub-adviser whose role is primarily portfolio management and is
sub-contracted with or overseen by another investment adviser) and any entity
controlling, controlled by or under common control with the investment adviser
that provides ongoing services to the Fund that were not pre-approved pursuant
to the DE MINIMIS exception, 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) of this Item that were approved by the audit committee
pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X
are as follows:
(b) Not Applicable
(c) Not Applicable
(d) Not Applicable
The percentage of services described in each of paragraphs (b) through
(d) of this Item that were approved by the audit committee pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X are as follows:
(b) Not Applicable
(c) Not Applicable
(d) Not Applicable
(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 adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by
another investment adviser), and any entity controlling, controlled by,
or under common control with the adviser that provides ongoing services
to the registrant for each of the last two fiscal years ending December
31, 2004 and 2003 of the registrant was $0 and $0, respectively.
(h) Not Applicable. The registrant's independent auditors do not currently
provide non-audit services to the registrant's investment adviser or
any of entity controlling, controlled by, or under common control with
the adviser that provide ongoing services to the registrant.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is 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.
Not applicable.
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 registrant's second fiscal
quarter of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. 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.
(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 DEFINED PORTFOLIO FUND, LLC
-------------------------------------------------------
By (Signature and Title)* /S/ JAMES A. BOWEN
------------------------------------------
James A. Bowen, President, Chairman &
Chief Executive Officer
(principal executive officer)
Date FEBRUARY 24, 2005
-------------------------------------------------------
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 A. BOWEN
-------------------------------------------
James A. Bowen, President, Chairman &
Chief Executive Officer
(principal executive officer)
Date FEBRUARY 24, 2005
-------------------------------------------------------
By (Signature and Title)* /S/ MARK R. BRADLEY
------------------------------------------
Mark R. Bradley, Treasurer, Controller,
Chief Financial Officer and
Chief Accounting Officer
(principal financial officer)
Date FEBRUARY 24, 2005
-------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.