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
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(Exact name of registrant as specified in charter)
1001 Warrenville Road, Suite 300
Lisle, IL 60532
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(Address of principal executive offices) (Zip code)
W. Scott Jardine, Esq.
First Trust Portfolios L.P.
1001 Warrenville Road, Suite 300
Lisle, IL 60532
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(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: June 30, 2007
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
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FIRST DEFINED PORTFOLIO FUND, LLC
SEMI-ANNUAL REPORT
FOR THE SIX MONTHS ENDED JUNE 30, 2007
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TABLE OF CONTENTS
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FIRST DEFINED PORTFOLIO FUND, LLC
JUNE 30, 2007
Shareholder Letter ........................................................ 1
Market Overview ........................................................... 2
Performance Summaries and Portfolio Components ............................ 3
Understanding Your Fund Expenses .......................................... 12
Portfolio of Investments .................................................. 13
Statements of Assets and Liabilities ...................................... 28
Statements of Operations .................................................. 30
Statements of Changes in Net Assets ....................................... 32
Statements of Changes in Net Assets - Capital Stock Activity .............. 34
Financial Highlights ...................................................... 36
Notes to Financial Statements ............................................. 44
Additional Information .................................................... 49
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This report contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933. Forward-looking statements include
statements regarding the goals, beliefs, plans or current expectations of First
Trust Advisors L.P. (the "Advisor" or "First Trust") and its representatives,
taking into account the information currently available to them. Forward-looking
statements include all statements that do not relate solely to current or
historical fact. For example, forward-looking statements include the use of
words such as "anticipate," "estimate," "intend," "expect," "believe," "plan,"
"may," "should," "would" or other words that convey uncertainty of future events
or outcomes.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
First Defined Portfolio Fund, LLC (the "Fund") to be materially different from
any future results, performance or achievements expressed or implied by the
forward-looking statements. When evaluating the information included in this
report, you are cautioned not to place undue reliance on these forward-looking
statements, which reflect the judgment of the Advisor and its representatives
only as of the date hereof. We undertake no obligation to publicly revise or
update these forward-looking statements to reflect events and circumstances that
arise after the date hereof.
PERFORMANCE AND RISK DISCLOSURE
There is no assurance that any Portfolio (individually called a "Portfolio" and
collectively the "Portfolios") of the Fund will achieve its investment
objective. Each Portfolio of the Fund is subject to market risk, which is the
possibility that the market value of securities owned by the Portfolio will
decline and that the value of the Fund shares may therefore be less than what
you paid for them. Accordingly, you can lose money investing in the Fund.
Performance data quoted represents past performance, which is no guarantee of
future results, and current performance may be lower or higher than the figures
shown. For the most recent month-end performance figures, please visit
http://www.ftportfolios.com or speak with your financial advisor. Investment
returns and net asset value will fluctuate and Portfolio shares may be worth
more or less than their original cost.
HOW TO READ THIS REPORT
This report contains information that may 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 by Robert F.
Carey, Chief Investment Officer of First Trust, the Fund's investment advisor,
you may obtain an understanding of how the market environment affected its
performance. The statistical information that follows may 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 Mr.
Carey 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.
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SHAREHOLDER LETTER
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FIRST DEFINED PORTFOLIO FUND, LLC
SEMI-ANNUAL REPORT
JUNE 30, 2007
Dear Shareholders:
We believe investment opportunities abound, both here and abroad, affording the
potential for exceptional returns for investors. At First Trust Advisors L.P.
("First Trust") we realize that we must be mindful of the complexities of the
global economy and at the same time address the needs of our customers through
the types of investments we bring to the market.
The report you hold gives detailed information about eight Portfolios in the
First Defined Portfolio Fund, LLC over the six-month period ended June 30, 2007.
I encourage you to read this semi-annual report and discuss it with your
financial advisor.
First Trust is pleased to be a part of the investment solutions offered by
American Skandia Life Assurance Corporation, a Prudential Financial Company, and
pleased to give you current information about your investment. We value the
trust you have placed in our Portfolios and appreciate the opportunity to assist
you in achieving your financial goals.
Sincerely,
/s/ James A. Bowen
James A. Bowen
President of First Defined Portfolio Fund, LLC
August 15, 2007
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[PHOTO OMITTED]
ROBERT F. CAREY, CFA
SENIOR VICE PRESIDENT AND CHIEF INVESTMENT OFFICER
FIRST TRUST ADVISORS L.P.
Mr. Carey is responsible for the overall management of research and analysis of
the First Trust product line. Mr. Carey has over 21 years of experience as an
Equity and Fixed-Income Analyst and is a recipient of the Chartered Financial
Analyst ("CFA") designation. He is a graduate of the University of Illinois at
Champaign-Urbana with a B.S. in Physics. He is also a member of the Investment
Analysts Society of Chicago and the CFA Institute. Mr. Carey has appeared as a
guest on such programs as Bloomberg TV, CNBC, and WBBN Radio and has been quoted
by several publications, including THE WALL STREET JOURNAL, THE WALL STREET
REPORTER, BLOOMBERG NEWS SERVICE, and REGISTERED REP.
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MARKET OVERVIEW
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The equities markets performed well in the first half of 2007. The S&P 500 Index
posted a total return of 7.0%, while the S&P MidCap 400 Index and Russell 2000
Index of small-caps returned 12.0% and 6.5%, respectively. According to Ibbotson
Associates, the S&P 500 Index has averaged 10.4% a year since 1926, while
small-cap stocks have averaged 12.7%. Large-caps are advancing at a faster clip
than their historical average, while small-caps are on pace to achieve their
norm. Mid-cap issues continue to be the sweet spot of the market. We believe
mid-caps are outperforming their two counterparts because their size makes them
attractive to private equity firms and others looking to make acquisitions.
Private equity firms, in particular, are well-capitalized so small companies are
not big enough to meet the needs of such firms, while most large companies are
out of reach. With interest rates still at relatively low levels, we believe
merger and acquisition activity will remain strong through at least the end of
this year.
With respect to fixed-income securities, the Lehman Brothers U.S. Treasury
Intermediate Index posted a total return of just 1.5% at the 2007 midway point.
Treasury bonds have returned 5.4%, on average, since 1926, according to Ibbotson
Associates. At this juncture they are not on pace to achieve their average. The
Federal Reserve Board (the "Fed") has held the federal funds rate at 5.25% over
the past 12 months. The Fed has been monitoring the weakness in the housing
market and weighing its influence against the overall strength of the economy.
Its primary concern is curbing inflation, which is still tracking above its 2.0%
ceiling. The Fed also has a new concern on its hands: sub-prime mortgages. A
high percentage of sub-prime mortgages written in recent years were
adjustable-rate. Unfortunately, some of these homeowners will not be able to
afford their homes once these mortgages reset higher over the next 6-12 months.
In fact, foreclosures were already 58% higher in the first half of this year
versus the same period a year ago, according to RealtyTrac. As of June, the Fed
did not believe the sub-prime fallout would derail the current economic
expansion.
The outlook for large-cap stocks is more optimistic than for mid- and small-cap
stocks at this stage of the economic cycle, in our opinion. Mid- and small- caps
have dominated their larger counterparts since the start of this decade. From
December 31, 1999 through June 30, 2007, the S&P 500 Index posted a cumulative
total return of 15.7%, which paled in comparison to the 119.2% gain posted by
the S&P MidCap 400 Index and the 82.3% gain posted by the Russell 2000 Index.
Two reasons for the anticipated shift in sentiment is the tempering of economic
growth here in the U.S. and the possibility that the Fed may have to raise the
fed funds rate in the second half of 2007 to stave off inflation. The Blue Chip
Economic Consensus Forecast in June called for 2.1% GDP growth in 2007, well
below last year's 3.3% growth rate and the 3.9% growth registered in 2004.
Page 2
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PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS
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FIRST DEFINED PORTFOLIO FUND, LLC
JUNE 30, 2007 (UNAUDITED)
TARGET MANAGED VIP PORTFOLIO
Over the six months ended June 30, 2007, the Portfolio's total return was 7.1%
versus 7.1% for the Portfolio's benchmark, the Russell 3000 Index. Of the
Portfolio's 114 stocks, 76 advanced and 38 declined. The top three performing
stocks in the Portfolio over the six months (by contribution to return) were
Research In Motion Ltd., Caterpillar, Inc., and Potash Corp. of Saskatchewan,
Inc. The worst performing stocks (by percentage loss) were Harley-Davidson,
Inc., DIRECTV Group, Inc., and Rogers Corp.
The biggest contributor to the Portfolio's performance over the six months
covered by this report was the industrial sector. Caterpillar, Inc. and PACCAR,
Inc., both top five performers in the Portfolio, led the strong performance in
the group. An underweight position in financials also helped portfolio
performance, relative to its benchmark, as it was the worst performing sector in
the benchmark. Performance was hurt most by the consumer discretionary sector,
which included Harley-Davidson, Inc. and DIRECTV Group, Inc., two of the
portfolio's worst performing stocks by contribution to return. Performance was
also hurt, relative to its benchmark, by the underperformance of the Portfolio's
energy holdings.
Page 3
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PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS (a) - (CONTINUED)
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FIRST DEFINED PORTFOLIO FUND, LLC
JUNE 30, 2007 (UNAUDITED)
TARGET MANAGED VIP PORTFOLIO (CONTINUED)
PORTFOLIO COMPONENTS
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
Software 10.2%
Diversified Telecommunication Services 9.7%
Communications Equipment 8.1%
Oil, Gas & Consumable Fuels 7.8%
Pharmaceuticals 6.1%
Machinery 5.7%
Chemicals 5.3%
Commercial Banks 4.9%
Computers & Peripherals 3.4%
Specialty Retail 3.4%
Consumer Finance 3.3%
Media 3.0%
Semiconductors & Semiconductor Equipment 2.8%
IT Services 1.9%
Commercial Services & Supplies 1.8%
Electric Utilities 1.7%
Metals & Mining 1.5%
Automobiles 1.5%
Wireless Telecommunication Services 1.5%
Beverages 1.5%
Leisure Equipment & Products 1.3%
Multi-Utilities 1.0%
Electrical Equipment 1.0%
Energy Equipment & Services 0.9%
Multiline Retail 0.9%
Aerospace & Defense 0.9%
Construction & Engineering 0.8%
Hotels, Restaurants & Leisure 0.8%
Biotechnology 0.7%
Air Freight & Logistics 0.7%
Electronic Equipment & Instruments 0.7%
Health Care Equipment & Supplies 0.7%
Health Care Technology 0.6%
Food Products 0.6%
Diversified Financial Services 0.6%
Real Estate Investment Trusts (REITs) 0.4%
Internet Software & Services 0.3%
Health Care Providers & Services 0.3%
Building Products 0.3%
Household Durables 0.3%
Internet & Catalog Retail 0.2%
Airlines 0.2%
Personal Products 0.2%
Containers & Packaging 0.2%
Textiles, Apparel & Luxury Goods 0.1%
Tobacco 0.1%
Life Sciences Tools & Services 0.1%
(a) Percentages are based on total investments. Please note that the
percentages shown on the Portfolio of Investments are based on net
assets.
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PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS (a) - (CONTINUED)
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FIRST DEFINED PORTFOLIO FUND, LLC
JUNE 30, 2007 (UNAUDITED)
THE DOW(R) DART 10 PORTFOLIO
Over the six months ended June 30, 2007, the Portfolio's total return was 5.9%
versus 8.8% for the Portfolio's benchmark, the Dow Jones Industrial Average. Of
the Portfolio's 10 stocks, 7 advanced and 3 declined. The top three performing
stocks in the Portfolio over the six months (by contribution to return) were
Caterpillar, Inc., Intel Corp., and 3M Co. The worst performing stocks (by
percentage loss) were Citigroup, Inc., Home Depot, Inc., and General Motors
Corp.
Caterpillar was the biggest contributor to the Portfolio over the six months
covered by this report as sustained global economic growth boosted the firm's
business. Intel Corp. and 3M Co. were also strong performers over the period.
Portfolio performance was hurt most by Citigroup, Inc. and Home Depot, Inc. Home
Depot shares lagged the overall market as the slowdown in housing affected
earnings.
PORTFOLIO COMPONENTS
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Machinery 12.0%
Semiconductor & Semiconductor Equipment 11.0%
Industrial Conglomerates 10.5%
Computers & Peripherals 10.2%
Oil, Gas & Consumable Fuels 10.2%
Chemicals 9.8%
Specialty Retail 9.3%
Software 9.2%
Pharmaceuticals 9.2%
Diversified Financial Services 8.6%
(a) Percentages are based on total investments. Please note that the
percentages shown on the Portfolio of Investments are based on net
assets.
Page 5
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PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS (a) - (CONTINUED)
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FIRST DEFINED PORTFOLIO FUND, LLC
JUNE 30, 2007 (UNAUDITED)
THE DOW(R) TARGET DIVIDEND PORTFOLIO
Over the six-month ended June 30, 2007, the Portfolio's total return was 4.0%
versus 4.2% for the Portfolio's benchmark, the Dow Jones Select Dividend
Index(R). Of the Portfolio's 20 stocks, 12 advanced and 8 declined. The top
three performing stocks in the Portfolio over the six months (by contribution to
return) were Lyondell Chemical Co., Lubrizol Corp., and ONEOK, Inc. The worst
performing stocks (by percentage loss) were Pinnacle West Capital Corp., Regions
Financial Corp., and UniSource Energy Corp.
The materials sector was the biggest contributor to Portfolio performance for
the six months covered by this report. The sector was led by Lyondell Chemical
Co. and Lubrizol Corp., the Portfolio's top two performers over the period.
Performance was held back by the Portfolio's financial holdings. Financials were
the worst performing sector over the period in the S&P 500 Index and the
Portfolio's large weight in the sector hurt performance.
PORTFOLIO COMPONENTS
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Multi-Utilities 19.6%
Electric Utilities 18.3%
Insurance 14.5%
Commercial Banks 13.4%
Chemicals 13.3%
Gas Utilities 10.7%
Paper & Forest Products 5.7%
Diversified Financial Services 4.5%
(a) Percentages are based on total investments. Please note that the
percentages shown on the Portfolio of Investments are based on net
assets.
Page 6
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PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS (a) - (CONTINUED)
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FIRST DEFINED PORTFOLIO FUND, LLC
JUNE 30, 2007 (UNAUDITED)
GLOBAL DIVIDEND TARGET 15 PORTFOLIO
Over the six months ended June 30, 2007, the Portfolio's total return was 15.4%
versus 9.2% for the Portfolio's benchmark, the Morgan Stanley International
Developed Markets World Index. Of the Portfolio's 15 stocks, 13 advanced and 2
declined. The top three performing stocks in the Portfolio over the six months
(by contribution to return) were GKN PLC, CITIC Pacific Ltd., and Compass Group
PLC. The worst performing stocks (by percentage loss) were BOC Hong Kong
(Holdings) Ltd., Hang Lung Properties Ltd., and Cathay Pacific Airways Ltd.
The biggest contributors to the Portfolio's outperformance over the six months
covered by this report were the Financial Times 30 Index stocks, which included
GKN PLC, the Portfolio's best performing stock, and Compass Group PLC, the third
best performing stock. The performance of the five Financial Times 30 Index
stocks was helped by a weakening U.S. dollar which boosted returns when
converted from pounds. Performance was hurt by BOC Hong Kong Holdings, the worst
performer in the Portfolio over the period.
PORTFOLIO COMPONENTS
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Diversified Telecommunication Services 25.5%
Industrial Conglomerates 14.3%
Commercial Banks 10.9%
Auto Components 8.4%
Automobiles 7.2%
Oil, Gas & Consumable Fuels 7.2%
Wireless Telecommunication Services 7.0%
Hotels, Restaurants & Leisure 7.0%
Electric Utilities 6.8%
Pharmaceuticals 5.7%
(a) Percentages are based on total investments. Please note that the
percentages shown on the Portfolio of Investments are based on net
assets.
Page 7
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PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS (a) - (CONTINUED)
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FIRST DEFINED PORTFOLIO FUND, LLC
JUNE 30, 2007 (UNAUDITED)
S&P(R) TARGET 24 PORTFOLIO
Over the six months ended June 30, 2007, the Portfolio's total return was 2.3%
versus 7.0% for the Portfolio's benchmark, the S&P 500 Index. Of the Portfolio's
24 stocks, 16 advanced and 8 declined. The top three performing stocks in the
Portfolio over the six months (by contribution to return) were PACCAR, Inc.,
Exxon Mobil Corp., and Coca-Cola Co. The worst performing stocks (by percentage
loss) were Johnson & Johnson, Harley-Davidson, Inc., and DIRECTV Group, Inc.
Over the six months covered by this report, the biggest positive contributor to
the Portfolio's performance was the industrials sector, led by PACCAR, Inc., the
Portfolio's best performing stock. The Portfolio's performance, relative to its
benchmark, was hurt by the health care and information technology sectors.
Johnson & Johnson, a top three Portfolio holding, trailed the overall health
care sector, hurting Portfolio returns. Lexmark International, Inc. and
Microsoft Corp. were responsible for the bulk of the underperformance of the
Portfolio's information technology holdings.
PORTFOLIO COMPONENTS
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
Consumer Finance 16.3%
Software 14.8%
Pharmaceuticals 10.8%
Oil, Gas & Consumable Fuels 10.7%
Beverages 9.3%
Machinery 6.5%
Media 5.3%
Electric Utilities 4.0%
Diversified Financial Services 3.8%
Aerospace & Defense 3.5%
Electrical Equipment 3.5%
Automobiles 2.9%
Real Estate Investment Trusts (REITs) 2.6%
Leisure Equipment & Products 1.8%
Food Products 1.1%
Electronic Equipment & Instruments 0.8%
Tobacco 0.7%
Health Care Providers & Services 0.6%
Energy Equipment & Services 0.4%
Life Sciences Tools & Services 0.4%
Computers & Peripherals 0.2%
(a) Percentages are based on total investments. Please note that the
percentages shown on the Portfolio of Investments are based on net
assets.
Page 8
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PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS (a) - (CONTINUED)
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FIRST DEFINED PORTFOLIO FUND, LLC
JUNE 30, 2007 (UNAUDITED)
NASDAQ(R) TARGET 15 PORTFOLIO
Over the six months ended June 30, 2007, the Portfolio's total return was 10.1%
versus 10.3% for the Portfolio's benchmark, the NASDAQ(R) 100 Index. Of the
Portfolio's 15 stocks, 9 advanced and 6 declined. The top three performing
stocks in the Portfolio over the six months (by contribution to return) were
Research In Motion Ltd., PACCAR, Inc., and Millicom International Cellular S.A.
The worst performing stocks (by percentage loss) were American Eagle Outfitters,
Inc., Infosys Technologies Ltd., and Wynn Resorts Ltd.
Over the six months covered by this report, the biggest contributor to the
Portfolio's performance relative to the benchmark was the industrials sector,
led by PACCAR, Inc., the Portfolio's second best performer by contribution to
return. The industrial sector was overweight and outperformed relative to its
benchmark. The telecommunications sector was the second biggest contributor to
Portfolio performance, led by the Portfolio's third best performing stock,
Millicom International Cellular S.A. The Portfolio's performance was hurt by its
overweight position in information technology as the Portfolio's holdings in the
sector underperformed relative to its benchmark.
PORTFOLIO COMPONENTS
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Software 18.7%
Communications Equipment 17.2%
Semiconductors & Semiconductor Equipment 13.2%
Specialty Retail 10.9%
Machinery 8.9%
Wireless Telecommunication Services 7.1%
Hotels, Restaurants & Leisure 6.4%
Media 6.3%
IT Services 6.1%
Electronic Equipment & Instruments 5.2%
(a) Percentages are based on total investments. Please note that the
percentages shown on the Portfolio of Investments are based on net
assets.
Page 9
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PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS (a) - (CONTINUED)
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FIRST DEFINED PORTFOLIO FUND, LLC
JUNE 30, 2007 (UNAUDITED)
FIRST TRUST 10 UNCOMMON VALUES PORTFOLIO
Over the six months ended June 30, 2007, the Portfolio's total return was 9.9%
versus 7.0% for the Portfolio's benchmark, the S&P 500 Index. Of the Portfolio's
10 stocks, 7 advanced and 3 declined. The top three performing stocks in the
Portfolio over the six months (by contribution to return) were Corning, Inc.,
Exelon Corp., and Regal Entertainment Group. The worst performing stocks (by
percentage loss) were Omnicare, Inc., Johnson & Johnson, and Intuit, Inc.
PORTFOLIO COMPONENTS
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Electric Utilities 13.0%
IT Services 12.2%
Communications Equipment 12.1%
Media 11.9%
Aerospace & Defense 11.9%
Software 11.0%
Pharmaceuticals 10.2%
Consumer Finance 9.5%
Health Care Providers & Services 8.2%
(a) Percentages are based on total investments. Please note that the
percentages shown on the Portfolio of Investments are based on net
assets.
Page 10
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PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS (a) - (CONTINUED)
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FIRST DEFINED PORTFOLIO FUND, LLC
JUNE 30, 2007 (UNAUDITED)
VALUE LINE(R) TARGET 25 PORTFOLIO
Over the six months ended June 30, 2007, the Portfolio's total return was 9.6%
versus 7.1% for the Portfolio's benchmark, the Russell 3000 Index. Of the
Portfolio's 25 stocks, 18 advanced and 7 declined. The top three performing
stocks in the Portfolio over the six months (by contribution to return) were
Potash Corp. of Saskatchewan, Inc., Research In Motion Ltd. and Allegheny
Technologies, Inc. The worst performing stocks (by percentage loss) were
American Eagle Outfitters, Inc., Harley-Davidson, Inc., and Continental
Airlines, Inc.
The biggest contributor to the Portfolio's outperformance relative to its
benchmark over the six months covered by this report was the materials sector,
led by Potash Corp. of Saskatchewan, Inc., the Portfolio's best performing
stock. Information technology stocks were also a top contributor to Portfolio
performance, led by Research in Motion Ltd. The Portfolio's performance was hurt
by its underweight position in the energy sector, which was the best performing
sector in the benchmark over the period. Industrials also negatively impacted
performance due to the poor performance of Continental Airlines, Inc., a bottom
three performer in the Portfolio.
PORTFOLIO COMPONENTS
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
Chemicals 14.5%
Leisure Equipment & Products 11.0%
Communications Equipment 10.2%
Metals & Mining 8.7%
Specialty Retail 7.4%
Semiconductors & Semiconductor Equipment 7.4%
Diversified Telecommunication Services 7.2%
Multiline Retail 7.0%
Media 6.2%
Automobiles 5.6%
Airlines 2.2%
Personal Products 2.1%
Household Durables 2.0%
Energy Equipment & Services 1.9%
Internet & Catalog Retail 1.8%
Commercial Services & Supplies 1.6%
Health Care Equipment & Supplies 1.4%
Containers & Packaging 1.0%
Textiles, Apparel & Luxury Goods 0.8%
(a) Percentages are based on total investments. Please note that the
percentages shown on the Portfolio of Investments are based on net assets.
Page 11
FIRST DEFINED PORTFOLIO FUND, LLC
UNDERSTANDING YOUR FUND EXPENSES
JUNE 30, 2007 (UNAUDITED)
As a shareholder of the Target Managed VIP Portfolio, The Dow(R) DART 10
Portfolio, The Dow(R) Target Dividend Portfolio, Global Dividend Target 15
Portfolio, S&P(R) Target 24 Portfolio, NASDAQ(R) Target 15 Portfolio, First
Trust 10 Uncommon Values Portfolio or Value Line (R) Target 25 Portfolio (the
"Portfolios"), you incur two types of costs: (1) transaction costs; and (2)
ongoing costs, including management fees, distribution and/or service fees, and
other Portfolio expenses. This Example is intended to help you understand your
ongoing costs (in dollars) of investing in the Portfolios 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 January 1, 2007 to June 30, 2007.
ACTUAL EXPENSES
The first three columns 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 column 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 columns of the table below provide information about hypothetical
account values and hypothetical expenses based on the Portfolio's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Portfolio'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 Portfolio 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) or redemption fees. Therefore, the hypothetical section of the
table is useful in comparing ongoing costs only, and will not help you determine
the relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
HYPOTHETICAL
ACTUAL EXPENSES (5% RETURN BEFORE EXPENSES)
------------------------------------- -------------------------------------
EXPENSES EXPENSES
BEGINNING ENDING PAID DURING BEGINNING ENDING PAID DURING
ACCOUNT ACCOUNT PERIOD (a) ACCOUNT ACCOUNT PERIOD (a)
VALUE VALUE 01/01/2007- VALUE VALUE 01/01/2007- EXPENSE
01/01/2007 06/30/2007 06/30/2007 01/01/2007 06/30/2007 06/30/2007 RATIO
---------- ---------- ----------- ---------- ---------- ----------- ---------
Target Managed VIP Portfolio ............. $1,000 $1,070.80 $6.98 $1,000 $1,018.05 $6.80 1.36%
The Dow(R) DART 10 Portfolio ............. 1,000 1,058.70 7.50 1,000 1,017.50 7.35 1.47 (b)
The Dow(R) Target Dividend Portfolio ..... 1,000 1,040.30 6.93 1,000 1,018.00 6.85 1.37
Global Dividend Target 15 Portfolio ...... 1,000 1,154.20 7.53 1,000 1,017.80 7.05 1.41
S&P Target 24 Portfolio .................. 1,000 1,022.60 7.37 1,000 1,017.50 7.35 1.47 (b)
NASDAQ(R) Target 15 Portfolio ............ 1,000 1,101.30 7.66 1,000 1,017.50 7.35 1.47 (b)
First Trust 10 Uncommon Values
Portfolio ............................. 1,000 1,099.30 7.13 1,000 1,018.00 6.85 1.37 (b)
Value Line(R) Target 25 Portfolio ........ 1,000 1,096.00 7.43 1,000 1,017.70 7.15 1.43
(a) Expenses are equal to each Portfolio's annualized expense ratio,
multiplied by the average account value over the period, multiplied by the
181 days in the most recent fiscal half-year, divided by 365 days in the
year (to reflect the one-half year period).
(b) These ratios reflect an expense waiver.
Page 12
TARGET MANAGED VIP PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
MARKET
SHARES DESCRIPTION VALUE
- ------------ ---------------------------------------------- ---------------
COMMON STOCKS - 99.8%
AEROSPACE & DEFENSE - 0.9%
14,444 Ladish Co., Inc. (a) ......................... $ 621,092
15,218 Rockwell Collins Inc. ........................ 1,075,000
---------------
1,696,092
---------------
AIR FREIGHT & LOGISTICS - 0.7%
39,537 Hub Group, Inc., Class A (a) ................. 1,390,121
---------------
AIRLINES - 0.2%
11,839 Continental Airlines, Inc., Class B (a) ...... 400,987
---------------
AUTOMOBILES - 1.5%
49,059 Harley-Davidson, Inc. ........................ 2,924,407
---------------
BEVERAGES - 1.5%
54,082 Coca-Cola (The), Company ..................... 2,829,029
---------------
BIOTECHNOLOGY - 0.7%
23,799 Digene Corp. (a) ............................. 1,429,130
---------------
BUILDING PRODUCTS - 0.3%
16,043 American Woodmark Corp. ...................... 555,088
---------------
CHEMICALS - 5.3%
12,530 Albemarle Corp. .............................. 482,781
122,543 E. I. du Pont de Nemours and Company ......... 6,230,086
6,448 OM Group, Inc. (a) ........................... 341,228
41,168 Potash Corp. of Saskatchewan, Inc. ........... 3,209,869
---------------
10,263,964
---------------
COMMERCIAL BANKS - 4.8%
61,605 ABN AMRO Holding NV, ADR ..................... 2,828,901
34,307 Barclays PLC, ADR ............................ 1,913,988
28,508 Cascade Bancorp .............................. 659,675
21,815 HSBC Holdings PLC, ADR ....................... 2,001,963
44,105 Lloyds TSB Group PLC, ADR .................... 1,972,375
---------------
9,376,902
---------------
COMMERCIAL SERVICES & SUPPLIES - 1.8%
54,766 Cenveo, Inc. (a) ............................. 1,270,024
19,936 Clean Harbors, Inc. (a) ...................... 985,237
21,204 Kenexa Corp. (a) ............................. 799,603
12,534 TeleTech Holdings, Inc. (a) .................. 407,104
---------------
3,461,968
---------------
COMMUNICATIONS EQUIPMENT - 8.1%
273,793 Cisco Systems, Inc. (a) ...................... 7,625,135
36,246 Packeteer, Inc. (a) .......................... 283,081
36,317 Research In Motion Ltd. (a) .................. 7,263,037
49,426 Sirenza Microdevices, Inc. (a) ............... 586,687
---------------
15,757,940
---------------
COMPUTERS & PERIPHERALS - 3.4%
61,960 International Business Machines Corp. ........ 6,521,290
1,529 Lexmark International, Inc., Class A (a) ..... 75,395
---------------
6,596,685
---------------
See Notes to Financial Statements. Page 13
TARGET MANAGED VIP PORTFOLIO - (CONTINUED)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
MARKET
SHARES DESCRIPTION VALUE
- ------------ ---------------------------------------------- ---------------
COMMON STOCKS - (CONTINUED)
CONSTRUCTION & ENGINEERING - 0.8%
40,807 Infrasource Services, Inc. (a) ............... $ 1,513,940
---------------
CONSUMER FINANCE - 3.3%
81,358 American Express Company ..................... 4,977,482
28,880 First Cash Financial Services, Inc. (a) ...... 676,947
17,925 World Acceptance Corp. (a) ................... 765,935
---------------
6,420,364
---------------
CONTAINERS & PACKAGING - 0.2%
10,886 Rock-Tenn Company, Class A ................... 345,304
---------------
DIVERSIFIED FINANCIAL SERVICES - 0.6%
18,759 Moody's Corp. ................................ 1,166,810
---------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 9.7%
142,089 BT Group PLC, ADR ............................ 9,460,286
26,410 Consolidated Communications Holdings, Inc. ... 596,866
109,499 Deutsche Telekom AG, ADR ..................... 2,015,877
35,432 FairPoint Communications, Inc. ............... 628,918
72,173 France Telecom SA, ADR ....................... 1,983,314
140,839 Koninklijke (Royal) KPN NV, ADR .............. 2,339,336
66,206 Telecom Italia SPA, ADR ...................... 1,818,017
---------------
18,842,614
---------------
ELECTRIC UTILITIES - 1.7%
38,812 Enel SpA, ADR ................................ 2,084,204
3,822 Entergy Corp. ................................ 410,292
5,894 FirstEnergy Corp. ............................ 381,519
7,452 FPL Group, Inc. .............................. 422,826
---------------
3,298,841
---------------
ELECTRICAL EQUIPMENT - 0.9%
15,237 Rockwell Automation, Inc. .................... 1,058,057
20,954 Superior Essex, Inc. (a) ..................... 782,632
---------------
1,840,689
---------------
ELECTRONIC EQUIPMENT & INSTRUCTION - 0.7%
6,269 Agilent Technologies, Inc. (a) ............... 240,980
4,195 CDW Corp. .................................... 356,449
18,257 Rogers Corp. (a) ............................. 675,509
---------------
1,272,938
---------------
ENERGY EQUIPMENT & SERVICES - 0.9%
1,567 Baker Hughes, Inc. ........................... 131,832
3,685 Core Laboratories N.V. (a) ................... 374,728
14,384 Gulf Island Fabrication, Inc. ................ 499,125
17,639 NATCO Group, Inc., Class A (a) ............... 812,100
---------------
1,817,785
---------------
FOOD PRODUCTS - 0.6%
8,994 Campbell Soup Company ........................ 349,057
31,562 TreeHouse Foods, Inc. (a) .................... 839,865
---------------
1,188,922
---------------
Page 14 See Notes to Financial Statements.
TARGET MANAGED VIP PORTFOLIO - (CONTINUED)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
MARKET
SHARES DESCRIPTION VALUE
- ------------ ---------------------------------------------- ---------------
COMMON STOCKS - (CONTINUED)
HEALTH CARE EQUIPMENT & SUPPLIES - 0.7%
23,865 DJO, Inc. (a) ................................ $ 984,909
10,077 Immucor, Inc. (a) ............................ 281,854
---------------
1,266,763
---------------
HEALTH CARE PROVIDERS & SERVICES - 0.3%
12,039 Air Methods Corp. (a) ........................ 441,470
2,328 Laboratory Corp. of America Holdings (a) ..... 182,189
---------------
623,659
---------------
HEALTH CARE TECHNOLOGY - 0.6%
29,371 Omnicell, Inc. (a) ........................... 610,329
36,593 Phase Forward, Inc. (a) ...................... 615,860
---------------
1,226,189
---------------
HOTELS, RESTAURANTS & LEISURE - 0.8%
17,268 Buffalo Wild Wings, Inc. (a) ................. 718,176
31,057 Interstate Hotels & Resorts, Inc. (a) ........ 162,118
6,767 Wynn Resorts Ltd. ............................ 606,932
---------------
1,487,226
---------------
HOUSEHOLD DURABLES - 0.3%
12,044 Kimball International, Inc., Class B ......... 168,736
14,321 Tempur-Pedic International, Inc. ............. 370,914
---------------
539,650
---------------
INTERNET & CATALOG RETAIL - 0.2%
6,857 Priceline.com, Inc. (a) ...................... 471,350
---------------
INTERNET SOFTWARE & SERVICES - 0.3%
44,761 Interwoven, Inc. (a) ......................... 628,444
---------------
IT SERVICES - 1.9%
37,462 Covansys Corp. (a) ........................... 1,271,086
36,824 Infosys Technologies Ltd., ADR ............... 1,855,193
39,545 Tyler Technologies, Inc. (a) ................. 490,753
---------------
3,617,032
---------------
LEISURE EQUIPMENT & PRODUCTS - 1.3%
20,655 Hasbro, Inc. ................................. 648,774
73,209 Mattel, Inc. ................................. 1,851,456
---------------
2,500,230
---------------
LIFE SCIENCES TOOLS & SERVICES - 0.1%
1,897 Waters Corp. (a) ............................. 112,606
---------------
MACHINERY - 5.7%
97,999 Caterpillar, Inc. ............................ 7,673,322
39,452 PACCAR, Inc. ................................. 3,433,902
---------------
11,107,224
---------------
MEDIA - 3.0%
229,826 DIRECTV Group (The), Inc. (a) ................ 5,311,279
10,367 Liberty Global, Inc., Class A (a) ............ 425,462
---------------
5,736,741
---------------
See Notes to Financial Statements. Page 15
TARGET MANAGED VIP PORTFOLIO - (CONTINUED)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
MARKET
SHARES DESCRIPTION VALUE
- ------------ ---------------------------------------------- ---------------
COMMON STOCKS - (CONTINUED)
METALS & MINING - 1.5%
13,174 Allegheny Technologies, Inc. ................. $ 1,381,689
8,903 Brush Engineered Materials, Inc. (a) ......... 373,837
27,162 Metal Management, Inc. ....................... 1,197,029
---------------
2,952,555
---------------
MULTI-UTILITIES - 1.0%
27,320 National Grid Transco PLC, ADR ............... 2,015,670
---------------
MULTILINE RETAIL - 0.9%
33,482 Nordstrom, Inc. .............................. 1,711,600
---------------
OIL, GAS & CONSUMABLE FUELS - 7.8%
29,802 BP PLC, ADR .................................. 2,149,916
10,631 Chevron Corp. ................................ 895,555
29,648 ENI SpA, ADR ................................. 2,145,032
106,094 Exxon Mobil Corp. ............................ 8,899,165
49,204 PetroQuest Energy, Inc. (a) .................. 715,426
60,776 VAALCO Energy, Inc. (a) ...................... 293,548
---------------
15,098,642
---------------
PERSONAL PRODUCTS - 0.2%
8,701 NBTY, Inc. (a) ............................... 375,883
---------------
PHARMACEUTICALS - 6.1%
38,120 GlaxoSmithKline PLC, ADR ..................... 1,996,344
53,535 Johnson & Johnson ............................ 3,298,826
24,490 Noven Pharmaceuticals, Inc. (a) .............. 574,291
230,466 Pfizer, Inc. ................................. 5,893,016
---------------
11,762,477
---------------
REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.4%
7,743 Boston Properties, Inc. ...................... 790,793
---------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 2.8%
53,529 Atheros Communications (a) ................... 1,650,834
9,396 Lam Research Corp. (a) ....................... 482,954
70,493 NVIDIA Corp. (a) ............................. 2,912,066
20,277 Ultra Clean Holdings, Inc. (a) ............... 283,472
---------------
5,329,326
---------------
SOFTWARE - 10.2%
23,853 Ansoft Corp. (a) ............................. 703,425
13,611 Check Point Software Technologies Ltd. (a) ... 310,467
404,298 Microsoft Corp. .............................. 11,914,662
344,049 Oracle Corp. (a) ............................. 6,781,206
---------------
19,709,760
---------------
SPECIALTY RETAIL - 3.4%
44,307 American Eagle Outfitters, Inc. .............. 1,136,918
18,892 Bed Bath & Beyond, Inc. (a) .................. 679,923
29,540 Buckle (The), Inc. ........................... 1,163,876
25,675 Charlotte Russe Holding, Inc. (a) ............ 689,887
Page 16 See Notes to Financial Statements.
TARGET MANAGED VIP PORTFOLIO - (CONTINUED)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
MARKET
SHARES DESCRIPTION VALUE
- ------------ ---------------------------------------------- ---------------
COMMON STOCKS - (CONTINUED)
SPECIALTY RETAIL - (CONTINUED)
24,491 Group 1 Automotive, Inc. ..................... $ 987,967
12,084 Guess?, Inc. ................................. 580,515
31,897 Gymboree (The), Corp. (a) .................... 1,257,061
---------------
6,496,147
---------------
TEXTILES, APPAREL & LUXURY GOODS - 0.1%
8,430 Steven Madden Ltd. ........................... 276,167
---------------
TOBACCO - 0.1%
3,699 UST, Inc. .................................... 198,673
---------------
WIRELESS TELECOMMUNICATION SERVICES - 1.5%
4,849 Millicom International Cellular S.A. (a) ..... 444,362
72,041 Vodafone Group PLC, ADR ...................... 2,422,739
---------------
2,867,101
---------------
TOTAL INVESTMENTS - 99.8% .................... 193,292,428
(Cost $171,936,432)
NET OTHER ASSETS AND LIABILITIES - 0.2% ...... 453,788
---------------
NET ASSETS - 100.0% .......................... $ 193,746,216
===============
- ----------
(a) Non-income producing security.
ADR American Depositary Receipt
See Notes to Financial Statements. Page 17
THE DOW(R) DART 10 PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
MARKET
SHARES DESCRIPTION VALUE
- ------------ ---------------------------------------------- ---------------
COMMON STOCKS - 99.6%
CHEMICALS - 9.7%
42,136 E. I. du Pont de Nemours and Company ......... $ 2,142,194
---------------
COMPUTERS & PERIPHERALS - 10.2%
21,307 International Business Machines Corp. ........ 2,242,562
---------------
DIVERSIFIED FINANCIAL SERVICES - 8.6%
36,972 Citigroup, Inc. .............................. 1,896,294
---------------
INDUSTRIAL CONGLOMERATES - 10.4%
26,434 3M Company ................................... 2,294,207
---------------
MACHINERY - 12.0%
33,695 Caterpillar, Inc. ............................ 2,638,319
---------------
OIL, GAS & CONSUMABLE FUELS - 10.1%
26,717 Exxon Mobil Corp. ............................ 2,241,022
---------------
PHARMACEUTICALS - 9.2%
79,248 Pfizer, Inc. ................................. 2,026,371
---------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 10.9%
101,174 Intel Corp. .................................. 2,403,894
---------------
SOFTWARE - 9.2%
68,913 Microsoft Corp. .............................. 2,030,866
---------------
SPECIALTY RETAIL - 9.3%
52,001 Home Depot (The), Inc. ....................... 2,046,239
---------------
TOTAL INVESTMENTS - 99.6% .................... 21,961,968
(Cost $20,413,230)
NET OTHER ASSETS AND LIABILITIES - 0.4% ...... 98,772
---------------
NET ASSETS - 100.0% .......................... $ 22,060,740
===============
- ----------
Page 18 See Notes to Financial Statements.
THE DOW(R) TARGET DIVIDEND PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
MARKET
SHARES DESCRIPTION VALUE
- ------------ ---------------------------------------------- ---------------
COMMON STOCKS - 99.2%
CHEMICALS - 13.2%
97,005 Lubrizol (The) Corp. ......................... $ 6,261,673
189,250 Lyondell Chemical Company .................... 7,024,960
---------------
13,286,633
---------------
COMMERCIAL BANKS - 13.3%
205,651 Huntington Bancshares, Inc. .................. 4,676,504
62,864 PNC Financial Services Group, Inc. ........... 4,499,805
129,373 Regions Financial Corp. ...................... 4,282,246
---------------
13,458,555
---------------
DIVERSIFIED FINANCIAL SERVICES - 4.5%
92,558 JPMorgan Chase & Company ..................... 4,484,435
---------------
ELECTRIC UTILITIES - 18.1%
80,279 FirstEnergy Corp. ............................ 5,196,460
172,909 Northeast Utilities .......................... 4,903,699
96,292 Pinnacle West Capital Corp. .................. 3,837,236
132,366 Unisource Energy Corp. ....................... 4,353,517
---------------
18,290,912
---------------
GAS UTILITIES - 10.6%
124,029 AGL Resources, Inc. .......................... 5,020,694
111,805 ONEOK, Inc. .................................. 5,636,090
---------------
10,656,784
---------------
INSURANCE - 14.4%
106,494 Cincinnati Financial Corp. ................... 4,621,840
73,210 Lincoln National Corp. ....................... 5,194,250
95,648 Unitrin, Inc. ................................ 4,703,969
---------------
14,520,059
---------------
MULTI-UTILITIES - 19.5%
130,483 Black Hills Corp. ............................ 5,186,699
100,095 DTE Energy Company ........................... 4,826,581
194,472 Energy East Corp. ............................ 5,073,774
118,938 SCANA Corp. .................................. 4,554,136
---------------
19,641,190
---------------
PAPER & FOREST PRODUCTS - 5.6%
160,741 MeadWestvaco Corp. ........................... 5,677,372
---------------
TOTAL INVESTMENTS - 99.2% .................... 100,015,940
(Cost $94,254,671)
NET OTHER ASSETS AND LIABILITIES - 0.8% ...... 841,455
---------------
NET ASSETS - 100.0% .......................... $ 100,857,395
===============
- ----------
See Notes to Financial Statements. Page 19
GLOBAL DIVIDEND TARGET 15 PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
MARKET
SHARES DESCRIPTION VALUE
- ------------ ---------------------------------------------- ---------------
COMMON STOCKS - 99.0%
HONG KONG - 33.0%
3,686,849 BOC Hong Kong (Holdings) Ltd. ................ $ 8,779,537
3,150,000 Cheung Kong Infrastructure Holdings Ltd. ..... 11,622,323
2,846,378 Citic Pacific Ltd. ........................... 14,287,914
10,815,000 CNOOC Ltd. ................................... 12,254,535
16,404,000 PCCW Ltd. .................................... 10,090,935
---------------
57,035,244
---------------
UNITED KINGDOM - 34.3%
1,655,413 BT Group PLC ................................. 11,053,152
1,728,736 Compass Group PLC ............................ 12,002,702
1,810,469 GKN PLC ...................................... 14,478,882
883,945 Lloyds TSB Group PLC ......................... 9,869,342
3,573,127 Vodafone Group PLC ........................... 12,040,057
---------------
59,444,135
---------------
UNITED STATES - 31.7%
280,591 AT&T Inc. .................................... 11,644,527
265,770 General Electric Company ..................... 10,173,676
325,309 General Motors Corp. ......................... 12,296,680
382,085 Pfizer, Inc. ................................. 9,769,913
266,906 Verizon Communications, Inc. ................. 10,988,520
---------------
54,873,316
---------------
TOTAL INVESTMENTS - 99.0% .................... 171,352,695
(Cost $143,746,169)
NET OTHER ASSETS AND LIABILITIES - 1.0% ...... 1,700,551
---------------
NET ASSETS - 100.0% .......................... $ 173,053,246
===============
- ----------
INDUSTRY DIVERSIFICATION AS A PERCENTAGE OF NET ASSETS:
Diversified Telecommunication Services ....... 25.4%
Industrial Conglomerates ..................... 14.1
Commercial Banks ............................. 10.8
Auto Components .............................. 8.4
Automobiles .................................. 7.1
Oil, Gas & Consumable Fuels .................. 7.1
Wireless Telecommunication Services .......... 6.9
Hotels, Restaurants & Leisure ................ 6.9
Electric Utilities ........................... 6.7
Pharmaceuticals .............................. 5.6
Net Other Assets and Liabilities ............. 1.0
----------
100.0%
==========
Page 20 See Notes to Financial Statements.
S&P(R) TARGET 24 PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
MARKET
SHARES DESCRIPTION VALUE
- ------------ ---------------------------------------------- ---------------
COMMON STOCKS - 98.5%
AEROSPACE & DEFENSE - 3.5%
7,619 Rockwell Collins Inc. ........................ $ 538,206
---------------
AUTOMOBILES - 2.9%
7,486 Harley-Davidson, Inc. ........................ 446,240
---------------
BEVERAGES - 9.1%
27,083 Coca-Cola (The), Company ..................... 1,416,712
---------------
COMPUTERS & PERIPHERALS - 0.2%
767 Lexmark International, Inc., Class A (a) ..... 37,821
3,764 Seagate Technology, Inc.
(Escrow Shares)(a)(b) ........................ 0
---------------
37,821
---------------
CONSUMER FINANCE - 16.0%
40,744 American Express Company ..................... 2,492,718
---------------
DIVERSIFIED FINANCIAL SERVICES - 3.8%
9,393 Moody's Corp. ................................ 584,245
---------------
ELECTRIC UTILITIES - 3.9%
1,914 Entergy Corp. ................................ 205,468
2,950 FirstEnergy Corp. ............................ 190,953
3,735 FPL Group, Inc. .............................. 211,924
---------------
608,345
---------------
ELECTRICAL EQUIPMENT - 3.4%
7,631 Rockwell Automation, Inc. .................... 529,897
---------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.8%
3,140 Agilent Technologies, Inc. (a) ............... 120,702
---------------
ENERGY EQUIPMENT & SERVICES - 0.4%
784 Baker Hughes, Inc. ........................... 65,958
---------------
FOOD PRODUCTS - 1.1%
4,504 Campbell Soup Company ........................ 174,800
---------------
HEALTH CARE PROVIDERS & SERVICES - 0.6%
1,167 Laboratory Corp. of America Holdings (a) ..... 91,329
---------------
LEISURE EQUIPMENT & PRODUCTS - 1.8%
11,171 Mattel, Inc. ................................. 282,514
---------------
LIFE SCIENCES TOOLS & SERVICES - 0.4%
950 Waters Corp. (a) ............................. 56,392
---------------
MACHINERY - 6.4%
11,375 PACCAR, Inc. ................................. 990,080
---------------
MEDIA - 5.2%
35,071 DIRECTV Group (The), Inc. (a) ................ 810,491
---------------
OIL, GAS & CONSUMABLE FUELS - 10.6%
5,324 Chevron Corp. ................................ 448,494
14,221 Exxon Mobil Corp. ............................ 1,192,857
---------------
1,641,351
---------------
PHARMACEUTICALS - 10.6%
26,811 Johnson & Johnson ............................ 1,652,094
---------------
See Notes to Financial Statements. Page 21
S&P(R) TARGET 24 PORTFOLIO - (CONTINUED)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
MARKET
SHARES DESCRIPTION VALUE
- ------------ ---------------------------------------------- ---------------
COMMON STOCKS - (CONTINUED)
REAL ESTATE INVESTMENT TRUSTS (REITS) - 2.6%
3,876 Boston Properties, Inc. ...................... $ 395,856
---------------
SOFTWARE - 14.6%
77,065 Microsoft Corp. .............................. 2,271,105
---------------
TOBACCO - 0.6%
1,853 UST, Inc. .................................... 99,525
---------------
TOTAL INVESTMENTS - 98.5% .................... 15,306,381
(Cost $14,768,605)
NET OTHER ASSETS AND LIABILITIES - 1.5%. ..... 231,787
---------------
NET ASSETS - 100.0% .......................... $ 15,538,168
===============
- ----------
(a) Non-income producing security.
(b) Security is fair valued and market value is determined in accordance
with procedures adopted by the Board of Trustees.
Page 22 See Notes to Financial Statements.
NASDAQ(R) TARGET 15 PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
MARKET
SHARES DESCRIPTION VALUE
- ------------ ---------------------------------------------- ---------------
COMMON STOCKS - 98.1%
COMMUNICATIONS EQUIPMENT - 16.9%
16,358 Cisco Systems, Inc. (a) ...................... $ 455,570
3,461 Research In Motion Ltd. (a) ................. 692,165
---------------
1,147,735
---------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 5.1%
4,107 CDW Corp. .................................... 348,972
---------------
HOTELS, RESTAURANTS & LEISURE - 6.3%
4,786 Wynn Resorts Ltd. ............................ 429,256
---------------
IT SERVICES - 6.0%
8,154 Infosys Technologies Ltd., ADR ............... 410,799
---------------
MACHINERY - 8.7%
6,828 PACCAR, Inc. ................................. 594,309
---------------
MEDIA - 6.2%
10,303 Liberty Global, Inc., Class A (a) ............ 422,835
---------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 12.9%
7,409 Lam Research Corp. (a) ....................... 380,823
12,047 NVIDIA Corp. (a) ............................. 497,662
---------------
878,485
---------------
SOFTWARE - 18.3%
12,817 Check Point Software Technologies Ltd. (a) ... 292,356
14,962 Microsoft Corp. .............................. 440,930
26,077 Oracle Corp. (a) ............................. 513,978
---------------
1,247,264
---------------
SPECIALTY RETAIL - 10.7%
11,818 American Eagle Outfitters, Inc. .............. 303,250
11,767 Bed Bath & Beyond, Inc. (a) .................. 423,494
---------------
726,744
---------------
WIRELESS TELECOMMUNICATION SERVICES - 7.0%
5,191 Millicom International Cellular S.A. (a) ..... 475,703
---------------
TOTAL INVESTMENTS - 98.1% .................... 6,682,102
(Cost $6,085,370)
NET OTHER ASSETS AND LIABILITIES - 1.9% ...... 132,157
---------------
NET ASSETS - 100.0% .......................... $ 6,814,259
===============
- ----------
(a) Non-income producing security.
ADR American Depositary Receipt
See Notes to Financial Statements. Page 23
FIRST TRUST 10 UNCOMMON VALUES PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
MARKET
SHARES DESCRIPTION VALUE
- ------------ ---------------------------------------------- ---------------
COMMON STOCKS - 99.8%
AEROSPACE & DEFENSE - 11.8%
9,373 United Technologies Corp. .................... $ 664,827
---------------
COMMUNICATIONS EQUIPMENT - 12.1%
26,646 Corning, Inc. (a) ............................ 680,805
---------------
CONSUMER FINANCE - 9.5%
6,804 Capital One Financial Corp. .................. 533,706
---------------
ELECTRIC UTILITIES - 13.0%
10,035 Exelon Corp. ................................. 728,541
---------------
HEALTH CARE PROVIDERS & SERVICES - 8.2%
12,821 Omnicare, Inc. .............................. 462,325
---------------
IT SERVICES - 12.1%
12,845 Automatic Data Processing, Inc. .............. 622,597
3,046 Broadridge Financial Solutions, Inc. ......... 58,240
---------------
680,837
---------------
MEDIA - 11.9%
30,321 Regal Entertainment Group, Class A ........... 664,940
---------------
PHARMACEUTICALS - 10.2%
9,291 Johnson & Johnson ............................ 572,511
---------------
SOFTWARE - 11.0%
20,596 Intuit, Inc. (a) ............................. 619,528
---------------
TOTAL INVESTMENTS - 99.8% .................... 5,608,020
(Cost $5,244,130)
NET OTHER ASSETS AND LIABILITIES - 0.2% ...... 9,074
---------------
NET ASSETS - 100.0% .......................... $ 5,617,094
===============
- ----------
(a) Non-income producing security.
Page 24 See Notes to Financial Statements.
VALUE LINE(R) TARGET 25 PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
MARKET
SHARES DESCRIPTION VALUE
- ------------ ---------------------------------------------- ---------------
COMMON STOCKS - 99.4%
AIRLINES - 2.2%
25,741 Continental Airlines, Inc., Class B (a) ...... $ 871,848
---------------
AUTOMOBILES - 5.6%
36,777 Harley-Davidson, Inc. ........................ 2,192,277
---------------
CHEMICALS - 14.4%
27,242 Albemarle Corp. .............................. 1,049,634
8,262 OM Group, Inc. (a) ........................... 437,225
53,494 Potash Corp. of Saskatchewan, Inc. ........... 4,170,927
---------------
5,657,786
---------------
COMMERCIAL SERVICES & SUPPLIES - 1.6%
19,548 TeleTech Holdings, Inc. (a) .................. 634,919
---------------
COMMUNICATIONS EQUIPMENT - 10.2%
20,008 Research In Motion Ltd. (a) .................. 4,001,400
---------------
CONTAINERS & PACKAGING - 1.0%
12,532 Rock-Tenn Company, Class A ................... 397,515
---------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 7.2%
42,558 BT Group PLC, ADR ............................ 2,833,512
---------------
ENERGY EQUIPMENT & SERVICES - 1.8%
7,156 Core Laboratories N.V. (a) ................... 727,694
---------------
HEALTH CARE EQUIPMENT & SUPPLIES - 1.4%
19,359 Immucor, Inc. (a) ............................ 541,471
---------------
HOUSEHOLD DURABLES - 2.0%
13,863 Kimball International, Inc., Class B ......... 194,221
23,324 Tempur-Pedic International, Inc. ............. 604,092
---------------
798,313
---------------
INTERNET & CATALOG RETAIL - 1.8%
10,386 Priceline.com, Inc. (a) ...................... 713,934
---------------
LEISURE EQUIPMENT & PRODUCTS - 11.0%
44,907 Hasbro, Inc. ................................. 1,410,529
114,839 Mattel, Inc. ................................. 2,904,278
---------------
4,314,807
---------------
MEDIA - 6.1%
104,139 DIRECTV Group (The), Inc. (a) ................ 2,406,652
---------------
METALS & MINING - 8.6%
28,305 Allegheny Technologies, Inc. ................. 2,968,628
10,244 Brush Engineered Materials, Inc. (a) ......... 430,146
---------------
3,398,774
---------------
MULTILINE RETAIL - 6.9%
53,444 Nordstrom, Inc. .............................. 2,732,057
---------------
PERSONAL PRODUCTS - 2.1%
18,917 NBTY, Inc. (a). .............................. 817,214
---------------
See Notes to Financial Statements. Page 25
VALUE LINE(R) TARGET 25 PORTFOLIO - (CONTINUED)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2007 (UNAUDITED)
MARKET
SHARES DESCRIPTION VALUE
- ------------ ---------------------------------------------- ---------------
COMMON STOCKS - (CONTINUED)
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 7.3%
69,632 NVIDIA Corp. (a) ............................. $ 2,876,498
---------------
SPECIALTY RETAIL - 7.4%
63,737 American Eagle Outfitters, Inc. .............. 1,635,491
26,270 Guess?, Inc. ................................. 1,262,011
---------------
2,897,502
---------------
TEXTILES, APPAREL & LUXURY GOODS - 0.8%
9,704 Steven Madden Ltd. ........................... 317,903
---------------
TOTAL INVESTMENTS - 99.4% .................... 39,132,076
(Cost $33,773,562)
NET OTHER ASSETS AND LIABILITIES - 0.6% ...... 250,467
---------------
NET ASSETS - 100.0% .......................... $ 39,382,543
===============
- ----------
(a) Non-income producing security.
ADR American Depositary Receipt
Page 26 See Notes to Financial Statements.
This Page Left Blank Intentionally.
FIRST DEFINED PORTFOLIO FUND, LLC
STATEMENTS OF ASSETS AND LIABILITIES
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
THE DOW(R) GLOBAL
TARGET THE DOW(R) TARGET DIVIDEND
MANAGED VIP DART 10 DIVIDEND TARGET 15
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ -------------
ASSETS:
Investments, at value (a) ............................................. $193,292,428 $ 21,961,968 $100,015,940 $171,352,695
Cash .................................................................. 643,453 228,914 841,262 3,399,611
Prepaid expenses ...................................................... 3,536 493 1,739 1,768
Receivables:
Dividends .......................................................... 309,744 -- 240,754 505,762
Dividend Reclaim ................................................... 21,070 -- -- --
Interest ........................................................... 2,998 779 4,811 9,598
Membership Interest purchased ...................................... -- -- -- --
From investment advisor ............................................ -- 17,959 -- --
Other assets .......................................................... -- -- -- 2,185
------------ ------------ ------------ ------------
Total Assets .................................................... 194,273,229 22,210,113 101,104,506 175,271,619
------------ ------------ ------------ ------------
LIABILITIES:
Payables:
Membership Interest redeemed ....................................... 151,858 102,104 72,515 569,268
Investment securities purchased .................................... -- -- -- 1,367,387
Investment advisory fees ........................................... 95,714 11,169 50,056 82,697
Administrative fees ................................................ 4,148 484 2,172 3,584
12b-1 service fees ................................................. 39,881 4,654 20,857 34,457
Audit fees ......................................................... 7,167 7,610 7,424 7,320
Legal fees ......................................................... 12,666 187 2,949 2,700
Membership Interest servicing fees ................................. 148,183 17,194 77,730 121,393
Custodian fees ..................................................... 12,859 495 3,374 8,576
Printing fees ...................................................... 4,906 4,906 4,906 4,890
Accrued expenses ...................................................... 49,631 570 5,128 16,101
------------ ------------ ------------ ------------
Total Liabilities ............................................... 527,013 149,373 247,111 2,218,373
------------ ------------ ------------ ------------
NET ASSETS ............................................................ $193,746,216 $ 22,060,740 $100,857,395 $173,053,246
============ ============ ============ ============
(a) Investments, at cost .............................................. $171,936,432 $ 20,413,230 $ 94,254,671 $143,746,169
============ ============ ============ ============
NET ASSETS CONSIST OF:
Undistributed net investment income (accumulated net
investment loss) ................................................... $ 2,004,559 $ 939,083 $ 3,207,661 $ 5,976,991
Accumulated net realized gain (loss) on investments sold
and foreign currency transactions .................................. 35,067,058 2,631,115 4,579,951 17,705,089
Net unrealized appreciation (depreciation) on investments
and foreign currency translation ................................... 21,355,996 1,548,738 5,761,269 27,605,816
Paid-in capital ....................................................... 135,318,603 16,941,804 87,308,514 121,765,350
------------ ------------ ------------ ------------
NET ASSETS ............................................................ $193,746,216 $ 22,060,740 $100,857,395 $173,053,246
============ ============ ============ ============
NET ASSET VALUE, offering price and redemption price of
Membership Interests outstanding (Net Assets / Membership
Interests Outstanding) ............................................. $ 12.55 $ 11.18 $ 12.13 $ 24.40
============ ============ ============ ============
Number of Membership Interests outstanding ............................ 15,437,689 1,972,988 8,313,146 7,092,086
============ ============ ============ ============
Page 28 See Notes to Financial Statements.
FIRST TRUST
S&P(R) NASDAQ(R) 10 UNCOMMON VALUE LINE(R)
TARGET 24 TARGET 15 VALUES TARGET 25
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ -------------
ASSETS:
Investments, at value (a) ............................................. $ 15,306,381 $ 6,682,102 $ 5,608,020 $ 39,132,076
Cash .................................................................. 219,672 133,621 28,906 312,957
Prepaid expenses ...................................................... 287 131 115 845
Receivables:
Dividends .......................................................... 11,939 1,182 3,137 13,028
Dividend Reclaim ................................................... -- -- -- --
Interest ........................................................... 747 432 221 934
Membership Interest purchased ...................................... 40,036 13,675 -- 4,754
From investment advisor ............................................ 1,476 8,692 9,555 --
Other assets .......................................................... -- -- -- --
------------ ------------ ------------ ------------
Total Assets .................................................... 15,580,538 6,839,835 5,649,954 39,464,594
------------ ------------ ------------ ------------
LIABILITIES:
Payables:
Membership Interest redeemed ....................................... -- -- 9,637 --
Investment securities purchased .................................... -- -- -- --
Investment advisory fees ........................................... 7,780 3,318 2,801 19,324
Administrative fees ................................................ 337 144 121 837
12b-1 service fees ................................................. 3,242 1,383 1,167 8,052
Audit fees ......................................................... 7,644 7,667 7,671 7,569
Legal fees ......................................................... 2,603 1,135 507 3,312
Membership Interest servicing fees ................................. 12,125 5,389 4,281 31,508
Custodian fees ..................................................... 1,791 979 717 532
Printing fees ...................................................... 4,906 4,906 4,905 4,906
Accrued expenses ...................................................... 1,942 655 1,053 6,011
------------ ------------ ------------ ------------
Total Liabilities ............................................... 42,370 25,576 32,860 82,051
------------ ------------ ------------ ------------
NET ASSETS ............................................................ $ 15,538,168 $ 6,814,259 $ 5,617,094 $ 39,382,543
============ ============ ============ ============
(a) Investments, at cost .............................................. $ 14,768,605 $ 6,085,370 $ 5,244,130 $ 33,773,562
============ ============ ============ ============
NET ASSETS CONSIST OF:
Undistributed net investment income (accumulated net
investment loss) ................................................... $ (62,089) $ (427,451) $ (247,113) $ (962,232)
Accumulated net realized gain (loss) on investments sold
and foreign currency transactions .................................. 1,628,134 (1,274,200) (15,590,432) 9,905,448
Net unrealized appreciation (depreciation) on investments
and foreign currency translation ................................... 537,776 596,732 363,890 5,358,514
Paid-in capital ....................................................... 13,434,347 7,919,178 21,090,749 25,080,813
------------ ------------ ------------ ------------
NET ASSETS ............................................................ $ 15,538,168 $ 6,814,259 $ 5,617,094 $ 39,382,543
============ ============ ============ ============
NET ASSET VALUE, offering price and redemption price of
Membership Interests outstanding (Net Assets / Membership
Interests Outstanding) ............................................. $ 9.49 $ 11.20 $ 5.98 $ 5.48
============ ============ ============ ============
Number of Membership Interests outstanding ............................ 1,636,974 608,416 939,788 7,187,779
============ ============ ============ ============
See Notes to Financial Statements. Page 29
FIRST DEFINED PORTFOLIO FUND, LLC
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
THE DOW(R) GLOBAL
TARGET THE DOW(R) TARGET DIVIDEND
MANAGED VIP DART 10 DIVIDEND TARGET 15
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
INVESTMENT INCOME:
Dividends ............................................................. $ 1,838,304 $ 287,074 $ 1,644,086 $ 3,474,139
Foreign withholding tax on dividend income ............................ (111,476) -- -- --
Interest .............................................................. 23,246 6,039 24,318 58,604
------------ ------------ ------------ ------------
Total investment income ............................................... 1,750,074 293,113 1,668,404 3,532,743
------------ ------------ ------------ ------------
EXPENSES:
Investment advisory fees .............................................. 573,892 70,977 295,424 442,453
Administration fees ................................................... 24,869 3,076 12,805 19,173
Fund accounting fees .................................................. 52,607 6,506 27,086 40,558
12b-1 service fees .................................................... 239,122 29,574 123,094 184,356
Trustees' fees and expenses ........................................... 6,820 968 3,429 4,455
Audit fees ............................................................ 9,026 8,587 8,772 8,778
Legal fees ............................................................ 16,946 4,214 12,219 19,026
Custodian fees ........................................................ 44,012 16,822 17,977 60,024
Membership Interest servicing fees .................................... 309,397 38,321 159,243 238,328
Printing fees ......................................................... 7,827 7,827 7,827 7,812
Other ................................................................. 13,442 2,085 5,500 17,390
------------ ------------ ------------ ------------
Total expenses ..................................................... 1,297,960 188,957 673,376 1,042,353
Fees waived or expenses reimbursed by the investment advisor ....... -- (15,076) -- --
------------ ------------ ------------ ------------
Net expenses .......................................................... 1,297,960 173,881 673,376 1,042,353
------------ ------------ ------------ ------------
NET INVESTMENT INCOME (LOSS) .......................................... 452,114 119,232 995,028 2,490,390
------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments ........................................................ 10,424,458 1,563,180 5,637,573 12,035,377
Foreign currency transactions ...................................... -- -- -- 6,600
------------ ------------ ------------ ------------
Net realized gain (loss) ........................................... 10,424,458 1,563,180 5,637,573 12,041,977
------------ ------------ ------------ ------------
Net change in unrealized appreciation (depreciation) on:
Investments ........................................................ 1,825,435 (599,334) (2,950,650) 6,830,998
Foreign currency translation of other assets and liabilities and
foreign currencies .............................................. -- -- -- (4,108)
------------ ------------ ------------ ------------
Net change in unrealized appreciation (depreciation) ............... 1,825,435 (599,334) (2,950,650) 6,826,890
------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ............................... 12,249,893 963,846 2,686,923 18,868,867
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ....... $ 12,702,007 $ 1,083,078 $ 3,681,951 $ 21,359,257
============ ============ ============ ============
Page 30 See Notes to Financial Statements.
FIRST TRUST
S&P(R) NASDAQ(R) 10 UNCOMMON VALUE LINE(R)
TARGET 24 TARGET 15 VALUES TARGET 25
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ -------------
INVESTMENT INCOME:
Dividends ............................................................ $ 115,226 $ 10,447 $ 101,536 $ 94,798
Foreign withholding tax on dividend income ........................... -- -- -- (448)
Interest ............................................................. 4,076 4,343 1,309 7,478
------------ ------------ ------------ -------------
Total investment income .............................................. 119,302 14,790 102,845 101,828
------------ ------------ ------------ -------------
EXPENSES:
Investment advisory fees ............................................. 46,586 21,952 16,528 124,522
Administration fees .................................................. 2,019 951 717 5,396
Fund accounting fees ................................................. 4,270 2,012 1,515 11,415
12b-1 service fees ................................................... 19,411 9,147 6,887 51,884
Trustees' fees and expenses .......................................... 552 265 201 1,525
Audit fees ........................................................... 8,553 8,530 8,526 8,627
Legal fees ........................................................... 186 303 329 3,155
Custodian fees ....................................................... 6,202 8,058 3,734 8,880
Membership Interest servicing fees ................................... 25,111 11,835 8,907 67,090
Printing fees ........................................................ 7,827 7,827 7,826 7,827
Other ................................................................ 1,790 1,085 2,493 6,355
------------ ------------ ------------ -------------
Total expenses .................................................... 122,507 71,965 57,663 296,676
Fees waived or expenses reimbursed by the investment advisor ...... (8,423) (18,306) (19,924) --
------------ ------------ ------------ -------------
Net expenses ......................................................... 114,084 53,659 37,739 296,676
------------ ------------ ------------ -------------
NET INVESTMENT INCOME (LOSS) ......................................... 5,218 (38,869) 65,106 (194,848)
------------ ------------ ------------ -------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments ....................................................... 463,992 882,449 645,267 (256,818)
Foreign currency transactions ..................................... -- -- -- --
------------ ------------ ------------ -------------
Net realized gain (loss) .......................................... 463,992 882,449 645,267 (256,818)
------------ ------------ ------------ -------------
Net change in unrealized appreciation (depreciation) on:
Investments ....................................................... (146,093) (241,346) (196,759) 4,268,592
Foreign currency translation of other assets and liabilities and
foreign currencies ............................................. -- -- -- --
------------ ------------ ------------ -------------
Net change in unrealized appreciation (depreciation) .............. (146,093) (241,346) (196,759) 4,268,592
------------ ------------ ------------ -------------
NET REALIZED AND UNREALIZED GAIN (LOSS) .............................. 317,899 641,103 448,508 4,011,774
------------ ------------ ------------ -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ...... $ 323,117 $ 602,234 $ 513,614 $ 3,816,926
============ ============ ============ =============
See Notes to Financial Statements. Page 31
FIRST DEFINED PORTFOLIO FUND, LLC
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
THE DOW(R) GLOBAL
TARGET THE DOW(R) TARGET DIVIDEND
MANAGED VIP DART 10 DIVIDEND TARGET 15
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- ------------- -------------
OPERATIONS:
Net investment income (loss) ...................................... $ 452,114 $ 119,232 $ 995,028 $ 2,490,390
Net realized gain (loss) .......................................... 10,424,458 1,563,180 5,637,573 12,041,977
Net change in unrealized appreciation (depreciation) .............. 1,825,435 (599,334) (2,950,650) 6,826,890
------------- ------------- ------------- -------------
Net increase (decrease) in net assets resulting from operations ... 12,702,007 1,083,078 3,681,951 21,359,257
Net increase (decrease) in net assets from Membership Interest
transactions ................................................... (22,823,634) (6,976,891) (3,730,794) 22,857,619
------------- ------------- ------------- -------------
Net increase (decrease) in net assets ............................. (10,121,627) (5,893,813) (48,843) 44,216,876
NET ASSETS:
Beginning of period ............................................... 203,867,843 27,954,553 100,906,238 128,836,370
------------- ------------- ------------- -------------
End of period ..................................................... $ 193,746,216 $ 22,060,740 $ 100,857,395 $ 173,053,246
============= ============= ============= =============
Undistributed net investment income (accumulated net investment
loss) at end of period ......................................... $ 2,004,559 $ 939,083 $ 3,207,661 $ 5,976,991
============= ============= ============= =============
FIRST DEFINED PORTFOLIO FUND, LLC
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 2006
THE DOW(R) GLOBAL
TARGET THE DOW(R) TARGET DIVIDEND
MANAGED VIP DART 10 DIVIDEND TARGET 15
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- ------------- -------------
OPERATIONS:
Net investment income (loss) ...................................... $ 1,011,630 $ 271,334 $ 1,743,800 $ 2,355,549
Net realized gain (loss) .......................................... 12,074,762 1,496,845 (991,444) 2,833,561
Net change in unrealized appreciation (depreciation) .............. 6,152,339 2,372,141 12,640,964 18,098,166
------------- ------------- ------------- -------------
Net increase (decrease) in net assets resulting from operations ... 19,238,731 4,140,320 13,393,320 23,287,276
Net increase (decrease) in net assets from Membership Interest
transactions ................................................... 1,736,753 12,203,112 29,074,615 68,758,271
------------- ------------- ------------- -------------
Net increase (decrease) in net assets ............................. 20,975,484 16,343,432 42,467,935 92,045,547
NET ASSETS:
Beginning of year ................................................. 182,892,359 11,611,121 58,438,303 36,790,823
------------- ------------- ------------- -------------
End of year ....................................................... $ 203,867,843 $ 27,954,553 $ 100,906,238 $ 128,836,370
============= ============= ============= =============
Undistributed net investment income (accumulated net investment
loss) at end of year ........................................... $ 1,552,445 $ 819,851 $ 2,212,633 $ 3,486,601
============= ============= ============= =============
Page 32 See Notes to Financial Statements.
FIRST TRUST
S&P(R) NASDAQ(R) 10 UNCOMMON VALUE LINE(R)
TARGET 24 TARGET 15 VALUES TARGET 25
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- ------------- -------------
OPERATIONS:
Net investment income (loss) ...................................... $ 5,218 $ (38,869) $ 65,106 $ (194,848)
Net realized gain (loss) .......................................... 463,992 882,449 645,267 (256,818)
Net change in unrealized appreciation (depreciation) .............. (146,093) (241,346) (196,759) 4,268,592
------------- ------------- ------------- -------------
Net increase (decrease) in net assets resulting from operations ... 323,117 602,234 513,614 3,816,926
Net increase (decrease) in net assets from Membership Interest
transactions ................................................... (841,609) (1,105,564) (630,452) (8,210,000)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets ............................. (518,492) (503,330) (116,838) (4,393,074)
NET ASSETS:
Beginning of period ............................................... 16,056,660 7,317,589 5,733,932 43,775,617
------------- ------------- ------------- -------------
End of period ..................................................... $ 15,538,168 $ 6,814,259 $ 5,617,094 $ 39,382,543
============= ============= ============= =============
Undistributed net investment income (accumulated net investment
loss) at end of period ......................................... $ (62,089) $ (427,451) $ (247,113) $ (962,232)
============= ============= ============= =============
FIRST TRUST
S&P(R) NASDAQ(R) 10 UNCOMMON VALUE LINE(R)
TARGET 24 TARGET 15 VALUES TARGET 25
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- ------------- -------------
OPERATIONS:
Net investment income (loss) ...................................... $ (65,939) $ (73,951) $ 72,492 $ (427,260)
Net realized gain (loss) .......................................... 600,055 401,679 (305,030) 5,648,868
Net change in unrealized appreciation (depreciation) .............. (176,427) 226,687 487,348 (4,223,703)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets resulting from operations ... 357,689 554,415 254,810 997,905
Net increase (decrease) in net assets from Membership Interest
transactions ................................................... (2,350,331) 211,629 (1,525,206) (11,294,704)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets ............................. (1,992,642) 766,044 (1,270,396) (10,296,799)
NET ASSETS:
Beginning of year ................................................. 18,049,302 6,551,545 7,004,328 54,072,416
------------- ------------- ------------- -------------
End of year ....................................................... $ 16,056,660 $ 7,317,589 $ 5,733,932 $ 43,775,617
============= ============= ============= =============
Undistributed net investment income (accumulated net investment
loss) at end of year ........................................... $ (67,307) $ (388,582) $ (312,219) $ (767,384)
============= ============= ============= =============
See Notes to Financial Statements. Page 33
FIRST DEFINED PORTFOLIO FUND, LLC
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
GLOBAL
TARGET THE DOW(R) THE DOW(R) DIVIDEND
MANAGED VIP DART 10 TARGET DIVIDEND TARGET 15
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- --------------- -------------
AMOUNT:
Sold ................................ $ 11,353,238 $ 5,310,620 $ 18,717,872 $ 52,510,628
Redeemed ............................ (34,176,872) (12,287,511) (22,448,666) (29,653,009)
------------- ------------- --------------- -------------
Net increase (decrease) ............. $ (22,823,634) $ (6,976,891) $ (3,730,794) $ 22,857,619
============= ============= =============== =============
MEMBERSHIP INTEREST:
Sold ................................ 948,840 495,657 1,558,448 2,361,743
Redeemed ............................ (2,908,575) (1,169,447) (1,900,694) (1,363,580)
------------- ------------- --------------- -------------
Net increase (decrease) ............. (1,959,735) (673,790) (342,246) 998,163
============= ============= =============== =============
FIRST DEFINED PORTFOLIO FUND, LLC
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY
FOR THE YEAR ENDED DECEMBER 31, 2006
GLOBAL
TARGET THE DOW(R) THE DOW(R) DIVIDEND
MANAGED VIP DART 10 TARGET DIVIDEND TARGET 15
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- --------------- -------------
AMOUNT:
Sold ................................ $ 57,979,776 $ 25,748,489 $ 71,866,833 $ 82,240,730
Redeemed ............................ (56,243,023) (13,545,377) (42,792,218) (13,482,459)
------------- ------------- --------------- -------------
Net increase (decrease) ............. $ 1,736,753 $ 12,203,112 $ 29,074,615 $ 68,758,271
============= ============= =============== =============
MEMBERSHIP INTEREST:
Sold ................................ 5,322,595 2,633,412 6,615,423 4,474,962
Redeemed ............................ (5,325,032) (1,367,662) (3,879,344) (790,977)
------------- ------------- --------------- -------------
Net increase (decrease) ............. (2,437) 1,265,750 2,736,079 3,683,985
============= ============= =============== =============
Page 34 See Notes to Financial Statements.
FIRST TRUST FIRST TRUST
S&P(R) NASDAQ(R) 10 UNCOMMON VALUE LINE(R)
TARGET 24 TARGET 15 VALUES TARGET 25
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- ------------- --------------
AMOUNT:
Sold ................................ $ 2,559,655 $ 4,262,342 $ 696,717 $ 4,734,017
Redeemed ............................ (3,401,264) (5,367,906) (1,327,169) (12,944,017)
------------- ------------- ------------- --------------
Net increase (decrease) ............. $ (841,609) $ (1,105,564) $ (630,452) $ (8,210,000)
============= ============= ============= ==============
MEMBERSHIP INTEREST:
Sold ................................ 272,929 405,507 118,201 915,160
Redeemed ............................ (366,167) (516,506) (232,075) (2,479,443)
------------- ------------- ------------- --------------
Net increase (decrease) ............. (93,238) (110,999) (113,874) (1,564,283)
============= ============= ============= ==============
FIRST TRUST FIRST TRUST
S&P(R) NASDAQ(R) 10 UNCOMMON VALUE LINE(R)
TARGET 24 TARGET 15 VALUES TARGET 25
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- ------------- --------------
AMOUNT:
Sold ................................ $ 5,588,648 $ 2,758,286 $ 649,604 $ 14,735,448
Redeemed ............................ (7,938,979) (2,546,657) (2,174,810) (26,030,152)
------------- ------------- ------------- --------------
Net increase (decrease) ............. $ (2,350,331) $ 211,629 $ (1,525,206) $ (11,294,704)
============= ============= ============= ==============
MEMBERSHIP INTEREST:
Sold ................................ 615,057 278,599 120,859 2,947,802
Redeemed ............................ (885,077) (260,692) (405,925) (5,316,022)
------------- ------------- ------------- --------------
Net increase (decrease) ............. (270,020) 17,907 (285,066) (2,368,220)
============= ============= ============= ==============
See Notes to Financial Statements. Page 35
TARGET MANAGED VIP PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
06/30/07 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/06 12/31/05 12/31/04 12/31/03 12/31/02 (a)
----------- --------- --------- --------- --------- ------------
Net asset value, beginning of period. .......... $ 11.72 $ 10.51 $ 9.80 $ 8.73 $ 6.47 $ 8.19
----------- --------- --------- --------- --------- ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .......................... 0.04 0.06 0.03 0.01(b) 0.02 0.00(b)(c)
Net realized and unrealized gain (loss) ........ 0.79 1.15 0.68 1.06 2.24 (1.72)
----------- --------- --------- --------- --------- ------------
Total from investment operations ............... 0.83 1.21 0.71 1.07 2.26 (1.72)
----------- --------- --------- --------- --------- ------------
Net asset value, end of period ................. $ 12.55 $ 11.72 $ 10.51 $ 9.80 $ 8.73 $ 6.47
=========== ========= ========= ========= ========= ============
TOTAL RETURN (d). .............................. 7.08% 11.51% 7.24% 12.26% 34.93% (21.00)%
=========== ========= ========= ========= ========= ============
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's). .......... $ 193,746 $ 203,868 $ 182,892 $ 108,473 $ 20,488 $ 12,056
Ratio of operating expenses to average
net assets ................................... 1.36%(e) 1.37% 1.47% 1.47% 1.47% 1.47%
Ratio of net investment income to average
net assets ................................... 0.47%(e) 0.54% 0.26% 0.14% 0.41% 0.06%
Portfolio turnover rate ........................ 79% 94% 76% 43% 72% 79%
Ratio of operating expenses to average
net assets without fee waivers and
expenses reimbursed .......................... 1.36%(e) 1.37% 1.48% 2.07% 1.69% 2.73%
- ----------
(a) Effective April 30, 2002, based upon the determination of the Fund's Board
of Trustees, the Portfolio changed its name from the Dow(SM) Target 5
Portfolio to the Target Managed VIP Portfolio. The Portfolio's primary
investment strategy was also changed. The performance figures provided
reflect the Portfolio performance prior to the name change and the change
of the primary investment strategy.
(b) Per Membership Interest values have been calculated using the average
share method.
(c) Amount represents less than $0.01 per Membership Interest.
(d) Total return is not annualized for periods less than one year. The total
return would have been lower if certain fees had not been waived and
expenses reimbursed by the investment advisor and administrator. The
returns for the Portfolio do not reflect the deduction of expenses
associated with variable products, such as mortality and expense risk
charges, and sales charges. These expenses would reduce the overall
returns shown.
(e) Annualized.
Page 36 See Notes to Financial Statements.
THE DOW(R) DART 10 PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
06/30/07 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/06 12/31/05 12/31/04 12/31/03 12/31/02
----------- --------- --------- --------- --------- ------------
Net asset value, beginning of period ........... $ 10.56 $ 8.41 $ 8.69 $ 8.37 $ 6.98 $ 8.54
----------- --------- --------- --------- --------- ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .......................... 0.05(a) 0.14(a) 0.14(a) 0.15(a) 0.22 0.12(a)
Net realized and unrealized gain (loss) ........ 0.57 2.01 (0.42) 0.17 1.17 (1.68)
----------- --------- --------- --------- --------- ------------
Total from investment operations ............... 0.62 2.15 (0.28) 0.32 1.39 (1.56)
----------- --------- --------- --------- --------- ------------
Net asset value, end of period ................. $ 11.18 $ 10.56 $ 8.41 $ 8.69 $ 8.37 $ 6.98
=========== ========= ========= ========= ========= ============
TOTAL RETURN (b) ............................... 5.87% 25.56% (3.22)% 3.82% 19.91% (18.27)%
=========== ========= ========= ========= ========= ============
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ........... $ 22,061 $ 27,955 $ 11,611 $ 12,749 $ 4,268 $ 4,219
Ratio of operating expenses to average
net assets ................................... 1.47%(c) 1.47% 1.47% 1.47% 1.47% 1.47%
Ratio of net investment income to
average net assets ........................... 1.01%(c) 1.47% 1.66% 1.84% 2.37% 1.52%
Portfolio turnover rate ........................ 78% 82% 145% 57% 78% 76%
Ratio of operating expenses to average
net assets without fee waivers and
expenses reimbursed ......................... 1.47%(c) 1.47% 1.59% 2.33% 3.27% 3.13%
- ----------
(a) Per Membership Interest values have been calculated using the average
share method.
(b) Total return is not annualized for periods less than one year. The total
return would have been lower if certain fees had not been waived and
expenses reimbursed by the investment advisor and administrator. The
returns for the Portfolio do not reflect the deduction of expenses
associated with variable products, such as mortality and expense risk
charges, and sales charges. These expenses would reduce the overall
returns shown.
(c) Annualized.
See Notes to Financial Statements. Page 37
THE DOW(R) TARGET DIVIDEND PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS
ENDED YEAR PERIOD
06/30/07 ENDED ENDED
(UNAUDITED) 12/31/06 12/31/05 (a)
----------- --------- ------------
Net asset value, beginning of period ........... $ 11.66 $ 9.87 $ 10.00
----------- --------- ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .......................... 0.12(b) 0.23(b) 0.12(b)
Net realized and unrealized gain (loss) ........ 0.35 1.56 (0.25)
----------- --------- ------------
Total from investment operations ............... 0.47 1.79 (0.13)
----------- --------- ------------
Net asset value, end of period ................. $ 12.13 $ 11.66 $ 9.87
=========== ========= ============
TOTAL RETURN (c) ............................... 4.03% 18.14% (1.30)%
=========== ========= ============
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ........... $ 100,857 $ 100,906 $ 58,438
Ratio of operating expenses to average
net assets ................................... 1.37%(d) 1.37% 1.47%(d)
Ratio of net investment income to average net
assets ....................................... 2.02%(d) 2.11% 2.00%(d)
Portfolio turnover rate ........................ 65% 78% 18%
Ratio of operating expenses to average
net assets without fee waivers and
expenses reimbursed .......................... 1.37%(d) 1.37% 1.52%(d)
- ----------
(a) The Portfolio commenced operations on May 2, 2005.
(b) Per Membership Interest values have been calculated using the average
share method.
(c) Total return is not annualized for periods less than one year. Total
return is not annualized for periods less than one year. The total return
would have been lower if certain fees had not been waived and expenses
reimbursed by the investment advisor. The returns for the Portfolio do not
reflect the deduction of expenses associated with variable products, such
as mortality and expense risk charges, and sales charges. These expenses
would reduce the overall returns shown.
(d) Annualized.
Page 38 See Notes to Financial Statements.
GLOBAL DIVIDEND TARGET 15 PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
06/30/07 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/06 12/31/05(a) 12/31/04 12/31/03 12/31/02
----------- --------- ----------- -------- -------- ----------
Net asset value, beginning of period ........... $ 21.14 $ 15.27 $ 13.86 $ 11.05 $ 8.24 $ 9.66
----------- --------- ----------- -------- -------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .......................... 0.37(b) 0.63(b) 0.35(b) 0.27(b) 0.33 0.25(b)
Net realized and unrealized gain
(loss) ...................................... 2.89 5.24 1.06 2.54 2.48 (1.67)
----------- --------- ----------- -------- -------- ----------
Total from investment operations ............... 3.26 5.87 1.41 2.81 2.81 (1.42)
----------- --------- ----------- -------- -------- ----------
Net asset value, end of period ................. $ 24.40 $ 21.14 $ 15.27 $ 13.86 $ 11.05 $ 8.24
=========== ========= =========== ======== ======== ==========
TOTAL RETURN (c) ............................... 15.42% 38.44% 10.17% 25.43% 34.10% (14.70)%
=========== ========= =========== ======== ======== ==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ........... $ 173,053 $ 128,836 $ 36,791 $ 22,618 $ 3,050 $ 2,341
Ratio of operating expenses to average
net assets .................................. 1.41%(d) 1.47% 1.47% 1.47% 1.47% 1.47%
Ratio of net investment income to
average net assets .......................... 3.38%(d) 3.45% 2.49% 2.18% 3.36% 2.73%
Portfolio turnover rate ........................ 43% 33% 70% 49% 66% 57%
Ratio of operating expenses to average
net assets without fee waivers and
expenses reimbursed ......................... 1.41%(d) 1.47% 1.61% 2.67% 4.51% 4.50%
- ----------
(a) Effective May 2, 2005, based upon the determination of the Fund's Board of
Trustees, the Portfolio changed its name from the Global Target 15
Portfolio to the Global Dividend Target 15 Portfolio.
(b) Per Membership Interest values have been calculated using the average
share method.
(c) Total return is not annualized for periods less than one year. The total
return would have been lower if certain fees had not been waived and
expenses reimbursed by the investment advisor and administrator. The
returns for the Portfolio do not reflect the deduction of expenses
associated with variable products, such as mortality and expense risk
charges, and sales charges. These expenses would reduce the overall
returns shown.
(d) Annualized.
See Notes to Financial Statements. Page 39
S&P(R) TARGET 24 PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
06/30/07 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/06 12/31/05 12/31/04 12/31/03 12/31/02(a)
----------- --------- ---------- -------- -------- -----------
Net asset value, beginning of period ........... $ 9.28 $ 9.02 $ 8.66 $ 7.62 $ 6.14 $ 7.19
----------- --------- ---------- -------- -------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) ................... 0.00(b) (0.04) 0.02 (0.03) 0.03 (0.01)
Net realized and unrealized gain
(loss) ...................................... 0.21 0.30 0.34 1.07 1.45 (1.04)
----------- --------- ---------- -------- -------- -----------
Total from investment operations ............... 0.21 0.26 0.36 1.04 1.48 (1.05)
----------- --------- ---------- -------- -------- -----------
Net asset value, end of period ................. $ 9.49 $ 9.28 $ 9.02 $ 8.66 $ 7.62 $ 6.14
=========== ========= ========== ======== ======== ===========
TOTAL RETURN (c) ............................... 2.26% 2.88% 4.16% 13.65% 24.10% (14.60)%
=========== ========= ========== ======== ======== ===========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ........... $ 15,538 $ 16,057 $ 18,049 $ 14,158 $ 5,554 $ 4,767
Ratio of operating expenses to average
net assets .................................. 1.47%(d) 1.47% 1.47% 1.47% 1.47% 1.47%
Ratio of net investment income (loss)
to average net assets ....................... 0.07%(d) (0.40)% 0.20% (0.51)% 0.46% (0.10)%
Portfolio turnover rate ........................ 98% 106% 113% 104% 84% 200%
Ratio of operating expenses to average
net assets without fee waivers and
expenses reimbursed ......................... 1.58%(d) 1.56% 1.58% 2.37% 2.89% 2.96%
- ----------
(a) Effective April 30, 2002, based upon the determination of the Fund's Board
of Trustees, the Portfolio changed its name from the S&P Target 10
Portfolio to the S&P(R) Target 24 Portfolio. The Portfolio's primary
investment strategy was also changed. The performance figures provided
reflect the Portfolio's performance prior to the name change and the
change of the primary investment strategy.
(b) Amount represents less than $0.01 per Membership Interest.
(c) Total return is not annualized for periods less than one year. The total
return would have been lower if certain fees had not been waived and
expenses reimbursed by the investment advisor and administrator. The
returns for the Portfolio do not reflect the deduction of expenses
associated with variable products, such as mortality and expense risk
charges, and sales charges. These expenses would reduce the overall
returns shown.
(d) Annualized.
Page 40 See Notes to Financial Statements.
NASDAQ(R) TARGET 15 PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
06/30/07 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/06 12/31/05 12/31/04 12/31/03 12/31/02
----------- --------- ---------- -------- -------- ----------
Net asset value, beginning of period .......... $ 10.17 $ 9.34 $ 9.04 $ 9.29 $ 6.83 $ 9.25
----------- --------- ---------- -------- -------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ........................... (0.06)(a) (0.11)(a) (0.07)(a) (0.10)(a) (0.14) (0.08)
Net realized and unrealized gain
(loss) ..................................... 1.09 0.94 0.37 (0.15) 2.60 (2.34)
----------- --------- ---------- -------- -------- ----------
Total from investment operations .............. 1.03 0.83 0.30 (0.25) 2.46 (2.42)
----------- --------- ---------- -------- -------- ----------
Net asset value, end of period ................ $ 11.20 $ 10.17 $ 9.34 $ 9.04 $ 9.29 $ 6.83
=========== ========= ========== ======== ======== ==========
TOTAL RETURN (b) .............................. 10.13% 8.89% 3.32% (2.69)% 36.02% (26.16)%
=========== ========= ========== ======== ======== ==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) .......... $ 6,814 $ 7,318 $ 6,552 $ 7,028 $ 5,073 $ 4,105
Ratio of operating expenses to average
net assets ................................. 1.47%(c) 1.47% 1.47% 1.47% 1.47% 1.47%
Ratio of net investment loss to average
net assets ................................. (1.06)%(c) (1.08)% (0.80)% (1.20)% (1.34)% (1.25)%
Portfolio turnover rate ....................... 139% 92% 175% 117% 83% 98%
Ratio of operating expenses to average
net assets without fee waivers and
expenses reimbursed ........................ 1.97%(c) 1.84% 1.83% 2.52% 2.96% 3.03%
- ----------
(a) Per Membership Interest values have been calculated using the average
share method.
(b) Total return is not annualized for periods less than one year. The total
return would have been lower if certain fees had not been waived and
expenses reimbursed by the investment advisor and administrator. The
returns for the Portfolio do not reflect the deduction of expenses
associated with variable products, such as mortality and expense risk
charges, and sales charges. These expenses would reduce the overall
returns shown.
(c) Annualized.
See Notes to Financial Statements. Page 41
FIRST TRUST 10 UNCOMMON VALUES PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
06/30/07 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/06 12/31/05 12/31/04 12/31/03 12/31/02
----------- --------- ---------- -------- -------- ----------
Net asset value, beginning of period .......... $ 5.44 $ 5.23 $ 5.20 $ 4.67 $ 3.41 $ 5.40
----------- --------- ---------- -------- -------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .................. 0.07(a) 0.06(a) (0.01)(a) (0.02) (0.01) (0.03)(a)
Net realized and unrealized gain
(loss) ..................................... 0.47 0.15 0.04 0.55 1.27 (1.96)
----------- --------- ---------- -------- -------- ----------
Total from investment operations .............. 0.54 0.21 0.03 0.53 1.26 (1.99)
----------- --------- ---------- -------- -------- ----------
Net asset value, end of period ................ $ 5.98 $ 5.44 $ 5.23 $ 5.20 $ 4.67 $ 3.41
=========== ========= ========== ======== ======== ==========
TOTAL RETURN (b) .............................. 9.93% 4.02% 0.58% 11.35% 36.95% (36.85)%
=========== ========= ========== ======== ======== ==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) .......... $ 5,617 $ 5,734 $ 7,004 $ 9,803 $ 9,487 $ 6,752
Ratio of operating expenses to average
net assets ................................. 1.37%(c) 1.37% 1.37% 1.37% 1.37% 1.37%
Ratio of net investment income (loss)
to average net assets ...................... 2.36%(c) 1.14% (0.16)% (0.11)% (0.29)% (0.78)%
Portfolio turnover rate ....................... 22% 87% 92% 123% 117% 106%
Ratio of operating expenses to average
net assets without fee waivers and
expenses reimbursed ....................... 2.09%(c) 1.79% 1.69% 1.61% 2.36% 2.29%
- ----------
(a) Per Membership Interest values have been calculated using the average
share method.
(b) Total return is not annualized for periods less than one year. The total
return would have been lower if certain fees had not been waived and
expenses reimbursed by the investment advisor and administrator. The
returns for the Portfolio do not reflect the deduction of expenses
associated with variable products, such as mortality and expense risk
charges, and sales charges. These expenses would reduce the overall
returns shown.
(c) Annualized.
Page 42 See Notes to Financial Statements.
VALUE LINE(R) TARGET 25 PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
06/30/07 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/06 12/31/05 12/31/04 12/31/03 12/31/02(a)
----------- --------- ---------- -------- -------- -----------
Net asset value, beginning of period .......... $ 5.00 $ 4.86 $ 4.06 $ 3.34 $ 2.37 $ 4.15
----------- --------- ---------- -------- -------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ........................... (0.02)(b) (0.04) (0.02)(b) (0.04)(b) (0.02) (0.03)(b)
Net realized and unrealized gain
(loss) ..................................... 0.50 0.18 0.82 0.76 0.99 (1.75)
----------- --------- ---------- -------- -------- -----------
Total from investment operations .............. 0.48 0.14 0.80 0.72 0.97 (1.78)
----------- --------- ---------- -------- -------- -----------
Net asset value, end of period ................ $ 5.48 $ 5.00 $ 4.86 $ 4.06 $ 3.34 $ 2.37
=========== ========= ========== ======== ======== ===========
TOTAL RETURN (c) .............................. 9.60% 2.88% 19.70% 21.56% 40.93% (42.89)%
=========== ========= ========== ======== ======== ===========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) .......... $ 39,383 $ 43,776 $ 54,072 $ 21,765 $ 4,936 $ 2,976
Ratio of operating expenses to average
net assets .... ............................ 1.43%(d) 1.41% 1.47% 1.47% 1.47% 1.47%
Ratio of net investment loss to average
net assets ................................. (0.94)%(d) (0.88)% (0.45)% (1.13)% (0.92)% (1.22)%
Portfolio turnover rate ....................... 95% 124% 97% 87% 74% 49%
Ratio of operating expenses to average
net assets without fee waivers and
expenses reimbursed ........................ 1.43%(d) 1.41% 1.49% 2.28% 3.36% 6.72%
- ----------
(a) Effective April 30, 2002, based upon the determination of the Fund's Board
of Trustees, the Portfolio changed its name from the First Trust Internet
Portfolio to the Value Line(R) Target 25 Portfolio. The Portfolio's
primary investment strategy was also changed. The performance figures
provided reflect the Portfolio's performance prior to the name change and
the change of the primary investment strategy.
(b) Per Membership Interest values have been calculated using the average
share method.
(c) Total return is not annualized for periods less than one year. The total
return would have been lower if certain fees had not been waived and
expenses reimbursed by the investment advisor and administrator. The
returns for the Portfolio do not reflect the deduction of expenses
associated with variable products, such as mortality and expense risk
charges, and sales charges. These expenses would reduce the overall
returns shown.
(d) Annualized.
See Notes to Financial Statements. Page 43
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
JUNE 30, 2007 (UNAUDITED)
1. FUND DESCRIPTION
First Defined Portfolio Fund, LLC (the "Registrant" or "Fund") 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 eight managed investment Portfolios: Target Managed VIP
Portfolio, The Dow(R) DART 10 Portfolio, The Dow(R) Target Dividend Portfolio,
Global Dividend Target 15 Portfolio, S&P(R) Target 24 Portfolio, NASDAQ(R)
Target 15 Portfolio, First Trust 10 Uncommon Values Portfolio and Value Line(R)
Target 25 Portfolio (each a "Portfolio," and collectively, the "Portfolios").
Under Delaware law, a limited liability company does not issue shares of stock.
Instead, ownership rights are contained in Membership Interests (each an
"Interest," and collectively, the "Interests"). Each Interest represents an
undivided interest in the net assets of each Portfolio. Membership Interests are
not offered directly to the public. Membership 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 Portfolios have indirect rights to
the Membership Interests.
On December 11, 2006, the Board of Trustees approved the liquidation of the
First Trust Energy Portfolio, First Trust Financial Services Portfolio, First
Trust Pharmaceutical Portfolio and First Trust Technology Portfolio
(collectively, the "Sector Portfolios"). The Sector Portfolios were terminated
and liquidated by resolution of the Board of Trustees of the Fund as of March
16, 2007.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Portfolios in the preparation of their financial statements. The
preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts and disclosures in
the financial statements. Actual results could differ from those estimates.
A. PORTFOLIO VALUATION:
Each Portfolio determines the net asset value ("NAV") of its Interests daily, as
of the close of regular session trading on the New York Stock Exchange ("NYSE"),
normally 4:00 p.m. Eastern time, on each day the NYSE is open for trading. The
NAV is computed by dividing the value of all assets of a Portfolio (including
accrued interest and dividends), less all liabilities (including accrued
expenses and dividends declared but unpaid), by the total number of Interests
outstanding.
Each Portfolio's investments are valued at market value or, in the absence of
market value with respect to any portfolio securities, at fair value according
to procedures adopted by the Board of Trustees of the Registrant. Portfolio
securities listed on any exchange other than the NASDAQ National Market
("NASDAQ") are valued at the last sale price on the business day as of which
such value is being determined. If there has been no sale on such day, the
securities are valued at the mean of the most recent bid and asked prices on
such day. Securities traded on the NASDAQ are valued at the NASDAQ Official
Closing Price as determined by NASDAQ. Portfolio securities traded on more than
one securities exchange are valued at the last sale price on the business day as
of which such value is being determined at the close of the exchange
representing the principal market for such securities. Portfolio securities
traded in the over-the-counter market, but excluding securities trading on the
NASDAQ, are valued at the closing bid prices. Short-term investments that mature
in less than 60 days 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 NYSE. Occasionally, events affecting the value of such securities may occur
between such times and the close of the NYSE that will not always be reflected
in such securities' value. If events materially affecting the value of such
securities occur during such period, these securities will be valued at their
fair value according to procedures adopted by the Registrant's Board of
Trustees. All securities and other assets of a Portfolio denominated in foreign
currencies will be converted to U.S. dollars using exchange rates in effect at
the time of valuation.
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded as of the trade date. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
Dividend income is recorded on the ex-dividend date. Interest income is recorded
on the accrual basis.
Page 44
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NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
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FIRST DEFINED PORTFOLIO FUND, LLC
JUNE 30, 2007 (UNAUDITED)
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 on such securities
is not accrued until settlement date. Each Portfolio maintains liquid assets
with a current value at least equal to the amount of its when-issued or
delayed-delivery purchase commitments. At June 30, 2007, the Portfolios had no
when-issued or delayed-delivery purchase commitments outstanding.
C. FOREIGN CURRENCY:
The books and records of the Portfolios 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 "Net change in unrealized appreciation (depreciation) on foreign
currency translation of other assets and liabilities and foreign currencies" on
the Statements of Operations. Net realized foreign currency gains and losses
include the effect of changes in exchange rates between trade date and
settlement date on investment security transactions, foreign currency
transactions and interest and dividends received. 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 the
"Realized gain (loss) on foreign currency transactions" on the Statements of
Operations. Unrealized depreciation of $710 from dividends receivable in foreign
currencies are included in "Dividends receivable" on the Statement of Assets and
Liabilities for the Global Dividend Target 15 Portfolio.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income and net realized long-term and short-term
capital gains of all Portfolios 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 Portfolio will be reinvested by the Portfolio.
E. 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 continue to comply with the provisions of Section 817(h) of the
Internal Revenue Code, which impose 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.
F. EXPENSES:
Expenses that are directly related to one of the Portfolios are charged directly
to that Portfolio. General expenses of the Registrant with the exception of
audit and printing fees, which are allocated evenly among the Portfolios, are
allocated to all the Portfolios based upon the average net assets of each
Portfolio.
The Trust has entered into an Administrative Services Agreement (the
"Agreement") with American Skandia whereby American Skandia provides certain
administrative and other services reasonably necessary for the operations of the
Portfolios other than the management services provided by First Trust Advisors
L.P. ("First Trust") pursuant to the Investment Advisory and Management
Agreement.
As compensation for the services rendered under the Agreement, American Skandia
is paid fees at an annual rate of 0.30% of average daily net assets from the
Portfolios. These fees are included in "Membership Interest servicing fees" in
the Statements of Operations.
G. ACCOUNTING PRONOUNCEMENT:
In September 2006, Statement of Financial Accounting Standards No. 157 Fair
Value Measurements ("SFAS 157") was issued by the FASB and is effective for
fiscal years beginning after November 15, 2007. SFAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. Management is currently evaluating the impact the
adoption of SFAS 157 could have on the Fund's financial statement disclosures.
Page 45
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NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
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FIRST DEFINED PORTFOLIO FUND, LLC
JUNE 30, 2007 (UNAUDITED)
3. INVESTMENT ADVISORY FEE AND OTHER AFFILIATED TRANSACTIONS
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 Portfolios pursuant to an Investment
Advisory and Management Agreement. First Trust provides each Portfolio 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 Portfolio's average daily net assets.
For the period September 30, 2004 through December 31, 2008, First Trust has
contractually agreed to waive fees and reimburse expenses of the Portfolios to
limit the total annual fund operating expenses (excluding brokerage expense and
extraordinary expenses) to 1.37% for the First Trust 10 Uncommon Values
Portfolio and 1.47% for each of the other Portfolios' average daily net assets.
First Trust has entered into an agreement with the Registrant that allows First
Trust to recover from the Portfolios any fees waived or expenses reimbursed
during the four year period of January 1, 2005 through December 31, 2008.
However, First Trust's ability to recover such amounts is limited to the extent
that it would not exceed the amount waived or reimbursed during such period. To
the extent that the actual expense ratio of a particular Portfolio is less than
such Portfolio's applicable expense cap, First Trust may recover a portion of
the previously waived or reimbursed amount equal to the amount that the expense
cap exceeds the actual expense ratio. These amounts would be included in
"Expenses previously waived or reimbursed" on the Statements of Operations. The
fees recovered, fees waived and expenses reimbursed by First Trust for the six
months ended June 30, 2007, are as follows:
FEES RECOVERED FEES WAIVED EXPENSES REIMBURSED
-------------- ----------- -------------------
Target Managed VIP Portfolio ........................ $ -- $ -- $ --
The Dow(R) Dart 10 Portfolio ........................ -- 15,076 --
The Dow(R) Target Dividend Portfolio ................ -- -- --
Global Dividend Target 15 Portfolio ................. -- -- --
S&P(R) Target 24 Portfolio .......................... -- 8,423 --
NASDAQ(R) Target 15 Portfolio ....................... -- 18,306 --
First Trust 10 Uncommon Values Portfolio ............ -- 16,528 3,396
Value Line(R) Target 25 Portfolio ................... -- -- --
PFPC Inc. ("PFPC") serves as the Registrant's administrator. In addition, PFPC
also provides certain fund accounting, administration and transfer agency
services in accordance with certain fee arrangements.
PFPC Trust Company serves as the custodian to the Funds.
Effective January 1, 2007, the Trustees approved a revised compensation plan.
Under the revised plan, each Trustee who is not an officer or employee of First
Trust, any sub-advisor or any of their affiliates ("Independent Trustees") is
paid an annual retainer of $10,000 per investment company for the first 14
investment companies of the First Trust Fund Complex and an annual retainer of
$7,500 per investment company of each subsequent investment company added to the
First Trust Fund Complex. The annual retainer is allocated equally among each of
the investment companies. No additional meeting fees are paid in connection with
board or committee meetings.
Additionally, Thomas R. Kadlec is paid $10,000 annually to serve as the Lead
Trustee and Niel B. Nielson is paid $5,000 annually to serve as the chairman of
the Audit Committee, with such compensation paid by the funds in the First Trust
Fund Complex and divided among those funds. Independent Trustees are also
reimbursed by the investment companies in the First Trust Fund Complex 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 in the
First Trust Fund Complex had the effect of rapidly increasing their compensation
under the previous arrangements. Prior to January 1, 2007, the Fund paid each
Independent Trustee an annual retainer of $10,000, which included compensation
for all board and committee meetings.
Page 46
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NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
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FIRST DEFINED PORTFOLIO FUND, LLC
JUNE 30, 2007 (UNAUDITED)
4. DISTRIBUTION PLAN
The Registrant, on behalf of each Portfolio, 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 Portfolios will be subject to an annual service fee.
First Trust Portfolios L.P. ("FTP") serves as the selling agent and distributor
of Interests of the Portfolios. In this capacity, FTP manages the offering of
the Portfolios' 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 Portfolio 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 Portfolio's Interest, 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
Portfolio's Interests, certain other expenses associated with the distribution
of the Portfolios, and any distribution-related expenses that may be authorized
by the Board of Trustees.
During the six months ended June 30, 2007, 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.
5. PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of securities, excluding short-term
investments, for the six months ended June 30, 2007, were as follows:
PURCHASES SALES
------------ ------------
Target Managed VIP Portfolio ..................... $151,477,617 $169,628,490
The Dow(R) DART 10 Portfolio ..................... 18,392,431 24,899,548
The Dow(R) Target Dividend Portfolio ............. 63,611,383 66,197,568
Global Dividend Target 15 Portfolio .............. 88,507,170 62,995,114
S&P(R) Target 24 Portfolio ....................... 15,237,047 16,189,661
NASDAQ(R) Target 15 Portfolio .................... 9,950,906 11,147,546
First Trust 10 Uncommon Values Portfolio ......... 1,197,737 1,762,885
Value Line(R) Target 25 Portfolio ................ 39,543,790 48,623,563
6. MEMBERSHIP INTERESTS
The Registrant has authorized an unlimited number of Membership Interests
without par value of one or more series.
7. RISK CONSIDERATIONS
The Portfolios 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 Portfolio 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 Portfolio without
registration under the Securities Act of 1933, as amended, a Portfolio will
endeavor to obtain the
Page 47
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NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
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FIRST DEFINED PORTFOLIO FUND, LLC
JUNE 30, 2007 (UNAUDITED)
right to registration at the expense of the issuer. There generally will be a
lapse of time between the decision by a Portfolio 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 Portfolio 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
Portfolio may therefore invest a relatively high percentage of its assets in a
limited number of issuers. This does expose each Portfolio to greater market
fluctuations than is experienced by a diversified fund. Each Portfolio is more
susceptible to any single economic, political or regulatory occurrence and to
the financial conditions of the issuer in which it invests.
8. CHANGE IN PUBLIC ACCOUNTANTS
At a meeting held on March 12, 2007, the Board of Trustees of the Fund selected
Deloitte & Touche LLP ("Deloitte"), 111 South Wacker Drive, Chicago, Illinois
60601, to serve as the Fund's independent registered public accounting firm for
the fiscal year ending December 31, 2007. Deloitte will audit each Portfolio's
financial statements and perform other related audit services. Ernst & Young LLP
("E&Y"), 200 Clarendon Street, Boston, Massachusetts 02116, served as the Fund's
independent registered public accounting firm for the fiscal years ended
December 31, 1999 through December 31, 2006. E&Y audited each Fund's financial
statements and performed other related audit services.
9. SUBSEQUENT EVENT
Prior to July 1, 2007, the First Trust 10 Uncommon Values Portfolio was adjusted
and rebalanced annually on or about July 1 of each year and invested in 10
common stocks determined by the Investment Policy Committee of Lehman Brothers
Inc. ("Lehman Brothers") with the assistance of the Research Department of
Lehman Brothers. Lehman Brothers notified Fund management that it will no longer
provide a list of securities to the Portfolio. As a result, on July 1, 2007, the
Portfolio was not adjusted or rebalanced and the Portfolio maintained the
securities that it held the previous year. On July 18, 2007, the Board approved
(i) a change in name from First Trust 10 Uncommon Values Portfolio to First
Trust Target Focus Four Portfolio and (ii) a change in investment strategy for
the Portfolio. On or about November 19, 2007, the Portfolio will implement the
name change and new investment strategy. The First Trust Target Focus Four
Portfolio seeks to provide above-average capital appreciation. The Portfolio
seeks to achieve its objective by investing in the common stocks of companies
which are selected by applying four separate uniquely specialized strategies
selected by First Trust (the "Focus Four Strategy"). The Focus Four Strategy
adheres to a disciplined investment process that targets the following four
distinct areas of the market: The Dow(R) Target Dividend Strategy, Value Line
Target 25 Strategy, S&P Target Mid 60 Strategy, and NYSE International Target 25
Strategy.
Page 48
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ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
JUNE 30, 2007 (UNAUDITED)
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Registrant uses to
determine how to vote proxies and information on 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
website at http://www.sec.gov.
PORTFOLIO HOLDINGS
The Registrant files its complete schedule of portfolio holdings with the
Securities and Exchange Commission ("SEC") for the first and third quarters of
each fiscal year on Form N-Q. The Registrant's Forms N-Q are 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 (800) SEC-0330.
SUBMISSION OF MATTERS TO A VOTE OF INTEREST HOLDERS
A Special Meeting of Interest holders of the Fund was held on April 23, 2007.
The Special Meeting was adjourned until April 30, 2007. At the Special Meeting,
Trustees Bowen, Erickson, Kadlec, Keith and Nielson were elected for an
indefinite term. American Skandia votes its Interests in the same proportion as
votes received from Policy owners that are indirectly invested in the Fund. The
number of votes cast in favor of James A. Bowen was 43,522,955, the number of
votes withheld was 385,278 and the number of abstentions was 0. The number of
votes cast in favor of Niel B. Nielson was 43,522,955, the number of votes
withheld was 385,278 and the number of abstentions was 0. The number of votes
cast in favor of Richard E. Erickson was 43,522,955, the number of votes
withheld was 385,278 and the number of abstentions was 0. The number of votes
cast in favor of Thomas R. Kadlec was 43,522,955, the number of votes withheld
was 385,278 and the number of abstentions was 0. The number of votes cast in
favor of Robert F. Keith was 43,522,955, the number of votes withheld was
385,278 and the number of abstentions was 0.
Also at the Special Meeting of Interest holders of the Fund, Interest holders of
the First Trust Value Line(R) Target 25 Portfolio approved a change in the
Portfolio's fundamental investment policy to provide the Portfolio may invest
more than 25% of its assets in the securities of issuers in any single industry
if the applicable investment strategy for the Portfolio selects securities in a
manner that results in such a concentration. American Skandia votes its
Interests in the same proportion as votes received from Policy owners that are
indirectly invested in the Portfolio. The number of votes cast in favor of the
change in fundamental investment policy was 8,262,212 the number of votes cast
against was 0, the number of abstentions was 0, and the number of broker
non-votes was 0.
ADVISORY AGREEMENT
BOARD CONSIDERATIONS REGARDING CONTINUATION OF INVESTMENT MANAGEMENT CONTRACT
The Board of Trustees of First Defined Portfolio Fund, LLC (the "Fund"),
including the Independent Trustees, unanimously approved the continuation of the
Investment Advisory and Management Agreement (the "Advisory Agreement") between
the Fund, on behalf of eight portfolios of the Fund (each a "Portfolio" and
collectively, the "Portfolios"), and First Trust Advisors L.P. (the "Advisor")
at a meeting held on March 12, 2007. The Board determined that the terms of the
Advisory Agreement are fair and reasonable and that the Advisory Agreement
continues to be in the best interests of the Fund and each Portfolio.
To reach this determination, the Board considered its duties under the
Investment Company Act of 1940, as amended (the "1940 Act"), as well as under
the general principles of state law in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; the fiduciary duty
of investment advisers with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Board in voting
on such agreements. To assist the Board in its evaluation of the Advisory
Agreement for each Portfolio, the Independent Trustees received a report from
the Advisor in advance of the Board meeting responding to a request for
information from counsel to the Independent Trustees. The report, among other
things, outlined the services provided by the Advisor to each Portfolio
(including the relevant personnel responsible for these services and their
experience); the advisory fees for each Portfolio as compared to fees charged by
investment advisors to comparable funds and as compared to fees charged to other
clients of the Advisor; expenses of each Portfolio as compared to expense ratios
of comparable funds; the nature of expenses incurred in providing services to
each Portfolio and the potential
Page 49
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ADDITIONAL INFORMATION - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
JUNE 30, 2007 (UNAUDITED)
for economies of scale, if any; financial data on the Advisor; any fall out
benefits to the Advisor; and information on the Advisor's compliance program.
The Independent Trustees also met separately with their independent legal
counsel to discuss the information provided by the Advisor. The Board applied
its business judgment to determine whether the arrangement between the Fund and
the Advisor is a reasonable business arrangement from each Portfolio's
perspective as well as from the perspective of its interest holders.
In reviewing the Advisory Agreement, the Board considered the nature, quality
and extent of services provided by the Advisor to each Portfolio under the
Advisory Agreement. The Board considered that the Advisor is responsible for the
overall management and administration of the Fund and each Portfolio and noted
the compliance program that had been developed by the Advisor. In light of the
information presented and the considerations made, the Board concluded that the
nature, quality and extent of services provided to the Fund and each Portfolio
by the Advisor under the Advisory Agreement have been and are expected to remain
satisfactory and that the Advisor has managed each Portfolio consistent with its
investment objective and policies.
The Board considered the advisory fees paid by each Portfolio under the Advisory
Agreement, noting that the annual fees for each Portfolio are 0.60% of average
daily net assets. The Board reviewed data prepared by Lipper Inc. ("Lipper"), an
independent source, showing the management fees and expense ratios of each
Portfolio as compared to the management fees and expense ratios of a peer group
selected by Lipper. Based on the information provided, the Board noted that,
except for The Dow(R) Target Dividend Portfolio and Value Line(R) Target 25
Portfolio, each Portfolio's management fees and expense ratios were in at least
the third quintile of its Lipper peer group. The Board noted that the management
fees and expense ratios of The Dow(R) Target Dividend Portfolio and Value
Line(R) Target 25 Portfolio were each in the fifth quintile of its respective
peer group, but considered Lipper's representation that due to a lack of
index-based and pure index equity income funds, the data provided for these
Portfolios did not represent Lipper's standard methodology. The Board considered
that the Advisor has agreed to waive fees and reimburse expenses of each
Portfolio through December 31, 2008 in order to prevent total annual operating
expenses (excluding extraordinary expenses and brokerage fees) from exceeding
1.47% of average daily net assets (1.37% for the First Trust 10 Uncommon Values
Portfolio). The Board noted that the Advisor may seek restitution from each
Portfolio for fees waived and reimbursed through December 31, 2008; however,
such restitution is limited to the extent that it would not cause a Portfolio to
exceed its current expense limitations. The Board also considered the advisory
fees paid to the Advisor by similar funds, and noted that the Advisor does not
provide advisory services to institutional clients that have investment
objectives and policies similar to the Portfolio's, other than to registered
investment companies. The Board noted that the Advisor does provide retail
separate managed account investment advisory services to a variety of accounts
that have investment objectives and policies similar to the Portfolios' and
noted the Advisor's standard fee for such services.
The Board considered each Portfolio's long-term and short-term performance for
the periods ended December 31, 2006 as compared to the performance of a relevant
benchmark index and to a performance universe selected by Lipper. The Board also
considered performance data provided by the Advisor. Because each Portfolio is
non-diversified and generally invests in a relatively small number of issuers,
the Board considered the difficulties of comparing each Portfolio to a broad
peer universe. The Board also noted the differences between each Portfolio and
its benchmark index. The Board noted that changes in the Portfolios' benchmarks
and investment policies over the years affected the utility of comparisons with
peer universe and benchmark performance and noted that each Portfolio's
investment results were consistent with their investment objectives. After
considering the information presented, the Board concluded that overall
performance for the Portfolios was satisfactory.
On the basis of all the information provided on the fees, expenses and
performance of each Portfolio, the Board concluded that the advisory fees for
each Portfolio were reasonable and appropriate in light of the nature, quality
and extent of services provided by the Advisor to each Portfolio under the
Advisory Agreement.
The Board noted that the Advisor has continued to invest in personnel and
infrastructure but had not identified any economies of scale realized by the
Portfolios. The Board concluded that the advisory fee for each Portfolio
reflects an appropriate level of sharing of any economies of scale. The Board
also considered the costs of the services provided and profits realized by the
Advisor from serving as investment manager to variable annuity products for the
twelve months ended December 31, 2006, as set forth in the materials provided to
the Board. The Board noted the inherent limitations in the profitability
analysis, and concluded that the Advisor's profitability appeared to be not
unreasonable in light of the services provided to the Fund and each Portfolio.
In addition, the Board considered and discussed any ancillary benefits derived
by the Advisor from its relationship with the Portfolios and noted that the
Advisor does not utilize soft dollars in managing the Portfolios and therefore
the typical fall out benefits are not present. The Board concluded that any
other fall out benefits received by the Advisor or its affiliates would appear
to be attenuated.
Page 50
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ADDITIONAL INFORMATION - (CONTINUED)
- --------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
JUNE 30, 2007 (UNAUDITED)
Based on all of the information considered and the conclusions reached, the
Board, including the Independent Trustees, determined that the terms of the
Advisory Agreement continue to be fair and reasonable and that the continuation
of the Advisory Agreement is in the best interests of the Fund and each
Portfolio. No single factor was determinative in the Board's analysis.
LICENSING INFORMATION
"Standard & Poor's(R)," "S&P(R)," "S&P 500(R)," "Standard & Poor's 500" and
"500" are trademarks of The McGraw Hill Companies, Inc. and have been licensed
for use by First Trust Advisors L.P., on behalf of the S&P(R) Target 24
Portfolio and the Target Managed VIP Portfolio. None of the Portfolios,
including, and in particular, the S&P(R) Target 24 Portfolio and the Target
Managed VIP Portfolio are sponsored, endorsed, sold or promoted by Standard &
Poor's and Standard & Poor's makes no representation regarding the advisability
of investing in any of the Portfolios.
"The NASDAQ-100(R)," "NASDAQ-100 Index(R)," "NASDAQ Stock Market(R)" and
"NASDAQ(R)" are registered trademarks of the Nasdaq Stock Market, Inc. (which
with its affiliates are the "Corporations") and have been licensed for use by
First Trust Advisors L.P., on behalf of the NASDAQ(R) Target 15 Portfolio and
the Target Managed VIP Portfolio. None of the Portfolios, including, and in
particular, the NASDAQ(R) Target 15 Portfolio and the Target Managed VIP
Portfolio have been passed on by the Corporations as to their legality or
suitability. The Portfolios are not issued, endorsed, sponsored, managed, sold
or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO
LIABILITY WITH RESPECT TO THE PORTFOLIOS.
"Dow Jones Industrial Average(SM)," "DJIA(SM)," "The Dow Jones Select Dividend
Index(SM)," "Dow Industrials(SM)," "The Dow(R)," and "The Dow(R) Dart 10" are
service marks or registered trademarks, as applicable, of Dow Jones & Company,
Inc. ("Dow Jones") and have been licensed for use for certain purposes by First
Trust Advisors L.P. on behalf of the Target Managed VIP Portfolio, The Dow(R)
Target Dividend Portfolio and The Dow(R) DART 10 Portfolio. None of the
Portfolios, including, and in particular, the Target Managed VIP Portfolio, The
Dow(R) Target Dividend Portfolio and The Dow(R) DART 10 Portfolio, are endorsed,
sold, or promoted by Dow Jones, and Dow Jones makes no representation regarding
the advisability of investing in such products.
"Value Line(R)," "The Value Line Investment Survey," and "Value Line(TM)
Timeliness Ranking System" are trademarks of Value Line Securities, Inc. or
Value Line Publishing, Inc. that have been licensed to First Trust Advisors L.P.
on behalf of the Value Line(R) Target 25 Portfolio and the Target Managed VIP
Portfolio. None of the Portfolios, including, and in particular, the Target
Managed VIP Portfolio and the Value Line(R) Target 25 Portfolio are sponsored,
recommended, sold or promoted by Value Line Publishing, Inc., Value Line, Inc.
or Value Line Securities, Inc. ("Value Line"). Value Line makes no
representation regarding the advisability of investing in any of the Portfolios.
The First Trust 10 Uncommon Values Portfolio is not sponsored or created by
Lehman Brothers. Lehman Brothers' only relationship to First Trust Advisors L.P.
is the licensing of certain trademarks and trade names of Lehman Brothers and of
the "10 Uncommon Values" which is determined, composed and calculated by Lehman
Brothers without regard to First Trust Advisors L.P. or the First Trust 10
Uncommon Values Portfolio.
PRIVACY POLICY
The open-end and closed-end funds advised by First Trust Advisors L.P. (each a
"FUND") consider your privacy an important priority in maintaining our
relationship. We are committed to protecting the security and confidentiality of
your personal information.
SOURCES OF INFORMATION
We may collect nonpublic personal information about you from the following
sources:
o Information we receive from you or your broker-dealer, investment adviser
or financial representative through interviews, applications, agreements
or other forms;
o Information about your transactions with us, our affiliates or others;
o Information we receive from your inquiries by mail, e-mail or telephone;
and
Page 51
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ADDITIONAL INFORMATION - (CONTINUED)
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FIRST DEFINED PORTFOLIO FUND, LLC
JUNE 30, 2007 (UNAUDITED)
o Information we collect on our website through the use of For example, we
may identify the pages on our website "cookies." that your browser
requests or visits.
INFORMATION COLLECTED
The type of data we collect may include your name, address, social security
number, age, financial status, assets, income, tax information, retirement and
estate plan information, transaction history, account balance, payment history,
investment objectives, marital status, family relationships and other personal
information.
DISCLOSURE OF INFORMATION
We do not disclose any nonpublic personal information about our customers or
former customers to anyone, except as permitted by law. The permitted uses
include the disclosure of such information to unaffiliated companies for the
following reasons:
o In order to provide you with products and services and to effect
transactions that you request or authorize, we may disclose your personal
information as described above to unaffiliated financial service providers
and other companies that perform administrative or other services on our
behalf, such as transfer agents, custodians and trustees, or that assist
us in the distribution of investor materials such as trustees, banks,
financial representatives and printers.
o We may release information we have about you if you direct us to do so, if
we are compelled by law to do so, or in other legally limited
circumstances (for example to protect your account from fraud).
In addition, in order to alert you to our other financial products and services,
we may share your personal information with affiliates of the Fund. Please note,
however, that the California Financial Information Privacy Act contains an "opt
out" mechanism that California consumers may use to prevent us from sharing
nonpublic personal information with affiliates.
CONFIDENTIALITY AND SECURITY
With regard to our internal security procedures, the Fund restricts access to
your nonpublic personal information to those individuals who need to know that
information to provide products or services to you. We maintain physical,
electronic and procedural safeguards to protect your nonpublic personal
information.
POLICY UPDATES AND INQUIRIES
As required by federal law, we will notify you of our privacy policy annually.
We reserve the right to modify this policy at any time; however, if we do change
it, we will tell you promptly.
For questions about our policy, or for additional copies of this notice, please
contact us at (800) 621-1675.
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ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
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.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)),
or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17
CFR 270.30a-3(d)) that occurred during the registrant's second fiscal
quarter of the period covered by this report that have materially
affected, or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Not applicable.
(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, Chairman of the Board, President and
Chief Executive Officer
(principal executive officer)
Date AUGUST 31, 2007
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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, Chairman of the Board, President and
Chief Executive Officer
(principal executive officer)
Date AUGUST 31, 2007
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By (Signature and Title)* /S/ MARK R. BRADLEY
-------------------------------------------------------
Mark R. Bradley, Treasurer, Controller, Chief Financial
Officer and Chief Accounting Officer
(principal financial officer)
Date AUGUST 31, 2007
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* Print the name and title of each signing officer under his or her signature.