CHAPMAN AND CUTLER LLP
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
June 16, 2009
VIA ELECTRONIC MAIL
Mr. Houghton Hallock
U.S. Securities and Exchange Commission
Washington, DC 20549
Re: First Trust NASDAQ(R) ABA(R) Community Bank Index Fund
Dear Mr. Hallock:
We have prepared this letter to respond to your comments received on June
4, 2009 regarding First Trust NASDAQ(R) ABA(R) Community Bank Index Fund
(the "Fund"), a series of the First Trust Exchange-Traded Fund (the
"Trust") filed on Form N-1A on May 15, 2009 (SEC File No. 333-125751)
(the "Registration Statement"). Each of your comments is provided below
along with our responses to those comments:
COMMENT 1:
With respect to the name of the Fund, how is it
possible to have a name of a fund that does not match the name
of the index that it seeks to replicate? Please provide an
explanation.
RESPONSE 1:
There are several examples of exchange-traded funds
that have names that do not match the names of the indices that
they track. For example, the PowerShares Global Biotech
Portfolio tracks the NASDAQ OMX Global Biotechnology IndexSM,
the PowerShares Global Wind Energy Portfolio tracks the NASDAQ
OMX Clean Edge(R) Global Wind Energy Index and the PowerShares
Water Resources Portfolio tracks the Palisades Water IndexTM.
Furthermore, because the Fund will invest at least 80% of its
assets in community banks, as such term is used by the index
provider, we believe that the name is appropriate for Rule 35d-1
purposes.
COMMENT 2:
What is the definition of a "community bank?" Please
provide a plain-English definition and additional disclosure
regarding community banks. Also provide definitions for
"international specialization" and "credit-card specialization."
RESPONSE 2:
Page 4 of the prospectus has been revised in response
to your comment.
COMMENT 3:
You referenced an article in which Andrew "Buddy"
Donohue, head of the SEC's Division of Investment Management,
stated that funds must adjust their disclosures when they are
experiencing increased expense ratios due to the decrease in
assets, and inquired as to whether you will be required to make
similar disclosure in your prospectus. Please provide a copy of
that article for our review.
RESPONSE 3:
The referenced article is attached hereto as Exhibit A.
COMMENT 4:
Please revise the risk factors in the prospectus to
address risks specific to community banks.
RESPONSE 4:
The "Principal Risks" section of the prospectus has
been revised in response to your comment.
TANDY ACKNOWLEDGMENT
In connection with the Registration Statement, the Trust acknowledges
that;
o should the Securities and Exchange Commission (the "Commission")
or the staff, acting pursuant to delegated authority, declare
the filing effective, it does not foreclose the Commission from
taking any action with respect to the filing;
o the action of the Commission or the staff, acting pursuant to
delegated authority in declaring the filing effective, does not
relieve the Trust from its full responsibility for the adequacy
and accuracy for the disclosure in the filing; and
o the Trust may not assert this action as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
Thank you very much for your assistance with this process.
Please feel free to call me at 312-845-3484 with any questions or
comments.
Sincerely,
CHAPMAN AND CUTLER LLP
By /s/ Morrison C. Warren
---------------------------------
Morrison C. Warren
EXHIBIT A
ARTICLE
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