UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT
COMPANIES
Investment Company Act file number 811-09235
-----------
First Defined Portfolio Fund, LLC
------------------------------------------------------------
(Exact name of registrant as specified in charter)
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
-------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
W. Scott Jardine, Esq.
First Trust Portfolios L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
-------------------------------------------------------------------
(Name and address of agent for service)
registrant's telephone number, including area code: 630-765-8000
--------------
Date of fiscal year end: December 31
-------------
Date of reporting period: December 31, 2011
-------------------
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.
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TABLE OF CONTENTS
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
DECEMBER 31, 2011
Shareholder Letter........................................................... 1
Market Overview.............................................................. 2
Performance Summaries and Portfolio Components............................... 4
Understanding Your Fund Expenses............................................. 20
Portfolio of Investments..................................................... 21
Statements of Assets and Liabilities......................................... 44
Statements of Operations..................................................... 46
Statements of Changes in Net Assets.......................................... 48
Statements of Changes in Net Assets - Membership Interest Activity........... 50
Financial Highlights......................................................... 52
Notes to Financial Statements................................................ 60
Report of Independent Registered Public Accounting Firm...................... 66
Additional Information....................................................... 67
Board of Trustees and Officers............................................... 68
Privacy Policy............................................................... 70
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This report contains certain forward-looking statements within the meaning of
the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934,
as amended. Forward-looking statements include statements regarding the goals,
beliefs, plans or current expectations of First Trust Advisors L.P. ("First
Trust" or the "Advisor") and its representatives, taking into account the
information currently available to them. Forward-looking statements include all
statements that do not relate solely to current or historical fact. For example,
forward-looking statements include the use of words such as "anticipate,"
"estimate," "intend," "expect," "believe," "plan," "may," "should," "would" or
other words that convey uncertainty of future events or outcomes.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
First Defined Portfolio Fund, LLC (the "Registrant") 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 respective
representatives only as of the date hereof. We undertake no obligation to
publicly revise or update these forward-looking statements to reflect events and
circumstances that arise after the date hereof.
PERFORMANCE AND RISK DISCLOSURE
There is no assurance that any Portfolio (individually called a "Portfolio" and
collectively, the "Portfolios") of the Registrant will achieve its investment
objective. Each Portfolio is subject to market risk, which is the possibility
that the market values of securities owned by the Portfolio will decline and
that the value of the Portfolio shares may therefore be less than what you paid
for them. Accordingly, you can lose money by investing in the Portfolios. See
"Risk Considerations" in the Notes to Financial Statements for a discussion of
certain other risks of investing in the Registrant.
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 Membership Interests, when sold,
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 market overview and discussion of each Portfolio's performance by
First Trust, the Registrant'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 personnel of
First Trust are just that: informed opinions. They should not be considered to
be promises or advice. The opinions, like the statistics, cover the period
through the date on the cover of this report. The risks of investing in the
Portfolios are spelled out in the prospectus, the statement of additional
information, this report and other regulatory filings.
--------------------------------------------------------------------------------
SHAREHOLDER LETTER
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL LETTER FROM THE CHAIRMAN AND CEO
DECEMBER 31, 2011
Dear Shareholders:
I am pleased to present you with the annual report for your investment in First
Defined Portfolio Fund, LLC.
First Trust Advisors L.P. ("First Trust"), now in our 21st year, has always
believed that staying invested in quality products and having a long-term
horizon can help investors reach their financial goals. Like many successful
investors, we understand that success in the markets doesn't just happen--it
requires a long-term investment perspective through all kinds of markets.
Although the markets have been somewhat choppy over the past six months, the
equity market is well above the lows it sank to during the recent recession.
The report you hold contains detailed information about eight portfolios in the
First Defined Portfolio Fund, LLC ("the Registrant") over the twelve months
ended December 31, 2011. It contains a market overview and a performance
analysis for the period. I encourage you to read this document and discuss it
with your financial advisor.
First Trust remains committed to being a long-term investor and investment
manager and to bringing you quality investment solutions regardless of market
ups and downs. In addition to the First Defined Portfolio Fund, LLC, we offer a
variety of products that may fit many financial plans to help those investors
who are seeking long-term investment success. You may want to talk to your
advisor about the other investments First Trust offers that could also fit your
financial goals.
First Trust will continue to make available up-to-date information about your
investments so you and your financial advisor are current on any First Trust
investments you own. We value our relationship with you, and thank you for the
opportunity to assist you in achieving your financial goals. I look forward to
2012 and to the next edition of your Registrant's report.
Sincerely,
/s/ James A. Bowen
James A. Bowen
Chairman of the Board of Trustees of First Defined Portfolio Fund, LLC and Chief
Executive Officer of First Trust
Page 1
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 22
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 WBBM
Radio and has been quoted by several publications, including The Wall Street
Journal, The Wall Street Reporter, Bloomberg News Service, and Registered
Rep.
--------------------------------------------------------------------------------
MARKET OVERVIEW
--------------------------------------------------------------------------------
STATE OF THE ECONOMY
The U.S. economy expanded in each of the past ten calendar quarters. While
economic activity was sluggish in the first half of 2011, it did accelerate
above the 2.0% level by year-end. GDP ranged from an annualized 0.4% in the
first quarter of 2011 to an annualized 2.8% in the fourth quarter of 2011. That
is still significant when you consider that the size of the U.S. economy
(nominal dollars) has grown from $5.99 trillion in 1991 to $15.09 trillion in
2011. Over that same 20-year period, GDP averaged 2.6%, according to data from
the Bureau of Economic Analysis. The Blue Chip Economic Indicators survey in
December 2011 revealed a consensus GDP estimate of 2.2% for 2012. Estimates have
been ratcheted down in recent months due to the ongoing debt crisis negotiations
in Europe. The austerity measures forthcoming, as well as those already
implemented, are expected to dampen economic activity in the European Union. If
so, it would likely temper global growth as well, in our opinion.
One of the most important and talked about economic indicators in 2011 was job
growth. It is likely to be in 2012 as well. The U.S. has increased its nonfarm
payrolls by 3.16 million since February 2010, yet the unemployment rate closed
2011 at 8.5%. While 8.5% is still high, it is down from 10.0% in October 2009.
This issue will be a big point of contention in the upcoming general election.
Since 1936, no incumbent in the White house has won a second term when the
unemployment rate has been above 7.2%. A secondary issue is the rising number of
people out-of-work for an extended period of time.
The U.S. economic recovery, while not robust, is actually one of the better
stories around the globe. Progress has been made on several fronts. The number
of bank failures in the U.S. in 2011 fell by nearly 44% from 2010's total. The
default rate on U.S. speculative-grade debt stood at 1.8% in December 2011, well
below its historical average of 5.0%, according to Moody's. The companies in the
REIT sector raised a record amount of capital in the public markets in 2011,
including a record amount of equity, in an ongoing effort to strengthen their
balance sheets, according to REIT.com. REITs raised $51.3 billion in public
equity and debt in 2011, surpassing the previous record of $49.0 billion raised
in 2006. RealtyTrac reported that foreclosures and repossessions declined 33% in
2011 to 2.7 million, their lowest level since 2007. S&P 500 Index earnings
reached a record-high in the third quarter of 2011. So we believe there is much
to be encouraged about heading into 2012.
U.S. STOCKS AND BONDS
The major U.S. stock indices were mixed in 2011. The S&P 500 Index, S&P MidCap
400 Index and S&P SmallCap 600 Index returned 2.11%, -1.74%, and 1.00%,
respectively, according to Bloomberg. Six of the 10 major sectors in the S&P 500
posted positive total returns. The top-performing sector was Utilities, up
19.88%, while the poorest showing came from Financials, down 17.03%. The
year-over-year estimated earnings growth rate for the companies in the S&P 500
Index is expected be 9.00% in 2011, according to Standard & Poor's.
A survey of 214 institutional investors just released by Bank of America Merrill
Lynch revealed that more investors are willing to assume risk and fewer are
predicting a global slowdown. Only a net 3% of institutional investors believe
the global economy will weaken in the next 12 months, down from 27% in December.
That is the biggest one-month improvement in sentiment since May 2009. While
most continue to shy away from European equities, it appears that investors are
favoring energy and technology stocks. In addition, portfolio managers in the
U.S. are once again investing in banks.
Page 2
--------------------------------------------------------------------------------
MARKET OVERVIEW - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
In the U.S. bond market, despite warnings from a high-profile analyst calling
for a surge in defaults, the top-performing major debt group was municipal
bonds. The Barclays Capital Municipal Bond: Long Bond (22+) Index posted a total
return of 14.88%. The next closest domestic category was GNMAs, up 7.97%, as
measured by the Barclays Capital GNMA 30 Index. All of the major debt groups in
the U.S. posted positive returns.
FOREIGN STOCKS AND BONDS
The Barclays Capital Global Emerging Markets Index of debt securities rose 5.77%
(USD) in 2011, while the MSCI Emerging Markets Index of stocks declined 18.42%
(USD). The Barclays Capital Global Aggregate Index of higher quality debt rose
5.64% (USD), while the MSCI World Index (excluding the U.S.) of stocks from
developed countries declined 13.71% (USD). The U.S. Dollar Index (DXY) rose
1.06% against a basket of major currencies in 2011.
Page 3
--------------------------------------------------------------------------------
PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
DECEMBER 31, 2011 (UNAUDITED)
TARGET MANAGED VIP PORTFOLIO
Over the twelve months ended December 31, 2011, the Target Managed VIP Portfolio
posted a total return of -1.68% versus 1.03% for the Russell 3000(R) Index over
the same period. The NAV decreased from $9.53 to $9.37 during the period.
Of the portfolio's 126 stocks, 59 advanced and 67 declined over the period. The
top three performing stocks, by contribution to return, were McDonald's Corp.
(MCD), Home Depot, Inc. (HD) and Apple, Inc. (AAPL). The worst-performing
stocks, by contribution to return, were Ford Motor Co. (F), Tata Motors Ltd.,
ADR (TTM) and Netflix, Inc. (NFLX).
Negative stock selection in the utilities and industrial sectors was the biggest
reason for portfolio underperformance in 2011. An underweight in consumer
staples, a top-performing sector in the benchmark, also hurt relative portfolio
performance. An underweight in financials, the worst-performing sector in the
benchmark, along with strong performance, helped mitigate the underperformance.
An underweight in the materials sector also had a positive impact on relative
performance.
All of the data on this page represents past performance which cannot be used to
predict future performance and the information in the table and graph does not
reflect the deduction of taxes that a shareholder would pay on portfolio
distributions or the redemption of shares.
--------------------------------------------------------------------------------
GROWTH OF A $10,000 INITIAL INVESTMENT
Dec. 31, 2001-Dec. 31, 2011
Target Managed VIP Dow Jones Russell 3000(R)
Portfolio (a) Industrial Avg.(SM)(b) Index (c)
Dec. 01 10000 10000 10000
Dec. 02 7900 8499 7847
Dec. 03 10659 10903 10284
Dec. 04 11966 11481 11513
Dec. 05 12833 11678 12222
Dec. 06 14310 13902 14154
Dec. 07 15665 15137 14897
Dec. 08 8645 10304 9340
Dec. 09 9768 12641 11989
Dec. 10 11636 14419 14018
Dec. 11 11441 15628 14162
--------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
RETURN COMPARISON PERIODS ENDED DEC. 31, 2011
1 YEAR 5 YEAR 10 YEAR SINCE INCEPTION
INCEPTION ANNUAL AVERAGE ANNUAL AVERAGE ANNUAL AVERAGE ANNUAL
DATE TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN
-------------------------------------------------------------------------------------------------------------
Target Managed VIP Portfolio (a) 10/6/99 -1.68% -4.38% 1.36% -0.53%
Dow Jones Industrial Avg.(SM) (b) 8.38% 2.37% 4.56% 3.56%
Russell 3000(R) Index (c) 1.03% 0.01% 3.54% 2.21%
-------------------------------------------------------------------------------------------------------------
(a) Effective April 30, 2002, based upon the determination of the Registrant's
Board of Trustees, the Portfolio changed its name from the Dow(R) Target 5
Portfolio to the Target Managed VIP Portfolio. The Portfolio's primary
investment strategy was also changed. The performance figures provided for
the periods prior to April 30, 2002, reflect the Portfolio's performance
prior to the name change and the change of the primary investment
strategy.
(b) The Dow Jones Industrial Average(SM) is a price-weighted average of 30
blue-chip stocks that are generally the leaders in their industry. It has
been a widely followed indicator of the stock market since October 1,
1928. (Bloomberg). (The index reflects no deduction for fees, expenses or
taxes).
(c) The Russell 3000(R) Index is composed of 3,000 large U.S. companies, as
determined by market capitalization. This index represents approximately
98% of the investable U.S. equity market. (Bloomberg). (The index reflects
no deduction for fees, expenses or taxes).
The returns for the Portfolio do not reflect the deduction of expenses
associated with variable products, such as mortality and expense risk charges,
separate account charges, and sales charges or the effect of taxes. These
expenses would reduce the overall returns shown.
Page 4
--------------------------------------------------------------------------------
PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
DECEMBER 31, 2011 (UNAUDITED)
TARGET MANAGED VIP PORTFOLIO (CONTINUED)
----------------------------------------------
% OF TOTAL
TOP 10 HOLDINGS INVESTMENTS
----------------------------------------------
Apple, Inc. 5.3%
McDonald's Corp. 4.5
International Business Machines Corp. 4.3
Home Depot (The), Inc. 4.1
AT&T, Inc. 3.5
Microsoft Corp. 3.2
Ford Motor Co. 2.8
eBay, Inc. 2.6
Exxon Mobil Corp. 2.3
Texas Instruments, Inc. 2.3
----------------------------------------------
Total 34.9%
=====
----------------------------------------------
% OF TOTAL
SECTOR INVESTMENTS
----------------------------------------------
Information Technology 30.0%
Consumer Discretionary 26.3
Telecommunication Services 8.8
Financials 8.7
Health Care 6.8
Utilities 5.1
Industrials 5.0
Energy 4.7
Consumer Staples 3.0
Materials 1.6
----------------------------------------------
Total 100.0%
======
Page 5
--------------------------------------------------------------------------------
PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
DECEMBER 31, 2011 (UNAUDITED)
THE DOW(R) DART 10 PORTFOLIO
Over the twelve months ended December 31, 2011, The Dow(R) DART 10 Portfolio
posted a total return of 7.72% versus 8.38% for the Dow Jones Industrial
Average(SM) over the same period. The NAV increased from $10.11 to $10.89 during
the period.
Of the portfolio's 10 stocks, 8 advanced and 2 declined over the period. The top
three performing stocks, by contribution to return, were McDonald's Corp. (MCD),
International Business Machines Corp. (IBM) and Home Depot, Inc. (HD). The
worst-performing stocks, by contribution to return, were Hewlett-Packard Co.
(HPQ), Microsoft Corp. (MSFT) and Procter & Gamble Co. (PG).
McDonald's Corp. (MCD), International Business Machines Corp. (IBM) and Home
Depot, Inc. (HD) were all up more than 20% during 2011 and helped the
portfolio's relative performance. Hewlett Packard Co. (HPQ) was the largest
detractor from performance. HPQ was down over 38% as the company lowered
earnings guidance amid slower PC sales. Microsoft Corp. (MSFT) also held back
relative performance.
All of the data on this page represents past performance which cannot be used to
predict future performance and the information in the table and graph does not
reflect the deduction of taxes that a shareholder would pay on portfolio
distributions or the redemption of shares.
--------------------------------------------------------------------------------
GROWTH OF A $10,000 INITIAL INVESTMENT
Dec. 31, 2001-Dec. 31, 2011
The Dow(R) DART 10 Dow Jones Industrial
Portfolio Avg.(SM)(a)
Dec. 01 10000 10000
Dec. 02 8173 8499
Dec. 03 9801 10903
Dec. 04 10176 11481
Dec. 05 9848 11678
Dec. 06 12365 13902
Dec. 07 12447 15137
Dec. 08 8899 10304
Dec. 09 10140 12641
Dec. 10 11838 14419
Dec. 11 12752 15628
--------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
RETURN COMPARISON PERIODS ENDED DEC. 31, 2011
1 YEAR 5 YEAR 10 YEAR SINCE INCEPTION
INCEPTION ANNUAL AVERAGE ANNUAL AVERAGE ANNUAL AVERAGE ANNUAL
DATE TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN
---------------------------------------------------------------------------------------------------------------
The Dow(R) DART 10 Portfolio 10/6/99 7.72% 0.62% 2.46% 0.70%
Dow Jones Industrial Avg.(SM) (a) 8.38% 2.37% 4.56% 3.56%
---------------------------------------------------------------------------------------------------------------
(a) The Dow Jones Industrial Average(SM) is a price-weighted average of 30
blue-chip stocks that are generally the leaders in their industry. It has
been a widely followed indicator of the stock market since October 1,
1928. (Bloomberg). (The index reflects no deduction for fees, expenses or
taxes).
The returns for the Portfolio do not reflect the deduction of expenses
associated with variable products, such as mortality and expense risk charges,
separate account charges, and sales charges or the effect of taxes. These
expenses would reduce the overall returns shown.
Page 6
--------------------------------------------------------------------------------
PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
DECEMBER 31, 2011 (UNAUDITED)
THE DOW(R) DART 10 PORTFOLIO (CONTINUED)
----------------------------------------------
% OF TOTAL
TOP 10 HOLDINGS INVESTMENTS
----------------------------------------------
McDonald's Corp. 12.2%
International Business Machines Corp. 11.8
Home Depot (The), Inc. 11.3
Verizon Communications, Inc. 10.6
Wal-Mart Stores, Inc. 10.3
Travelers (The) Cos., Inc. 10.0
Procter & Gamble (The) Co. 9.7
AT&T, Inc. 9.7
Microsoft Corp. 8.7
Hewlett-Packard Co. 5.7
----------------------------------------------
Total 100.0%
======
----------------------------------------------
% OF TOTAL
SECTOR INVESTMENTS
----------------------------------------------
Information Technology 26.2
Consumer Discretionary 23.5
Telecommunication Services 20.2
Consumer Staples 20.1
Financials 10.0
----------------------------------------------
Total 100.0%
======
Page 7
--------------------------------------------------------------------------------
PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
DECEMBER 31, 2011 (UNAUDITED)
THE DOW(R) TARGET DIVIDEND PORTFOLIO
Over the twelve months ended December 31, 2011, The Dow(R) Target Dividend
Portfolio posted a total return of 6.01% versus 12.42% for the Dow Jones U.S.
Select Dividend Index(SM) over the same period. The NAV increased from $9.32 to
$9.88 during the period.
Of the portfolio's 20 stocks, 15 advanced and 5 declined over the period. The
top three performing stocks, by contribution to return, were NiSource, Inc.
(NI), Cleco Corp. (CNL) and Alliant Energy Corp. (LNT). The worst-performing
stocks, by contribution to return, were First Niagara Financial Group Inc.
(FNFG), Masco Corp. (MAS) and R.R. Donnelley & Sons Co. (RRD).
Sector allocation accounted for most of the underperformance for the year. The
portfolio had no holdings in the consumer staples sector, one of the best
performing sectors for the year. An overweight in financials, one of the
worst-performing sectors, also hurt portfolio performance. An underweight in the
consumer discretionary sector, the best-performing sector in the benchmark in
2011, along with underperformance, further hurt relative performance. An
overweight in telecommunication services was also a drag on returns though
positive stock selection helped mitigate some of the underperformance. A
positive selection effect in the materials and utilities sectors added to
relative performance but was not enough to avoid overall portfolio
underperformance.
All of the data on this page represents past performance which cannot be used to
predict future performance and the information in the table and graph does not
reflect the deduction of taxes that a shareholder would pay on portfolio
distributions or the redemption of shares.
--------------------------------------------------------------------------------
GROWTH OF A $10,000 INITIAL INVESTMENT
May 2, 2005-Dec. 31, 2011
The Dow Target Dow Jones U.S. Select S&P 500(R)
Dividend Portfolio Dividend Index(SM)(a) Index (b)
May 05 10000 10000 10000
Dec. 05 9870 10529 10879
Dec. 06 11660 12587 12598
Dec. 07 11790 11938 13290
Dec. 08 7010 8240 8373
Dec. 09 8000 9157 10589
Dec. 10 9321 10835 12184
Dec. 11 9881 12180 12441
--------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
RETURN COMPARISON PERIODS ENDED DEC. 31, 2011
1 YEAR 5 YEAR SINCE INCEPTION
INCEPTION ANNUAL AVERAGE ANNUAL AVERAGE ANNUAL
DATE TOTAL RETURN TOTAL RETURN TOTAL RETURN
-------------------------------------------------------------------------------------------------------------
The Dow(R) Target Dividend Portfolio 5/2/05 6.01% -3.26% -0.18%
Dow Jones U.S. Select Dividend Index(SM) (a) 12.42% -0.66% 3.00%
S&P 500(R) Index (b) 2.11% -0.25% 3.33%
-------------------------------------------------------------------------------------------------------------
(a) The Dow Jones U.S. Select Dividend Index(SM) is comprised of 100 of the
highest dividend-yielding securities (excluding REITs) in the Dow Jones
U.S. Index. (The index reflects no deduction for fees, expenses or taxes).
(b) The S&P 500(R) Index is a capitalization-weighted index of 500 stocks. The
index is designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing
all major industries. (Bloomberg). (The index reflects no deduction for
fees, expenses or taxes).
The returns for the Portfolio do not reflect the deduction of expenses
associated with variable products, such as mortality and expense risk charges,
separate account charges, and sales charges or the effect of taxes. These
expenses would reduce the overall returns shown.
Page 8
--------------------------------------------------------------------------------
PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
DECEMBER 31, 2011 (UNAUDITED)
THE DOW(R) TARGET DIVIDEND PORTFOLIO (CONTINUED)
----------------------------------------------
% OF TOTAL
TOP 10 HOLDINGS INVESTMENTS
----------------------------------------------
NiSource, Inc. 6.6%
Cleco Corp. 6.0
Alliant Energy Corp. 5.8
Chevron Corp. 5.7
Pinnacle West Capital Corp. 5.6
MeadWestvaco Corp. 5.5
F.N.B. Corp. 5.5
Black Hills Corp. 5.4
Integrys Energy Group, Inc. 5.4
Edison International 5.2
----------------------------------------------
Total 56.7%
=====
----------------------------------------------
% OF TOTAL
SECTOR INVESTMENTS
----------------------------------------------
Utilities 45.1%
Financials 17.3
Industrials 12.5
Telecommunication Services 9.0
Energy 5.7
Materials 5.5
Consumer Discretionary 4.9
----------------------------------------------
Total 100.0%
======
Page 9
--------------------------------------------------------------------------------
PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
DECEMBER 31, 2011 (UNAUDITED)
GLOBAL DIVIDEND TARGET 15 PORTFOLIO
Over the twelve months ended December 31, 2011, the Global Dividend Target 15
Portfolio posted a total return of -7.49% versus -5.54% for the Morgan Stanley
Capital International Developed Markets World Index over the same period. The
NAV decreased from $21.22 to $19.63 during the period.
Of the portfolio's 15 stocks, 7 advanced and 8 declined over the period. The top
three performing stocks, by contribution to return, were Pfizer, Inc. (PFE),
Kraft Foods, Inc. (KFT) and Intel Corp. (INTC). The worst-performing stocks, by
contribution to return, were Esprit Holdings Ltd. (330 HK), Man Group PLC (EMG
LN) and BOC Hong Kong (Holdings) Ltd. (2388 HK).
The portfolio benefited from its 1/3 weight in United States stocks. The five
U.S. positions were among the top six performing stocks in the overall
portfolio. The Hong Kong and United Kingdom allocations underperformed the
benchmark and were the reason the portfolio slightly underperformed.
All of the data on this page represents past performance which cannot be used to
predict future performance and the information in the table and graph does not
reflect the deduction of taxes that a shareholder would pay on portfolio
distributions or the redemption of shares.
--------------------------------------------------------------------------------
GROWTH OF A $10,000 INITIAL INVESTMENT
Dec. 31, 2001-Dec. 31, 2011
Global Dividend MSCI Developed Markets
Target 15 Portfolio (a) World Index (b)
Dec. 01 10000 10000
Dec. 02 8530 8011
Dec. 03 11439 10664
Dec. 04 14348 12233
Dec. 05 15807 13394
Dec. 06 21884 16082
Dec. 07 24803 17535
Dec. 08 14193 10396
Dec. 09 20022 13513
Dec. 10 21968 15103
Dec. 11 20322 14266
--------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
RETURN COMPARISON PERIODS ENDED DEC. 31, 2011
1 YEAR 5 YEAR 10 YEAR SINCE INCEPTION
INCEPTION ANNUAL AVERAGE ANNUAL AVERAGE ANNUAL AVERAGE ANNUAL
DATE TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN
---------------------------------------------------------------------------------------------------------------------
Global Dividend Target 15 Portfolio (a) 10/6/99 -7.49% -1.47% 7.35% 5.66%
MSCI Developed Markets World Index (b) -5.54% -2.36% 3.62% 1.33%
---------------------------------------------------------------------------------------------------------------------
(a) Effective May 2, 2005, based upon the determination of the Registrant's
Board of Trustees, the Portfolio changed its name from the Global Target
15 Portfolio to the Global Dividend Target 15 Portfolio.
(b) The Morgan Stanley Capital International Developed Markets World Index
("MSCI Developed Markets World Index") is based on the share prices of
approximately 1,600 companies listed on stock exchanges in the twenty-two
countries that make up the MSCI National Indices. (Bloomberg). (The index
reflects no deduction for fees, expenses or taxes).
The returns for the Portfolio do not reflect the deduction of expenses
associated with variable products, such as mortality and expense risk charges,
separate account charges, and sales charges or the effect of taxes. These
expenses would reduce the overall returns shown.
Page 10
--------------------------------------------------------------------------------
PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
DECEMBER 31, 2011 (UNAUDITED)
GLOBAL DIVIDEND TARGET 15 PORTFOLIO (CONTINUED)
----------------------------------------------
% OF TOTAL
TOP 10 HOLDINGS INVESTMENTS
----------------------------------------------
Pfizer, Inc. 9.2%
Kraft Foods, Inc., Class A 8.8
Intel Corp. 8.6
Verizon Communications, Inc. 8.4
Vodafone Group PLC 7.9
BT Group PLC 7.7
AT&T, Inc. 7.7
PetroChina Co., Ltd., H Shares 7.2
BAE Systems PLC 6.3
RSA Insurance Group PLC 6.2
----------------------------------------------
Total 78.0%
=====
----------------------------------------------
% OF TOTAL
SECTOR INVESTMENTS
----------------------------------------------
Telecommunication Services 31.8%
Financials 25.9
Health Care 9.2
Consumer Staples 8.8
Information Technology 8.6
Energy 7.2
Industrials 6.4
Consumer Discretionary 2.1
----------------------------------------------
Total 100.0%
======
Page 11
--------------------------------------------------------------------------------
PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
DECEMBER 31, 2011 (UNAUDITED)
S&P(R) TARGET 24 PORTFOLIO
Over the twelve months ended December 31, 2011, the S&P(R) Target 24 Portfolio
posted a total return of 8.56% versus 2.11% for the S&P 500(R) Index over the
same period. The NAV increased from $9.46 to $10.27 during the period.
Of the portfolio's 24 stocks, 17 advanced and 7 declined over the period. The
top three performing stocks, by contribution to return, were Philip Morris
International, Inc. (PM), Biogen Idec, Inc. (BIIB) and Exxon Mobil Corp. (XOM).
The worst-performing stocks, by contribution to return, were Netflix,
Inc.(NFLX), Freeport McMoRan Copper & Gold (FCX) and Texas Instruments, Inc.
(TXN).
The health care, consumer staples, financials, energy and industrial sectors all
had positive selection effects, which contributed to the overall portfolio
outperformance. The consumer discretionary, technology and materials sectors had
negative selection effects and were a drag on relative performance.
All of the data on this page represents past performance which cannot be used to
predict future performance and the information in the table and graph does not
reflect the deduction of taxes that a shareholder would pay on portfolio
distributions or the redemption of shares.
--------------------------------------------------------------------------------
GROWTH OF A $10,000 INITIAL INVESTMENT
Dec. 31, 2001-Dec. 31, 2011
S&P(R) Target 24 S&P 500(R)
Portfolio (a) Index (b)
Dec. 01 10000 10000
Dec. 02 8540 7790
Dec. 03 10598 10024
Dec. 04 12045 11115
Dec. 05 12545 11661
Dec. 06 12907 13503
Dec. 07 13449 14245
Dec. 08 9694 8974
Dec. 09 11030 11350
Dec. 10 13158 13060
Dec. 11 14284 13335
--------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
RETURN COMPARISON PERIODS ENDED DEC. 31, 2011
1 YEAR 5 YEAR 10 YEAR SINCE INCEPTION
INCEPTION ANNUAL AVERAGE ANNUAL AVERAGE ANNUAL AVERAGE ANNUAL
DATE TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN
---------------------------------------------------------------------------------------------------------------------
S&P(R) Target 24 Portfolio (a) 10/6/99 8.56% 2.05% 3.63% 0.22%
S&P 500(R) Index (b) 2.11% -0.25% 2.92% 1.41%
---------------------------------------------------------------------------------------------------------------------
(a) Effective April 30, 2002, based upon the determination of the Registrant's
Board of Trustees, the Portfolio changed its name from the S&P(R) Target
10 Portfolio to the S&P(R) Target 24 Portfolio. The Portfolio's primary
investment strategy was also changed. The performance figures provided for
the periods prior to April 30,2002, reflect the Portfolio's performance
prior to the name change and the change of the primary investment
strategy.
(b) The S&P 500(R) Index is a capitalization-weighted index of 500 stocks. The
index is designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing
all major industries. (Bloomberg). (The index reflects no deduction for
fees, expenses or taxes).
The returns for the Portfolio do not reflect the deduction of expenses
associated with variable products, such as mortality and expense risk charges,
separate account charges, and sales charges or the effect of taxes. These
expenses would reduce the overall returns shown.
Page 12
--------------------------------------------------------------------------------
PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
DECEMBER 31, 2011 (UNAUDITED)
S&P(R) TARGET 24 PORTFOLIO (CONTINUED)
----------------------------------------------
% OF TOTAL
TOP 10 HOLDINGS INVESTMENTS
----------------------------------------------
Exxon Mobil Corp. 12.8%
Texas Instruments, Inc. 12.3
Philip Morris International, Inc. 12.2
Berkshire Hathaway, Inc. 10.2
Biogen Idec, Inc. 8.6
AutoZone, Inc. 5.4
Northrop Grumman Corp. 5.3
W.W. Grainger, Inc. 4.0
ACE Ltd. 3.1
Xilinx, Inc. 3.0
----------------------------------------------
Total 76.9%
=====
----------------------------------------------
% OF TOTAL
SECTOR INVESTMENTS
----------------------------------------------
Information Technology 18.3%
Financials 16.0
Consumer Staples 14.9
Health Care 13.8
Energy 13.3
Industrials 11.4
Consumer Discretionary 9.6
Materials 2.7
----------------------------------------------
Total 100.0%
======
Page 13
--------------------------------------------------------------------------------
PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
DECEMBER 31, 2011 (UNAUDITED)
NASDAQ(R) TARGET 15 PORTFOLIO
Over the twelve months ended December 31, 2011, the NASDAQ(R) Target 15
Portfolio posted a total return of 1.29% versus 3.68% for the NASDAQ 100
Index(R) over the same period. The NAV increased from $9.27 to $9.39 during the
period.
Of the portfolio's 15 stocks, 9 advanced and 6 declined over the period. The top
three performing stocks, by contribution to return, were Ross Stores, Inc.
(ROST), Dollar Tree, Inc. (DLTR) and Baidu, Inc. (BIDU). The worst-performing
stocks, by contribution to return, were Netflix, Inc. (NFLX), Virgin Media, Inc.
(VMED) and Lam Research Corp. (LRCX).
The portfolio underperformed the NASDAQ 100 benchmark for the year. Netflix,
Inc. (NFLX) was the biggest detractor, ending the year down over 60% due to
significant customer losses which led to disappointing earnings. Virgin Media,
Inc. (VMED) and Lam Research Corp. (LRCX) also underperformed. Discount
retailers Ross Stores, Inc. (ROST) and Dollar Tree, Inc. (DLTR) were the top
positive contributors to the portfolio performance. These retailers saw
significant earnings and market share gains due to the American consumer's
continued desire to make their shopping dollars go further. Also contributing
positively to the portfolio were technology stocks Baidu, Inc. (BIDU) and Apple,
Inc. (AAPL).
All of the data on this page represents past performance which cannot be used to
predict future performance and the information in the table and graph does not
reflect the deduction of taxes that a shareholder would pay on portfolio
distributions or the redemption of shares.
--------------------------------------------------------------------------------
GROWTH OF A $10,000 INITIAL INVESTMENT
Dec. 31, 2001-Dec. 31, 2011
NASDAQ(R) NASDAQ(R) 100
Target 15 Portfolio Index (a)
Dec. 01 10000 10000
Dec. 02 7384 6248
Dec. 03 10043 9339
Dec. 04 9773 10343
Dec. 05 10097 10539
Dec. 06 10995 11307
Dec. 07 13384 13482
Dec. 08 6573 7878
Dec. 09 7687 12181
Dec. 10 10022 14635
Dec. 11 10151 15174
--------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
RETURN COMPARISON PERIODS ENDED DEC. 31, 2011
1 YEAR 5 YEAR 10 YEAR SINCE INCEPTION
INCEPTION ANNUAL AVERAGE ANNUAL AVERAGE ANNUAL AVERAGE ANNUAL
DATE TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN
---------------------------------------------------------------------------------------------------------------------
NASDAQ(R) Target 15 Portfolio 10/6/99 1.29% -1.58% 0.15% -0.51%
NASDAQ(R) 100 Index (a) 3.68% 6.07% 4.26% -0.45%
---------------------------------------------------------------------------------------------------------------------
(a) The NASDAQ(R) 100 Index is a modified capitalization-weighted index of the
100 largest and most active non-financial domestic and international
issues listed on the NASDAQ(R). (Bloomberg). (The index reflects no
deduction for fees, expenses or taxes).
The returns for the Portfolio do not reflect the deduction of expenses
associated with variable products, such as mortality and expense risk charges,
separate account charges, and sales charges or the effect of taxes. These
expenses would reduce the overall returns shown.
Page 14
--------------------------------------------------------------------------------
PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
DECEMBER 31, 2011 (UNAUDITED)
NASDAQ(R) TARGET 15 PORTFOLIO (CONTINUED)
----------------------------------------------
% OF TOTAL
TOP 10 HOLDINGS INVESTMENTS
----------------------------------------------
Apple, Inc. 9.1%
Baidu, Inc., ADR 8.6
priceline.com, Inc. 8.5
eBay, Inc. 7.9
Ross Stores, Inc. 7.8
Millicom International Cellular S.A. 7.6
Altera Corp. 7.6
SanDisk Corp. 7.3
Dollar Tree, Inc. 7.2
Cognizant Technology Solutions Corp.,
Class A 6.4
----------------------------------------------
Total 78.0%
=====
----------------------------------------------
% OF TOTAL
SECTOR INVESTMENTS
----------------------------------------------
Information Technology 50.0%
Consumer Discretionary 37.0
Telecommunication Services 7.6
Industrials 5.4
----------------------------------------------
Total 100.0%
======
Page 15
--------------------------------------------------------------------------------
PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
DECEMBER 31, 2011 (UNAUDITED)
FIRST TRUST TARGET FOCUS FOUR PORTFOLIO
Over the twelve months ended December 31, 2011, the First Trust Target Focus
Four Portfolio posted a total return of -10.91% versus 2.11% for the S&P 500(R)
Index over the same period. The NAV decreased from $4.95 to $4.41 during the
period.
Of the portfolio's 129 stocks, 44 advanced and 85 declined over the period. The
top three performing stocks, by contribution to return, were NiSource, Inc.
(NI), Cleco Corp. (CNL) and Alliant Energy Corp. (LNT). The worst-performing
stocks, by contribution to return, were Ford Motor Co. (F), Tata Motors Ltd.,
ADR (TTM) and TRW Automotive Holdings Corp. (TRW).
The portfolio was overweight in the auto and semiconductor industries, which
were two of the worst-performing industries in the S&P 500 during 2011. Negative
stock selection in the industrial sector also contributed to the portfolio
underperformance. A large overweight in utilities was the biggest positive
contributor to performance. The sector was the top performer in the benchmark
for the year. Positive stock selection in the materials, financials and
utilities sectors also helped mitigate some of the underperformance.
All of the data on this page represents past performance which cannot be used to
predict future performance and the information in the table and graph does not
reflect the deduction of taxes that a shareholder would pay on portfolio
distributions or the redemption of shares.
--------------------------------------------------------------------------------
GROWTH OF A $10,000 INITIAL INVESTMENT
Dec. 31, 2001-Dec. 31, 2011
First Trust Target S&P 500(R)
Focus Four Portfolio (a) Index (b)
Dec. 01 10000 10000
Dec. 02 6315 7790
Dec. 03 8648 10024
Dec. 04 9630 11115
Dec. 05 9685 11661
Dec. 06 10074 13503
Dec. 07 10648 14245
Dec. 08 5981 8974
Dec. 09 7704 11350
Dec. 10 9166 13060
Dec. 11 8166 13335
--------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
RETURN COMPARISON PERIODS ENDED DEC. 31, 2011
1 YEAR 5 YEAR 10 YEAR SINCE INCEPTION
INCEPTION ANNUAL AVERAGE ANNUAL AVERAGE ANNUAL AVERAGE ANNUAL
DATE TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN
------------------------------------------------------------------------------------------------------------
First Trust Target Focus Four
Portfolio (a) 10/6/99 -10.91% -4.11% -2.00% -6.47%
S&P 500(R) Index (b) 2.11% -0.25% 2.92% 1.41%
------------------------------------------------------------------------------------------------------------
(a) Effective November 19, 2007, based upon the determination of the
Registrant's Board of Trustees, the Portfolio changed its name from the
First Trust 10 Uncommon Values Portfolio to the First Trust Target Focus
Four Portfolio. The Portfolio's primary investment strategy was also
changed. The performance figures provided for the periods prior to
November 19, 2007, reflect the Portfolio's performance prior to the name
change and the change of the primary investment strategy.
(b) The S&P 500(R) Index is a capitalization-weighted index of 500 stocks.
The index is designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing
all major industries. (Bloomberg). (The index reflects no deduction for
fees, expenses or taxes).
The returns for the Portfolio do not reflect the deduction of expenses
associated with variable products, such as mortality and expense risk charges,
separate account charges, and sales charges or the effect of taxes. These
expenses would reduce the overall returns shown.
Page 16
--------------------------------------------------------------------------------
PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
DECEMBER 31, 2011 (UNAUDITED)
FIRST TRUST TARGET FOCUS FOUR PORTFOLIO (CONTINUED)
----------------------------------------------
% OF TOTAL
TOP 10 HOLDINGS INVESTMENTS
----------------------------------------------
Ford Motor Co. 5.5%
Cleco Corp. 3.0
Tata Motors Ltd., ADR 3.0
NiSource, Inc. 2.3
Alliant Energy Corp. 2.0
Chevron Corp. 2.0
Pinnacle West Capital Corp. 2.0
MeadWestvaco Corp. 1.9
F.N.B. Corp. 1.9
Black Hills Corp. 1.9
----------------------------------------------
Total 25.5%
=====
----------------------------------------------
% OF TOTAL
SECTOR INVESTMENTS
----------------------------------------------
Consumer Discretionary 22.8%
Utilities 20.6
Financials 13.4
Industrials 11.7
Energy 8.7
Information Technology 8.0
Telecommunication Services 7.3
Materials 5.4
Health Care 1.2
Consumer Staples 0.9
----------------------------------------------
Total 100.0%
======
Page 17
--------------------------------------------------------------------------------
PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
DECEMBER 31, 2011 (UNAUDITED)
VALUE LINE(R) TARGET 25 PORTFOLIO
Over the twelve months ended December 31, 2011, the Value Line(R) Target 25
Portfolio posted a total return of -24.66% versus 1.03% for the Russell 3000(R)
Index over the same period. The NAV decreased from $3.73 to $2.81 during the
period.
Of the portfolio's 25 stocks, 5 advanced and 20 declined over the period. The
top three performing stocks, by contribution to return, were Sally Beauty
Holdings, Inc. (SBH), United Rentals, Inc. (URI) and Pier 1 Imports, Inc. (PIR).
The worst-performing stocks, by contribution to return, were TRW Automotive
Holdings Corp. (TRW), Atmel Corp. (ATML) and Tata Motors Ltd., ADR (TTM).
The portfolio had significant auto industry and semiconductor industry exposure
during 2011. These were two of the worst performing S&P 500 industries during
2011 and resulted in portfolio underperformance. The top contributing stocks
were: Sally Beauty Holdings, Inc. (SBH), United Rentals, Inc. (URI) and Pier 1
Imports, Inc. (PIR). The biggest detractors were: TRW Automotive Holdings Corp.
(TRW), Atmel Corp. (ATML) and Tata Motors Ltd., ADR (TTM).
All of the data on this page represents past performance which cannot be used to
predict future performance and the information in the table and graph does not
reflect the deduction of taxes that a shareholder would pay on portfolio
distributions or the redemption of shares.
--------------------------------------------------------------------------------
GROWTH OF A $10,000 INITIAL INVESTMENT
Dec. 31, 2001-Dec. 31, 2011
Value Line(R) Target 25 Russell 3000(R)
Portfolio (a) Index (b)
Dec. 01 10000 10000
Dec. 02 5711 7847
Dec. 03 8048 10284
Dec. 04 9783 11513
Dec. 05 11711 12222
Dec. 06 12048 14154
Dec. 07 14241 14897
Dec. 08 6434 9340
Dec. 09 6891 11989
Dec. 10 8988 14018
Dec. 11 6772 14162
--------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
RETURN COMPARISON PERIODS ENDED DEC. 31, 2011
1 YEAR 5 YEAR 10 YEAR SINCE INCEPTION
INCEPTION ANNUAL AVERAGE ANNUAL AVERAGE ANNUAL AVERAGE ANNUAL
DATE TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN
------------------------------------------------------------------------------------------------------
Value Line(R) Target 25
Portfolio (a) 10/6/99 -24.66% -10.89% -3.82% -9.85%
Russell 3000 Index (b) 1.03% 0.01% 3.54% 2.21%
------------------------------------------------------------------------------------------------------
(a) Effective April 30, 2002, based upon the determination of the Registrant'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 for the periods prior to April 30, 2002, reflect the
Portfolio's performance prior to the name change and the change of the
primary investment strategy.
(b) The Russell 3000(R) Index is composed of 3000 large U.S. companies, as
determined by market capitalization. This index represents approximately
98% of the investable U.S. equity market. (Bloomberg). (The index reflects
no deduction for fees, expenses or taxes).
The returns for the Portfolio do not reflect the deduction of expenses
associated with variable products, such as mortality and expense risk charges,
separate account charges, and sales charges or the effect of taxes. These
expenses would reduce the overall returns shown.
Page 18
--------------------------------------------------------------------------------
PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
DECEMBER 31, 2011 (UNAUDITED)
VALUE LINE(R) TARGET 25 PORTFOLIO (CONTINUED)
----------------------------------------------
% OF TOTAL
TOP 10 HOLDINGS INVESTMENTS
----------------------------------------------
Fossil, Inc. 10.2%
Sally Beauty Holdings, Inc. 7.3
Autoliv, Inc. 6.6
Atmel Corp. 6.5
Ford Motor Co. 6.2
TRW Automotive Holdings Corp. 6.0
MetroPCS Communications, Inc. 6.0
Deckers Outdoor Corp. 5.7
Tata Motors Ltd., ADR 5.7
RPC, Inc. 5.2
----------------------------------------------
Total 65.4%
=====
----------------------------------------------
% OF TOTAL
SECTOR INVESTMENTS
----------------------------------------------
Consumer Discretionary 55.5%
Information Technology 19.8
Industrials 12.4
Telecommunication Services 7.0
Energy 5.3
----------------------------------------------
Total 100.0%
======
Page 19
FIRST DEFINED PORTFOLIO FUND, LLC
UNDERSTANDING YOUR FUND EXPENSES
DECEMBER 31, 2011 (UNAUDITED)
As an Interest holder 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 Target Focus Four 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 July 1, 2011 to December 31, 2011.
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 07/01/2011- VALUE VALUE 07/01/2011- EXPENSE
07/01/2011 12/31/2011 12/31/2011 07/01/2011 12/31/2011 12/31/2011 RATIO (b)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Target Managed VIP Portfolio........... $ 1,000.00 $ 907.90 $7.07 $ 1,000.00 $ 1,017.80 $7.48 1.47%
The Dow(R) DART 10 Portfolio........... 1,000.00 1,047.10 7.58 1,000.00 1,017.80 7.48 1.47
The Dow(R) Target Dividend Portfolio .. 1,000.00 998.00 7.40 1,000.00 1,017.80 7.48 1.47
Global Dividend Target 15 Portfolio ... 1,000.00 902.10 7.05 1,000.00 1,017.80 7.48 1.47
S&P(R) Target 24 Portfolio............. 1,000.00 961.60 7.27 1,000.00 1,017.80 7.48 1.47
NASDAQ(R) Target 15 Portfolio.......... 1,000.00 891.70 7.01 1,000.00 1,017.80 7.48 1.47
First Trust Target Focus Four Portfolio 1,000.00 869.80 6.46 1,000.00 1,018.30 6.97 1.37
Value Line(R) Target 25 Portfolio...... 1,000.00 715.00 6.35 1,000.00 1,017.80 7.48 1.47
(a) Expenses are equal to the Portfolio's annualized expense ratio multiplied
by the average account value over the period, multiplied by 184/365 (to
reflect the one half year period).
(b) These expense ratios reflect expense caps.
Page 20
TARGET MANAGED VIP PORTFOLIO
PORTFOLIO OF INVESTMENTS (a)
DECEMBER 31, 2011
SHARES DESCRIPTION VALUE
----------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS - 98.2%
AEROSPACE & DEFENSE - 1.2%
1,953 GeoEye, Inc. (b)................................................................. $ 43,396
3,270 Northrop Grumman Corp............................................................ 191,229
--------------
234,625
--------------
AIR FREIGHT & LOGISTICS - 0.1%
1,587 Park-Ohio Holdings Corp. (b)..................................................... 28,312
--------------
AIRLINES - 0.1%
5,218 US Airways Group, Inc. (b)....................................................... 26,455
--------------
AUTO COMPONENTS - 1.7%
2,896 Autoliv, Inc..................................................................... 154,907
1,988 Tenneco, Inc. (b)................................................................ 59,203
3,931 TRW Automotive Holdings Corp. (b)................................................ 128,150
--------------
342,260
--------------
AUTOMOBILES - 4.2%
50,310 Ford Motor Co.................................................................... 541,335
17,374 Tata Motors Ltd., ADR............................................................ 293,621
--------------
834,956
--------------
BIOTECHNOLOGY - 1.5%
2,809 Biogen Idec, Inc. (b)............................................................ 309,130
--------------
CHEMICALS - 0.6%
1,891 Innophos Holdings, Inc........................................................... 91,827
273 PPG Industries, Inc.............................................................. 22,793
182 Sherwin-Williams (The) Co........................................................ 16,247
--------------
130,867
--------------
COMMERCIAL BANKS - 3.3%
17,986 Banco Bilbao Vizcaya Argentaria S.A., ADR........................................ 154,140
17,152 Banco Santander S.A., ADR........................................................ 128,983
2,993 Bank of The Ozarks, Inc.......................................................... 88,682
2,946 Community Bank System, Inc....................................................... 81,899
10,142 F.N.B. Corp...................................................................... 114,706
11,529 Susquehanna Bancshares, Inc...................................................... 96,613
--------------
665,023
--------------
COMMERCIAL SERVICES & SUPPLIES - 0.5%
1,512 Portfolio Recovery Associates, Inc. (b).......................................... 102,090
--------------
COMMUNICATIONS EQUIPMENT - 0.8%
2,701 Finisar Corp. (b)................................................................ 45,228
3,174 NetGear, Inc. (b)................................................................ 106,551
4,350 Oclaro, Inc. (b)................................................................. 12,267
--------------
164,046
--------------
COMPUTERS & PERIPHERALS - 6.0%
2,589 Apple, Inc. (b).................................................................. 1,048,545
3,054 SanDisk Corp. (b)................................................................ 150,287
--------------
1,198,832
--------------
See Notes to Financial Statements Page 21
TARGET MANAGED VIP PORTFOLIO
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
DECEMBER 31, 2011
SHARES DESCRIPTION VALUE
----------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
CONSUMER FINANCE - 1.0%
4,107 EZCORP, Inc. (b)................................................................. $ 108,302
1,400 World Acceptance Corp. (b)....................................................... 102,900
--------------
211,202
--------------
CONTAINERS & PACKAGING - 0.3%
7,483 Boise, Inc....................................................................... 53,279
--------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 6.4%
22,996 AT&T, Inc........................................................................ 695,399
13,879 Deutsche Telekom AG, ADR......................................................... 158,915
8,451 France Telecom S.A., ADR......................................................... 132,343
2,541 General Communication, Inc. (b).................................................. 24,876
12,106 Koninklijke KPN N.V., ADR........................................................ 144,303
7,801 Telefonica S.A., ADR............................................................. 134,099
--------------
1,289,935
--------------
ELECTRIC UTILITIES - 2.9%
5,859 E.ON AG, ADR..................................................................... 125,324
35,475 Enel SpA, ADR.................................................................... 141,900
5,778 Iberdrola S.A., ADR.............................................................. 139,250
9,115 SSE PLC, ADR..................................................................... 183,120
--------------
589,594
--------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 0.5%
1,502 DTS, Inc. (b).................................................................... 40,915
3,243 Power-One, Inc. (b).............................................................. 12,680
4,974 Vishay Intertechnology, Inc. (b)................................................. 44,716
--------------
98,311
--------------
ENERGY EQUIPMENT & SERVICES - 0.5%
252 FMC Technologies, Inc. (b)....................................................... 13,162
4,903 RPC, Inc......................................................................... 89,480
--------------
102,642
--------------
FOOD PRODUCTS - 0.5%
1,935 Diamond Foods, Inc............................................................... 62,443
640 Mead Johnson Nutrition Co........................................................ 43,987
--------------
106,430
--------------
HEALTH CARE EQUIPMENT & SUPPLIES - 1.4%
1,099 C.R. Bard, Inc................................................................... 93,964
2,461 Cyberonics, Inc. (b)............................................................. 82,444
1,423 Varian Medical Systems, Inc. (b)................................................. 95,526
--------------
271,934
--------------
HEALTH CARE PROVIDERS & SERVICES - 0.7%
1,098 Air Methods Corp. (b)............................................................ 92,726
2,910 Hanger Orthopedic Group, Inc. (b)................................................ 54,388
--------------
147,114
--------------
HOTELS, RESTAURANTS & LEISURE - 4.9%
8,755 McDonald's Corp.................................................................. 878,389
6,267 Texas Roadhouse, Inc............................................................. 93,378
--------------
971,767
--------------
Page 22 See Notes to Financial Statements
TARGET MANAGED VIP PORTFOLIO
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
DECEMBER 31, 2011
SHARES DESCRIPTION VALUE
----------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
INSURANCE - 3.7%
1,583 ACE Ltd.......................................................................... $ 111,000
4,841 Berkshire Hathaway, Inc. (b)..................................................... 369,369
1,424 Chubb Corp....................................................................... 98,569
6,853 Zurich Financial Services AG, ADR................................................ 155,426
--------------
734,364
--------------
INTERNET & CATALOG RETAIL - 2.6%
7,320 Liberty Media Corp. - Interactive, Class A (b)................................... 118,694
1,422 Netflix, Inc. (b)................................................................ 98,530
633 priceline.com, Inc. (b).......................................................... 296,061
--------------
513,285
--------------
INTERNET SOFTWARE & SERVICES - 5.1%
3,426 Baidu, Inc., ADR (b)............................................................. 399,026
16,845 eBay, Inc. (b)................................................................... 510,909
4,032 j2 Global, Inc................................................................... 113,461
--------------
1,023,396
--------------
IT SERVICES - 6.5%
3,733 Cardtronics, Inc. (b)............................................................ 101,015
3,870 Cognizant Technology Solutions Corp., Class A (b)................................ 248,880
4,601 International Business Machines Corp............................................. 846,032
2,195 Teradata Corp. (b)............................................................... 106,479
--------------
1,302,406
--------------
LEISURE EQUIPMENT & PRODUCTS - 0.3%
1,644 Sturm Ruger & Co, Inc............................................................ 55,008
--------------
LIFE SCIENCES TOOLS & SERVICES - 0.5%
5,146 PAREXEL International Corp. (b).................................................. 106,728
--------------
MACHINERY - 1.0%
1,338 Joy Global, Inc.................................................................. 100,310
2,784 NN, Inc. (b)..................................................................... 16,704
1,300 Pall Corp........................................................................ 74,295
--------------
191,309
--------------
MEDIA - 1.0%
2,384 Arbitron, Inc.................................................................... 82,033
1,621 Valassis Communications, Inc. (b)................................................ 31,172
4,089 Virgin Media, Inc................................................................ 87,423
--------------
200,628
--------------
METALS & MINING - 0.3%
1,573 Freeport-McMoRan Copper & Gold, Inc.............................................. 57,871
--------------
MULTI-UTILITIES - 2.1%
4,894 GDF Suez S.A., ADR............................................................... 132,970
3,985 National Grid PLC, ADR........................................................... 193,193
2,685 RWE AG, ADR...................................................................... 93,787
--------------
419,950
--------------
See Notes to Financial Statements Page 23
TARGET MANAGED VIP PORTFOLIO
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
DECEMBER 31, 2011
SHARES DESCRIPTION VALUE
----------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
MULTILINE RETAIL - 1.6%
1,906 Dillard's, Inc................................................................... $ 85,541
1,608 Dollar Tree, Inc. (b)............................................................ 133,641
1,726 Family Dollar Stores, Inc........................................................ 99,521
--------------
318,703
--------------
OIL, GAS & CONSUMABLE FUELS - 4.1%
4,059 Eni S.p.A., ADR.................................................................. 167,515
5,439 Exxon Mobil Corp................................................................. 461,010
144 Newfield Exploration Co. (b)..................................................... 5,433
3,305 Total S.A., ADR.................................................................. 168,919
10,218 USEC, Inc. (b)................................................................... 11,648
--------------
814,525
--------------
PAPER & FOREST PRODUCTS - 0.3%
4,067 Kapstone Paper and Packaging Corp. (b)........................................... 64,015
--------------
PHARMACEUTICALS - 2.5%
3,840 AstraZeneca PLC, ADR............................................................. 177,754
4,515 GlaxoSmithKline PLC, ADR......................................................... 206,019
5,648 Impax Laboratories, Inc. (b)..................................................... 113,920
--------------
497,693
--------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 5.5%
4,039 Altera Corp...................................................................... 149,847
15,305 Atmel Corp. (b).................................................................. 123,971
4,102 Fairchild Semiconductor International, Inc. (b).................................. 49,388
12,683 GT Advanced Technologies, Inc. (b)............................................... 91,825
1,593 LAM Research Corp. (b)........................................................... 58,973
9,201 RF Micro Devices, Inc. (b)....................................................... 49,685
15,247 Texas Instruments, Inc........................................................... 443,840
5,251 TriQuint Semiconductor, Inc. (b)................................................. 25,572
3,396 Xilinx, Inc...................................................................... 108,876
--------------
1,101,977
--------------
SOFTWARE - 5.1%
2,898 ACI Worldwide, Inc. (b).......................................................... 82,999
24,098 Microsoft Corp................................................................... 625,584
3,635 NetScout Systems, Inc. (b)....................................................... 63,976
3,028 Smith Micro Software, Inc. (b)................................................... 3,422
3,209 Synchronoss Technologies, Inc. (b)............................................... 96,944
2,212 Ultimate Software Group, Inc. (b)................................................ 144,045
--------------
1,016,970
--------------
SPECIALTY RETAIL - 8.8%
601 AutoZone, Inc. (b)............................................................... 195,307
2,266 Children's Place Retail Stores (The), Inc. (b)................................... 120,370
2,450 Hibbett Sports, Inc. (b)......................................................... 110,691
19,318 Home Depot (The), Inc............................................................ 812,129
2,646 Monro Muffler Brake, Inc......................................................... 102,638
3,173 Pier 1 Imports, Inc. (b)......................................................... 44,200
3,067 Ross Stores, Inc................................................................. 145,775
5,902 Sally Beauty Holdings, Inc. (b).................................................. 124,709
Page 24 See Notes to Financial Statements
TARGET MANAGED VIP PORTFOLIO
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
DECEMBER 31, 2011
SHARES DESCRIPTION VALUE
----------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
SPECIALTY RETAIL - (CONTINUED)
2,459 Vitamin Shoppe, Inc. (b)......................................................... $ 98,065
--------------
1,753,884
--------------
TEXTILES, APPAREL & LUXURY GOODS - 2.4%
1,296 Deckers Outdoor Corp. (b)........................................................ 97,939
2,183 Fossil, Inc. (b)................................................................. 173,243
1,691 G-III Apparel Group Ltd. (b)..................................................... 42,123
2,067 Maidenform Brands, Inc. (b)...................................................... 37,826
3,692 Steven Madden Ltd. (b)........................................................... 127,374
--------------
478,505
--------------
TOBACCO - 2.5%
464 Lorillard, Inc................................................................... 52,896
5,617 Philip Morris International, Inc................................................. 440,822
--------------
493,718
--------------
TRADING COMPANIES & DISTRIBUTORS - 1.0%
2,004 United Rentals, Inc. (b)......................................................... 59,218
776 W.W. Grainger, Inc............................................................... 145,260
--------------
204,478
--------------
WIRELESS TELECOMMUNICATION SERVICES - 2.2%
11,841 MetroPCS Communications, Inc. (b)................................................ 102,780
1,412 Millicom International Cellular S.A.............................................. 142,598
6,740 Vodafone Group PLC, ADR.......................................................... 188,922
--------------
434,300
--------------
TOTAL INVESTMENTS - 98.2%........................................................ 19,662,517
(Cost $19,710,680) (c)
NET OTHER ASSETS AND LIABILITIES - 1.8%.......................................... 350,804
--------------
NET ASSETS - 100.0%.............................................................. $ 20,013,321
==============
-------------------------------------------------
(a) All percentages shown in the Portfolio of Investments are based on net
assets.
(b) Non-income producing security.
(c) Aggregate cost for federal income tax purposes is $19,710,680. As of
December 31, 2011, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was
$2,367,175 and the aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over value was
$2,415,338.
ADR American Depositary Receipt
VALUATION INPUTS
A summary of the inputs used to value the Portfolio's investments as of December
31, 2011 is as follows (see Note 2A - Portfolio Valuation in the Notes to
Financial Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
12/31/2011 PRICES INPUTS INPUTS
------------ ------------ ------------ ------------
Common Stocks*....................................... $ 19,662,517 $ 19,662,517 $ -- $ --
============ ============ ============ ============
* See the Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 25
THE DOW (R) DART 10 PORTFOLIO
PORTFOLIO OF INVESTMENTS (a)
DECEMBER 31, 2011
SHARES DESCRIPTION VALUE
----------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS - 98.5%
COMPUTERS & PERIPHERALS - 5.6%
14,776 Hewlett-Packard Co............................................................... $ 380,630
--------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 20.0%
21,337 AT&T, Inc........................................................................ 645,231
17,575 Verizon Communications, Inc...................................................... 705,109
--------------
1,350,340
--------------
FOOD & STAPLES RETAILING - 10.2%
11,562 Wal-Mart Stores, Inc............................................................. 690,945
--------------
HOTELS, RESTAURANTS & LEISURE - 12.0%
8,122 McDonald's Corp.................................................................. 814,880
--------------
HOUSEHOLD PRODUCTS - 9.6%
9,708 Procter & Gamble (The) Co........................................................ 647,621
--------------
INSURANCE - 9.8%
11,249 Travelers (The) Cos., Inc........................................................ 665,603
--------------
IT SERVICES - 11.6%
4,268 International Business Machines Corp............................................. 784,800
--------------
SOFTWARE - 8.6%
22,358 Microsoft Corp................................................................... 580,414
--------------
SPECIALTY RETAIL - 11.1%
17,925 Home Depot (The), Inc............................................................ 753,567
--------------
TOTAL INVESTMENTS - 98.5%........................................................ 6,668,800
(Cost $6,201,916) (b)
NET OTHER ASSETS AND LIABILITIES - 1.5%.......................................... 101,550
--------------
NET ASSETS - 100.0%.............................................................. $ 6,770,350
==============
-------------------------------------------------
(a) All percentages shown in the Portfolio of Investments are based on net
assets.
(b) Aggregate cost for federal income tax purposes is $6,201,916. As of
December 31, 2011, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was
$676,427 and the aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over value was
$209,543.
VALUATION INPUTS
A summary of the inputs used to value the Portfolio's investments as of December
31, 2011 is as follows (see Note 2A - Portfolio Valuation in the Notes to
Financial Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
12/31/2011 PRICES INPUTS INPUTS
------------ ------------ ------------ ------------
Common Stocks*....................................... $ 6,668,800 $ 6,668,800 $ -- $ --
============ ============ ============ ============
* See the Portfolio of Investments for industry breakout.
Page 26 See Notes to Financial Statements
THE DOW(R) TARGET DIVIDEND PORTFOLIO
PORTFOLIO OF INVESTMENTS (a)
DECEMBER 31, 2011
SHARES DESCRIPTION VALUE
----------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS - 95.4%
AEROSPACE & DEFENSE - 4.2%
15,596 Northrop Grumman Corp............................................................ $ 912,054
--------------
BUILDING PRODUCTS - 3.8%
79,615 Masco Corp....................................................................... 834,365
--------------
COMMERCIAL BANKS - 8.1%
100,888 F.N.B. Corp...................................................................... 1,141,043
71,212 First Niagara Financial Group, Inc............................................... 614,560
--------------
1,755,603
--------------
COMMERCIAL SERVICES & SUPPLIES - 3.9%
59,176 R.R. Donnelley & Sons Co......................................................... 853,910
--------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 8.5%
34,525 AT&T, Inc........................................................................ 1,044,036
21,880 Centurylink, Inc................................................................. 813,936
--------------
1,857,972
--------------
ELECTRIC UTILITIES - 20.9%
32,599 Cleco Corp....................................................................... 1,242,022
26,120 Edison International............................................................. 1,081,368
14,237 Entergy Corp..................................................................... 1,040,013
24,267 Pinnacle West Capital Corp....................................................... 1,169,184
--------------
4,532,587
--------------
HOUSEHOLD DURABLES - 4.7%
43,844 Leggett & Platt, Inc............................................................. 1,010,166
--------------
INSURANCE - 8.4%
31,710 Allstate Corp.................................................................... 869,171
31,652 Cincinnati Financial Corp........................................................ 964,120
--------------
1,833,291
--------------
MULTI-UTILITIES - 22.2%
27,461 Alliant Energy Corp.............................................................. 1,211,305
33,331 Black Hills Corp................................................................. 1,119,255
20,637 Integrys Energy Group, Inc....................................................... 1,118,113
57,397 NiSource, Inc.................................................................... 1,366,622
--------------
4,815,295
--------------
OIL, GAS & CONSUMABLE FUELS - 5.4%
11,074 Chevron Corp..................................................................... 1,178,273
--------------
PAPER & FOREST PRODUCTS - 5.3%
38,415 MeadWestvaco Corp................................................................ 1,150,529
--------------
TOTAL INVESTMENTS - 95.4%........................................................ 20,734,045
(Cost $19,792,940) (b)
NET OTHER ASSETS AND LIABILITIES - 4.6%.......................................... 1,006,870
--------------
NET ASSETS - 100.0%.............................................................. $ 21,740,915
==============
See Notes to Financial Statements Page 27
THE DOW(R) TARGET DIVIDEND PORTFOLIO
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
DECEMBER 31, 2011
-------------------------------------------------
(a) All percentages shown in the Portfolio of Investments are based on net
assets.
(b) Aggregate cost for federal income tax purposes is $19,792,940. As of
December 31, 2011, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was
$1,825,312 and the aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over value was
$884,207.
VALUATION INPUTS
A summary of the inputs used to value the Portfolio's investments as of December
31, 2011 is as follows (see Note 2A - Portfolio Valuation in the Notes to
Financial Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
12/31/2011 PRICES INPUTS INPUTS
------------ ------------ ------------ ------------
Common Stocks*....................................... $ 20,734,045 $ 20,734,045 $ -- $ --
============ ============ ============ ============
* See the Portfolio of Investments for industry breakout.
Page 28 See Notes to Financial Statements
GLOBAL DIVIDEND TARGET 15 PORTFOLIO
PORTFOLIO OF INVESTMENTS (a)
DECEMBER 31, 2011
SHARES DESCRIPTION VALUE
----------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS - 99.0%
CHINA - 18.4%
3,480,000 Bank of China Ltd................................................................ $ 1,281,483
2,493,000 Industrial & Commercial Bank of China Ltd........................................ 1,479,758
1,418,000 PetroChina Co., Ltd., Class H.................................................... 1,765,510
--------------
4,526,751
--------------
HONG KONG - 7.2%
540,000 BOC Hong Kong Holdings Ltd....................................................... 1,279,320
387,000 Esprit Holdings Ltd.............................................................. 499,282
--------------
1,778,602
--------------
UNITED KINGDOM - 31.0%
349,361 BAE Systems PLC.................................................................. 1,546,820
635,545 BT Group PLC..................................................................... 1,884,171
392,330 Man Group PLC.................................................................... 765,870
920,668 RSA Insurance Group PLC.......................................................... 1,504,135
695,203 Vodafone Group PLC............................................................... 1,931,479
--------------
7,632,475
--------------
UNITED STATES - 42.4%
62,076 AT&T, Inc........................................................................ 1,877,178
86,890 Intel Corp....................................................................... 2,107,082
57,651 Kraft Foods, Inc., Class A....................................................... 2,153,841
103,379 Pfizer, Inc...................................................................... 2,237,122
51,138 Verizon Communications, Inc...................................................... 2,051,657
--------------
10,426,880
--------------
TOTAL INVESTMENTS - 99.0%........................................................ 24,364,708
(Cost $27,525,088) (b)
NET OTHER ASSETS AND LIABILITIES - 1.0%.......................................... 236,856
--------------
NET ASSETS - 100.0%.............................................................. $ 24,601,564
==============
-------------------------------------------------
(a) All percentages shown in the Portfolio of Investments are based on net
assets.
(b) Aggregate cost for federal income tax purposes is $27,525,088. As of
December 31, 2011, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was
$1,874,077 and the aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over value was
$5,034,457.
VALUATION INPUTS
A summary of the inputs used to value the Portfolio's investments as of December
31, 2011 is as follows (see Note 2A - Portfolio Valuation in the Notes to
Financial Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
12/31/2011 PRICES INPUTS INPUTS
------------ ------------ ------------ ------------
Common Stocks*....................................... $ 24,364,708 $ 24,364,708 $ -- $ --
============ ============ ============ ============
*See the Portfolio of Investments for country breakout.
See Notes to Financial Statements Page 29
GLOBAL DIVIDEND TARGET 15 PORTFOLIO
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
DECEMBER 31, 2011
INDUSTRY DIVERSIFICATION AS A PERCENTAGE OF NET ASSETS:
Diversified Telecommunication Services....................... 23.6%
Commercial Banks............................................. 16.4
Pharmaceuticals.............................................. 9.1
Food Products................................................ 8.8
Semiconductors & Semiconductor Equipment..................... 8.6
Wireless Telecommunication Services.......................... 7.8
Oil, Gas & Consumable Fuels.................................. 7.2
Aerospace & Defense.......................................... 6.3
Insurance.................................................... 6.1
Capital Markets.............................................. 3.1
Specialty Retail............................................. 2.0
Net Other Assets and Liabilities............................. 1.0
------
100.0%
======
Page 30 See Notes to Financial Statements
S&P(R) TARGET 24 PORTFOLIO
PORTFOLIO OF INVESTMENTS (a)
DECEMBER 31, 2011
SHARES DESCRIPTION VALUE
----------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS - 98.9%
AEROSPACE & DEFENSE - 5.2%
8,244 Northrop Grumman Corp............................................................ $ 482,109
--------------
BIOTECHNOLOGY - 8.5%
7,079 Biogen Idec, Inc. (b)............................................................ 779,044
--------------
CHEMICALS - 1.1%
687 PPG Industries, Inc.............................................................. 57,357
458 Sherwin-Williams (The) Co........................................................ 40,886
--------------
98,243
--------------
ENERGY EQUIPMENT & SERVICES - 0.4%
638 FMC Technologies, Inc. (b)....................................................... 33,323
--------------
FOOD PRODUCTS - 1.2%
1,613 Mead Johnson Nutrition Co........................................................ 110,861
--------------
HEALTH CARE EQUIPMENT & SUPPLIES - 5.2%
2,771 C.R. Bard, Inc................................................................... 236,921
3,585 Varian Medical Systems, Inc. (b)................................................. 240,661
--------------
477,582
--------------
INSURANCE - 15.9%
3,986 ACE Ltd.......................................................................... 279,499
12,201 Berkshire Hathaway, Inc. (b)..................................................... 930,936
3,587 Chubb Corp....................................................................... 248,292
--------------
1,458,727
--------------
INTERNET & CATALOG RETAIL - 1.4%
1,846 Netflix, Inc. (b)................................................................ 127,909
--------------
IT SERVICES - 2.9%
5,532 Teradata Corp. (b)............................................................... 268,357
--------------
MACHINERY - 2.0%
3,277 Pall Corp........................................................................ 187,281
--------------
METALS & MINING - 1.6%
3,964 Freeport-McMoRan Copper & Gold, Inc.............................................. 145,836
--------------
MULTILINE RETAIL - 2.7%
4,352 Family Dollar Stores, Inc........................................................ 250,936
--------------
OIL, GAS & CONSUMABLE FUELS - 12.8%
13,711 Exxon Mobil Corp................................................................. 1,162,144
361 Newfield Exploration Co. (b)..................................................... 13,621
--------------
1,175,765
--------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 15.2%
38,432 Texas Instruments, Inc........................................................... 1,118,755
8,562 Xilinx, Inc...................................................................... 274,498
--------------
1,393,253
--------------
SPECIALTY RETAIL - 5.3%
1,513 AutoZone, Inc. (b)............................................................... 491,680
--------------
See Notes to Financial Statements Page 31
S&P(R) TARGET 24 PORTFOLIO
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
DECEMBER 31, 2011
SHARES DESCRIPTION VALUE
----------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
TOBACCO - 13.5%
1,166 Lorillard, Inc................................................................... $ 132,924
14,162 Philip Morris International, Inc................................................. 1,111,434
--------------
1,244,358
--------------
TRADING COMPANIES & DISTRIBUTORS - 4.0%
1,953 W.W. Grainger, Inc............................................................... 365,582
--------------
TOTAL INVESTMENTS - 98.9%........................................................ 9,090,846
(Cost $8,881,885) (c)
NET OTHER ASSETS AND LIABILITIES - 1.1%.......................................... 97,349
--------------
NET ASSETS - 100.0%.............................................................. $ 9,188,195
==============
-------------------------------------------------
(a) All percentages shown in the Portfolio of Investments are based on net
assets.
(b) Non-income producing security
(c) Aggregate cost for federal income tax purposes is $8,881,885. As of
December 31, 2011, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was
$580,730 and the aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over value was
$371,769.
VALUATION INPUTS
A summary of the inputs used to value the Portfolio's investments as of December
31, 2011 is as follows (see Note 2A - Portfolio Valuation in the Notes to
Financial Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
12/31/2011 PRICES INPUTS INPUTS
------------ ------------ ------------ ------------
Common Stocks*....................................... $ 9,090,846 $ 9,090,846 $ -- $ --
============ ============ ============ ============
* See the Portfolio of Investments for industry breakout.
Page 32 See Notes to Financial Statements
NASDAQ(R) TARGET 15 PORTFOLIO
PORTFOLIO OF INVESTMENTS (a)
DECEMBER 31, 2011
SHARES DESCRIPTION VALUE
----------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS - 100.5%
COMPUTERS & PERIPHERALS - 16.5%
999 Apple, Inc. (b).................................................................. $ 404,595
6,528 SanDisk Corp. (b)................................................................ 321,243
--------------
725,838
--------------
INTERNET & CATALOG RETAIL - 17.4%
17,340 Liberty Media Corp. - Interactive, Class A (b)................................... 281,168
1,630 Netflix, Inc. (b)................................................................ 112,942
801 priceline.com, Inc. (b).......................................................... 374,636
--------------
768,746
--------------
INTERNET SOFTWARE & SERVICES - 16.6%
3,278 Baidu, Inc., ADR (b)............................................................. 381,788
11,463 eBay, Inc. (b)................................................................... 347,673
--------------
729,461
--------------
IT SERVICES - 6.4%
4,382 Cognizant Technology Solutions Corp., Class A (b)................................ 281,806
--------------
MACHINERY - 5.4%
3,172 Joy Global, Inc.................................................................. 237,805
--------------
MEDIA - 4.7%
9,683 Virgin Media, Inc................................................................ 207,023
--------------
MULTILINE RETAIL - 7.2%
3,809 Dollar Tree, Inc. (b)............................................................ 316,566
--------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 10.8%
9,026 Altera Corp...................................................................... 334,865
3,774 LAM Research Corp. (b)........................................................... 139,713
--------------
474,578
--------------
SPECIALTY RETAIL - 7.8%
7,264 Ross Stores, Inc................................................................. 345,258
--------------
WIRELESS TELECOMMUNICATION SERVICES - 7.7%
3,345 Millicom International Cellular S.A.............................................. 337,812
--------------
TOTAL INVESTMENTS - 100.5%....................................................... 4,424,893
(Cost $4,592,145) (c)
NET OTHER ASSETS AND LIABILITIES - (0.5%)........................................ (21,422)
--------------
NET ASSETS - 100.0%.............................................................. $ 4,403,471
==============
-------------------------------------------------
(a) All percentages shown in the Portfolio of Investments are based on net
assets.
(b) Non-income producing security
(c) Aggregate cost for federal income tax purposes is $4,592,145. As of
December 31, 2011, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was
$257,903 and the aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over value was
$425,155.
ADR American Depositary Receipt
See Notes to Financial Statements Page 33
NASDAQ(R) TARGET 15 PORTFOLIO
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
DECEMBER 31, 2011
VALUATION INPUTS
A summary of the inputs used to value the Portfolio's investments as of December
31, 2011 is as follows (see Note 2A - Portfolio Valuation in the Notes to
Financial Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
12/31/2011 PRICES INPUTS INPUTS
------------ ------------ ------------ ------------
Common Stocks*....................................... $ 4,424,893 $ 4,424,893 $ -- $ --
============ ============ ============ ============
* See the Portfolio of Investments for industry breakout.
Page 34 See Notes to Financial Statements
FIRST TRUST TARGET FOCUS FOUR PORTFOLIO
PORTFOLIO OF INVESTMENTS (a)
DECEMBER 31, 2011
SHARES DESCRIPTION VALUE
----------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS - 100.6%
AEROSPACE & DEFENSE - 1.9%
849 Ceradyne, Inc. (b)............................................................... $ 22,736
1,852 Northrop Grumman Corp............................................................ 108,305
--------------
131,041
--------------
AIR FREIGHT & LOGISTICS - 0.3%
1,131 Park-Ohio Holdings Corp. (b)..................................................... 20,177
--------------
AIRLINES - 0.3%
3,720 US Airways Group, Inc. (b)....................................................... 18,860
--------------
AUTO COMPONENTS - 3.5%
2,065 Autoliv, Inc..................................................................... 110,457
1,417 Tenneco, Inc. (b)................................................................ 42,198
2,803 TRW Automotive Holdings Corp. (b)................................................ 91,378
--------------
244,033
--------------
AUTOMOBILES - 9.2%
35,865 Ford Motor Co.................................................................... 385,907
810 Honda Motor Co., Ltd., ADR....................................................... 24,746
12,386 Tata Motors Ltd., ADR............................................................ 209,323
405 Toyota Motor Corp., ADR.......................................................... 26,783
--------------
646,759
--------------
BUILDING PRODUCTS - 1.4%
9,452 Masco Corp....................................................................... 99,057
--------------
CAPITAL MARKETS - 0.5%
615 Deutsche Bank AG................................................................. 23,284
755 Piper Jaffray Cos. (b)........................................................... 15,251
--------------
38,535
--------------
CHEMICALS - 1.1%
1,041 Ashland, Inc..................................................................... 59,503
689 OM Group, Inc. (b)............................................................... 15,427
--------------
74,930
--------------
COMMERCIAL BANKS - 6.5%
3,031 Banco Santander S.A., ADR........................................................ 22,793
1,942 Barclays PLC, ADR................................................................ 21,343
2,728 East West Bancorp, Inc........................................................... 53,878
11,977 F.N.B. Corp...................................................................... 135,460
8,454 First Niagara Financial Group, Inc............................................... 72,958
2,575 International Bancshares Corp.................................................... 47,213
5,910 Mitsubishi UFJ Financial Group, Inc., ADR........................................ 24,763
8,321 Mizuho Financial Group, Inc., ADR................................................ 22,300
4,449 Sumitomo Mitsui Financial Group, Inc., ADR....................................... 24,514
276 Westpac Banking Corp., ADR....................................................... 28,262
--------------
453,484
--------------
COMMERCIAL SERVICES & SUPPLIES - 1.8%
850 G&K Services, Inc................................................................ 24,743
7,025 R.R. Donnelley & Sons Co......................................................... 101,371
--------------
126,114
--------------
See Notes to Financial Statements Page 35
FIRST TRUST TARGET FOCUS FOUR PORTFOLIO
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
DECEMBER 31, 2011
SHARES DESCRIPTION VALUE
----------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
COMMUNICATIONS EQUIPMENT - 1.0%
1,107 Bel Fuse, Inc.................................................................... $ 20,756
673 Black Box Corp................................................................... 18,871
1,925 Finisar Corp. (b)................................................................ 32,234
--------------
71,861
--------------
CONSTRUCTION MATERIALS - 0.2%
5,527 Headwaters, Inc. (b)............................................................. 12,270
--------------
CONTAINERS & PACKAGING - 0.5%
2,658 Myers Industries, Inc............................................................ 32,800
--------------
DIVERSIFIED FINANCIAL SERVICES - 0.3%
3,330 ING Groep N.V., ADR (b).......................................................... 23,876
--------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 5.3%
4,099 AT&T, Inc........................................................................ 123,954
2,598 Centurylink, Inc................................................................. 96,645
2,229 China Unicom (Hong Kong), Ltd., ADR.............................................. 47,099
1,526 France Telecom S.A., ADR......................................................... 23,897
1,811 General Communication, Inc. (b).................................................. 17,730
1,423 Nippon Telegraph & Telephone Corp., ADR.......................................... 36,044
2,464 Telecom Italia SpA, ADR.......................................................... 26,242
--------------
371,611
--------------
ELECTRIC UTILITIES - 11.8%
5,590 Cleco Corp....................................................................... 212,979
3,101 Edison International............................................................. 128,381
1,690 Entergy Corp..................................................................... 123,454
2,740 Great Plains Energy, Inc......................................................... 59,677
2,414 Korea Electric Power Corp., ADR.................................................. 26,506
3,805 NV Energy, Inc................................................................... 62,212
2,881 Pinnacle West Capital Corp....................................................... 138,807
4,042 PNM Resources, Inc............................................................... 73,686
--------------
825,702
--------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 3.2%
1,558 Arrow Electronics, Inc. (b)...................................................... 58,285
1,475 Benchmark Electronics, Inc. (b).................................................. 19,868
1,647 Electro Scientific Industries, Inc............................................... 23,849
617 Hitachi Ltd., ADR................................................................ 32,170
2,784 Ingram Micro, Inc. (b)........................................................... 50,641
2,313 Power-One, Inc. (b).............................................................. 9,044
3,545 Vishay Intertechnology, Inc. (b)................................................. 31,869
--------------
225,726
--------------
ENERGY EQUIPMENT & SERVICES - 4.1%
561 Bristow Group, Inc............................................................... 26,586
2,216 Exterran Holdings, Inc. (b)...................................................... 20,166
4,427 Helix Energy Solutions Group, Inc. (b)........................................... 69,946
2,956 Pioneer Drilling Co. (b)......................................................... 28,614
3,496 RPC, Inc......................................................................... 63,802
259 SEACOR Holdings, Inc. (b)........................................................ 23,041
1,157 Unit Corp. (b)................................................................... 53,685
--------------
285,840
--------------
Page 36 See Notes to Financial Statements
FIRST TRUST TARGET FOCUS FOUR PORTFOLIO
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
DECEMBER 31, 2011
SHARES DESCRIPTION VALUE
----------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
FOOD PRODUCTS - 0.9%
2,529 Smithfield Foods, Inc. (b)....................................................... $ 61,404
--------------
HEALTH CARE PROVIDERS & SERVICES - 0.8%
792 Amedisys, Inc. (b)............................................................... 8,641
3,010 Cross Country Healthcare, Inc. (b)............................................... 16,705
2,856 Kindred Healthcare, Inc. (b)..................................................... 33,615
--------------
58,961
--------------
HOTELS, RESTAURANTS & LEISURE - 0.6%
5,214 Boyd Gaming Corp. (b)............................................................ 38,896
--------------
HOUSEHOLD DURABLES - 3.7%
2,319 American Greetings Corp.......................................................... 29,011
5,205 Leggett & Platt, Inc............................................................. 119,923
913 Mohawk Industries, Inc. (b)...................................................... 54,643
2,267 Panasonic Corp., ADR............................................................. 19,020
893 Sony Corp., ADR.................................................................. 16,110
6,208 Standard Pacific Corp. (b)....................................................... 19,741
--------------
258,448
--------------
INSURANCE - 6.1%
3,765 Allstate Corp.................................................................... 103,199
1,640 American Financial Group, Inc.................................................... 60,500
3,757 Cincinnati Financial Corp........................................................ 114,438
422 Infinity Property & Casualty Corp................................................ 23,944
1,872 Manulife Financial Corp.......................................................... 19,881
1,973 Protective Life Corp............................................................. 44,511
1,170 Stancorp Financial Group, Inc.................................................... 42,997
1,060 Sun Life Financial, Inc.......................................................... 19,631
--------------
429,101
--------------
INTERNET SOFTWARE & SERVICES - 0.3%
3,978 United Online, Inc............................................................... 21,640
--------------
IT SERVICES - 0.7%
4,045 Convergys Corp. (b).............................................................. 51,655
--------------
LEISURE EQUIPMENT & PRODUCTS - 0.3%
1,451 Jakks Pacific, Inc............................................................... 20,474
--------------
LIFE SCIENCES TOOLS & SERVICES - 0.3%
5,307 Affymetrix, Inc. (b)............................................................. 21,706
--------------
MACHINERY - 1.0%
1,984 NN, Inc. (b)..................................................................... 11,904
2,034 Trinity Industries, Inc.......................................................... 61,142
--------------
73,046
--------------
MEDIA - 1.4%
2,604 E.W. Scripps Co. (b)............................................................. 20,858
1,788 Scholastic Corp.................................................................. 53,586
1,155 Valassis Communications, Inc. (b)................................................ 22,211
--------------
96,655
--------------
See Notes to Financial Statements Page 37
FIRST TRUST TARGET FOCUS FOUR PORTFOLIO
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
DECEMBER 31, 2011
SHARES DESCRIPTION VALUE
----------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
METALS & MINING - 1.1%
302 POSCO, ADR....................................................................... $ 24,794
1,041 Reliance Steel & Aluminum Co..................................................... 50,686
--------------
75,480
--------------
MULTI-UTILITIES - 9.0%
3,260 Alliant Energy Corp.............................................................. 143,799
3,957 Black Hills Corp................................................................. 132,876
2,450 Integrys Energy Group, Inc....................................................... 132,741
2,643 MDU Resources Group, Inc......................................................... 56,719
6,814 NiSource, Inc.................................................................... 162,241
--------------
628,376
--------------
MULTILINE RETAIL - 0.9%
1,359 Dillard's, Inc................................................................... 60,992
--------------
OIL, GAS & CONSUMABLE FUELS - 4.7%
1,315 Chevron Corp..................................................................... 139,916
2,133 Comstock Resources, Inc. (b)..................................................... 32,635
733 Eni S.p.A., ADR.................................................................. 30,251
1,523 Penn Virginia Corp............................................................... 8,057
873 Petroleo Brasileiro S.A., ADR.................................................... 21,694
1,674 Plains Exploration & Production Co. (b).......................................... 61,469
1,151 Repsol YPF S.A., ADR............................................................. 35,117
--------------
329,139
--------------
PAPER & FOREST PRODUCTS - 2.6%
5,544 Louisiana-Pacific Corp. (b)...................................................... 44,740
4,561 MeadWestvaco Corp................................................................ 136,602
--------------
181,342
--------------
PROFESSIONAL SERVICES - 0.5%
1,410 CDI Corp......................................................................... 19,472
1,389 Kelly Services, Inc.............................................................. 19,002
--------------
38,474
--------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 2.8%
10,910 Atmel Corp. (b).................................................................. 88,371
2,925 Fairchild Semiconductor International, Inc. (b).................................. 35,217
2,372 Pericom Semiconductor Corp. (b).................................................. 18,051
6,559 RF Micro Devices, Inc. (b)....................................................... 35,419
3,743 TriQuint Semiconductor, Inc. (b)................................................. 18,228
--------------
195,286
--------------
SPECIALTY RETAIL - 3.1%
637 Group 1 Automotive, Inc.......................................................... 32,996
1,960 Haverty Furniture Cos., Inc...................................................... 21,521
1,867 Lithia Motors, Inc............................................................... 40,813
2,262 Pier 1 Imports, Inc. (b)......................................................... 31,510
4,207 Sally Beauty Holdings, Inc. (b).................................................. 88,894
--------------
215,734
--------------
Page 38 See Notes to Financial Statements
FIRST TRUST TARGET FOCUS FOUR PORTFOLIO
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
DECEMBER 31, 2011
SHARES DESCRIPTION VALUE
----------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
TEXTILES, APPAREL & LUXURY GOODS - 3.4%
924 Deckers Outdoor Corp. (b)........................................................ $ 69,827
1,557 Fossil, Inc. (b)................................................................. 123,564
1,667 Movado Group, Inc................................................................ 30,289
964 Perry Ellis International, Inc. (b).............................................. 13,708
--------------
237,388
--------------
TRADING COMPANIES & DISTRIBUTORS - 1.5%
1,483 GATX Corp........................................................................ 64,748
1,429 United Rentals, Inc. (b)......................................................... 42,227
--------------
106,975
--------------
WIRELESS TELECOMMUNICATION SERVICES - 2.1%
8,441 MetroPCS Communications, Inc. (b)................................................ 73,268
1,839 NTT DoCoMo, Inc., ADR............................................................ 33,745
1,448 Telephone & Data Systems, Inc.................................................... 37,489
--------------
144,502
--------------
TOTAL INVESTMENTS - 100.6%....................................................... 7,048,350
(Cost $7,999,592) (c)
NET OTHER ASSETS AND LIABILITIES - (0.6%)........................................ (42,699)
--------------
NET ASSETS - 100.0%.............................................................. $ 7,005,651
==============
-------------------------------------------------
(a) All percentages shown in the Portfolio of Investments are based on net
assets.
(b) Non-income producing security
(c) Aggregate cost for federal income tax purposes is $7,999,592. As of
December 31, 2011, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was
$413,610 and the aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over value was
$1,364,852.
ADR American Depositary Receipt
VALUATION INPUTS
A summary of the inputs used to value the Portfolio's investments as of December
31, 2011 is as follows (see Note 2A - Portfolio Valuation in the Notes to
Financial Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
12/31/2011 PRICES INPUTS INPUTS
------------ ------------ ------------ ------------
Common Stocks*....................................... $ 7,048,350 $ 7,048,350 $ -- $ --
============ ============ ============ ============
* See the Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 39
FIRST TRUST TARGET FOCUS FOUR PORTFOLIO
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
DECEMBER 31, 2011
COUNTRY DIVERSIFICATION AS A PERCENTAGE OF NET ASSETS:
United States............................................... 87.5%
Japan....................................................... 3.7
India....................................................... 3.0
Sweden...................................................... 1.6
Spain....................................................... 0.8
South Korea................................................. 0.7
China....................................................... 0.7
Canada...................................................... 0.6
Australia................................................... 0.4
Italy....................................................... 0.4
Netherlands................................................. 0.3
Germany..................................................... 0.3
Brazil...................................................... 0.3
United Kingdom.............................................. 0.3
Net Other Assets and Liabilities............................ (0.6)
------
100.0%
======
Page 40 See Notes to Financial Statements
VALUE LINE(R) TARGET 25 PORTFOLIO
PORTFOLIO OF INVESTMENTS (a)
DECEMBER 31, 2011
SHARES DESCRIPTION VALUE
----------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS - 99.4%
AIR FREIGHT & LOGISTICS - 1.1%
4,319 Park-Ohio Holdings Corp. (b)..................................................... $ 77,051
--------------
AIRLINES - 1.5%
21,701 US Airways Group, Inc. (b)....................................................... 110,024
--------------
AUTO COMPONENTS - 16.0%
8,711 Autoliv, Inc..................................................................... 465,951
8,266 Tenneco, Inc. (b)................................................................ 246,161
13,116 TRW Automotive Holdings Corp. (b)................................................ 427,582
--------------
1,139,694
--------------
AUTOMOBILES - 11.8%
41,114 Ford Motor Co.................................................................... 442,387
23,782 Tata Motors Ltd., ADR............................................................ 401,916
--------------
844,303
--------------
COMMUNICATIONS EQUIPMENT - 2.6%
11,228 Finisar Corp. (b)................................................................ 188,013
--------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.9%
6,922 General Communication, Inc. (b).................................................. 67,766
--------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 3.4%
14,778 Power-One, Inc. (b).............................................................. 57,782
20,684 Vishay Intertechnology, Inc. (b)................................................. 185,949
--------------
243,731
--------------
ENERGY EQUIPMENT & SERVICES - 5.2%
20,395 RPC, Inc......................................................................... 372,209
--------------
MACHINERY - 0.6%
7,577 NN, Inc. (b)..................................................................... 45,462
--------------
MEDIA - 1.8%
6,738 Valassis Communications, Inc. (b)................................................ 129,572
--------------
MULTILINE RETAIL - 5.0%
7,929 Dillard's, Inc................................................................... 355,854
--------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 13.7%
56,507 Atmel Corp. (b).................................................................. 457,707
17,056 Fairchild Semiconductor International, Inc. (b).................................. 205,354
38,265 RF Micro Devices, Inc. (b)....................................................... 206,631
21,835 TriQuint Semiconductor, Inc. (b)................................................. 106,336
--------------
976,028
--------------
SPECIALTY RETAIL - 10.4%
16,099 Pier 1 Imports, Inc. (b)......................................................... 224,259
24,541 Sally Beauty Holdings, Inc. (b).................................................. 518,551
--------------
742,810
--------------
TEXTILES, APPAREL & LUXURY GOODS - 15.8%
5,392 Deckers Outdoor Corp. (b)........................................................ 407,474
9,078 Fossil, Inc. (b)................................................................. 720,430
--------------
1,127,904
--------------
See Notes to Financial Statements Page 41
VALUE LINE(R) TARGET 25 PORTFOLIO
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
DECEMBER 31, 2011
SHARES DESCRIPTION VALUE
----------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
TRADING COMPANIES & DISTRIBUTORS - 3.5%
8,335 United Rentals, Inc. (b)......................................................... $ 246,299
--------------
WIRELESS TELECOMMUNICATION SERVICES - 6.0%
49,238 MetroPCS Communications, Inc. (b)................................................ 427,386
--------------
TOTAL INVESTMENTS - 99.4%........................................................ 7,094,106
(Cost $9,082,957) (c)
NET OTHER ASSETS AND LIABILITIES - 0.6%.......................................... 40,788
--------------
NET ASSETS - 100.0%.............................................................. $ 7,134,894
==============
-------------------------------------------------
(a) All percentages shown in the Portfolio of Investments are based on net
assets.
(b) Non-income producing security
(c) Aggregate cost for federal income tax purposes is $9,082,957. As of
December 31, 2011, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was
$472,226 and the aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over value was
$2,461,077.
ADR American Depositary Receipt
VALUATION INPUTS
A summary of the inputs used to value the Portfolio's investments as of December
31, 2011 is as follows (see Note 2A - Portfolio Valuation in the Notes to
Financial Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
12/31/2011 PRICES INPUTS INPUTS
------------ ------------ ------------ ------------
Common Stocks*....................................... $ 7,094,106 $ 7,094,106 $ -- $ --
============ ============ ============ ============
* See the Portfolio of Investments for industry breakout.
Page 42 See Notes to Financial Statements
This Page Left Blank Intentionally.
FIRST DEFINED PORTFOLIO FUND, LLC
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 2011
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 (1)................................... $ 19,662,517 $ 6,668,800 $ 20,734,045 $ 24,364,708
Cash........................................................ 380,678 127,149 338,365 175,682
Prepaid expenses............................................ 635 132 487 702
Receivables:
Membership Interests purchased.......................... 9,871 2,640 684,640 12,236
Dividends............................................... 27,193 5,786 40,283 120,120
From Investment Advisor................................. -- -- -- --
------------ ----------- ------------ ------------
Total Assets........................................... 20,080,894 6,804,507 21,797,820 24,673,448
------------ ----------- ------------ ------------
LIABILITIES:
Payables:
Audit fees.............................................. 17,000 17,000 17,000 17,000
Membership Interest servicing fees...................... 17,333 4,773 15,844 20,363
Membership Interests redeemed........................... -- -- -- --
Custodian fees.......................................... 10,875 2,704 3,114 8,230
Investment advisory fees................................ 4,126 3,127 10,691 13,818
Printing fees........................................... 3,564 3,596 3,562 3,557
12b-1 service fees...................................... 4,277 1,390 4,359 5,178
Due to custodian........................................ -- -- -- --
Licensing fees.......................................... 7,511 810 -- --
Administrative fees..................................... 1,386 450 1,412 1,678
Legal fees.............................................. 886 183 706 1,053
Trustees' fees and expenses............................. 17 3 13 21
Other liabilities........................................... 598 121 204 986
------------ ----------- ------------ ------------
Total Liabilities...................................... 67,573 34,157 56,905 71,884
------------ ----------- ------------ ------------
NET ASSETS.................................................. $ 20,013,321 $ 6,770,350 $ 21,740,915 $ 24,601,564
============ =========== ============ ============
(1) Investments, at cost.................................... $ 19,710,680 $ 6,201,916 $ 19,792,940 $ 27,525,088
============ =========== ============ ============
NET ASSETS CONSIST OF:
Paid-in capital............................................. $ 20,061,484 $ 6,303,466 $ 20,799,810 $ 27,763,144
Net unrealized appreciation (depreciation) on investments and
foreign currency translation............................. (48,163) 466,884 941,105 (3,161,580)
------------ ----------- ------------ ------------
NET ASSETS.................................................. $ 20,013,321 $ 6,770,350 $ 21,740,915 $ 24,601,564
============ =========== ============ ============
NET ASSET VALUE, offering price and redemption price of
Membership Interests outstanding (Net Assets/Membership
Interests outstanding)................................... $ 9.37 $ 10.89 $ 9.88 $ 19.63
============ =========== ============ ============
Number of Membership Interests outstanding.................. 2,136,980 621,833 2,200,344 1,253,485
============ =========== ============ ============
Page 44 See Notes to Financial Statements
FIRST TRUST
S&P(R) NASDAQ(R) TARGET VALUE LINE(R)
TARGET 24 TARGET 15 FOCUS FOUR TARGET 25
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
$ 9,090,846 $ 4,424,893 $ 7,048,350 $ 7,094,106
136,844 9,514 -- 117,664
213 157 211 230
-- -- 9,108 --
13,506 -- 6,561 396
-- -- 2,108 --
------------ ------------ ------------ ------------
9,241,409 4,434,564 7,066,338 7,212,396
------------ ------------ ------------ ------------
17,000 17,000 17,000 17,000
7,535 4,192 6,243 6,495
15,962 397 -- 37,669
4,416 3,284 11,327 3,450
1,629 983 -- 2,924
3,589 3,598 3,593 3,597
1,952 967 1,523 1,563
-- -- 16,551 --
-- -- 3,034 3,753
632 313 494 506
308 204 350 351
6 4 7 7
185 151 565 187
------------ ------------ ------------ ------------
53,214 31,093 60,687 77,502
------------ ------------ ------------ ------------
$ 9,188,195 $ 4,403,471 $ 7,005,651 $ 7,134,894
============ ============ ============ ============
$ 8,881,885 $ 4,592,145 $ 7,999,592 $ 9,082,957
============ ============ ============ ============
$ 8,979,234 $ 4,570,723 $ 7,956,893 $ 9,123,745
208,961 (167,252) (951,242) (1,988,851)
------------ ------------ ------------ ------------
$ 9,188,195 $ 4,403,471 $ 7,005,651 $ 7,134,894
============ ============ ============ ============
$ 10.27 $ 9.39 $ 4.41 $ 2.81
============ ============ ============ ============
894,322 468,716 1,589,818 2,540,051
============ ============ ============ ============
See Notes to Financial Statements Page 45
FIRST DEFINED PORTFOLIO FUND, LLC
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2011
THE DOW(R) GLOBAL
TARGET THE DOW(R) TARGET DIVIDEND
MANAGED VIP DART 10 DIVIDEND TARGET 15
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ----------- ------------ ------------
INVESTMENT INCOME:
Dividends................................................... $ 561,868 $ 174,997 $ 917,387 $ 1,548,373
Interest.................................................... 194 61 194 235
Foreign withholding tax on dividend income.................. (43,575) -- -- (26,547)
------------ ----------- ------------ ------------
Total investment income.................................. 518,487 175,058 917,581 1,522,061
------------ ----------- ------------ ------------
EXPENSES:
Investment advisory fees.................................... 153,962 34,125 125,355 188,057
Membership Interest servicing fees.......................... 89,822 19,842 72,896 109,730
12b-1 service fees.......................................... 64,151 14,218 52,231 78,357
Custodian fees.............................................. 34,847 8,441 9,251 24,078
Audit fees.................................................. 17,000 17,000 17,000 17,000
Administrative fees......................................... 20,785 4,607 16,923 25,388
Licensing fees.............................................. 21,936 2,184 12,408 --
Printing fees............................................... 5,217 5,108 5,183 5,258
Trustees' fees and expenses................................. 8,297 1,910 6,886 10,147
Legal fees.................................................. 7,556 1,553 6,154 8,863
Other....................................................... 10,035 2,501 4,849 16,116
------------ ----------- ------------ ------------
Total expenses........................................... 433,608 111,489 329,136 482,994
Fees waived or expenses reimbursed by the investment
advisor .............................................. (56,401) (27,884) (22,017) (22,253)
------------ ----------- ------------ ------------
Net expenses............................................. 377,207 83,605 307,119 460,741
------------ ----------- ------------ ------------
NET INVESTMENT INCOME (LOSS)................................ 141,280 91,453 610,462 1,061,320
------------ ----------- ------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments.............................................. 3,394,940 531,384 1,635,495 1,016,473
Foreign currency transactions............................ -- -- -- 3,979
------------ ----------- ------------ ------------
Net realized gain (loss).................................... 3,394,940 531,384 1,635,495 1,020,452
------------ ----------- ------------ ------------
Net change in unrealized appreciation (depreciation) on:....
Investments.............................................. (4,040,729) (189,934) (1,255,506) (4,665,652)
Foreign currency translation............................. -- -- -- (2,862)
------------ ----------- ------------ ------------
Net change in unrealized appreciation (depreciation)........ (4,040,729) (189,934) (1,255,506) (4,668,514)
------------ ----------- ------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)..................... (645,789) 341,450 379,989 (3,648,062)
------------ ----------- ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS................................ $ (504,509) $ 432,903 $ 990,451 $ (2,586,742)
============ =========== ============ ============
Page 46 See Notes to Financial Statements
FIRST TRUST
S&P(R) NASDAQ(R) TARGET VALUE LINE(R)
TARGET 24 TARGET 15 FOCUS FOUR TARGET 25
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
$ 156,138 $ 29,303 $ 228,346 $ 37,452
112 62 98 69
-- (2,646) (5,336) --
------------ ------------ ------------ ------------
156,250 26,719 223,108 37,521
------------ ------------ ------------ ------------
57,519 35,555 61,938 61,098
33,530 20,851 36,180 35,691
23,966 14,815 25,807 25,458
13,918 9,711 38,178 10,523
17,000 17,000 17,000 17,000
7,765 4,800 8,362 8,248
5,000 5,000 7,566 11,321
5,125 5,110 5,134 5,141
3,235 1,964 3,305 3,271
2,822 1,781 3,189 3,015
3,487 2,655 8,165 3,722
------------ ------------ ------------ ------------
173,367 119,242 214,824 184,488
(32,445) (32,132) (73,400) (34,798)
------------ ------------ ------------ ------------
140,922 87,110 141,424 149,690
------------ ------------ ------------ ------------
15,328 (60,391) 81,684 (112,169)
------------ ------------ ------------ ------------
1,536,111 1,341,288 843,673 2,583,438
-- -- -- --
------------ ------------ ------------ ------------
1,536,111 1,341,288 843,673 2,583,438
------------ ------------ ------------ ------------
(1,037,348) (1,162,853) (2,371,729) (4,963,046)
-- -- -- --
------------ ------------ ------------ ------------
(1,037,348) (1,162,853) (2,371,729) (4,963,046)
------------ ------------ ------------ ------------
498,763 178,435 (1,528,056) (2,379,608)
------------ ------------ ------------ ------------
$ 514,091 $ 118,044 $ (1,446,372) $ (2,491,777)
============ ============ ============ ============
See Notes to Financial Statements Page 47
FIRST DEFINED PORTFOLIO FUND, LLC
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 2011
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)................................ $ 141,280 $ 91,453 $ 610,462 $ 1,061,320
Net realized gain (loss).................................... 3,394,940 531,384 1,635,495 1,020,452
Net change in unrealized appreciation (depreciation)........ (4,040,729) (189,934) (1,255,506) (4,668,514)
------------ ----------- ------------ ------------
Net increase (decrease) in net assets resulting from
operations (504,509) 432,903 990,451 (2,586,742)
Net increase (decrease) in net assets from Membership
Interest transactions.................................... (7,322,490) (459,328) (1,530,236) (9,300,804)
------------ ----------- ------------ ------------
Net increase (decrease) in net assets....................... (7,826,999) (26,425) (539,785) (11,887,546)
NET ASSETS:
Beginning of period......................................... 27,840,320 6,796,775 22,280,700 36,489,110
------------ ----------- ------------ ------------
End of period............................................... $ 20,013,321 $ 6,770,350 $ 21,740,915 $ 24,601,564
============ =========== ============ ============
FIRST DEFINED PORTFOLIO FUND, LLC
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 2010
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)................................ $ 224,899 $ 122,408 $ 628,096 $ 1,051,621
Net realized gain (loss).................................... 1,899,883 559,682 1,782,485 1,373,106
Net change in unrealized appreciation (depreciation)........ 2,439,952 143,699 990,055 379,935
------------ ----------- ------------ ------------
Net increase (decrease) in net assets resulting from
operations 4,564,734 825,789 3,400,636 2,804,662
Net increase (decrease) in net assets from Membership
Interest transactions.................................... (7,873,139) 523,963 (3,676,476) (13,200,656)
------------ ----------- ------------ ------------
Net increase (decrease) in net assets....................... (3,308,405) 1,349,752 (275,840) (10,395,994)
NET ASSETS:
Beginning of period......................................... 31,148,725 5,447,023 22,556,540 46,885,104
------------ ----------- ------------ ------------
End of period............................................... $ 27,840,320 $ 6,796,775 $ 22,280,700 $ 36,489,110
============ =========== ============ ============
Page 48 See Notes to Financial Statements
FIRST TRUST
S&P(R) NASDAQ(R) TARGET VALUE LINE(R)
TARGET 24 TARGET 15 FOCUS FOUR TARGET 25
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
$ 15,328 $ (60,391) $ 81,684 $ (112,169)
1,536,111 1,341,288 843,673 2,583,438
(1,037,348) (1,162,853) (2,371,729) (4,963,046)
------------ ------------ ------------ ------------
514,091 118,044 (1,446,372) (2,491,777)
(821,473) (3,416,639) (2,263,449) (2,975,546)
------------ ------------ ------------ ------------
(307,382) (3,298,595) (3,709,821) (5,467,323)
9,495,577 7,702,066 10,715,472 12,602,217
------------ ------------ ------------ ------------
$ 9,188,195 $ 4,403,471 $ 7,005,651 $ 7,134,894
============ ============ ============ ============
FIRST TRUST
S&P(R) NASDAQ(R) TARGET VALUE LINE(R)
TARGET 24 TARGET 15 FOCUS FOUR TARGET 25
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
$ 36,700 $ 60,675 $ 101,028 $ (92,614)
983,553 785,702 2,380,335 869,193
287,594 362,475 (797,208) 2,249,028
------------ ------------ ------------ ------------
1,307,847 1,208,852 1,684,155 3,025,607
(1,104,546) 3,671,937 (2,173,079) (1,634,416)
------------ ------------ ------------ ------------
203,301 4,880,789 (488,924) 1,391,191
9,292,276 2,821,277 11,204,396 11,211,026
------------ ------------ ------------ ------------
$ 9,495,577 $ 7,702,066 $ 10,715,472 $ 12,602,217
============ ============ ============ ============
See Notes to Financial Statements Page 49
FIRST DEFINED PORTFOLIO FUND, LLC
STATEMENTS OF CHANGES IN NET ASSETS - MEMBERSHIP INTEREST ACTIVITY
FOR THE YEAR ENDED DECEMBER 31, 2011
THE DOW(R) GLOBAL
TARGET THE DOW(R) TARGET DIVIDEND
MANAGED VIP DART 10 DIVIDEND TARGET 15
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ----------- ------------ ------------
AMOUNT:
Sold........................................................ $ 4,870,316 $ 3,185,931 $ 9,728,762 $ 4,598,742
Redeemed.................................................... (12,192,806) (3,645,259) (11,258,998) (13,899,546)
------------ ----------- ------------ ------------
Net increase (decrease)..................................... $ (7,322,490) $ (459,328) $ (1,530,236) $ (9,300,804)
============ =========== ============ ============
MEMBERSHIP INTEREST:
Sold........................................................ 491,466 305,684 1,021,990 220,784
Redeemed.................................................... (1,275,953) (356,210) (1,213,083) (686,959)
------------ ----------- ------------ ------------
Net increase (decrease)..................................... (784,487) (50,526) (191,093) (466,175)
============ =========== ============ ============
FIRST DEFINED PORTFOLIO FUND, LLC
STATEMENTS OF CHANGES IN NET ASSETS - MEMBERSHIP INTEREST ACTIVITY
FOR THE YEAR ENDED DECEMBER 31, 2010
THE DOW(R) GLOBAL
TARGET THE DOW(R) TARGET DIVIDEND
MANAGED VIP DART 10 DIVIDEND TARGET 15
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ----------- ------------ ------------
AMOUNT:
Sold........................................................ $ 4,478,929 $ 3,045,012 $ 9,818,508 $ 6,387,314
Redeemed.................................................... (12,352,068) (2,521,049) (13,494,984) (19,587,970)
------------ ----------- ------------ ------------
Net increase (decrease)..................................... $ (7,873,139) $ 523,963 $ (3,676,476) $(13,200,656)
============ =========== ============ ============
MEMBERSHIP INTEREST:
Sold........................................................ 529,774 327,823 1,147,679 323,484
Redeemed.................................................... (1,504,273) (284,478) (1,575,247) (1,027,520)
------------ ----------- ------------ ------------
Net increase (decrease)..................................... (974,499) 43,345 (427,568) (704,036)
============ =========== ============ ============
Page 50 See Notes to Financial Statements
FIRST TRUST
S&P(R) NASDAQ(R) TARGET VALUE LINE(R)
TARGET 24 TARGET 15 FOCUS FOUR TARGET 25
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
$ 9,210,189 $ 3,641,426 $ 5,467,132 $ 1,768,615
(10,031,662) (7,058,065) (7,730,581) (4,744,161)
------------ ------------ ------------ ------------
$ (821,473) $ (3,416,639) $ (2,263,449) $ (2,975,546)
============ ============ ============ ============
903,545 358,143 1,120,376 534,953
(1,013,467) (720,325) (1,696,406) (1,374,189)
------------ ------------ ------------ ------------
(109,922) (362,182) (576,030) (839,236)
============ ============ ============ ============
FIRST TRUST
S&P(R) NASDAQ(R) TARGET VALUE LINE(R)
TARGET 24 TARGET 15 FOCUS FOUR TARGET 25
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
$ 3,167,035 $ 5,707,099 $ 4,121,790 $ 1,708,040
(4,271,581) (2,035,162) (6,294,869) (3,342,456)
------------ ------------ ------------ ------------
$ (1,104,546) $ 3,671,937 $ (2,173,079) $ (1,634,416)
============ ============ ============ ============
372,682 686,395 917,024 523,087
(539,843) (252,078) (1,442,739) (1,069,306)
------------ ------------ ------------ ------------
(167,161) 434,317 (525,715) (546,219)
============ ============ ============ ============
See Notes to Financial Statements Page 51
TARGET MANAGED VIP PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH PERIOD
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/11 12/31/10 12/31/09 12/31/08 12/31/07
---------- ---------- ---------- ---------- ----------
Net asset value, beginning of period........... $ 9.53 $ 8.00 $ 7.08 $ 12.83 $ 11.72
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (a)........... 0.05 0.07 0.06 0.08 0.07
Net realized and unrealized gain (loss)........ (0.21) 1.46 0.86 (5.83) 1.04
---------- ---------- ---------- ---------- ----------
Total from investment operations............... (0.16) 1.53 0.92 (5.75) 1.11
---------- ---------- ---------- ---------- ----------
Net asset value, end of period................. $ 9.37 $ 9.53 $ 8.00 $ 7.08 $ 12.83
========== ========== ========== ========== ==========
TOTAL RETURN (b)............................... (1.68)% (c) 19.13% (c) 12.99% (c) (44.82)% (c) 9.47%
========== ========== ========== ========== ==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........... $ 20,013 $ 27,840 $ 31,149 $ 32,281 $ 174,134
Ratio of expenses to average net assets
without fee waivers and expenses reimbursed . 1.69% 1.70% 1.66% 1.51% 1.35%
Ratio of expenses to average net assets........ 1.47% 1.47% 1.47% 1.47% 1.35%
Ratio of net investment income (loss)
to average net assets........................ 0.55% 0.81% 0.82% 0.75% 0.53%
Portfolio turnover rate........................ 89% 101% 111% 155% 88%
-------------------------
(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 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) The total return would have been lower if certain fees had not been waived
and expenses reimbursed by the investment advisor.
Page 52 See Notes to Financial Statements
THE DOW(R) DART 10 PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH PERIOD
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/11 12/31/10 12/31/09 12/31/08 12/31/07
---------- ---------- ---------- ---------- ----------
Net asset value, beginning of period........... $ 10.11 $ 8.66 $ 7.60 $ 10.63 $ 10.56
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (a)............... 0.17 0.20 0.14 0.13 0.11
Net realized and unrealized gain (loss)........ 0.61 1.25 0.92 (3.16) (0.04)
---------- ---------- ---------- ---------- ----------
Total from investment operations............... 0.78 1.45 1.06 (3.03) 0.07
---------- ---------- ---------- ---------- ----------
Net asset value, end of period................. $ 10.89 $ 10.11 $ 8.66 $ 7.60 $ 10.63
========== ========== ========== ========== ==========
Total return (b) (c)........................... 7.72% 16.74% 13.95% (28.50)% 0.66%
========== ========== ========== ========== ==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........... $ 6,770 $ 6,797 $ 5,447 $ 7,081 $ 16,172
Ratio of expenses to average net assets
without fee waivers and expenses reimbursed . 1.96% 2.09% 2.13% 1.81% 1.56%
Ratio of expenses to average net assets........ 1.47% 1.47% 1.47% 1.47% 1.47%
Ratio of net investment income (loss)
to average net assets........................ 1.61% 2.24% 2.00% 1.42% 1.01%
Portfolio turnover rate........................ 95% 104% 108% 105% 98%
-------------------------
(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 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) The total return would have been lower if certain fees had not been waived
and expenses reimbursed by the investment advisor.
See Notes to Financial Statements Page 53
THE DOW(R) TARGET DIVIDEND PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH PERIOD
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/11 12/31/10 12/31/09 12/31/08 12/31/07
---------- ---------- ---------- ---------- ----------
Net asset value, beginning of period........... $ 9.32 $ 8.00 $ 7.01 $ 11.79 $ 11.66
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (a)............... 0.28 0.24 0.18 0.28 0.25
Net realized and unrealized gain (loss)........ 0.28 1.08 0.81 (5.06) (0.12)
---------- ---------- ---------- ---------- ----------
Total from investment operations............... 0.56 1.32 0.99 (4.78) 0.13
---------- ---------- ---------- ---------- ----------
Net asset value, end of period................. $ 9.88 $ 9.32 $ 8.00 $ 7.01 $ 11.79
========== ========== ========== ========== ==========
Total return (b)............................... 6.01% (c) 16.50% (c) 14.12% (c) (40.54)% (c) 1.12%
========== ========== ========== ========== ==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........... $ 21,741 $ 22,281 $ 22,557 $ 20,369 $ 82,900
Ratio of expenses to average net assets
without fee waivers and expenses reimbursed . 1.58% 1.60% 1.67% 1.47% 1.36%
Ratio of expenses to average net assets........ 1.47% 1.47% 1.47% 1.47% 1.36%
Ratio of net investment income (loss)
to average net assets........................ 2.92% 2.77% 2.83% 2.76% 2.06%
Portfolio turnover rate........................ 107% 104% 109% 172% 83%
-------------------------
(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 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) The total return would have been lower if certain fees had not been waived
and expenses reimbursed by the investment advisor.
Page 54 See Notes to Financial Statements
GLOBAL DIVIDEND TARGET 15 PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH PERIOD
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/11 12/31/10 12/31/09 12/31/08 12/31/07
---------- ---------- ---------- ---------- ----------
Net asset value, beginning of period........... $ 21.22 $ 19.34 $ 13.71 $ 23.96 $ 21.14
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (a)............... 0.71 0.52 0.11 0.72 0.60
Net realized and unrealized gain (loss)........ (2.30) 1.36 5.52 (10.97) 2.22
---------- ---------- ---------- ---------- ----------
Total from investment operations............... (1.59) 1.88 5.63 (10.25) 2.82
---------- ---------- ---------- ---------- ----------
Net asset value, end of period................. $ 19.63 $ 21.22 $ 19.34 $ 13.71 $ 23.96
========== ========== ========== ========== ==========
Total return (b)............................... (7.49)% (c) 9.72% (c) 41.06% (c) (42.78)% (c) 13.34%
========== ========== ========== ========== ==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........... $ 24,602 $ 36,489 $ 46,885 $ 36,063 $ 173,741
Ratio of expenses to average net assets
without fee waivers and expenses reimbursed . 1.54% 1.53% 1.53% 1.53% 1.39%
Ratio of expenses to average net assets........ 1.47% 1.47% 1.47% 1.47% 1.39%
Ratio of net investment income (loss)
to average net assets........................ 3.39% 2.69% 0.71% 3.47% 2.56%
Portfolio turnover rate........................ 47% 123% 84% 105% 60%
-------------------------
(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 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) The total return would have been lower if certain fees had not been waived
and expenses reimbursed by the investment advisor.
See Notes to Financial Statements Page 55
S&P(R) TARGET 24 PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH PERIOD
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/11 12/31/10 12/31/09 12/31/08 12/31/07
---------- ---------- ---------- ---------- ----------
Net asset value, beginning of period........... $ 9.46 $ 7.93 $ 6.97 $ 9.66 $ 9.28
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .................. 0.02 (a) 0.04 (a) 0.07 (a) 0.01 0.04 (a)
Net realized and unrealized gain (loss)........ 0.79 1.49 0.89 (2.70) 0.34
---------- ---------- ---------- ---------- ----------
Total from investment operations............... 0.81 1.53 0.96 (2.69) 0.38
---------- ---------- ---------- ---------- ----------
Net asset value, end of period................. $ 10.27 $ 9.46 $ 7.93 $ 6.97 $ 9.66
========== ========== ========== ========== ==========
Total return (b) (c)........................... 8.56% 19.29% 13.77% (27.85)% 4.10%
========== ========== ========== ========== ==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)....... $ 9,188 $ 9,496 $ 9,292 $ 7,758 $ 15,789
Ratio of expenses to average net assets
without fee waivers and expenses reimbursed 1.81% 1.95% 2.07% 1.83% 1.55%
Ratio of expenses to average net assets.... 1.47% 1.47% 1.47% 1.47% 1.47%
Ratio of net investment income (loss)
to average net assets.................... 0.16% 0.46% 0.97% 0.10% 0.43%
Portfolio turnover rate.................... 161% 135% 142% 202% 115%
-------------------------
(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 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) The total return would have been lower if certain fees had not been waived
and expenses reimbursed by the investment advisor.
Page 56 See Notes to Financial Statements
NASDAQ(R) TARGET 15 PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH PERIOD
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/11 12/31/10 12/31/09 12/31/08 12/31/07
---------- ---------- ---------- ---------- ----------
Net asset value, beginning of period........... $ 9.27 $ 7.11 $ 6.08 $ 12.38 $ 10.17
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (a)............... (0.10) 0.12 (0.04) (0.07) (0.04)
Net realized and unrealized gain (loss)........ 0.22 2.04 1.07 (6.23) 2.25
---------- ---------- ---------- ---------- ----------
Total from investment operations............... 0.12 2.16 1.03 (6.30) 2.21
---------- ---------- ---------- ---------- ----------
Net asset value, end of period................. $ 9.39 $ 9.27 $ 7.11 $ 6.08 $ 12.38
========== ========== ========== ========== ==========
Total return (b) (c)........................... 1.29% 30.38% 16.94% (50.89)% 21.73%
========== ========== ========== ========== ==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........... $ 4,403 $ 7,702 $ 2,821 $ 3,177 $ 11,316
Ratio of expenses to average net assets
without fee waivers and expenses reimbursed . 2.01% 2.49% 2.93% 2.13% 1.76%
Ratio of expenses to average net assets........ 1.47% 1.47% 1.47% 1.47% 1.47%
Ratio of net investment income (loss)
to average net assets........................ (1.02)% 1.52% (0.68)% (0.79)% (0.34)%
Portfolio turnover rate........................ 127% 100% 194% 181% 161%
-------------------------
(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 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) The total return would have been lower if certain fees had not been waived
and expenses reimbursed by the investment advisor.
See Notes to Financial Statements Page 57
FIRST TRUST TARGET FOCUS FOUR PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH PERIOD
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/11 12/31/10 12/31/09 12/31/08 12/31/07 (a)
---------- ---------- ---------- ---------- ------------
Net asset value, beginning of period........... $ 4.95 $ 4.16 $ 3.23 $ 5.75 $ 5.44
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (b)............... 0.04 0.04 0.03 0.07 0.09
Net realized and unrealized gain (loss)........ (0.58) 0.75 0.90 (2.59) 0.22
---------- ---------- ---------- ---------- ----------
Total from investment operations............... (0.54) 0.79 0.93 (2.52) 0.31
---------- ---------- ---------- ---------- ----------
Net asset value, end of period................. $ 4.41 $ 4.95 $ 4.16 $ 3.23 $ 5.75
========== ========== ========== ========== ==========
Total return (c) (d)........................... (10.91)% 18.99% 28.79% (43.83)% 5.70%
========== ========== ========== ========== ==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........... $ 7,006 $ 10,715 $ 11,204 $ 4,708 $ 12,708
Ratio of expenses to average net assets without
fee waivers and expenses reimbursed.......... 2.08% 2.01% 2.29% 2.97% 1.92%
Ratio of expenses to average net assets........ 1.37% 1.37% 1.37% 1.37% 1.37%
Ratio of net investment income (loss)
to average net assets........................ 0.79% 0.95% 0.92% 1.40% 1.54%
Portfolio turnover rate........................ 124% 110% 81% 248% 130%
-------------------------
(a) Effective on November 19, 2007, the Portfolio changed its name from First
Trust 10 Uncommon Values Portfolio to First Trust Target Focus Four
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 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) The total return would have been lower if certain fees had not been waived
and expenses reimbursed by the investment advisor.
Page 58 See Notes to Financial Statements
VALUE LINE(R) TARGET 25 PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT EACH PERIOD
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/11 12/31/10 12/31/09 12/31/08 12/31/07
---------- ---------- ---------- ---------- ----------
Net asset value, beginning of period........... $ 3.73 $ 2.86 $ 2.67 $ 5.91 $ 5.00
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (a)............... (0.04) (0.03) (0.02) (0.01) (0.02)
Net realized and unrealized gain (loss)........ (0.88) 0.90 0.21 (3.23) 0.93
---------- ---------- ---------- ---------- ----------
Total from investment operations............... (0.92) 0.87 0.19 (3.24) 0.91
---------- ---------- ---------- ---------- ----------
Net asset value, end of period................. $ 2.81 $ 3.73 $ 2.86 $ 2.67 $ 5.91
========== ========== ========== ========== ==========
Total return (b)............................... (24.66)% (c) 30.42% (c) 7.12% (c) (54.82)% (c) 18.20%
========== ========== ========== ========== ==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........... $ 7,135 $ 12,602 $ 11,211 $ 15,186 $ 43,998
Ratio of expenses to average net assets
without fee waivers and expenses reimbursed . 1.81% 1.83% 1.80% 1.51% 1.41%
Ratio of expenses to average net assets........ 1.47% 1.47% 1.47% 1.47% 1.41%
Ratio of net investment income (loss)
to average net assets........................ (1.10)% (0.82)% (0.63)% (0.22)% (0.37)%
Portfolio turnover rate........................ 129% 103% 119% 142% 110%
-------------------------
(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 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) The total return would have been lower if certain fees had not been waived
and expenses reimbursed by the investment advisor.
See Notes to Financial Statements Page 59
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 2011
1. FUND DESCRIPTION
First Defined Portfolio Fund, LLC (the "Registrant") was organized as a Delaware
limited liability company on January 8, 1999 under the laws of the State of
Delaware. The Registrant is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended (the "1940
Act"), as a non-diversified, open-end management investment company.
The Registrant offers eight managed investment portfolios (each a "Portfolio"
and collectively, the "Portfolios") as follows:
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 Target Focus Four Portfolio
Value Line(R) Target 25 Portfolio
Under Delaware law, a limited liability company does not issue shares of stock.
Instead, ownership rights are contained in Portfolio Membership Interests (each
an "Interest" and collectively, the "Interests"). Each Interest represents an
undivided interest in the net assets of the applicable Portfolio. Interests are
not offered directly to the public. Interests are sold only to Prudential
Annuities Life Assurance Corporation Variable Account B ("Account B"), a
separate account of Prudential Annuities Life Assurance Corporation
("Prudential"), to fund the benefits of variable annuity policies (the
"Policies") issued by Prudential. 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 Interests.
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:
The net asset value ("NAV") of each Interest is determined daily as of the close
of regular trading on the New York Stock Exchange ("NYSE"), normally 4:00 p.m.
Eastern time, on each day the NYSE is open for trading. If the NYSE closes early
on a valuation day, the NAV is determined as of that time. Domestic debt
securities and foreign securities are priced using data reflecting the earlier
closing of the principal markets for those securities. The NAV per Interest is
calculated by dividing the value of all assets of a Portfolio (including accrued
interest and dividends), less all liabilities (including accrued expenses,
dividends declared but unpaid, and any borrowings of the Portfolio) by the total
number of Interests outstanding.
Each Portfolio's investments are valued daily in accordance with valuation
procedures adopted by the Registrant's Board of Trustees, and in accordance with
provisions of the 1940 Act. All securities and other assets of a Portfolio
initially expressed in foreign currencies will be converted to U.S. dollars
using exchange rates in effect at the time of valuation. The following
securities, for which accurate and reliable market quotations are readily
available, will be valued as follows:
Common stocks, and other securities listed on any national or foreign
exchange (excluding the NASDAQ National Market ("NASDAQ") and the London
Stock Exchange Alternative Investment Market ("AIM")) are valued at the
last sale price on the exchange on which they are principally traded. If
there are no transactions on the valuation day, the securities are valued
at the mean between the most recent bid and asked prices.
Securities listed on the NASDAQ or the AIM are valued at the official
closing price. If there is no official closing price on the valuation day,
the securities are valued at the mean between the most recent bid and
asked prices.
Securities traded in the over-the-counter market are valued at their
closing bid prices.
Short-term investments that mature in less than 60 days when purchased are
valued at amortized cost.
All market quotations used in valuing a Portfolio's securities will be obtained
from a third party pricing service. If no quotation is received from a pricing
service, attempts will be made to obtain one or more broker quotes for the
security. In the event the pricing service does not provide a valuation, broker
quotations are not readily available, or the valuations received are deemed
unreliable, the Registrant's Board of Trustees has designated First Trust
Page 60
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 2011
Advisors L.P. ("First Trust") to use a fair value method to value a Portfolio's
securities. Additionally, if events occur after the close of the principal
markets for certain securities (e.g., domestic debt and foreign securities) that
could materially affect a Portfolio's NAV, First Trust will use a fair value
method to value a Portfolio's securities. The use of fair value pricing is
governed by valuation procedures adopted by the Registrant's Board of Trustees,
and in accordance with the provisions of the 1940 Act. As a general principle,
the fair value of a security is the amount which a Portfolio might reasonably
expect to receive for the security upon its current sale. However, in light of
the judgment involved in fair valuations, there can be no assurance that a fair
value assigned to a particular security will be the amount which a Portfolio
might be able to receive upon its current sale. Fair valuation of a security
will be based on the consideration of all available information, including, but
not limited to the following:
1) the type of security;
2) the size of the holding;
3) the initial cost of the security;
4) transactions in comparable securities;
5) price quotes from dealers and/or pricing services;
6) relationships among various securities;
7) information obtained by contacting the issuer, analysts, or the
appropriate stock exchange;
8) an analysis of the issuer's financial statements; and
9) the existence of merger proposals or tender offers that might affect
the value of the security.
If the securities in question are foreign securities, the following additional
information may be considered:
1) the value of similar foreign securities traded on other foreign
markets;
2) ADR trading of similar securities;
3) foreign currency exchange activity;
4) the trading prices of financial products that are tied to baskets of
foreign securities;
5) factors relating to the event that precipitated the pricing problem;
6) whether the event is likely to recur; and
7) whether the effects of the event are isolated or whether they affect
entire markets, countries or regions.
The Portfolios are subject to fair value accounting standards that define fair
value, establish the framework for measuring fair value and provide a
three-level hierarchy for fair valuation based upon the inputs to the valuation
as of the measurement date. The three levels of the fair value hierarchy are as
follows:
o Level 1 - -Level 1 inputs are quoted prices in active markets for
identical securities. An active market is a market in which
transactions for the security occur with sufficient frequency and
volume to provide pricing information on an ongoing basis.
o Level 2 - Level 2 inputs are observable inputs, either directly or
indirectly, and include the following:
o Quoted prices for similar securities in active markets.
o Quoted prices for identical or similar securities in markets
that are non-active. A non-active market is a market where
there are few transactions for the security, the prices are
not current, or price quotations vary substantially either
over time or among market makers, or in which little
information is released publicly.
o Inputs other than quoted prices that are observable for the
security (for example, interest rates and yield curves
observable at commonly quoted intervals, volatilities,
prepayment speeds, loss severities, credit risks, and default
rates).
o Inputs that are derived principally from or corroborated by
observable market data by correlation or other means.
o Level 3 - Level 3 inputs are unobservable inputs. Unobservable
inputs may reflect the reporting entity's own assumptions about the
assumptions that market participants would use in pricing the
security.
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities. A summary
of the inputs used to value each Portfolio's investments as of December 31,
2011, is included with the Portfolio's Portfolio of Investments.
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded as of the trade date. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
Dividend income is recorded on the ex-dividend date. Interest income is recorded
on the accrual basis, including amortization of premiums and accretion of
discounts.
Page 61
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 2011
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" 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 "Net realized gain (loss) on foreign currency transactions" on
the Statements of Operations. Unrealized depreciation of $1,200 from dividends
receivable in foreign currencies is included in "Dividends receivable" on the
Statement of Assets and Liabilities for the Global Dividend Target 15 Portfolio.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Distributions 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 distributions 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 Prudential 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
distributions have been paid by any of the Portfolios and 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
generally allocated to all the Portfolios based upon the average net assets of
each Portfolio.
The Registrant has entered into an Administrative Services Agreement (the
"Agreement") with Prudential whereby Prudential provides certain Membership
Interests servicing reasonably necessary for the operations of the Portfolios
other than the management services provided by First Trust pursuant to the
Investment Advisory and Management Agreement. As compensation for the services
rendered under the Agreement, Prudential 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" on the Statements of Operations.
First Trust has entered into various licensing agreements, which allow First
Trust to use certain trademarks and trade names of the applicable licensors (see
Licensing Information in the Additional Information section of this report). The
Portfolios are sub-licensees to these license agreements and are required to pay
licensing fees, which are shown on the Statements of Operations.
G. ACCOUNTING PRONOUNCEMENT:
In May 2011, the Financial Accounting Standards Board ("FASB") issued ASU
2011-04 "Amendments to Achieve Common Fair Value Measurement and Disclosure
Requirements in U.S. GAAP and IFRSs", modifying Topic 820, "Fair Value
Measurements and Disclosures." At the same time, the International Accounting
Standards Board ("IASB") issued International Financial Reporting Standard
("IFRS") 13, "Fair Value Measurement." The objective of the FASB and IASB is
convergence of their guidance on fair value measurements and disclosures.
Specifically, the ASU requires reporting entities to disclose (i) the amounts of
any transfers between Level 1 and Level 2, and the reasons for the transfers,
(ii) for Level 3 fair value measurements, quantitative information about
significant unobservable inputs used, (iii) a description of the valuation
processes used by the reporting entity, and (iv) a narrative description of the
sensitivity of the fair value measurement to changes in unobservable inputs if a
change in those inputs might result in a significantly higher or lower fair
value measurement. The effective date of the ASU is for interim and annual
periods beginning after December 15, 2011, and it is therefore not effective for
the current fiscal year. Management is in the process of assessing the impact of
the updated standards on the Portfolios' financial statements, if any.
Page 62
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 2011
3. INVESTMENT ADVISORY FEE AND OTHER AFFILIATED TRANSACTIONS
First Trust, the investment advisor to the Portfolios, is a limited partnership
with one limited partner, Grace Partners of DuPage L.P., and one general
partner, The Charger Corporation. 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, 2011, 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 Target Focus Four Portfolio
and 1.47% for each of the other Portfolios' average daily net assets. Expenses
reimbursed and fees waived by First Trust under the Expense Reimbursement, Fee
Waiver and Recovery Agreement are subject to recovery by First Trust for up to
three years from the date the fee or expense was incurred, but no reimbursement
payment will be made by the Portfolio if it results in the Portfolio exceeding
an expense ratio equal to the expense cap in place at the time the expenses or
fees were reimbursed or waived by First Trust. These amounts would be included
in "Expenses previously waived or reimbursed" on the Statements of Operations.
The advisory fee waivers and expense reimbursements for the year ended December
31, 2011 and the expenses borne by First Trust subject to recovery from each
Portfolio at December 31, 2011 were as follows:
EXPENSES BORNE BY FIRST TRUST SUBJECT TO RECOVERY
-------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
FEES EXPENSES DECEMBER DECEMBER DECEMBER
WAIVED REIMBURSED 31, 2009 31, 2010 31, 2011 TOTAL
---------- ---------- ---------- ---------- ---------- ----------
Target Managed VIP
Portfolio............................ $ 56,401 $ -- $ 53,913 $ 62,766 $ 56,401 $ 173,080
The Dow(R) Dart 10
Portfolio............................ 27,884 -- 35,264 33,855 27,884 97,003
The Dow(R) Target Dividend
Portfolio............................ 22,017 -- 34,903 28,538 22,017 85,458
Global Dividend Target 15
Portfolio............................ 22,253 -- 21,774 24,765 22,253 68,792
S&P(R) Target 24
Portfolio............................ 32,445 -- 43,615 38,449 32,445 114,509
NASDAQ(R) Target 15
Portfolio............................ 32,132 -- 40,468 40,900 32,132 113,500
First Trust Target Focus Four
Portfolio............................ 61,938 11,462 69,680 67,821 73,400 210,901
Value Line(R) Target 25
Portfolio ........................... 34,798 -- 41,127 40,655 34,798 116,580
BNY Mellon Investment Servicing (US) Inc. serves as the Registrant's
Administrator, Fund Accountant and Transfer Agent in accordance with certain fee
arrangements. Effective September 30, 2011, The Bank of New York Mellon serves
as the Registrant's Custodian in accordance with certain fee arrangements. Prior
to September 30, 2011, BNY Mellon Investment Servicing Trust Company (formerly
known as PFPC Trust Company) served as the Registrant's Custodian in accordance
with certain fee arrangements.
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 trust for the first 14 trusts of the First Trust Fund Complex and
an annual retainer of $7,500 per trust for each subsequent trust in the First
Trust Fund Complex. The annual retainer is allocated equally among each of the
trusts. No additional meeting fees are paid in connection with Board or
Committee meetings.
Additionally, the Lead Independent Trustee is paid $10,000 annually, the
Chairman of the Audit Committee is paid $5,000 annually, and each of the
Chairmen of the Nominating and Governance Committee and Valuation Committee are
paid $2,500 annually to serve in such capacities, with such compensation paid by
the trusts in the First Trust Fund Complex and equally allocated among those
trusts. Trustees are also reimbursed by the trusts in the First Trust Fund
Complex for travel and out-of-pocket expenses in connection with all meetings.
The Lead Independent Trustee and each Committee chairman serve two-year terms
before rotating to serve as chairman of another Committee or as Lead Independent
Trustee. The officers and "Interested" Trustee receive no compensation from the
trusts for serving in such capacities.
Page 63
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 2011
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 Prudential 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 sale and
distribution of a Portfolio's Interests including, without limitation, expenses
of preparing, printing and distributing prospectuses to persons other than
Interest holders or policy owners, as well as compensating its sales force,
printing and distributing advertising and sales literature and reports to
Interest holders and policy owners used in connection with the sale of a
Portfolio's Interests, certain other expenses associated with the distribution
of the Portfolios, and any distribution-related expenses that may be authorized
by the Registrant's Board of Trustees.
During the year ended December 31, 2011, all service fees received by FTP were
paid to Prudential, 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 Registrant's Board of
Trustees and a vote of the Independent 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 U.S.
government and short-term investments, for the year ended December 31, 2011,
were as follows:
PURCHASES SALES
------------- -------------
Target Managed VIP Portfolio................. $22,515,690 $29,552,410
The Dow(R) DART 10 Portfolio................. 5,451,414 5,847,889
The Dow(R) Target Dividend Portfolio......... 22,187,508 23,829,871
Global Dividend Target 15 Portfolio ......... 14,657,101 22,989,433
S&P(R) Target 24 Portfolio................... 15,259,162 15,831,828
NASDAQ(R) Target 15 Portfolio................ 7,411,492 10,679,239
First Trust Target Focus Four Portfolio ..... 12,656,341 14,630,572
Value Line(R) Target 25 Portfolio............ 13,048,612 15,948,994
6. MEMBERSHIP INTERESTS
The Registrant has authorized an unlimited number of Membership Interests
without par value of one or more series.
7. INDEMNIFICATION
The Registrant has a variety of indemnification obligations under contracts with
its service providers. The Registrant's maximum exposure under these
arrangements is unknown. However, the Registrant has not had prior claims or
losses pursuant to these contracts and expects the risk of loss to be remote.
8. RISK CONSIDERATIONS
Risks are inherent in all investing. The following summarizes some of the risks
that should be considered for the Portfolios. For additional information about
the risks associated with investing in the Portfolios, please see the
Portfolios' prospectus and statement of additional information, as well as other
regulatory filings.
MARKET RISK: The principal risk of investing in the Portfolios is market risk.
Market risk is the risk that a particular stock in a Portfolio, the Portfolio
itself or stocks in general may fall in value. In 2008 and early 2009,
securities markets were significantly negatively affected by the financial
crises that initially resulted from the downturn in the subprime mortgage market
in the U.S. The impact of the financial crises on securities markets has proven
to be significant and may be long lasting and may have a substantial impact on
the value of the Portfolios. As with any mutual fund investment, loss of money
Page 64
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 2011
is a risk of investing. Shares are subject to market fluctuations caused by such
factors as economic, political, regulatory or market developments, changes in
interest rates and perceived trends in stock prices. Overall stock values could
decline generally or could underperform other investments.
NON-U.S. SECURITIES INVESTMENT RISK: The Portfolios may invest in non-U.S.
securities. Investing in securities of non-U.S. companies and non-U.S.
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 non-U.S. companies and non-U.S.
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.
NON-DIVERSIFICATION RISK: 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 issuers in which it
invests.
INVESTMENT STRATEGY RISK: Each Portfolio is also exposed to additional market
risk due to its policy of investing in accordance with an investment strategy.
As a result of this policy, securities held by the Portfolios will generally not
be bought or sold in response to market fluctuations and the securities may be
issued by companies concentrated in a particular industry. Each Portfolio's
relative lack of diversification, possible concentration in a particular
industry and passive management style may subject investors to greater market
risk than other mutual funds.
SMALL CAP COMPANY RISK: The Target Managed VIP Portfolio and Value Line(R)
Target 25 Portfolio invest in small cap stocks, which presents additional risk.
Small cap stocks are more vulnerable to market conditions, less liquid and
generally experience greater price volatility than stocks of larger
capitalization companies.
FINANCIALS SECTOR RISK: The Portfolios may invest in securities of companies in
the financial sector. The downturn in the U.S. and world economies has adversely
affected banks, thrifts, credit and capital markets, companies involved in the
insurance industry and other companies in the financial sectors.
9. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Portfolios
through the date the financial statements were issued, and has determined that
there were the following subsequent events:
Effective January 1, 2012, each Independent Trustee will be paid a fixed annual
retainer of $125,000 per year and an annual per fund fee of $4,000 for each
closed-end fund or other actively managed fund and $1,000 for each Portfolio.
The fixed annual retainer will be allocated pro rata among each fund in the
First Trust Fund Complex based on net assets.
Additionally, the Lead Independent Trustee will be paid $15,000 annually, the
Chairman of the Audit Committee will be paid $10,000 annually, and each of the
Chairmen of the Nominating and Governance Committee and the Valuation Committee
will be paid $5,000 annually to serve in such capacities, with such compensation
allocated pro rata among each fund in the First Trust Fund Complex based on net
assets. Trustees continue to be reimbursed for travel and out-of-pocket expenses
in connection with all meetings. The Lead Independent Trustee and each Committee
chairman will serve two-year terms before rotating to serve as chairman of
another committee or as Lead Independent Trustee. The officers and "Interested"
Trustee receive no compensation from the funds for acting in such capacities.
Effective January 23, 2012, Mr. Bowen resigned from his position as the
President and Chief Executive Officer of the Registrant. He will continue as a
Trustee, the Chairman of the Board and member of the Executive Committee. The
Board elected Mr. Bradley to serve as the President and Chief Executive Officer
and Mr. Dykas to serve as the Treasurer, Chief Financial Officer and Chief
Accounting Officer of the Registrant.
Page 65
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------
TO THE BOARD OF TRUSTEES AND MEMBERS OF FIRST DEFINED PORTFOLIO FUND, LLC:
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of First Defined Portfolio Fund, LLC (the
"Fund"), comprised of 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 Target Focus Four Portfolio, and Value Line(R) Target 25 Portfolio (the
"Portfolios"), as of December 31, 2011, the related statements of operations for
the year then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Portfolios' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
The Fund is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audit included consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of December 31, 2011, by correspondence with the
Portfolios' custodian. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Portfolios as of December 31, 2011, the results of their operations for the year
then ended, the changes in their net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended, in conformity with accounting principles generally
accepted in the United States of America.
/s/ Deloitte & Touche LLP
Chicago, Illinois
February 10, 2012
Page 66
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 2011 (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 the Registrant 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 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.
LICENSING INFORMATION
"Dow Jones Industrial Average(SM)," "DJIA(SM)," "The Dow Jones U.S. Select
Dividend Index(SM)," "Dow Industrials(SM)," "The Dow(R)," "Dow 30(SM)," and "The
Dow 10(SM)" 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 on behalf of the Registrant. None of the Portfolios,
including, and in particular, Target Managed VIP Portfolio, The Dow(R) Target
Dividend Portfolio, The Dow(R) DART 10 Portfolio and the First Trust Target
Focus Four Portfolio, are endorsed, sold, or promoted by Dow Jones, and Dow
Jones makes no representation regarding the advisability of investing in such
products.
"The NASDAQ-100(R)", "NASDAQ-100 Index(R)", "NASDAQ Stock Market(R)" and
"NASDAQ(R)" are registered trademarks of the Nasdaq OMX Group, Inc. (which with
its affiliates are the "Corporations") and have been licensed for use by First
Trust on behalf of the Registrant. The NASDAQ(R) Target 15 Portfolio and the
Target Managed VIP Portfolio have not been passed on by the Corporations as to
their legality or suitability. The NASDAQ(R) Target 15 Portfolio and the Target
Managed VIP Portfolio 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 REGISTRANT.
"Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", "Standard & Poor's 500", "500"
"S&P MidCap 400", "Standard & Poor's MidCap 400", "S&P SmallCap 600" and
"Standard & Poor's SmallCap 600" are trademarks of Standard & Poor's Financial
Services LLC and have been licensed for use by First Trust on behalf of the
Registrant. The S&P(R) Target 24 Portfolio, the Target Managed VIP Portfolio and
the First Trust Target Focus Four Portfolio are not sponsored, endorsed, sold or
promoted by Standard & Poor's and Standard & Poor's makes no representation
regarding the advisability of investing in the S&P(R) Target 24 Portfolio, the
Target Managed VIP Portfolio or the First Trust Target Focus Four Portfolio.
Please see the Statement of Additional Information which sets forth certain
additional disclaimers and limitations on behalf of Standard & Poor's.
"Value Line(R)", "The Value Line Investment Survey," and "Value Line
Timeliness(TM) Ranking System" are trademarks of Value Line Securities, Inc. or
Value Line Publishing, Inc. that have been licensed to First Trust on behalf of
the Registrant. The Target Managed VIP Portfolio, the Value Line(R) Target 25
Portfolio and the First Trust Target Focus Four Portfolio are not 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 the Target Managed VIP
Portfolio, the Value Line(R) Target 25 Portfolio or the First Trust Target Focus
Four Portfolio.
"NYSE(R)" and "NYSE International 100 Index(R)" are registered trademarks of
NYSE Group, Inc. and have been licensed for use for certain purposes by First
Trust. The First Trust Target Focus Four Portfolio, based in part on the NYSE
International 100 Index(R), is not sponsored, endorsed, sold or promoted by NYSE
Group, Inc. or any of its affiliates, and NYSE Group, Inc. and its affiliates
make no representation regarding the advisability of investing in such product.
NYSE Group, Inc. has no relationship to the First Trust Target Focus Four
Portfolio or First Trust other than the licensing of NYSE International 100
Index(R) and its registered trademarks for use in connection with the First
Trust Target Focus Four Portfolio.
Page 67
--------------------------------------------------------------------------------
BOARD OF TRUSTEES AND OFFICERS
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 2011 (UNAUDITED)
Information pertaining to the Trustees and officers of the Registrant is set
forth below. The statement of additional information includes additional
information about the Trustees and is available without charge, upon request, by
calling (800) 988-5891.
NUMBER OF
PORTFOLIOS IN
THE FIRST TRUST OTHER
NAME, ADDRESS, TERM OF OFFICE FUND COMPLEX TRUSTEESHIPS OR
DATE OF BIRTH AND AND LENGTH OF PRINCIPAL OCCUPATIONS OVERSEEN BY DIRECTORSHIPS
POSITION WITH THE REGISTRANT SERVICE (2) DURING PAST 5 YEARS TRUSTEE HELD BY TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
------------------------------------------------------------------------------------------------------------------------------------
Richard E. Erickson, Trustee o Indefinite Term Physician; President, Wheaton Orthopedics; 82 None
c/o First Trust Advisors L.P. Co-Owner and Co-Director (January 1996
120 East Liberty Drive, o Since Inception to May 2007), Sports Med Center for
Suite 400 Fitness; Limited Partner, Gundersen Real
Wheaton, IL 60187 Estate Limited Partnership; Member,
D.O.B.: 04/51 Sportsmed LLC
Thomas R. Kadlec, Trustee o Indefinite Term President (March 2010 to Present), Senior 82 Director of ADM
c/o First Trust Advisors L.P. Vice President and Chief Financial Officer Investor
120 East Liberty Drive, o Since March 2004 (May 2007 to March 2010), Vice President Services, Inc.
Suite 400 and Chief Financial Officer (1990 to May and ADM Investor
Wheaton, IL 60187 2007), ADM Investor Services, Inc. (Futures Services
D.O.B.: 11/57 Commission Merchant) International
Robert F. Keith, Trustee o Indefinite Term President (2003 to Present), Hibs 82 Director of
c/o First Trust Advisors L.P. Enterprises (Financial and Management Trust Company of
120 East Liberty Drive, o Since April 2007 Consulting) Illinois
Suite 400
Wheaton, IL 60187
D.O.B.: 11/56
Niel B. Nielson, Trustee o Indefinite Term President (June 2002 to Present), Covenant 82 Director of
c/o First Trust Advisors L.P. College Covenant
120 East Liberty Drive, o Since Inception Transport Inc.
Suite 400
Wheaton, IL 60187
D.O.B.: 03/54
------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
James A. Bowen, Trustee, o Indefinite Term Chief Executive Officer (December 2010 82 None
President, Chairman of the to Present), President (until December
Board and CEO(1) o Since Inception 2010), First Trust Advisors L.P. and First
120 East Liberty Drive, Trust Portfolios L.P.; Chairman of the
Suite 400 Board of Directors, BondWave LLC
Wheaton, IL 60187 (Software Development Company/
D.O.B.: 09/55 Investment Advisor) and Stonebridge
Advisors LLC (Investment Advisor)
---------------------
(1) Mr. Bowen is deemed an "interested person" of the Registrant due to his
position as Chief Executive Officer of First Trust Advisors L.P.,
investment advisor of the Registrant.
(2) The term "officer" means the president, vice president, secretary,
treasurer, controller or any other officer who performs a policy making
function.
Page 68
--------------------------------------------------------------------------------
BOARD OF TRUSTEES AND OFFICERS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 2011 (UNAUDITED)
NAME, ADDRESS POSITION AND OFFICES TERM OF OFFICE AND PRINCIPAL OCCUPATIONS
AND DATE OF BIRTH WITH REGISTRANT LENGTH OF SERVICE DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS WHO ARE NOT TRUSTEES(3)
------------------------------------------------------------------------------------------------------------------------------------
Mark R. Bradley Treasurer, Chief Financial o Indefinite Term Chief Operating Officer (December 2010 to Present)
120 E. Liberty Drive, Officer and Chief and Chief Financial Officer, First Trust Advisors
Suite 400 Accounting Officer o Since Inception L.P. and First Trust Portfolios L.P.; Chief
Wheaton, IL 60187 Financial Officer, BondWave LLC (Software
D.O.B.: 11/57 Development Company/Investment Advisor) and
Stonebridge Advisors LLC (Investment Advisor)
Susan M. Brix Assistant Vice President o Indefinite Term Representative, First Trust Portfolios L.P.;
120 E. Liberty Drive, Assistant Portfolio Manager, First Trust
Suite 400 o Since Inception Advisors L.P.
Wheaton, IL 60187
D.O.B.: 01/60
Erin E. Chapman Assistant Secretary o Indefinite Term Assistant General Counsel (October 2007 to
120 E. Liberty Drive, Present), Associate Counsel (March 2006 to October
Suite 400 o Since June 2009 2007), First Trust Advisors L.P. and First Trust
Wheaton, IL 60187 Portfolios L.P.; Associate Attorney (November 2003
D.O.B.: 08/76 to March 2006), Doyle & Bolotin, Ltd.
James M. Dykas Assistant Treasurer o Indefinite Term Controller (January 2011 to Present), Senior Vice
120 E. Liberty Drive, President (April 2007 to January 2011), Vice
Suite 400 o Since December 2005 President (January 2005 to April 2007), First
Wheaton, IL 60187 Trust Advisors L.P. and First Trust Portfolios
D.O.B.: 01/66 L.P.
Roseanne Gatta Assistant Secretary o Indefinite Term Board Liaison Associate (July 2010 to Present),
120 E. Liberty Drive, First Trust Advisors L.P. and First Trust
Suite 400 o Since March 2011 Portfolios L.P.;Assistant Vice President (February
Wheaton, IL 60187 2001 to July 2010), PNC Global Investment Services
D.O.B.: 07/55
W. Scott Jardine Secretary o Indefinite Term General Counsel, First Trust Advisors L.P., First
120 E. Liberty Drive, Trust Portfolios L.P. and BondWave LLC
Suite 400 o Since Inception (Software Development Company/Investment
Wheaton, IL 60187 Advisor): Secretary of Stonebridge Advisors LLC
D.O.B.: 05/60 (Investment Advisor)
Daniel J. Lindquist Vice President o Indefinite Term Senior Vice President (September 2005 to
120 E. Liberty Drive, Present), First Trust Advisors L.P. and First
Suite 400 o Since December 2005 Trust Portfolios L.P.
Wheaton, IL 60187
D.O.B.: 02/70
Coleen D. Lynch Assistant Vice President o Indefinite Term Assistant Vice President (January 2008 to
120 E. Liberty Drive, Present), First Trust Advisors L.P. and First
Suite 400 o Since July 2008 L.P.; Vice President (May 1998 to January 2008),
Wheaton, IL 60187 Trust Portfolios Van Kampen Asset Management and
D.O.B.: 07/58 Morgan Stanley Investment Management
Kristi A. Maher Assistant Secretary and o Indefinite Term Deputy General Counsel (May 2007 to Present),
120 E. Liberty Drive, Chief Compliance Officer o Assistant Secretary Assistant General Counsel (March 2004 to May
Suite 400 Since July 2004 2007), First Trust Advisors L.P. and First Trust
Wheaton, IL 60187 o Chief Compliance Officer Portfolios L.P.
D.O.B.: 12/66 Since January 2011
Roger F. Testin Vice President o Indefinite Term Senior Vice President, First Trust Advisors L.P.
120 E. Liberty Drive, and First Trust Portfolios L.P.
Suite 400 o Since September 2001
Wheaton, IL 60187
D.O.B.: 06/66
---------------------
(3) The term "officer" means the president, vice president, secretary,
treasurer, controller or any other officer who performs a policy making
function.
Page 69
PRIVACY POLICY
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 2011 (UNAUDITED)
PRIVACY POLICY
The open-end and closed-end funds advised by First Trust Advisors L.P. (each a
"Fund") value our relationship with you and consider your privacy an important
priority in maintaining that relationship. We are committed to protecting the
security and confidentiality of your personal information.
SOURCES OF INFORMATION
We collect nonpublic personal information about you from the following sources:
o Information we receive from you and your broker-dealer, investment
advisor or financial representative through interviews,
applications, agreements or other forms;
o Information about your transactions with us, our affiliates or
others;
o Information we receive from your inquiries by mail, e-mail or
telephone; and
o Information we collect on our website through the use of "cookies".
For example, we may identify the pages on our website that your
browser requests or visits.
INFORMATION COLLECTED
The type of data we collect may include your name, address, social security
number, age, financial status, assets, income, tax information, retirement and
estate plan information, transaction history, account balance, payment history,
investment objectives, marital status, family relationships and other personal
information.
DISCLOSURE OF INFORMATION
We do not disclose any nonpublic personal information about our customers or
former customers to anyone, except as permitted by law. In addition to using
this information to verify your identity (as required under law), the permitted
uses may also include the disclosure of such information to unaffiliated
companies for the following reasons:
o In order to provide you with products and services and to effect
transactions that you request or authorize, we may disclose your
personal information as described above to unaffiliated financial
service providers and other companies that perform administrative or
other services on our behalf, such as transfer agents, custodians
and trustees, or that assist us in the distribution of investor
materials such as trustees, banks, financial representatives, proxy
services, solicitors and printers.
o We may release information we have about you if you direct us to do
so, if we are compelled by law to do so, or in other legally limited
circumstances (for example to protect your account from fraud).
In addition, in order to alert you to our other financial products and services,
we may share your personal information with affiliates of the Fund.
PRIVACY ONLINE
We allow third-party companies, including AddThis, to collect certain anonymous
information when you visit our website. These companies may use non-personally
identifiable information during your visits to this and other websites in order
to provide advertisements about goods and services likely to be of greater
interest to you. These companies typically use a cookie, third party web beacon
or pixel tags, to collect this information. To learn more about this behavioral
advertising practice, you can visit www.networkadvertising.org.
CONFIDENTIALITY AND SECURITY
With regard to our internal security procedures, we restrict 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 go to www.ftportfolios.com, or contact us at
1-800-621-1675 (First Trust Portfolios) or 1-800-222-6822 (First Trust
Advisors).
Page 70
This Page Left Blank Intentionally.
This Page Left Blank Intentionally.
FIRST TRUST
INVESTMENT ADVISOR
First Trust Advisors L.P.
120 E. Liberty Drive, Suite 400
Wheaton, IL 60187
ADMINISTRATOR,
FUND ACCOUNTANT &
TRANSFER AGENT
BNY Mellon Investment Servicing (US) Inc.
301 Bellevue Parkway
Wilmington, DE 19809
CUSTODIAN
The Bank of New York Mellon
1 Wall Street
New York, NY 10286
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
111 S. Wacker Drive
Chicago, IL 60606
LEGAL COUNSEL
Chapman and Cutler LLP
111 W. Monroe Street
Chicago, IL 60603
[BLANK BACK COVER]
ITEM 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report,
has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by
the registrant or a third party.
(c) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial
officer, principal accounting officer or controller, or persons
performing similar functions, regardless of whether these
individuals are employed by the registrant or a third party, and
that relates to any element of the code of ethics description.
(d) The registrant has not granted any waivers, including an implicit
waiver, from a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial
officer, principal accounting officer or controller, or persons
performing similar functions, regardless of whether these
individuals are employed by the registrant or a third party, that
relates to one or more of the items set forth in paragraph (b) of
this item's instructions.
(e) Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
As of the end of the period covered by the report, the Registrant's board of
trustees has determined that Thomas R. Kadlec and Robert F. Keith are qualified
to serve as audit committee financial experts serving on its audit committee and
that each is "independent," as defined by Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees -- The aggregate fees billed for each of the last two fiscal
years for professional services rendered by the principal accountant for
the audit of the registrant's annual financial statements or services that
are normally provided by the accountant in connection with statutory and
regulatory filings or engagements were $136,000.00 for 2010 and
$136,000.00 for 2011.
(b) Audit-Related Fees (Registrant) -- The aggregate fees billed in each of
the last two fiscal years, for assurance and related services by the
principal accountant that are reasonably related to the performance of the
audit of the registrant's financial statements and are not reported under
paragraph (a) of this Item were $0 for 2010 and $0 for 2011.
Audit-Related Fees (Investment Adviser and Distributor) -- The
aggregate fees billed in each of the last two fiscal years for assurance and
related services by the principal accountant that are reasonably related to the
performance of the audit of the registrant's financial statements and are not
reported under paragraph (a) of this Item were $0 for 2010 and $0 for 2011.
(c) Tax Fees (Registrant) -- The aggregate fees billed in each of the last two
fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning to the
registrant were $0 for 2010 and $0 for 2011.
Tax Fees (Investment Adviser and Distributor) -- The aggregate fees
billed in each of the last two fiscal years for professional services rendered
by the principal accountant for tax compliance, tax advice, and tax planning to
the registrant's adviser and distributor were $0 for 2010 and $0 for 2011.
(d) All Other Fees (Registrant) -- The aggregate fees billed in each of the
last two fiscal years for products and services provided by the principal
accountant to the registrant, other than the services reported in
paragraphs (a) through (c) of this Item were $0 for 2010 and $0 for 2011.
All Other Fees (Investment Adviser and Distributor) -- The aggregate fees
billed in each of the last two fiscal years for products and services
provided by the principal accountant to the registrant's investment
adviser and distributor, other than the services reported in paragraphs
(a) through (c) of this Item were $0 for 2010 and $0 for 2011.
(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
Pursuant to its charter and its Audit and Non-Audit Services Pre-Approval
Policy, the Audit Committee (the "Committee") is responsible for the
pre-approval of all audit services and permitted non-audit services (including
the fees and terms thereof) to be performed for the registrant by its
independent auditors. The Chairman of the Committee is authorized to give such
pre-approvals on behalf of the Committee up to $25,000 and report any such
pre-approval to the full Committee.
The Committee is also responsible for the pre-approval of the independent
auditor's engagements for non-audit services with the registrant's adviser (not
including a sub-adviser whose role is primarily portfolio management and is
sub-contracted or overseen by another investment adviser) and any entity
controlling, controlled by or under common control with the investment adviser
that provides ongoing services to the registrant, if the engagement relates
directly to the operations and financial reporting of the registrant, subject to
the de minimis exceptions for non-audit services described in Rule 2-01 of
Regulation S-X. If the independent auditor has provided non-audit services to
the registrant's adviser (other than any sub-adviser whose role is primarily
portfolio management and is sub-contracted with or overseen by another
investment adviser) and any entity controlling, controlled by or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to its policies, the Committee
will consider whether the provision of such non-audit services is compatible
with the auditor's independence.
(e)(2) The percentage of services described in each of paragraphs (b) through
(d) for the registrant and the registrant's investment adviser of this
Item that were approved by the audit committee pursuant to the
pre-approval exceptions included in paragraph (c)(7)(i)(c) or paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X are as follows:
(b) 0%
(c) 0%
(d) 0%
(f) The percentage of hours expended on the principal accountant's engagement
to audit the registrant's financial statements for the most recent fiscal
year that were attributed to work performed by persons other than the
principal accountant's full-time, permanent employees was less than fifty
percent.
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under
common control with the adviser that provides ongoing services to the
registrant for 2010 were $0 for the registrant, $6,000.00 for the
registrant's investment adviser and $57,145.00 for the registrant's
distributor and for 2011 were $0 for the registrant, $6,200.00 for the
registrant's investment adviser and $59,063 for the registrant's
distributor.
(h) The registrant's audit committee of its Board of Trustees has determined
that the provision of non-audit services that were rendered to the
registrant's investment adviser (not including any sub-adviser whose role
is primarily portfolio management and is subcontracted with or overseen by
another investment adviser), and any entity controlling, controlled by, or
under common control with the investment adviser that provides ongoing
services to the registrant that were not pre-approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principal accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. INVESTMENTS.
(a) 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.
(b) Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)),
or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers, or
persons performing similar functions, have concluded that the registrant's
disclosure controls and procedures (as defined in Rule 30a-3(c) under the
Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR
270.30a-3(c))) are effective, as of a date within 90 days of the filing
date of the report that includes the disclosure required by this
paragraph, based on their evaluation of these controls and procedures
required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and
Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as
amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR
270.30a-3(d)) that occurred during the registrant's second fiscal quarter
of the period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant's internal control
over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section
302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section
906 of the Sarbanes- Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) First Defined Portfolio Fund, LLC
--------------------------------------------------------------------
By (Signature and Title)* /s/ Mark R. Bradley
------------------------------------------------------
Mark R. Bradley, President and Chief Executive Officer
(principal executive officer)
Date February 21, 2012
--------------------
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/ Mark R. Bradley
------------------------------------------------------
Mark R. Bradley, President and Chief Executive Officer
(principal executive officer)
Date February 21, 2012
--------------------
By (Signature and Title)* /s/ James M. Dykas
------------------------------------------------------
James M. Dykas, Treasurer, Chief Financial Officer
and Chief Accounting Officer
(principal financial officer)
Date February 21, 2012
--------------------
* Print the name and title of each signing officer under his or her signature.