CHAPMAN AND CUTLER LLP 111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
July 27, 2016
VIA EDGAR CORRESPONDENCE
Karen Rossotto, Esq.
Kathy Churko
Division of Investment Management
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Re: First Trust Exchange-Traded Fund VI
File No. 333-211163
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Dear Ms. Rossotto and Ms. Churko:
We received your oral comments via telephonic conference and voicemail on
July 21, 2016 and July 22, 2016 regarding Amendment No. 1 to the Registration
Statement on Form N-14 (the "Registration Statement") for First Trust
Exchange-Traded Fund VI (the "Trust") filed with respect to its series, First
Trust High Income ETF ("FTHI"), on July 5, 2016. Capitalized terms used but not
defined herein have the meanings ascribed to such terms in the Registration
Statement. Page number references included herein refer to the page numbers in
the EDGARized version of the Registration Statement as filed on July 5, 2016. We
are submitting via EDGAR this letter on behalf of the Trust, which is intended
to respond to your comments, and a revised, marked draft of the Registration
Statement is included for your review and convenience.
DISCLOSURE COMMENTS
No further comments.
ACCOUNTING AND FINANCIAL COMMENTS
COMMENT 1
In the Questions and Answers section on pages 2 and 3 of the Registration
Statement, in response to the question "Will Shareholders of the Funds have to
any pay any fees or expenses in connection with the Merger," please provide
Division of Investment Management
July 27, 2016
Page 2
estimates of the amounts of fees and expenses expected to be paid by each Fund
in connection with the Merger as of an assumed date.
RESPONSE TO COMMENT 1
The Registration Statement has been revised as requested by adding the
following text in the referenced Question and Answer:
Based on the amount of the estimated Merger-related fees and
expenses, the relative values of the Funds and the cost sharing
agreement, management of FAV estimates that FAV would incur
approximately $295,855 and FTHI would incur approximately $7,315
(net of reimbursement by First Trust of approximately $21,945) of
the fees and expenses associated with the Merger, respectively.
COMMENT 2
With respect to the Comparative Fees and Expenses table on page 14 of the
Registration Statement, please either provide 12b-1 plan fees in the table or
extend the expiration of the agreement not to pay any 12b-1 fees for at least 12
months from the effective date of the Registration Statement.
RESPONSE TO COMMENT 2
Management of FTHI has informed us that the agreement not to charge any
12b-1 fees has been extended until January 31, 2018 and the disclosure in the
Registration Statement has been revised accordingly to indicate such date.
COMMENT 3
Please provide an estimate of the aggregate realized gain or loss on FAV's
debt securities portfolio in connection with the discussion of the expected
liquidation of all of the debt securities in the portfolio prior to the Merger
in the first full paragraph on page 24 of the Registration Statement.
Division of Investment Management
July 27, 2016
Page 3
RESPONSE TO COMMENT 3
The Registration Statement has been revised as requested by adding the
following text in the referenced paragraph on page 24:
Management of FAV estimates that such sales will result in an
aggregate realized net loss of approximately $326,000 on the debt
securities in its portfolio.
COMMENT 4
An estimate of $1,000 in transaction costs to reposition and deleverage
FAV's portfolio is included in the same paragraph on page 24 of the Registration
Statement. Please provide an explanation in your response as to how the
liquidation of the debt securities can be accomplished for only $1,000.
RESPONSE TO COMMENT 4
Management of FAV has advised us that the sale of the debt securities of
FAV has and will be conducted through a platform on which there are no
transaction costs or commissions associated with selling the loans. However,
there is a cost of $19 to settle each loan sale and when applied against the
number of debt securities in the Portfolio, results in charges that have been
rounded to $1,000.
COMMENT 5
In the pro forma Capitalization table on page 28 of the Registration
Statement (as well as on page 10 of the Pro Forma Financial Statements in
Appendix IV of the Merger SAI), please advise in your response why two
offsetting adjustments of the same amount of $662,689 are shown in the Pro Forma
Adjustments column or revise the presentation.
RESPONSE TO COMMENT 5
The $662,689 unrealized loss is reclassified through the adjustments to a
realized loss since the loans are being liquidated and there will be no senior
loans when the Funds merge. In removing the senior loans from the portfolio, any
unrealized gains and losses on the securities should convert to realized gain
and losses. The offsetting adjustments show the movement from unrealized to
realized.
COMMENT 6
In the Statement of Assets and Liabilities appearing on page 10 of the Pro
Forma Financial Statements in Appendix IV to the Merger SAI, please explain why
Division of Investment Management
July 27, 2016
Page 4
all of the Payables of FAV are being brought forward to the Pro Forma Combined
Fund when there is a unitary fee in place at FTHI, the survivor in the Merger,
or otherwise revise the presentation.
RESPONSE TO COMMENT 6
The Payables in the Statement of Assets and Liabilities are current
Payables of FAV that are due and will be owing to the date of the Merger. The
payment of these Payables has no effect or impact on the overall Net Assets of
the Pro Forma Combined FTHI whether accounted for at FAV by debiting cash at FAV
prior to the Merger or at the Pro Forma Combined FTHI post-Merger. However, the
presentation has been revised to offset the Payables of FAV prior to the Merger
out of cash on hand at FAV and the FAV Payables no longer carry forward to the
Pro Forma Combined FTHI.
COMMENT 7
In Note 3 - Significant Accounting Policies to the Pro Forma Financial
Statements in Appendix IV to the Merger SAI, please clarify the disclosure on
page 15 to confirm that all of the securities held by FTHI post-Merger will be
considered Level 1 under the the fair value hierarchy and cross reference the
Pro Forma Portfolio of Investments or otherwise provide a full explanation of
the fair value hierarchy in the Notes.
RESPONSE TO COMMENT 7
The Registration Statement has been revised as requested by adding the
following text in Note 3:
All securities held by FTHI post-Merger will be considered Level 1
under the fair value hierarchy. Please see the Pro Forma Portfolio
of Investments.
COMMENT 8
In Note 4 - Reorganization to the Pro Forma Financial Statements in
Appendix IV to the Merger SAI, please provide estimates of the amounts of fees
and expenses to be paid by each Fund in connection with the Merger as of an
assumed date.
RESPONSE TO COMMENT 8
The Registration Statement has been revised as requested by adding the
following text in Note 4:
Based on the amount of the estimated Merger-related fees and
expenses, the relative values of the Funds and the cost sharing
Division of Investment Management
July 27, 2016
Page 5
agreement, management of FAV estimates that FAV would incur
approximately $295,855 and FTHI would incur approximately $7,315
(net of reimbursement by First Trust of approximately $21,945) of
the fees and expenses associated with the Merger, respectively.
TANDY ACKNOWLEDGEMENT
In connection with the Registration Statement, the Trust has advised us
that it acknowledges that:
o the Trust is responsible for the adequacy and accuracy of the
disclosure in the filing;
o staff comments or changes to disclosure in response to staff comments
in the filings reviewed by the staff do not foreclose the Securities
and Exchange Commission (the "Commission") from taking any action with
respect to the filing; and
o the Trust may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws of the United States.
Please call me at (312) 845-2978 or Bill Hermann at (312) 845-3895 if you
have additional comments or wish to discuss any of the foregoing responses.
Thank you.
Very truly yours,
CHAPMAN AND CUTLER LLP
By: /s/ Jonathan A. Koff
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Jonathan A. Koff
cc: W. Scott Jardine