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 811-22652 ----------- First Trust Variable Insurance Trust ---------------------------------------------------------- (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: June 30, 2017 ------------------- 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 TRUST VARIABLE INSURANCE TRUST SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED JUNE 30, 2017 -------------------------------------------------------------------------------- TABLE OF CONTENTS -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST SEMI-ANNUAL REPORT JUNE 30, 2017 Shareholder Letter.......................................................... 1 Portfolio Management........................................................ 2 Performance Summary and Portfolio Components First Trust/Dow Jones Dividend & Income Allocation Portfolio........... 5 First Trust Multi Income Allocation Portfolio.......................... 7 First Trust Dorsey Wright Tactical Core Portfolio...................... 9 Understanding Your Fund Expenses............................................ 11 Portfolio of Investments First Trust/Dow Jones Dividend & Income Allocation Portfolio........... 12 First Trust Multi Income Allocation Portfolio.......................... 37 First Trust Dorsey Wright Tactical Core Portfolio...................... 47 Statements of Assets and Liabilities........................................ 48 Statements of Operations.................................................... 49 Statements of Changes in Net Assets......................................... 50 Financial Highlights........................................................ 53 Notes to Financial Statements............................................... 56 Additional Information...................................................... 68 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"), Energy Income Partners, LLC ("EIP" or a "Sub-Advisor"), Stonebridge Advisors LLC ("Stonebridge" or a "Sub-Advisor") and their 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 any series of the First Trust Variable Insurance Trust (the "Trust") 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/or Sub-Advisors and their 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 series (individually called a "Fund" and collectively the "Funds") of the Trust will achieve its investment objectives. Each Fund is subject to market risk, which is the possibility that the market values of securities owned by the Fund will decline and that the value of the Fund shares may therefore be less than what you paid for them. Accordingly, you can lose money by investing in a Fund. See "Risk Considerations" in the Additional Information section of this report for a discussion of certain other risks of investing in the Funds. 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 Fund shares, when sold, may be worth more or less than their original cost. The Advisor may also periodically provide additional information on Fund performance on each Fund's webpage at http://www.ftportfolios.com. HOW TO READ THIS REPORT This report contains information that may help you evaluate your investment in each Fund. It includes details about each Fund and presents data and analysis that provide insight into each Fund's performance. The statistical information that follows may help you understand each Fund'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 and the Sub-Advisors 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 material risks of investing in each Fund are spelled out in the prospectus, the statement of additional information, this report and other Fund regulatory filings. -------------------------------------------------------------------------------- SHAREHOLDER LETTER -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST SEMI-ANNUAL LETTER FROM THE CHAIRMAN AND CEO JUNE 30, 2017 Dear Shareholders: First Trust Advisors L.P. ("First Trust") is pleased to provide you with this semi-annual report which contains detailed information and the financial statements for your investment in the First Trust Variable Insurance Trust. We encourage you to read this report and discuss it with your financial advisor. Six months into the year, with the lion's share of it governed by President Donald Trump's administration, the bull market in stocks continues. The President's pro-growth, pro-U.S. policies, while slow in coming, have at least created some optimism about the prospects for the U.S. economy, in our opinion. From Donald Trump's election on November 8, 2016 through June 30, 2017, the S&P 500(R) Index (the "Index") posted a total return of 14.79%, according to Bloomberg. During June, the Index closed its June 19, 2017 trading session at an all-time high of 2,453.46. The current bull market (measuring from March 9, 2009 through June 30, 2017) is the second longest in history. While we are optimistic about the U.S. economy, we are also well aware that no one can predict the future or know how an administration will affect markets and the economy in the future. Therefore, we stress the importance of maintaining a long-term perspective, as we have done since First Trust's inception over 25 years ago. Thank you for giving First Trust the opportunity to be a part of your investment plan through the First Trust Variable Insurance Trust. We value our relationship with you and will continue our relentless focus on bringing the types of investments that we believe could help you reach your financial goals. Sincerely, /s/ James A. Bowen James A. Bowen Chairman of the Board of Trustees Chief Executive Officer of First Trust Advisors L.P. Page 1 -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT -------------------------------------------------------------------------------- FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO SEMI-ANNUAL REPORT JUNE 30, 2017 ADVISOR First Trust Advisors L.P. ("First Trust") is a registered investment advisor based in Wheaton, IL and is the investment advisor to First Trust/Dow Jones Dividend & Income Allocation Portfolio (the "Fund"). In this capacity, First Trust is responsible for the selection and ongoing monitoring of the securities in the Fund's portfolio and certain other services necessary for the management of the Fund. PORTFOLIO MANAGEMENT TEAM Daniel J. Lindquist, Chairman of the Investment Committee and Managing Director, First Trust David G. McGarel, Chief Investment Officer, Chief Operating Officer and Managing Director, First Trust Jon C. Erickson, Senior Vice President, First Trust Roger F. Testin, Senior Vice President, First Trust Todd Larson, Vice President, First Trust Chris A. Peterson, Senior Vice President, First Trust Page 2 -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST MULTI INCOME ALLOCATION PORTFOLIO SEMI-ANNUAL REPORT JUNE 30, 2017 ADVISOR First Trust is a registered investment advisor based in Wheaton, IL and is the investment advisor to First Trust Multi Income Allocation Portfolio (the "Fund"). First Trust manages the Fund's fixed income investments, as well as a portion of the Fund's equity investments. SUB-ADVISORS Stonebridge Advisors LLC ("Stonebridge" or a "Sub-Advisor") is a sub-advisor to the Fund and is a registered investment advisor based in Wilton, CT. Stonebridge specializes in the management of preferred securities and North American equity income securities. Energy Income Partners, LLC ("EIP" or a "Sub-Advisor"), is a sub-advisor to the Fund and is a registered investment advisor based in Westport, CT. EIP was founded in 2003 to provide professional asset management services in the area of energy-related master limited partnerships ("MLPs") and other high-payout securities such as pipeline companies, power utilities and Canadian income equities. PORTFOLIO MANAGEMENT TEAMS FIRST TRUST Daniel J. Lindquist, Chairman of the Investment Committee and Managing Director, First Trust David G. McGarel, Chief Investment Officer, Chief Operating Officer and Managing Director, First Trust Jon C. Erickson, Senior Vice President, First Trust Roger F. Testin, Senior Vice President, First Trust William Housey, Senior Vice President, First Trust Chris A. Peterson, Senior Vice President, First Trust Todd Larson, Vice President, First Trust James Snyder, Senior Vice President, First Trust Jeremiah Charles, Senior Vice President, First Trust STONEBRIDGE Scott Fleming, Portfolio Manager, President and Chief Investment Officer of Stonebridge Robert Wolf, Senior Portfolio Manager and Senior Vice President of Stonebridge EIP James J. Murchie, Portfolio Manager, Founder, Principal and CEO of EIP Eva Pao, Co-Portfolio Manager, Principal of EIP John Tysseland, Co-Portfolio Manager, Principal of EIP Page 3 -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST DORSEY WRIGHT TACTICAL CORE PORTFOLIO SEMI-ANNUAL REPORT JUNE 30, 2017 ADVISOR First Trust is a registered investment advisor based in Wheaton, IL and is the investment advisor to First Trust Dorsey Wright Tactical Core Portfolio (the "Fund"). In this capacity, First Trust is responsible for the selection and ongoing monitoring of the securities in the Fund's portfolio and certain other services necessary for the management of the Fund. PORTFOLIO MANAGEMENT TEAM Daniel J. Lindquist, Chairman of the Investment Committee and Managing Director, First Trust David G. McGarel, Chief Investment Officer, Chief Operating Officer and Managing Director, First Trust Jon C. Erickson, Senior Vice President, First Trust Roger F. Testin, Senior Vice President, First Trust Todd Larson, Vice President, First Trust Chris A. Peterson, Senior Vice President, First Trust Page 4 -------------------------------------------------------------------------------- PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS -------------------------------------------------------------------------------- FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO SEMI-ANNUAL REPORT JUNE 30, 2017 (UNAUDITED) ------------------------------------------------------------------------------------------------------------------------------------ RETURN COMPARISON PERIOD ENDED JUNE 30, 2017 1 YEAR 5 YEAR SINCE INCEPTION INCEPTION SIX MONTH ANNUAL AVERAGE ANNUAL AVERAGE ANNUAL DATE TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO - CLASS I 5/1/12 5.53% 10.71% 8.81% 8.55% Blended Benchmark (a) 6.35% 10.19% 9.29% 8.83% Bloomberg Barclays U.S. Corporate Investment-Grade Index (b) 3.80% 2.28% 3.96% 4.11% Russell 3000(R) Index (c) 8.93% 18.51% 14.58% 13.42% Secondary Blended Benchmark (d) 6.27% 9.69% 9.43% 8.97% Dow Jones Equal Weight U.S. Issued Corporate Bond Index(SM) (e) 3.51% 1.27% 4.07% 4.24% Dow Jones U.S. Total Stock Market Index(SM) (f) 8.97% 18.51% 14.50% 13.33% ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ 1 YEAR SINCE INCEPTION INCEPTION SIX MONTH ANNUAL AVERAGE ANNUAL DATE TOTAL RETURN TOTAL RETURN TOTAL RETURN FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO - CLASS II 5/1/14 5.73% 11.04% 8.13% Blended Benchmark (a) 6.35% 10.19% 7.09% Bloomberg Barclays U.S. Corporate Investment-Grade Index (b) 3.80% 2.28% 3.78% Russell 3000(R) Index (c) 8.93% 18.51% 10.20% Secondary Blended Benchmark (d) 6.27% 9.69% 7.27% Dow Jones Equal Weight U.S. Issued Corporate Bond Index(SM) (e) 3.51% 1.27% 3.93% Dow Jones U.S. Total Stock Market Index(SM) (f) 8.97% 18.51% 10.12% ------------------------------------------------------------------------------------------------------------------------------------ (a) The Blended Benchmark returns are a 50/50 split between the Russell 3000(R) Index and the Bloomberg Barclays U.S. Corporate Investment-Grade Index returns. (b) Bloomberg Barclays U.S. Corporate Investment-Grade Index measures the performance of investment grade U.S. corporate bonds. The index includes all publicly issued, dollar-denominated corporate bonds with a minimum of $250 million par outstanding that are investment grade-rated (Baa3/BBB- or higher). The index excludes bonds having less than one year to final maturity as well as floating rate bonds, non-registered private placements, structured notes, hybrids, and convertible securities. (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). (d) The Secondary Blended Benchmark return is a 50/50 split between the Dow Jones U.S. Total Stock Market Index(SM) and the Dow Jones Equal Weight U.S. Issued Corporate Bond Index(SM) returns. (e) The Dow Jones Equal Weight U.S. Issued Corporate Bond Index(SM) measures the return of readily tradable, high-grade U.S. corporate bonds. The index includes an equally weighted basket of 96 recently issued investment-grade corporate bonds with laddered maturities. (The index reflects no deduction for fees, expenses or taxes). (f) The Dow Jones U.S. Total Stock Market Index(SM) measures all U.S. equity securities that have readily available prices. (The index reflects no deduction for fees, expenses or taxes). The returns for the Fund 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. PERFORMANCE OF A $10,000 INITIAL INVESTMENT May 1, 2012 - June 30, 2017 Bloomberg Dow Jones First Trust/Dow Barclays U.S. Equal Weight Dow Jones Jones Dividend & Corporate Russell Secondary U.S. Issued U.S. Total Income Allocation Blended Investment-Grade 3000(R) Blended Corporate Bond Stock Market Portfolio - Class I Benchmark Index Index Benchmark Index(SM) Index(SM) 5/1/2012 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 6/30/2012 10,020 9,925 10,135 9,701 9,933 10,152 9,702 12/31/2012 10,438 10,495 10,636 10,331 10,519 10,677 10,322 6/30/2013 10,904 11,026 10,273 11,784 11,047 10,290 11,786 12/31/2013 11,770 12,055 10,472 13,798 12,088 10,523 13,777 6/30/2014 12,318 12,823 11,067 14,756 12,844 11,083 14,733 12/31/2014 12,951 13,269 11,254 15,531 13,336 11,336 15,493 6/30/2015 12,989 13,350 11,150 15,832 13,409 11,215 15,790 12/31/2015 12,962 13,286 11,177 15,606 13,402 11,315 15,559 6/30/2016 13,806 14,046 12,035 16,171 14,214 12,239 16,110 12/31/2017 14,484 14,554 11,859 17,592 14,672 11,975 17,521 6/30/2017 15,285 15,478 12,310 19,163 15,592 12,395 19,093 Page 5 -------------------------------------------------------------------------------- PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO SEMI-ANNUAL REPORT JUNE 30, 2017 (UNAUDITED) ------------------------------------------------------ % OF TOTAL TOP EQUITY HOLDINGS INVESTMENTS ------------------------------------------------------ National Instruments Corp. 0.5% IDEX Corp. 0.4 Wyndham Worldwide Corp. 0.4 Delta Air Lines, Inc. 0.4 Best Buy Co., Inc. 0.4 PS Business Parks, Inc. 0.4 FNF Group 0.4 Intuit, Inc. 0.4 First American Financial Corp. 0.4 Quest Diagnostics, Inc. 0.4 ------------------------------------------------------ Total 4.1% ====== ------------------------------------------------------ % OF TOTAL TOP FIXED-INCOME HOLDINGS BY ISSUER INVESTMENTS ------------------------------------------------------ Citigroup, Inc. 2.0% Goldman Sachs Group (The), Inc. 1.9 Wells Fargo & Co. 1.7 JPMorgan Chase & Co. 1.5 Morgan Stanley 1.5 Bank of America Corp. 1.4 U.S. Government 1.1 Verizon Communications, Inc. 0.9 AT&T, Inc. 0.9 UnitedHealth Group, Inc. 0.8 ------------------------------------------------------ Total 13.7% ====== ------------------------------------------------------ % OF TOTAL FIXED-INCOME CREDIT QUALITY(1) INVESTMENTS ------------------------------------------------------ AAA 4.9% AA+ 1.6 AA 4.3 AA- 8.9 A+ 12.4 A 26.2 A- 14.8 BBB+ 8.5 BBB 11.3 BBB- 6.2 A-1 (short-term) 0.8 A-2 (short-term) 0.1 ------------------------------------------------------ Total 100.0% ====== ------------------------------------------------------ % OF TOTAL SECTOR ALLOCATION INVESTMENTS ------------------------------------------------------ Common Stocks: Financials 15.7% Industrials 13.3 Information Technology 8.1 Consumer Discretionary 7.2 Consumer Staples 6.0 Materials 2.8 Health Care 2.7 Energy 0.7 Real Estate 0.3 ------------------------------------------------------ Total Common Stocks 56.8 ------------------------------------------------------ Corporate Bonds & Notes: Financials 14.4 Utilities 5.2 Energy 4.0 Information Technology 3.3 Industrials 3.3 Health Care 2.7 Consumer Discretionary 2.4 Consumer Staples 2.0 Telecommunication Services 1.8 Materials 0.7 Real Estate 0.0* ------------------------------------------------------ Total Corporate Bonds & Notes 39.8 ------------------------------------------------------ Foreign Corporate Bonds & Notes: Financials 0.9 Energy 0.5 Health Care 0.2 Materials 0.2 Telecommunication Services 0.1 ------------------------------------------------------ Total Foreign Corporate Bonds & Notes 1.9 ------------------------------------------------------ U.S. Government Bonds & Notes 1.1 ------------------------------------------------------ Commercial Paper: Utilities 0.3 Energy 0.1 ------------------------------------------------------ Total Commercial Paper 0.4 ------------------------------------------------------ Total 100.0% ====== * Amount is less than 0.1%. (1) The credit quality information presented reflects the ratings assigned by one or more nationally recognized statistical rating organizations (NRSROs), including Standard & Poor's Ratings Group, a division of the McGraw-Hill Companies, Inc., Moody's Investors Service, Inc., Fitch Ratings or a comparably rated NRSRO. For situations in which a security is rated by more than one NRSRO and ratings are not equivalent, the highest ratings are used. Sub-investment grade ratings are those rated BB+/Ba1 or lower. Investment grade ratings are those rated BBB-/Baa3 or higher. The credit ratings shown relate to the creditworthiness of the issuers of the underlying securities in the Fund, and not to the Fund or its shares. Credit ratings are subject to change. Page 6 -------------------------------------------------------------------------------- PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST MULTI INCOME ALLOCATION PORTFOLIO SEMI-ANNUAL REPORT JUNE 30, 2017 (UNAUDITED) ------------------------------------------------------------------------------------------------------------------------------------ RETURN COMPARISON PERIOD ENDED JUNE 30, 2017 1 YEAR SINCE INCEPTION INCEPTION SIX MONTH AVERAGE ANNUAL AVERAGE ANNUAL DATE TOTAL RETURN TOTAL RETURN TOTAL RETURN FIRST TRUST MULTI INCOME ALLOCATION PORTFOLIO - CLASS I 5/1/14 3.44% 4.93% 4.34% FIRST TRUST MULTI INCOME ALLOCATION PORTFOLIO - CLASS II 5/1/14 3.57% 5.29% 4.58% Broad Blended Benchmark (a) 4.90% 6.92% 5.77% Bloomberg Barclays U.S. Aggregate Bond Index (b) 2.27% -0.31% 2.67% Russell 3000(R) Index (c) 8.93% 18.51% 10.20% Multi Asset Class Blended Benchmark (d) 3.11% 5.16% 3.93% ------------------------------------------------------------------------------------------------------------------------------------ (a) The Broad Blended Benchmark return is split between the Bloomberg Barclays U.S. Aggregate Bond Index (60%) and the Russell 3000(R) Index (40%). (b) The Bloomberg Barclays U.S. Aggregate Bond Index represents the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. Bonds included in the index are U.S. dollar denominated; have a fixed rate coupon; carry an investment-grade rating; have at least one year to final maturity; and meet certain criteria for minimum amount of outstanding par value. (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). (d) The Multi Asset Class Blended Benchmark is weighted to include nine indexes: Russell 3000(R) Index (15%), BofA Merrill Lynch Fixed Rate Preferred Securities Index (8%), Alerian MLP Index (15%), S&P U.S. REIT Index (15%), BofA Merrill Lynch U.S. High Yield Index (8%), S&P/LSTA Leveraged Loan Index (15%), Bloomberg Barclays U.S. Corporate Investment-Grade Index (8%), BofA Merrill Lynch U.S. MBS Index (8%), and BofA Merrill Lynch U.S. Inflation-Linked Treasury Index (8%). The returns for the Fund 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. PERFORMANCE OF A $10,000 INITIAL INVESTMENT May 1, 2014 - June 30, 2017 First Trust Multi Broad Bloomberg Income Allocation Blended Barclays U.S. Russell 3000(R) Multi Asset Class Portfolio -- Class I Benchmark Aggregate Index Index Blended Benchmark 5/1/2014 $10,000 $10,000 $10,000 $10,000 $10,000 6/30/2014 10,320 10,245 10,096 10,470 10,334 12/31/2014 10,457 10,582 10,295 11,020 10,428 6/30/2015 10,383 10,667 10,284 11,234 10,278 12/31/2015 10,119 10,662 10,354 11,073 9,933 6/30/2016 10,900 11,168 10,904 11,474 10,744 12/31/2016 11,057 11,384 10,628 12,483 10,958 6/30/2017 11,437 11,942 10,869 13,598 11,299 Page 7 -------------------------------------------------------------------------------- PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST MULTI INCOME ALLOCATION PORTFOLIO SEMI-ANNUAL REPORT JUNE 30, 2017 (UNAUDITED) ------------------------------------------------------ % OF TOTAL TOP 10 HOLDINGS INVESTMENTS ------------------------------------------------------ First Trust Senior Loan Fund 14.9% First Trust Preferred Securities and Income ETF 9.2 iShares iBoxx $ Investment Grade Corporate Bond ETF 6.9 First Trust Tactical High Yield ETF 6.0 iShares Floating Rate Bond ETF 1.3 Enterprise Products Partners, L.P. 1.3 First Trust Low Duration Opportunities ETF 1.2 TransCanada Corp. 0.8 TC Pipelines, L.P. 0.8 Spectra Energy Partners, L.P. 0.7 ------------------------------------------------------ Total 43.1% ====== ------------------------------------------------------ % OF TOTAL SECTOR ALLOCATION INVESTMENTS ------------------------------------------------------ Exchange-Traded Funds 40.0% ------------------------------------------------------ Common Stocks: Financials 3.3 Information Technology 3.3 Industrials 3.0 Energy 3.0 Health Care 2.9 Utilities 2.4 Consumer Discretionary 1.9 Consumer Staples 1.0 Materials 0.6 Telecommunication Services 0.3 ------------------------------------------------------ Total Common Stocks 21.7 ------------------------------------------------------ Real Estate Investment Trusts: Financials 12.1 ------------------------------------------------------ Total Real Estate Investment Trusts 12.1 ------------------------------------------------------ Master Limited Partnerships: Energy 8.2 Utilities 0.7 Materials 0.2 ------------------------------------------------------ Total Master Limited Partnerships 9.1 ------------------------------------------------------ U.S. Government Bonds & Notes 8.9 ------------------------------------------------------ U.S. Government Agency Mortgage-Backed Securities 8.0 ------------------------------------------------------ Mortgage-Backed Securities 0.2 ------------------------------------------------------ Asset-Backed Securities 0.0* ------------------------------------------------------ Total 100.0% ====== * Amount is less than 0.1%. Page 8 -------------------------------------------------------------------------------- PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST DORSEY WRIGHT TACTICAL CORE PORTFOLIO SEMI-ANNUAL REPORT JUNE 30, 2017 (UNAUDITED) ------------------------------------------------------------------------------------------------------------------------------------ RETURN COMPARISON PERIOD ENDED JUNE 30, 2017 1 YEAR SINCE INCEPTION INCEPTION SIX MONTH ANNUAL AVERAGE ANNUAL DATE TOTAL RETURN TOTAL RETURN TOTAL RETURN FIRST TRUST DORSEY WRIGHT TACTICAL CORE PORTFOLIO - CLASS I 10/30/15 7.35% 9.85% 4.57% FIRST TRUST DORSEY WRIGHT TACTICAL CORE PORTFOLIO - CLASS II 10/30/15 7.60% 9.90% 4.73% Broad Blended Benchmark (a) 6.48% 10.33% 8.27% Bloomberg Barclays U.S. Aggregate Bond Index (b) 2.27% -0.31% 2.59% S&P 500(R) Index (c) 9.34% 17.90% 12.02% ------------------------------------------------------------------------------------------------------------------------------------ (a) The Broad Blended Benchmark return is split between Bloomberg Barclays U.S. Aggregate Bond Index (40%) and the S&P 500(R) Index (60%). (b) The Bloomberg Barclays U.S. Aggregate Bond Index represents the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. Bonds included in the index are U.S. dollar denominated; have a fixed rate coupon; carry an investment-grade rating; have at least one year to final maturity; and meet certain criteria for minimum amount of outstanding par value. (The index reflects no deduction for fees, expenses or taxes). (c) The S&P 500(R) Index is an unmanaged index of 500 stocks used to measure large-cap U.S. stock market performance. (The index reflects no deduction for fees, expenses or taxes). The returns for the Fund 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. PERFORMANCE OF A $10,000 INITIAL INVESTMENT October 30, 2015 - June 30, 2017 First Trust Dorsey Wright Tactical Core Portfolio - Broad Blended Bloomberg Barclays S&P 500(R) Class I Benchmark U.S. Aggregate Index Index 10/30/15 $10,000 $10,000 $10,000 $10,000 12/31/15 9,940 9,900 9,941 9,872 6/30/16 9,807 10,347 10,469 10,251 12/31/16 10,035 10,722 10,204 11,053 6/30/2017 10,773 11,417 10,436 12,085 Page 9 -------------------------------------------------------------------------------- PERFORMANCE SUMMARY AND PORTFOLIO COMPONENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST DORSEY WRIGHT TACTICAL CORE PORTFOLIO SEMI-ANNUAL REPORT JUNE 30, 2017 (UNAUDITED) ------------------------------------------------------ % OF TOTAL TOP 10 HOLDINGS INVESTMENTS ------------------------------------------------------ First Trust Mid Cap Core AlphaDEX(R) Fund 10.4% First Trust Small Cap Growth AlphaDEX(R) Fund 10.3 First Trust Large Cap Growth AlphaDEX(R) Fund 10.0 First Trust Dow Jones Internet Index Fund 10.0 First Trust NASDAQ-100-Technology Sector Index Fund 9.9 First Trust Utilities AlphaDEX(R) Fund 8.7 First Trust Industrials/Producer Durables AlphaDEX(R) Fund 8.5 First Trust Nasdaq Bank ETF 8.5 iShares Core U.S. Aggregate Bond ETF 5.5 SPDR Bloomberg Barclays Convertible Securities ETF 3.5 ------------------------------------------------------ Total 85.3% ====== Page 10 FIRST TRUST VARIABLE INSURANCE TRUST UNDERSTANDING YOUR FUND EXPENSES JUNE 30, 2017 (UNAUDITED) As a shareholder of First Trust/Dow Jones Dividend & Income Allocation Portfolio, First Trust Multi Income Allocation Portfolio or First Trust Dorsey Wright Tactical Core Portfolio (each a "Fund" and collectively, the "Funds"), you incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees, if any; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in U.S. dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held through the six-month period ended June 30, 2017. 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 the 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 each Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not each Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing cost of investing in the Funds 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 contingent deferred sales charges. 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 ANNUAL- ACCOUNT ACCOUNT PERIOD ACCOUNT ACCOUNT PERIOD IZED VALUE VALUE 1/1/2017- VALUE VALUE 1/1/2017- EXPENSE 1/1/2017 6/30/2017 6/30/2017 (a) 1/1/2017 6/30/2017 6/30/2017 (a) RATIO (b) -------------- ---------- -------------- -------------- ---------- -------------- ---------- First Trust/Dow Jones Dividend & Income Allocation Portfolio Class I................... $1,000.00 $1,055.30 $ 6.12 $1,000.00 $1,018.84 $ 6.01 1.20% Class II.................. $1,000.00 $1,057.30 $ 4.85 $1,000.00 $1,020.08 $ 4.76 0.95% First Trust Multi Income Allocation Portfolio Class I................... $1,000.00 $1,034.40 $ 4.19 $1,000.00 $1,020.68 $ 4.16 0.83% Class II.................. $1,000.00 $1,035.70 $ 2.93 $1,000.00 $1,021.92 $ 2.91 0.58% First Trust Dorsey Wright Tactical Core Portfolio Class I................... $1,000.00 $1,073.50 $ 3.86 $1,000.00 $1,021.08 $ 3.76 0.75% Class II.................. $1,000.00 $1,076.00 $ 2.57 $1,000.00 $1,022.32 $ 2.51 0.50% (a) Expenses are equal to the annualized expense ratio as indicated in the table, multiplied by the average account value over the period (January 1, 2017 through June 30, 2017), multiplied by 181/365 (to reflect the one-half year period). (b) The expense ratios reflect an expense cap. First Trust Multi Income Allocation Portfolio expense ratios reflect an additional waiver. See Note 3 in the Notes to Financial Statements. Page 11 FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 2017 (UNAUDITED) SHARES DESCRIPTION VALUE ----------- ----------------------------------------------------------------------------- ------------- COMMON STOCKS - 56.4% AEROSPACE & DEFENSE - 2.3% 12,678 General Dynamics Corp........................................................ $ 2,511,512 11,850 Huntington Ingalls Industries, Inc........................................... 2,205,996 8,867 Lockheed Martin Corp......................................................... 2,461,568 9,981 Northrop Grumman Corp........................................................ 2,562,223 15,561 Raytheon Co.................................................................. 2,512,790 24,427 Rockwell Collins, Inc........................................................ 2,566,789 ------------- 14,820,878 ------------- AIR FREIGHT & LOGISTICS - 0.7% 30,706 CH Robinson Worldwide, Inc................................................... 2,108,888 42,011 Expeditors International of Washington, Inc.................................. 2,372,781 ------------- 4,481,669 ------------- AIRLINES - 0.4% 51,638 Delta Air Lines, Inc......................................................... 2,775,026 ------------- AUTO COMPONENTS - 0.4% 16,764 Lear Corp.................................................................... 2,381,829 ------------- BANKS - 2.5% 42,655 Banner Corp.................................................................. 2,410,434 62,987 Cathay General Bancorp....................................................... 2,390,357 91,634 CenterState Banks, Inc....................................................... 2,278,021 42,260 Commerce Bancshares, Inc..................................................... 2,401,636 59,856 First Interstate BancSystem, Inc............................................. 2,226,643 26,561 South State Corp............................................................. 2,276,278 46,082 U.S. Bancorp................................................................. 2,392,577 ------------- 16,375,946 ------------- BEVERAGES - 1.1% 55,921 Coca-Cola (The) Co........................................................... 2,508,057 24,236 Dr. Pepper Snapple Group, Inc................................................ 2,208,142 21,216 PepsiCo, Inc................................................................. 2,450,236 ------------- 7,166,435 ------------- BUILDING PRODUCTS - 0.8% 46,390 A.O. Smith Corp.............................................................. 2,613,149 39,002 Fortune Brands Home & Security, Inc.......................................... 2,544,490 ------------- 5,157,639 ------------- CAPITAL MARKETS - 2.3% 6,186 BlackRock, Inc............................................................... 2,613,028 19,977 CME Group, Inc............................................................... 2,501,919 14,392 FactSet Research Systems, Inc................................................ 2,391,662 56,321 Franklin Resources, Inc...................................................... 2,522,618 39,642 Intercontinental Exchange, Inc............................................... 2,613,201 34,823 T. Rowe Price Group, Inc..................................................... 2,584,215 ------------- 15,226,643 ------------- CHEMICALS - 1.5% 17,543 Air Products & Chemicals, Inc................................................ 2,509,701 17,908 International Flavors & Fragrances, Inc...................................... 2,417,580 5,235 NewMarket Corp............................................................... 2,410,613 7,651 Sherwin-Williams (The) Co.................................................... 2,685,195 ------------- 10,023,089 ------------- Page 12 See Notes to Financial Statements FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) SHARES DESCRIPTION VALUE ----------- ----------------------------------------------------------------------------- ------------- COMMON STOCKS (CONTINUED) COMMERCIAL SERVICES & SUPPLIES - 0.8% 18,756 Cintas Corp.................................................................. $ 2,364,006 63,920 Rollins, Inc................................................................. 2,602,183 ------------- 4,966,189 ------------- COMMUNICATIONS EQUIPMENT - 0.3% 70,216 Cisco Systems, Inc........................................................... 2,197,761 ------------- CONTAINERS & PACKAGING - 0.8% 30,827 AptarGroup, Inc.............................................................. 2,677,633 29,447 Avery Dennison Corp.......................................................... 2,602,232 ------------- 5,279,865 ------------- DISTRIBUTORS - 0.4% 25,683 Genuine Parts Co............................................................. 2,382,355 ------------- ELECTRICAL EQUIPMENT - 1.5% 43,885 AMETEK, Inc.................................................................. 2,658,115 39,649 Emerson Electric Co.......................................................... 2,363,873 19,769 Hubbell, Inc................................................................. 2,237,258 15,242 Rockwell Automation, Inc..................................................... 2,468,594 ------------- 9,727,840 ------------- ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 2.4% 33,345 Amphenol Corp., Class A...................................................... 2,461,528 87,898 Corning, Inc................................................................. 2,641,335 65,416 FLIR Systems, Inc............................................................ 2,267,318 14,840 Littelfuse, Inc.............................................................. 2,448,600 72,889 National Instruments Corp.................................................... 2,931,596 31,834 TE Connectivity, Ltd......................................................... 2,504,699 ------------- 15,255,076 ------------- EQUITY REAL ESTATE INVESTMENT TRUSTS - 0.8% 20,679 PS Business Parks, Inc....................................................... 2,737,693 10,841 Public Storage............................................................... 2,260,674 ------------- 4,998,367 ------------- FOOD & STAPLES RETAILING - 1.1% 14,151 Costco Wholesale Corp........................................................ 2,263,170 30,233 CVS Health Corp.............................................................. 2,432,547 32,927 Wal-Mart Stores, Inc......................................................... 2,491,915 ------------- 7,187,632 ------------- FOOD PRODUCTS - 2.2% 40,218 General Mills, Inc........................................................... 2,228,077 68,533 Hormel Foods Corp............................................................ 2,337,661 17,507 J&J Snack Foods Corp......................................................... 2,312,149 24,329 McCormick & Co., Inc......................................................... 2,372,321 22,855 Sanderson Farms, Inc......................................................... 2,643,181 38,458 Tyson Foods, Inc., Class A................................................... 2,408,624 ------------- 14,302,013 ------------- HEALTH CARE EQUIPMENT & SUPPLIES - 0.7% 27,748 Danaher Corp................................................................. 2,341,654 18,027 Stryker Corp................................................................. 2,501,787 ------------- 4,843,441 ------------- See Notes to Financial Statements Page 13 FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) SHARES DESCRIPTION VALUE ----------- ----------------------------------------------------------------------------- ------------- COMMON STOCKS (CONTINUED) HEALTH CARE PROVIDERS & SERVICES - 1.2% 29,104 Cardinal Health, Inc......................................................... $ 2,267,784 24,171 Quest Diagnostics, Inc....................................................... 2,686,848 14,471 UnitedHealth Group, Inc...................................................... 2,683,213 ------------- 7,637,845 ------------- HOTELS, RESTAURANTS & LEISURE - 1.5% 37,458 Cheesecake Factory (The), Inc................................................ 1,884,138 14,904 Cracker Barrel Old Country Store, Inc........................................ 2,492,694 40,645 Starbucks Corp............................................................... 2,370,010 28,157 Wyndham Worldwide Corp....................................................... 2,827,244 ------------- 9,574,086 ------------- HOUSEHOLD DURABLES - 0.4% 71,248 DR Horton, Inc............................................................... 2,463,043 ------------- HOUSEHOLD PRODUCTS - 0.7% 47,589 Church & Dwight Co., Inc..................................................... 2,468,917 26,414 Procter & Gamble (The) Co.................................................... 2,301,980 ------------- 4,770,897 ------------- INDUSTRIAL CONGLOMERATES - 1.1% 12,404 3M Co........................................................................ 2,582,389 22,303 Carlisle Cos., Inc........................................................... 2,127,706 19,007 Honeywell International, Inc................................................. 2,533,443 ------------- 7,243,538 ------------- INSURANCE - 10.3% 32,773 AFLAC, Inc................................................................... 2,545,807 29,125 Allstate (The) Corp.......................................................... 2,575,815 24,873 American Financial Group, Inc................................................ 2,471,630 19,995 Aon PLC...................................................................... 2,658,335 35,006 Argo Group International Holdings, Ltd....................................... 2,121,364 45,597 Aspen Insurance Holdings, Ltd................................................ 2,273,010 24,806 Assurant, Inc................................................................ 2,572,134 35,406 Axis Capital Holdings, Ltd................................................... 2,289,352 56,886 Brown & Brown, Inc........................................................... 2,450,080 17,419 Chubb, Ltd................................................................... 2,532,374 32,840 Cincinnati Financial Corp.................................................... 2,379,258 53,732 CNA Financial Corp........................................................... 2,619,435 10,150 Everest Re Group, Ltd........................................................ 2,584,088 60,419 First American Financial Corp................................................ 2,700,125 60,949 FNF Group.................................................................... 2,732,344 49,370 Hartford Financial Services (The) Group, Inc................................. 2,595,381 32,119 Marsh & McLennan Cos., Inc................................................... 2,503,997 37,605 Principal Financial Group, Inc............................................... 2,409,352 39,391 ProAssurance Corp............................................................ 2,394,973 60,574 Progressive (The) Corp....................................................... 2,670,708 18,690 Reinsurance Group of America, Inc............................................ 2,399,609 16,408 RenaissanceRe Holdings, Ltd.................................................. 2,281,532 30,807 Torchmark Corp............................................................... 2,356,736 19,689 Travelers Cos., Inc.......................................................... 2,491,249 42,088 Validus Holdings, Ltd........................................................ 2,187,313 Page 14 See Notes to Financial Statements FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) SHARES DESCRIPTION VALUE ----------- ----------------------------------------------------------------------------- ------------- COMMON STOCKS (CONTINUED) INSURANCE (CONTINUED) 33,603 W.R. Berkley Corp............................................................ $ 2,324,320 59,542 XL Group, Ltd................................................................ 2,607,940 ------------- 66,728,261 ------------- IT SERVICES - 3.4% 19,797 Accenture PLC, Class A....................................................... 2,448,493 38,914 Amdocs, Ltd.................................................................. 2,508,397 23,179 Automatic Data Processing, Inc............................................... 2,374,920 34,927 Broadridge Financial Solutions, Inc.......................................... 2,639,084 13,630 International Business Machines Corp......................................... 2,096,703 25,491 Jack Henry & Associates, Inc................................................. 2,647,750 21,102 MasterCard, Inc., Class A.................................................... 2,562,838 40,293 Paychex, Inc................................................................. 2,294,283 26,705 Visa, Inc., Class A.......................................................... 2,504,395 ------------- 22,076,863 ------------- MACHINERY - 2.8% 15,697 Cummins, Inc................................................................. 2,546,367 25,380 IDEX Corp.................................................................... 2,868,194 17,916 Illinois Tool Works, Inc..................................................... 2,566,467 29,184 Ingersoll-Rand PLC........................................................... 2,667,126 14,803 Parker-Hannifin Corp......................................................... 2,365,816 14,071 Snap-On, Inc................................................................. 2,223,218 37,997 Toro (The) Co................................................................ 2,632,812 ------------- 17,870,000 ------------- MEDIA - 1.1% 96,593 Interpublic Group of (The) Cos., Inc......................................... 2,376,188 27,528 Omnicom Group, Inc........................................................... 2,282,071 20,929 Walt Disney (The) Co......................................................... 2,223,706 ------------- 6,881,965 ------------- MORTGAGE REAL ESTATE INVESTMENT TRUSTS - 0.4% 293,728 MFA Financial, Inc........................................................... 2,464,378 ------------- MULTILINE RETAIL - 0.3% 43,001 Target Corp.................................................................. 2,248,522 ------------- OIL, GAS & CONSUMABLE FUELS - 0.7% 28,939 Exxon Mobil Corp............................................................. 2,336,245 29,959 Phillips 66.................................................................. 2,477,310 ------------- 4,813,555 ------------- PAPER & FOREST PRODUCTS - 0.4% 31,771 Neenah Paper, Inc............................................................ 2,549,623 ------------- PERSONAL PRODUCTS - 0.4% 27,991 Estee Lauder (The) Cos., Inc., Class A....................................... 2,686,576 ------------- PHARMACEUTICALS - 0.8% 19,054 Johnson & Johnson............................................................ 2,520,653 69,374 Pfizer, Inc.................................................................. 2,330,273 ------------- 4,850,926 ------------- See Notes to Financial Statements Page 15 FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) SHARES DESCRIPTION VALUE ----------- ----------------------------------------------------------------------------- ------------- COMMON STOCKS (CONTINUED) PROFESSIONAL SERVICES - 1.1% 17,358 Equifax, Inc................................................................. $ 2,385,336 39,852 Exponent, Inc................................................................ 2,323,372 23,137 ManpowerGroup, Inc........................................................... 2,583,246 ------------- 7,291,954 ------------- ROAD & RAIL - 0.7% 27,710 Landstar System, Inc......................................................... 2,371,976 22,406 Union Pacific Corp........................................................... 2,440,237 ------------- 4,812,213 ------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 0.4% 29,462 Texas Instruments, Inc....................................................... 2,266,512 ------------- SOFTWARE - 1.2% 74,820 CA, Inc...................................................................... 2,579,045 20,461 Intuit, Inc.................................................................. 2,717,426 53,199 Oracle Corp.................................................................. 2,667,398 ------------- 7,963,869 ------------- SPECIALTY RETAIL - 2.0% 48,287 Best Buy Co., Inc............................................................ 2,768,294 31,725 Foot Locker, Inc............................................................. 1,563,408 16,162 Home Depot (The), Inc........................................................ 2,479,251 36,030 Ross Stores, Inc............................................................. 2,080,012 30,011 TJX (The) Cos., Inc.......................................................... 2,165,894 34,412 Tractor Supply Co............................................................ 1,865,474 ------------- 12,922,333 ------------- TEXTILES, APPAREL & LUXURY GOODS - 1.1% 26,429 Carter's, Inc................................................................ 2,350,860 42,586 NIKE, Inc., Class B.......................................................... 2,512,574 43,174 VF Corp...................................................................... 2,486,822 ------------- 7,350,256 ------------- TOBACCO - 0.4% 33,229 Altria Group, Inc............................................................ 2,474,564 ------------- TRADING COMPANIES & DISTRIBUTORS - 1.0% 46,082 Fastenal Co.................................................................. 2,005,950 10,195 W.W. Grainger, Inc........................................................... 1,840,503 16,576 Watsco, Inc.................................................................. 2,556,019 ------------- 6,402,472 ------------- TOTAL COMMON STOCKS.......................................................... 365,893,944 (Cost $324,992,587) ------------- Page 16 See Notes to Financial Statements FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- CORPORATE BONDS AND NOTES - 39.4% AEROSPACE & DEFENSE - 1.0% $ 100,000 Boeing (The) Co..................................... 1.65% 10/30/20 $ 99,123 250,000 Boeing (The) Co..................................... 2.35% 10/30/21 251,953 553,000 Boeing (The) Co..................................... 2.13% 03/01/22 552,335 175,000 Boeing (The) Co..................................... 1.88% 06/15/23 168,521 100,000 Boeing (The) Co..................................... 2.60% 10/30/25 98,582 175,000 Boeing (The) Co..................................... 2.25% 06/15/26 166,670 250,000 Boeing (The) Co..................................... 2.80% 03/01/27 248,679 308,000 Boeing (The) Co..................................... 3.38% 06/15/46 296,428 250,000 Boeing (The) Co..................................... 3.65% 03/01/47 251,088 300,000 Boeing Capital Corp................................. 4.70% 10/27/19 320,168 250,000 Lockheed Martin Corp................................ 3.55% 01/15/26 259,515 220,000 Lockheed Martin Corp................................ 4.70% 05/15/46 248,215 200,000 Northrop Grumman Corp............................... 5.05% 11/15/40 231,363 250,000 Rockwell Collins, Inc............................... 2.80% 03/15/22 252,580 250,000 Rockwell Collins, Inc............................... 3.20% 03/15/24 253,784 250,000 Rockwell Collins, Inc............................... 3.50% 03/15/27 254,017 250,000 Rockwell Collins, Inc............................... 4.35% 04/15/47 262,554 250,000 United Technologies Corp............................ 1.90% 05/04/20 250,532 250,000 United Technologies Corp............................ 2.30% 05/04/22 249,446 250,000 United Technologies Corp............................ 2.80% 05/04/24 251,003 250,000 United Technologies Corp............................ 3.13% 05/04/27 251,246 500,000 United Technologies Corp............................ 3.75% 11/01/46 490,879 500,000 United Technologies Corp............................ 4.05% 05/04/47 513,479 ------------- 6,222,160 ------------- AIR FREIGHT & LOGISTICS - 0.8% 250,000 FedEx Corp.......................................... 2.30% 02/01/20 252,083 300,000 FedEx Corp.......................................... 3.20% 02/01/25 304,128 850,000 FedEx Corp.......................................... 3.30% 03/15/27 853,574 250,000 FedEx Corp.......................................... 4.75% 11/15/45 271,040 648,000 FedEx Corp.......................................... 4.55% 04/01/46 683,430 500,000 FedEx Corp.......................................... 4.40% 01/15/47 516,402 500,000 United Parcel Service, Inc. (a)..................... 1.56% 05/16/22 502,051 500,000 United Parcel Service, Inc.......................... 2.35% 05/16/22 501,991 545,000 United Parcel Service, Inc.......................... 2.45% 10/01/22 550,938 500,000 United Parcel Service, Inc.......................... 2.40% 11/15/26 483,496 500,000 United Parcel Service, Inc.......................... 3.40% 11/15/46 477,637 ------------- 5,396,770 ------------- AIRLINES - 0.2% 385,000 Southwest Airlines Co............................... 2.75% 11/06/19 391,214 420,000 Southwest Airlines Co............................... 2.65% 11/05/20 425,330 250,000 Southwest Airlines Co............................... 3.00% 11/15/26 242,960 ------------- 1,059,504 ------------- AUTOMOBILES - 0.0% 250,000 Ford Motor Co....................................... 5.29% 12/08/46 257,539 ------------- BANKS - 7.1% 1,400,000 Bank of America Corp................................ 2.60% 01/15/19 1,413,710 400,000 Bank of America Corp. (a)........................... 2.17% 04/01/19 403,791 100,000 Bank of America Corp................................ 2.63% 10/19/20 101,088 See Notes to Financial Statements Page 17 FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- CORPORATE BONDS AND NOTES (CONTINUED) BANKS (CONTINUED) $ 600,000 Bank of America Corp................................ 2.63% 04/19/21 $ 603,200 725,000 Bank of America Corp................................ 5.70% 01/24/22 820,054 250,000 Bank of America Corp. (a)........................... 2.34% 10/21/22 253,990 250,000 Bank of America Corp................................ 2.50% 10/21/22 247,108 500,000 Bank of America Corp. (a)........................... 2.32% 01/20/23 505,841 500,000 Bank of America Corp. (a)........................... 2.88% 04/24/23 501,483 450,000 Bank of America Corp................................ 4.00% 04/01/24 471,958 100,000 Bank of America Corp................................ 4.00% 01/22/25 101,840 400,000 Bank of America Corp................................ 4.45% 03/03/26 417,045 950,000 Bank of America Corp................................ 3.50% 04/19/26 955,027 150,000 Bank of America Corp................................ 3.25% 10/21/27 145,263 250,000 Bank of America Corp................................ 4.18% 11/25/27 254,763 500,000 Bank of America Corp. (a)........................... 3.82% 01/20/28 509,289 500,000 Bank of America Corp. (a)........................... 3.71% 04/24/28 504,280 250,000 Bank of America Corp. (a)........................... 4.24% 04/24/38 260,489 225,000 Bank of America Corp................................ 5.88% 02/07/42 282,968 225,000 Bank of America Corp................................ 4.88% 04/01/44 252,888 250,000 Bank of America Corp. (a)........................... 4.44% 01/20/48 265,086 1,000,000 BB&T Corp........................................... 2.05% 05/10/21 992,744 500,000 BB&T Corp. (a)...................................... 1.95% 04/01/22 503,478 500,000 Citibank N.A. (a)................................... 1.61% 03/20/19 500,850 800,000 Citigroup, Inc...................................... 2.15% 07/30/18 802,726 300,000 Citigroup, Inc...................................... 2.50% 09/26/18 302,124 300,000 Citigroup, Inc...................................... 2.05% 06/07/19 300,334 1,000,000 Citigroup, Inc. (a)................................. 2.15% 06/07/19 1,009,595 1,000,000 Citigroup, Inc. (a)................................. 2.09% 01/10/20 1,007,584 500,000 Citigroup, Inc...................................... 2.45% 01/10/20 503,302 250,000 Citigroup, Inc...................................... 2.40% 02/18/20 251,503 600,000 Citigroup, Inc...................................... 2.70% 03/30/21 604,301 350,000 Citigroup, Inc...................................... 2.35% 08/02/21 347,156 1,000,000 Citigroup, Inc. (a)................................. 2.29% 12/08/21 1,010,134 250,000 Citigroup, Inc...................................... 2.90% 12/08/21 252,790 775,000 Citigroup, Inc...................................... 4.50% 01/14/22 834,219 500,000 Citigroup, Inc...................................... 2.75% 04/25/22 499,767 500,000 Citigroup, Inc. (a)................................. 2.28% 05/17/24 499,960 450,000 Citigroup, Inc...................................... 4.60% 03/09/26 473,048 300,000 Citigroup, Inc...................................... 3.40% 05/01/26 297,330 250,000 Citigroup, Inc...................................... 3.20% 10/21/26 243,421 300,000 Citigroup, Inc...................................... 4.30% 11/20/26 308,735 100,000 Citigroup, Inc...................................... 4.45% 09/29/27 104,130 500,000 Citigroup, Inc. (a)................................. 3.89% 01/10/28 508,735 500,000 Citigroup, Inc...................................... 4.13% 07/25/28 508,684 200,000 Citigroup, Inc...................................... 5.88% 01/30/42 252,943 100,000 Citigroup, Inc...................................... 6.68% 09/13/43 133,919 750,000 Citigroup, Inc...................................... 4.75% 05/18/46 790,421 500,000 Citigroup, Inc. (a)................................. 4.28% 04/24/48 513,732 600,000 HSBC Bank USA N.A................................... 4.88% 08/24/20 645,593 100,000 HSBC USA, Inc....................................... 1.50% 11/13/17 99,954 1,000,000 HSBC USA, Inc....................................... 1.63% 01/16/18 1,000,414 Page 18 See Notes to Financial Statements FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- CORPORATE BONDS AND NOTES (CONTINUED) BANKS (CONTINUED) $ 400,000 JPMorgan Chase & Co................................. 1.85% 03/22/19 $ 399,680 400,000 JPMorgan Chase & Co................................. 2.20% 10/22/19 401,413 150,000 JPMorgan Chase & Co................................. 2.55% 03/01/21 150,814 1,000,000 JPMorgan Chase & Co. (a)............................ 1.77% 03/09/21 1,000,360 550,000 JPMorgan Chase & Co................................. 4.63% 05/10/21 593,223 450,000 JPMorgan Chase & Co................................. 2.40% 06/07/21 449,398 1,000,000 JPMorgan Chase & Co. (a)............................ 2.16% 01/15/23 1,006,833 325,000 JPMorgan Chase & Co................................. 3.20% 01/25/23 331,612 250,000 JPMorgan Chase & Co. (a)............................ 2.78% 04/25/23 250,617 500,000 JPMorgan Chase & Co................................. 2.70% 05/18/23 494,918 250,000 JPMorgan Chase & Co. (a)............................ 2.38% 10/24/23 253,974 400,000 JPMorgan Chase & Co................................. 3.88% 02/01/24 419,590 850,000 JPMorgan Chase & Co................................. 3.30% 04/01/26 845,005 300,000 JPMorgan Chase & Co................................. 4.13% 12/15/26 311,343 250,000 JPMorgan Chase & Co................................. 3.63% 12/01/27 247,973 500,000 JPMorgan Chase & Co. (a)............................ 3.78% 02/01/28 511,922 500,000 JPMorgan Chase & Co. (a)............................ 3.54% 05/01/28 502,134 400,000 JPMorgan Chase & Co................................. 6.40% 05/15/38 536,962 100,000 JPMorgan Chase & Co................................. 4.85% 02/01/44 115,508 150,000 JPMorgan Chase & Co................................. 4.95% 06/01/45 167,731 500,000 JPMorgan Chase & Co. (a)............................ 4.26% 02/22/48 524,405 437,000 JPMorgan Chase Bank N.A............................. 6.00% 10/01/17 441,495 600,000 Wells Fargo & Co.................................... 6.00% 11/15/17 609,526 575,000 Wells Fargo & Co.................................... 2.13% 04/22/19 578,149 200,000 Wells Fargo & Co.................................... 2.15% 01/30/20 200,589 100,000 Wells Fargo & Co.................................... 2.55% 12/07/20 101,196 900,000 Wells Fargo & Co.................................... 3.00% 01/22/21 919,520 550,000 Wells Fargo & Co.................................... 2.50% 03/04/21 552,191 300,000 Wells Fargo & Co.................................... 2.10% 07/26/21 296,148 1,000,000 Wells Fargo & Co. (a)............................... 2.11% 02/11/22 1,008,982 1,000,000 Wells Fargo & Co. (a)............................... 2.26% 01/24/23 1,011,241 250,000 Wells Fargo & Co. (a)............................... 2.40% 10/31/23 254,628 425,000 Wells Fargo & Co.................................... 3.30% 09/09/24 431,495 550,000 Wells Fargo & Co.................................... 3.00% 04/22/26 537,777 100,000 Wells Fargo & Co.................................... 4.10% 06/03/26 103,663 250,000 Wells Fargo & Co.................................... 3.00% 10/23/26 243,733 200,000 Wells Fargo & Co.................................... 4.30% 07/22/27 209,740 500,000 Wells Fargo & Co. (a)............................... 3.58% 05/22/28 505,943 100,000 Wells Fargo & Co.................................... 4.90% 11/17/45 109,297 275,000 Wells Fargo & Co.................................... 4.40% 06/14/46 279,094 750,000 Wells Fargo & Co.................................... 4.75% 12/07/46 802,707 1,000,000 Wells Fargo Bank N.A. (a)........................... 1.70% 11/28/18 1,004,442 250,000 Wells Fargo Bank N.A................................ 1.75% 05/24/19 249,584 500,000 Wells Fargo Bank N.A. (a)........................... 1.87% 12/06/19 506,028 200,000 Wells Fargo Bank N.A................................ 5.95% 08/26/36 252,040 ------------- 46,099,410 ------------- BEVERAGES - 1.1% 690,000 Anheuser-Busch Inbev Worldwide, Inc................. 2.65% 02/01/21 699,831 200,000 Anheuser-Busch Inbev Worldwide, Inc................. 2.50% 07/15/22 199,952 625,000 Anheuser-Busch Inbev Worldwide, Inc................. 3.30% 02/01/23 644,376 See Notes to Financial Statements Page 19 FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- CORPORATE BONDS AND NOTES (CONTINUED) BEVERAGES (CONTINUED) $ 600,000 Anheuser-Busch Inbev Worldwide, Inc................. 3.65% 02/01/26 $ 619,268 875,000 Anheuser-Busch Inbev Worldwide, Inc................. 4.70% 02/01/36 966,060 1,100,000 Anheuser-Busch Inbev Worldwide, Inc................. 4.90% 02/01/46 1,246,472 250,000 Coca-Cola (The) Co.................................. 1.38% 05/30/19 249,085 150,000 Coca-Cola (The) Co.................................. 1.88% 10/27/20 149,789 250,000 Coca-Cola (The) Co.................................. 1.55% 09/01/21 245,164 975,000 Coca-Cola (The) Co.................................. 3.20% 11/01/23 1,012,636 100,000 Coca-Cola (The) Co.................................. 2.88% 10/27/25 100,690 100,000 Coca-Cola (The) Co.................................. 2.55% 06/01/26 97,068 250,000 Coca-Cola (The) Co.................................. 2.25% 09/01/26 237,654 550,000 Molson Coors Brewing Co............................. 4.20% 07/15/46 544,654 ------------- 7,012,699 ------------- BIOTECHNOLOGY - 0.6% 350,000 AbbVie, Inc......................................... 2.50% 05/14/20 354,294 375,000 AbbVie, Inc......................................... 2.90% 11/06/22 378,993 250,000 AbbVie, Inc......................................... 3.60% 05/14/25 255,439 175,000 AbbVie, Inc......................................... 4.40% 11/06/42 179,964 300,000 AbbVie, Inc......................................... 4.70% 05/14/45 320,046 500,000 Amgen, Inc.......................................... 1.90% 05/10/19 500,695 500,000 Amgen, Inc.......................................... 2.20% 05/11/20 502,872 450,000 Amgen, Inc.......................................... 2.70% 05/01/22 453,075 500,000 Amgen, Inc.......................................... 2.65% 05/11/22 502,227 200,000 Amgen, Inc.......................................... 3.63% 05/22/24 208,938 100,000 Amgen, Inc.......................................... 2.60% 08/19/26 94,827 200,000 Amgen, Inc.......................................... 5.38% 05/15/43 227,292 100,000 Amgen, Inc.......................................... 4.40% 05/01/45 103,126 ------------- 4,081,788 ------------- BUILDING PRODUCTS - 0.2% 450,000 Masco Corp.......................................... 3.50% 04/01/21 464,387 250,000 Masco Corp.......................................... 3.50% 11/15/27 248,351 250,000 Masco Corp.......................................... 4.50% 05/15/47 252,165 500,000 Owens Corning....................................... 4.30% 07/15/47 483,001 ------------- 1,447,904 ------------- CAPITAL MARKETS - 3.5% 825,000 Goldman Sachs Group (The), Inc...................... 6.15% 04/01/18 851,629 1,000,000 Goldman Sachs Group (The), Inc. (a)................. 2.37% 04/30/18 1,007,743 300,000 Goldman Sachs Group (The), Inc...................... 2.00% 04/25/19 300,002 600,000 Goldman Sachs Group (The), Inc...................... 2.55% 10/23/19 606,885 700,000 Goldman Sachs Group (The), Inc. (a)................. 2.04% 12/13/19 704,384 500,000 Goldman Sachs Group (The), Inc...................... 2.30% 12/13/19 501,651 500,000 Goldman Sachs Group (The), Inc...................... 2.60% 04/23/20 504,972 500,000 Goldman Sachs Group (The), Inc. (a)................. 2.02% 12/27/20 501,037 700,000 Goldman Sachs Group (The), Inc...................... 2.63% 04/25/21 702,007 500,000 Goldman Sachs Group (The), Inc...................... 2.35% 11/15/21 493,780 497,000 Goldman Sachs Group (The), Inc. (a)................. 2.28% 04/26/22 500,986 500,000 Goldman Sachs Group (The), Inc...................... 3.00% 04/26/22 504,112 700,000 Goldman Sachs Group (The), Inc...................... 3.63% 01/22/23 723,388 250,000 Goldman Sachs Group (The), Inc. (a)................. 2.27% 06/05/23 250,332 Page 20 See Notes to Financial Statements FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- CORPORATE BONDS AND NOTES (CONTINUED) CAPITAL MARKETS (CONTINUED) $ 250,000 Goldman Sachs Group (The), Inc. (a)................. 2.91% 06/05/23 $ 249,788 600,000 Goldman Sachs Group (The), Inc...................... 4.00% 03/03/24 628,643 150,000 Goldman Sachs Group (The), Inc...................... 3.50% 01/23/25 151,775 600,000 Goldman Sachs Group (The), Inc...................... 4.25% 10/21/25 621,277 550,000 Goldman Sachs Group (The), Inc...................... 3.75% 02/25/26 561,042 500,000 Goldman Sachs Group (The), Inc...................... 3.50% 11/16/26 497,939 750,000 Goldman Sachs Group (The), Inc...................... 3.85% 01/26/27 763,811 250,000 Goldman Sachs Group (The), Inc. (a)................. 3.69% 06/05/28 251,303 400,000 Goldman Sachs Group (The), Inc...................... 6.25% 02/01/41 523,594 50,000 Goldman Sachs Group (The), Inc...................... 4.75% 10/21/45 55,456 800,000 Morgan Stanley (a).................................. 2.00% 01/24/19 805,914 695,000 Morgan Stanley...................................... 2.50% 01/24/19 700,630 400,000 Morgan Stanley...................................... 2.65% 01/27/20 404,467 100,000 Morgan Stanley (a).................................. 1.98% 02/14/20 100,434 1,000,000 Morgan Stanley...................................... 2.50% 04/21/21 999,769 550,000 Morgan Stanley...................................... 5.50% 07/28/21 610,430 500,000 Morgan Stanley...................................... 2.63% 11/17/21 499,570 875,000 Morgan Stanley (a).................................. 2.34% 01/20/22 884,204 500,000 Morgan Stanley...................................... 2.75% 05/19/22 500,232 300,000 Morgan Stanley...................................... 3.75% 02/25/23 312,181 500,000 Morgan Stanley (a).................................. 2.55% 10/24/23 509,058 450,000 Morgan Stanley...................................... 3.88% 04/29/24 468,099 500,000 Morgan Stanley (a).................................. 2.37% 05/08/24 502,990 800,000 Morgan Stanley...................................... 3.88% 01/27/26 824,481 250,000 Morgan Stanley...................................... 4.35% 09/08/26 260,401 250,000 Morgan Stanley...................................... 3.63% 01/20/27 252,100 350,000 Morgan Stanley...................................... 6.38% 07/24/42 466,903 100,000 Morgan Stanley...................................... 4.30% 01/27/45 103,665 250,000 Morgan Stanley...................................... 4.38% 01/22/47 261,459 300,000 Nasdaq, Inc......................................... 3.85% 06/30/26 304,960 250,000 TD Ameritrade Holding Corp.......................... 3.30% 04/01/27 249,995 ------------- 22,479,478 ------------- CHEMICALS - 0.4% 250,000 CF Industries, Inc. (b)............................. 3.40% 12/01/21 253,017 250,000 Chevron Phillips Chemical Co., LLC/Chevron Phillips Chemical Co., L.P. (b)........................... 3.40% 12/01/26 254,468 525,000 Dow Chemical (The) Co............................... 8.55% 05/15/19 588,277 200,000 Dow Chemical (The) Co............................... 3.00% 11/15/22 204,094 75,000 Dow Chemical (The) Co............................... 4.63% 10/01/44 80,141 140,000 EI du Pont de Nemours & Co. (a)..................... 1.70% 05/01/20 140,900 250,000 EI du Pont de Nemours & Co.......................... 2.20% 05/01/20 251,459 250,000 Sherwin-Williams (The) Co........................... 2.75% 06/01/22 250,136 250,000 Sherwin-Williams (The) Co........................... 3.13% 06/01/24 251,646 250,000 Sherwin-Williams (The) Co........................... 3.45% 06/01/27 252,165 100,000 Westlake Chemical Corp.............................. 3.60% 08/15/26 99,441 250,000 Westlake Chemical Corp.............................. 5.00% 08/15/46 265,100 ------------- 2,890,844 ------------- See Notes to Financial Statements Page 21 FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- CORPORATE BONDS AND NOTES (CONTINUED) COMMUNICATIONS EQUIPMENT - 0.3% $ 100,000 Cisco Systems, Inc.................................. 1.40% 09/20/19 $ 99,344 100,000 Cisco Systems, Inc.................................. 2.45% 06/15/20 101,648 800,000 Cisco Systems, Inc.................................. 2.20% 09/20/23 783,219 500,000 Cisco Systems, Inc.................................. 3.63% 03/04/24 529,326 100,000 Cisco Systems, Inc.................................. 2.95% 02/28/26 100,139 200,000 Cisco Systems, Inc.................................. 2.50% 09/20/26 192,017 225,000 Cisco Systems, Inc.................................. 5.90% 02/15/39 293,155 ------------- 2,098,848 ------------- CONSTRUCTION MATERIALS - 0.1% 250,000 CRH America Finance, Inc. (b)....................... 3.40% 05/09/27 250,534 250,000 CRH America Finance, Inc. (b)....................... 4.40% 05/09/47 257,768 250,000 Vulcan Materials Co................................. 3.90% 04/01/27 257,430 250,000 Vulcan Materials Co................................. 4.50% 06/15/47 253,828 ------------- 1,019,560 ------------- CONSUMER FINANCE - 2.4% 400,000 American Express Centurion Bank..................... 6.00% 09/13/17 403,278 450,000 American Express Co................................. 3.63% 12/05/24 461,206 800,000 American Express Credit Corp........................ 2.13% 07/27/18 803,296 200,000 American Express Credit Corp........................ 1.88% 11/05/18 200,348 297,000 American Express Credit Corp. (a)................... 1.82% 03/18/19 298,558 500,000 American Express Credit Corp........................ 1.70% 10/30/19 497,474 250,000 American Express Credit Corp........................ 2.20% 03/03/20 251,284 150,000 American Express Credit Corp........................ 2.60% 09/14/20 152,258 575,000 American Express Credit Corp........................ 2.25% 05/05/21 574,426 250,000 American Express Credit Corp. (a)................... 1.92% 03/03/22 251,863 250,000 American Express Credit Corp........................ 2.70% 03/03/22 252,465 500,000 American Express Credit Corp........................ 3.30% 05/03/27 500,211 500,000 Capital One Financial Corp. (a)..................... 2.17% 03/09/22 499,338 550,000 Capital One Financial Corp.......................... 3.75% 04/24/24 562,838 350,000 Capital One Financial Corp.......................... 3.75% 07/28/26 342,188 250,000 Capital One N.A..................................... 2.25% 09/13/21 245,611 1,000,000 Capital One N.A. (a)................................ 2.32% 01/30/23 1,006,416 300,000 Caterpillar Financial Services Corp. (a)............ 1.81% 01/10/20 301,912 500,000 Caterpillar Financial Services Corp................. 2.10% 01/10/20 503,506 1,039,000 Caterpillar Financial Services Corp................. 1.70% 08/09/21 1,016,304 250,000 Caterpillar Financial Services Corp................. 2.40% 06/06/22 249,530 150,000 Caterpillar Financial Services Corp................. 3.25% 12/01/24 153,930 400,000 Ford Motor Credit Co., LLC.......................... 2.88% 10/01/18 404,088 250,000 Ford Motor Credit Co., LLC.......................... 2.26% 03/28/19 250,787 500,000 Ford Motor Credit Co., LLC.......................... 1.90% 08/12/19 496,429 200,000 Ford Motor Credit Co., LLC (a)...................... 2.30% 01/09/20 201,488 200,000 Ford Motor Credit Co., LLC.......................... 2.68% 01/09/20 201,465 200,000 Ford Motor Credit Co., LLC.......................... 2.46% 03/27/20 200,305 500,000 Ford Motor Credit Co., LLC.......................... 2.43% 06/12/20 500,191 100,000 Ford Motor Credit Co., LLC.......................... 3.22% 01/09/22 100,994 250,000 Ford Motor Credit Co., LLC.......................... 3.34% 03/28/22 253,955 450,000 Ford Motor Credit Co., LLC.......................... 3.10% 05/04/23 445,193 725,000 Ford Motor Credit Co., LLC.......................... 4.38% 08/06/23 763,791 200,000 Ford Motor Credit Co., LLC.......................... 3.81% 01/09/24 202,788 Page 22 See Notes to Financial Statements FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- CORPORATE BONDS AND NOTES (CONTINUED) CONSUMER FINANCE (CONTINUED) $ 350,000 Ford Motor Credit Co., LLC.......................... 4.13% 08/04/25 $ 356,647 100,000 General Motors Financial Co., Inc................... 2.40% 05/09/19 100,312 250,000 General Motors Financial Co., Inc................... 2.65% 04/13/20 251,329 250,000 General Motors Financial Co., Inc................... 3.20% 07/06/21 253,042 250,000 General Motors Financial Co., Inc. (a).............. 2.71% 01/14/22 255,079 200,000 General Motors Financial Co., Inc................... 5.25% 03/01/26 216,392 100,000 General Motors Financial Co., Inc................... 4.00% 10/06/26 99,612 250,000 General Motors Financial Co., Inc................... 4.35% 01/17/27 253,558 ------------- 15,335,685 ------------- CONTAINERS & PACKAGING - 0.1% 200,000 International Paper Co.............................. 3.00% 02/15/27 192,878 150,000 International Paper Co.............................. 4.40% 08/15/47 151,601 ------------- 344,479 ------------- DIVERSIFIED FINANCIAL SERVICES - 0.3% 250,000 Berkshire Hathaway Finance Corp. (a)................ 1.62% 01/10/20 251,356 175,000 Berkshire Hathaway, Inc............................. 2.20% 03/15/21 176,435 125,000 Berkshire Hathaway, Inc............................. 2.75% 03/15/23 126,753 425,000 Berkshire Hathaway, Inc............................. 3.13% 03/15/26 430,257 350,000 Diamond 1 Finance Corp./Diamond 2 Finance Corp. (b)........................................ 3.48% 06/01/19 358,346 250,000 Diamond 1 Finance Corp./Diamond 2 Finance Corp. (b)........................................ 4.42% 06/15/21 263,788 250,000 Voya Financial, Inc................................. 3.13% 07/15/24 247,262 ------------- 1,854,197 ------------- DIVERSIFIED TELECOMMUNICATION SERVICES - 1.8% 500,000 AT&T, Inc........................................... 2.30% 03/11/19 503,172 300,000 AT&T, Inc........................................... 2.45% 06/30/20 301,751 250,000 AT&T, Inc........................................... 2.80% 02/17/21 252,864 275,000 AT&T, Inc........................................... 3.88% 08/15/21 287,355 250,000 AT&T, Inc........................................... 3.20% 03/01/22 253,318 300,000 AT&T, Inc........................................... 3.00% 06/30/22 300,500 150,000 AT&T, Inc........................................... 3.60% 02/17/23 153,708 250,000 AT&T, Inc........................................... 3.80% 03/01/24 256,018 150,000 AT&T, Inc........................................... 3.90% 03/11/24 153,838 350,000 AT&T, Inc........................................... 3.40% 05/15/25 344,669 650,000 AT&T, Inc........................................... 4.13% 02/17/26 667,599 250,000 AT&T, Inc........................................... 5.25% 03/01/37 267,162 425,000 AT&T, Inc........................................... 4.80% 06/15/44 422,774 250,000 AT&T, Inc........................................... 4.35% 06/15/45 232,936 250,000 AT&T, Inc........................................... 4.75% 05/15/46 246,103 550,000 AT&T, Inc........................................... 5.65% 02/15/47 610,183 250,000 AT&T, Inc........................................... 5.70% 03/01/57 274,511 523,000 Verizon Communications, Inc. (a).................... 2.99% 09/14/18 532,557 450,000 Verizon Communications, Inc. (a).................... 2.04% 06/17/19 453,488 1,277,000 Verizon Communications, Inc. (b).................... 2.95% 03/15/22 1,287,275 100,000 Verizon Communications, Inc. (a).................... 2.25% 03/16/22 101,242 525,000 Verizon Communications, Inc......................... 5.15% 09/15/23 583,943 650,000 Verizon Communications, Inc......................... 3.50% 11/01/24 657,033 100,000 Verizon Communications, Inc......................... 2.63% 08/15/26 92,163 250,000 Verizon Communications, Inc......................... 4.13% 03/16/27 258,710 See Notes to Financial Statements Page 23 FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- CORPORATE BONDS AND NOTES (CONTINUED) DIVERSIFIED TELECOMMUNICATION SERVICES (CONTINUED) $ 231,000 Verizon Communications, Inc......................... 4.27% 01/15/36 $ 223,654 298,000 Verizon Communications, Inc......................... 4.13% 08/15/46 266,288 500,000 Verizon Communications, Inc......................... 4.86% 08/21/46 502,027 250,000 Verizon Communications, Inc......................... 4.52% 09/15/48 237,485 249,000 Verizon Communications, Inc......................... 5.01% 08/21/54 246,889 522,000 Verizon Communications, Inc......................... 4.67% 03/15/55 490,777 ------------- 11,461,992 ------------- ELECTRIC UTILITIES - 3.8% 250,000 AEP Transmission Co., LLC........................... 3.10% 12/01/26 249,594 250,000 AEP Transmission Co., LLC........................... 4.00% 12/01/46 258,948 250,000 Alabama Power Co.................................... 2.45% 03/30/22 251,020 100,000 Alabama Power Co.................................... 3.75% 03/01/45 99,053 1,055,000 American Electric Power Co., Inc.................... 1.65% 12/15/17 1,055,209 250,000 American Electric Power Co., Inc.................... 2.95% 12/15/22 254,834 300,000 Appalachian Power Co................................ 4.40% 05/15/44 320,107 250,000 Baltimore Gas & Electric Co......................... 2.40% 08/15/26 236,906 250,000 Baltimore Gas & Electric Co......................... 3.50% 08/15/46 238,992 240,000 CenterPoint Energy Houston Electric LLC............. 2.25% 08/01/22 237,267 250,000 CenterPoint Energy Houston Electric LLC............. 2.40% 09/01/26 237,917 500,000 CenterPoint Energy Houston Electric LLC............. 3.00% 02/01/27 498,022 295,000 CenterPoint Energy Houston Electric LLC............. 4.50% 04/01/44 330,979 200,000 Commonwealth Edison Co.............................. 2.55% 06/15/26 192,671 300,000 Commonwealth Edison Co.............................. 3.40% 09/01/21 312,406 300,000 Commonwealth Edison Co.............................. 3.70% 03/01/45 296,077 400,000 Commonwealth Edison Co.............................. 3.65% 06/15/46 389,784 575,000 Constellation Energy Group, Inc..................... 5.15% 12/01/20 620,630 100,000 Duke Energy Carolinas LLC........................... 2.50% 03/15/23 100,282 250,000 Duke Energy Carolinas LLC........................... 2.95% 12/01/26 249,123 350,000 Duke Energy Carolinas LLC........................... 6.00% 01/15/38 463,448 50,000 Duke Energy Carolinas LLC........................... 3.75% 06/01/45 49,863 100,000 Duke Energy Carolinas LLC........................... 3.88% 03/15/46 102,223 200,000 Duke Energy Corp.................................... 2.10% 06/15/18 200,817 250,000 Duke Energy Corp.................................... 1.80% 09/01/21 244,286 300,000 Duke Energy Corp.................................... 3.55% 09/15/21 312,468 450,000 Duke Energy Corp.................................... 3.75% 09/01/46 429,345 500,000 Duke Energy Florida LLC............................. 3.20% 01/15/27 507,004 250,000 Duke Energy Florida LLC............................. 3.40% 10/01/46 233,087 100,000 Duke Energy Indiana LLC............................. 3.75% 05/15/46 98,827 250,000 Duke Energy Progress LLC............................ 3.70% 10/15/46 246,361 350,000 Entergy Corp........................................ 2.95% 09/01/26 335,811 250,000 Entergy Louisiana LLC............................... 3.12% 09/01/27 249,467 500,000 Exelon Corp......................................... 3.50% 06/01/22 511,384 200,000 Exelon Corp......................................... 2.45% 04/15/21 199,629 50,000 Exelon Corp......................................... 5.10% 06/15/45 56,244 250,000 Exelon Corp......................................... 4.45% 04/15/46 259,432 250,000 FirstEnergy Corp.................................... 2.85% 07/15/22 250,054 350,000 Florida Power & Light Co............................ 3.25% 06/01/24 362,333 210,000 Florida Power & Light Co............................ 4.05% 06/01/42 221,546 250,000 Great Plains Energy, Inc............................ 3.90% 04/01/27 253,405 Page 24 See Notes to Financial Statements FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- CORPORATE BONDS AND NOTES (CONTINUED) ELECTRIC UTILITIES (CONTINUED) $ 410,000 Great Plains Energy, Inc............................ 4.85% 04/01/47 $ 423,551 100,000 Indiana Michigan Power Co........................... 4.55% 03/15/46 109,839 500,000 Indiana Michigan Power Co........................... 3.75% 07/01/47 487,779 410,000 Metropolitan Edison Co. (b)......................... 3.50% 03/15/23 417,162 125,000 Monongahela Power Co. (b)........................... 5.40% 12/15/43 152,382 150,000 Ohio Edison Co...................................... 6.88% 07/15/36 201,387 295,000 Pacific Gas & Electric Co........................... 5.63% 11/30/17 299,861 250,000 Pacific Gas & Electric Co........................... 3.50% 06/15/25 258,737 100,000 Pacific Gas & Electric Co........................... 2.95% 03/01/26 99,420 500,000 Pacific Gas & Electric Co........................... 3.30% 03/15/27 511,774 600,000 Pacific Gas & Electric Co........................... 4.30% 03/15/45 644,252 250,000 Pacific Gas & Electric Co........................... 4.25% 03/15/46 266,629 750,000 Pacific Gas & Electric Co........................... 4.00% 12/01/46 773,870 100,000 Public Service Electric & Gas Co.................... 1.90% 03/15/21 99,176 195,000 Public Service Electric & Gas Co.................... 2.38% 05/15/23 193,615 550,000 Public Service Electric & Gas Co.................... 2.25% 09/15/26 519,594 250,000 Public Service Electric & Gas Co.................... 3.00% 05/15/27 250,817 275,000 Public Service Electric & Gas Co.................... 3.95% 05/01/42 285,603 100,000 Public Service Electric & Gas Co.................... 3.80% 03/01/46 101,950 550,000 Southern (The) Co................................... 1.85% 07/01/19 548,134 815,000 Southern (The) Co................................... 2.35% 07/01/21 809,826 250,000 Southern (The) Co................................... 3.25% 07/01/26 245,037 425,000 Southern (The) Co................................... 4.40% 07/01/46 434,486 200,000 Southern California Edison Co....................... 3.50% 10/01/23 209,039 200,000 Southern California Edison Co....................... 3.60% 02/01/45 195,051 250,000 Southern California Edison Co....................... 4.00% 04/01/47 262,152 500,000 Southern Co. Gas Capital Corp....................... 4.40% 05/30/47 512,081 1,100,000 Southern Power Co................................... 1.85% 12/01/17 1,101,076 250,000 Southern Power Co................................... 4.95% 12/15/46 259,166 500,000 Southwestern Electric Power Co...................... 2.75% 10/01/26 480,190 100,000 Southwestern Electric Power Co...................... 6.20% 03/15/40 128,909 200,000 Virginia Electric & Power Co........................ 3.45% 02/15/24 206,735 450,000 Virginia Electric & Power Co........................ 2.95% 11/15/26 446,131 250,000 Virginia Electric & Power Co........................ 3.50% 03/15/27 257,577 475,000 Virginia Electric & Power Co........................ 4.45% 02/15/44 521,005 250,000 Virginia Electric & Power Co........................ 4.00% 11/15/46 258,884 ------------- 24,989,732 ------------- ENERGY EQUIPMENT & SERVICES - 0.1% 250,000 Halliburton Co...................................... 5.00% 11/15/45 267,019 250,000 Nabors Industries, Inc. (b)......................... 5.50% 01/15/23 237,812 ------------- 504,831 ------------- EQUITY REAL ESTATE INVESTMENT TRUSTS - 0.0% 250,000 American Tower Corp................................. 3.55% 07/15/27 248,415 ------------- FOOD & STAPLES RETAILING - 0.6% 600,000 CVS Health Corp..................................... 1.90% 07/20/18 601,713 150,000 CVS Health Corp..................................... 2.80% 07/20/20 152,822 600,000 CVS Health Corp..................................... 2.13% 06/01/21 593,237 700,000 CVS Health Corp..................................... 4.00% 12/05/23 740,428 See Notes to Financial Statements Page 25 FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- CORPORATE BONDS AND NOTES (CONTINUED) FOOD & STAPLES RETAILING (CONTINUED) $ 178,000 CVS Health Corp..................................... 3.88% 07/20/25 $ 185,386 150,000 CVS Health Corp..................................... 2.88% 06/01/26 145,646 675,000 CVS Health Corp..................................... 5.13% 07/20/45 776,834 250,000 Sysco Corp.......................................... 3.25% 07/15/27 246,671 325,000 Wal-Mart Stores, Inc................................ 3.30% 04/22/24 339,650 300,000 Wal-Mart Stores, Inc................................ 4.30% 04/22/44 333,092 ------------- 4,115,479 ------------- FOOD PRODUCTS - 0.2% 500,000 Tyson Foods, Inc.................................... 3.55% 06/02/27 506,862 500,000 Tyson Foods, Inc.................................... 4.55% 06/02/47 528,552 ------------- 1,035,414 ------------- HEALTH CARE EQUIPMENT & SUPPLIES - 0.9% 250,000 Abbott Laboratories................................. 2.90% 11/30/21 253,048 250,000 Abbott Laboratories................................. 3.40% 11/30/23 256,278 600,000 Abbott Laboratories................................. 4.90% 11/30/46 663,520 500,000 Becton Dickinson and Co............................. 3.36% 06/06/24 501,894 750,000 Becton Dickinson and Co............................. 3.70% 06/06/27 753,890 500,000 Becton Dickinson and Co............................. 4.67% 06/06/47 521,896 300,000 Medtronic, Inc...................................... 2.50% 03/15/20 304,466 750,000 Medtronic, Inc...................................... 3.15% 03/15/22 776,635 600,000 Medtronic, Inc...................................... 3.50% 03/15/25 624,788 1,150,000 Medtronic, Inc...................................... 4.63% 03/15/45 1,297,415 ------------- 5,953,830 ------------- HEALTH CARE PROVIDERS & SERVICES - 0.8% 750,000 UnitedHealth Group, Inc............................. 1.63% 03/15/19 745,427 275,000 UnitedHealth Group, Inc............................. 4.70% 02/15/21 297,281 100,000 UnitedHealth Group, Inc............................. 2.13% 03/15/21 99,804 550,000 UnitedHealth Group, Inc............................. 2.88% 12/15/21 562,510 100,000 UnitedHealth Group, Inc............................. 3.75% 07/15/25 105,435 250,000 UnitedHealth Group, Inc............................. 3.10% 03/15/26 251,574 500,000 UnitedHealth Group, Inc............................. 3.45% 01/15/27 514,726 500,000 UnitedHealth Group, Inc............................. 3.38% 04/15/27 511,543 150,000 UnitedHealth Group, Inc............................. 6.88% 02/15/38 213,462 573,000 UnitedHealth Group, Inc............................. 4.75% 07/15/45 659,795 500,000 UnitedHealth Group, Inc............................. 4.20% 01/15/47 528,800 500,000 UnitedHealth Group, Inc............................. 4.25% 04/15/47 534,393 ------------- 5,024,750 ------------- HOTELS, RESTAURANTS & LEISURE - 0.2% 330,000 McDonald's Corp..................................... 2.10% 12/07/18 331,972 150,000 McDonald's Corp..................................... 3.70% 01/30/26 155,621 500,000 McDonald's Corp..................................... 3.50% 03/01/27 509,269 100,000 McDonald's Corp..................................... 4.88% 12/09/45 111,930 ------------- 1,108,792 ------------- HOUSEHOLD DURABLES - 0.2% 250,000 DR Horton, Inc...................................... 4.38% 09/15/22 266,392 250,000 Newell Brands, Inc.................................. 3.15% 04/01/21 256,029 100,000 Newell Brands, Inc.................................. 4.00% 12/01/24 104,054 Page 26 See Notes to Financial Statements FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- CORPORATE BONDS AND NOTES (CONTINUED) HOUSEHOLD DURABLES (CONTINUED) $ 350,000 Newell Brands, Inc.................................. 4.20% 04/01/26 $ 372,024 525,000 Newell Brands, Inc.................................. 5.50% 04/01/46 633,592 ------------- 1,632,091 ------------- HOUSEHOLD PRODUCTS - 0.1% 250,000 Proctor & Gamble (The) Co........................... 1.70% 11/03/21 246,884 100,000 Proctor & Gamble (The) Co........................... 2.70% 02/02/26 99,764 250,000 Proctor & Gamble (The) Co........................... 2.45% 11/03/26 244,610 ------------- 591,258 ------------- INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS - 0.2% 250,000 NextEra Energy Capital Holdings, Inc................ 2.06% 09/01/17 250,126 250,000 NextEra Energy Capital Holdings, Inc................ 2.30% 04/01/19 251,254 525,000 NextEra Energy Capital Holdings, Inc................ 2.40% 09/15/19 528,860 500,000 NextEra Energy Capital Holdings, Inc................ 3.55% 05/01/27 508,969 ------------- 1,539,209 ------------- INDUSTRIAL CONGLOMERATES - 0.2% 250,000 3M Co............................................... 1.63% 09/19/21 247,385 250,000 3M Co............................................... 2.25% 09/19/26 237,224 250,000 3M Co............................................... 3.13% 09/19/46 225,635 129,000 General Electric Co................................. 6.75% 03/15/32 177,086 425,000 General Electric Co................................. 4.50% 03/11/44 473,295 ------------- 1,360,625 ------------- INSURANCE - 1.0% 300,000 AIG Global Funding (b).............................. 2.15% 07/02/20 299,916 400,000 American International Group, Inc................... 3.38% 08/15/20 414,223 200,000 American International Group, Inc................... 4.13% 02/15/24 211,466 100,000 American International Group, Inc................... 3.90% 04/01/26 102,487 50,000 American International Group, Inc................... 3.88% 01/15/35 48,625 300,000 American International Group, Inc................... 6.25% 05/01/36 376,430 250,000 Brighthouse Financial, Inc. (b)..................... 3.70% 06/22/27 247,473 250,000 Brighthouse Financial, Inc. (b)..................... 4.70% 06/22/47 247,792 490,000 Chubb INA Holdings, Inc............................. 2.30% 11/03/20 493,024 200,000 Chubb INA Holdings, Inc............................. 2.88% 11/03/22 203,601 350,000 Chubb INA Holdings, Inc............................. 3.35% 05/03/26 358,382 600,000 Chubb INA Holdings, Inc............................. 4.35% 11/03/45 659,546 100,000 MetLife, Inc........................................ 3.00% 03/01/25 100,400 150,000 MetLife, Inc........................................ 3.60% 11/13/25 155,751 300,000 MetLife, Inc........................................ 4.88% 11/13/43 339,899 170,000 MetLife, Inc........................................ 4.60% 05/13/46 187,512 325,000 Metropolitan Life Global Funding I (a) (b).......... 1.70% 12/19/18 326,477 500,000 Metropolitan Life Global Funding I (b).............. 2.65% 04/08/22 501,933 500,000 Metropolitan Life Global Funding I (b).............. 3.45% 12/18/26 513,109 200,000 Principal Financial Group, Inc...................... 3.10% 11/15/26 197,467 275,000 Prudential Financial, Inc........................... 4.60% 05/15/44 301,639 500,000 Travelers (The) Cos., Inc........................... 4.00% 05/30/47 512,820 ------------- 6,799,972 ------------- See Notes to Financial Statements Page 27 FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- CORPORATE BONDS AND NOTES (CONTINUED) IT SERVICES - 0.5% $ 500,000 International Business Machines Corp................ 1.63% 05/15/20 $ 495,994 100,000 International Business Machines Corp................ 3.63% 02/12/24 104,619 600,000 Visa, Inc........................................... 2.20% 12/14/20 605,309 950,000 Visa, Inc........................................... 2.80% 12/14/22 967,939 550,000 Visa, Inc........................................... 3.15% 12/14/25 558,999 303,000 Visa, Inc........................................... 4.15% 12/14/35 328,921 450,000 Visa, Inc........................................... 4.30% 12/14/45 494,787 ------------- 3,556,568 ------------- MACHINERY - 0.1% 490,000 Parker-Hannifin Corp. (b)........................... 3.25% 03/01/27 496,010 245,000 Parker-Hannifin Corp. (b)........................... 4.10% 03/01/47 257,114 ------------- 753,124 ------------- MEDIA - 1.3% 500,000 CBS Corp............................................ 3.38% 02/15/28 491,130 610,000 Charter Communications Operating LLC/Charter Communications Operating Capital................. 4.91% 07/23/25 660,067 250,000 Charter Communications Operating LLC/Charter Communications Operating Capital (b)............. 3.75% 02/15/28 246,845 750,000 Charter Communications Operating LLC/Charter Communications Operating Capital................. 6.48% 10/23/45 903,334 500,000 Charter Communications Operating LLC/Charter Communications Operating Capital (b)............. 5.38% 05/01/47 530,972 200,000 Comcast Corp........................................ 3.15% 03/01/26 201,256 300,000 Comcast Corp........................................ 2.35% 01/15/27 281,930 100,000 Comcast Corp........................................ 4.60% 08/15/45 109,313 250,000 Comcast Corp........................................ 3.40% 07/15/46 228,258 250,000 Discovery Communications LLC........................ 3.80% 03/13/24 253,151 450,000 Discovery Communications LLC........................ 4.90% 03/11/26 477,817 329,000 Time Warner Cable LLC............................... 6.75% 07/01/18 344,285 100,000 Time Warner Cable LLC............................... 8.75% 02/14/19 110,033 200,000 Time Warner Cable LLC............................... 4.50% 09/15/42 190,999 100,000 Time Warner, Inc.................................... 2.95% 07/15/26 94,525 200,000 Time Warner, Inc.................................... 6.50% 11/15/36 246,810 50,000 Time Warner, Inc.................................... 4.85% 07/15/45 51,682 1,000,000 Walt Disney (The) Co................................ 0.88% 07/12/19 985,433 100,000 Walt Disney (The) Co................................ 2.15% 09/17/20 100,728 150,000 Walt Disney (The) Co................................ 3.00% 02/13/26 150,945 350,000 Walt Disney (The) Co................................ 1.85% 07/30/26 318,974 500,000 Walt Disney (The) Co................................ 2.95% 06/15/27 496,314 475,000 Walt Disney (The) Co................................ 4.13% 06/01/44 499,822 250,000 Walt Disney (The) Co................................ 3.00% 07/30/46 219,171 ------------- 8,193,794 ------------- METALS & MINING - 0.1% 250,000 Glencore Funding LLC (b)............................ 4.13% 05/30/23 256,857 250,000 Glencore Funding LLC (b)............................ 4.00% 03/27/27 246,465 ------------- 503,322 ------------- Page 28 See Notes to Financial Statements FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- CORPORATE BONDS AND NOTES (CONTINUED) MULTI-UTILITIES - 1.0% $ 493,000 CMS Energy Corp..................................... 3.00% 05/15/26 $ 483,277 100,000 CMS Energy Corp..................................... 4.88% 03/01/44 111,888 95,000 Consolidated Edison Co. of New York, Inc............ 4.50% 12/01/45 104,779 335,000 Consolidated Edison Co. of New York, Inc............ 4.45% 03/15/44 367,705 100,000 Consolidated Edison Co. of New York, Inc............ 3.85% 06/15/46 101,071 500,000 Consolidated Edison Co. of New York, Inc............ 3.88% 06/15/47 508,067 250,000 Consolidated Edison Co. of New York, Inc............ 4.30% 12/01/56 261,345 250,000 Consolidated Edison, Inc............................ 2.00% 03/15/20 250,009 100,000 Consolidated Edison, Inc............................ 2.00% 05/15/21 98,532 500,000 Dominion Energy, Inc................................ 2.58% 07/01/20 502,942 250,000 Dominion Resources, Inc............................. 1.88% 01/15/19 249,546 250,000 Dominion Resources, Inc............................. 1.60% 08/15/19 248,011 200,000 Dominion Resources, Inc............................. 5.20% 08/15/19 213,052 250,000 Dominion Resources, Inc............................. 2.75% 01/15/22 251,621 495,000 Dominion Resources, Inc............................. 4.70% 12/01/44 537,856 250,000 NiSource Finance Corp............................... 3.49% 05/15/27 252,232 600,000 NiSource Finance Corp............................... 4.38% 05/15/47 621,235 250,000 Public Service Enterprise Group, Inc................ 1.60% 11/15/19 247,396 250,000 Public Service Enterprise Group, Inc................ 2.00% 11/15/21 244,620 500,000 Southern Co. Gas Capital Corp....................... 2.45% 10/01/23 485,757 500,000 Southern Co. Gas Capital Corp....................... 3.95% 10/01/46 479,293 ------------- 6,620,234 ------------- OIL, GAS & CONSUMABLE FUELS - 3.9% 150,000 Anadarko Petroleum Corp............................. 5.55% 03/15/26 167,912 761,000 Anadarko Petroleum Corp............................. 6.45% 09/15/36 898,377 344,000 Anadarko Petroleum Corp............................. 6.60% 03/15/46 426,363 250,000 Boardwalk Pipelines L.P............................. 5.95% 06/01/26 278,866 750,000 Boardwalk Pipelines L.P............................. 4.45% 07/15/27 769,414 550,000 Chevron Corp........................................ 1.56% 05/16/19 548,548 175,000 Chevron Corp........................................ 2.19% 11/15/19 176,784 250,000 Chevron Corp. (a)................................... 1.43% 03/03/20 250,684 750,000 Chevron Corp........................................ 2.10% 05/16/21 748,147 182,000 Chevron Corp. (a)................................... 1.75% 03/03/22 183,682 550,000 Chevron Corp........................................ 2.57% 05/16/23 551,365 500,000 Chevron Corp........................................ 2.90% 03/03/24 504,498 150,000 Chevron Corp........................................ 3.33% 11/17/25 153,896 1,360,000 Chevron Corp........................................ 2.95% 05/16/26 1,351,384 500,000 Cimarex Energy Co................................... 3.90% 05/15/27 503,738 225,000 ConocoPhillips...................................... 6.50% 02/01/39 296,379 300,000 ConocoPhillips Co................................... 4.20% 03/15/21 318,341 250,000 ConocoPhillips Co................................... 5.95% 03/15/46 313,851 325,000 Devon Energy Corp................................... 3.25% 05/15/22 323,359 500,000 Enable Midstream Partners L.P....................... 4.40% 03/15/27 502,763 185,000 Enbridge Energy Partners L.P........................ 5.50% 09/15/40 194,428 400,000 Enbridge Energy Partners L.P........................ 7.38% 10/15/45 511,126 50,000 Energy Transfer Partners L.P........................ 4.15% 10/01/20 51,968 400,000 Energy Transfer Partners L.P........................ 3.60% 02/01/23 402,336 50,000 Energy Transfer Partners L.P........................ 4.05% 03/15/25 50,281 50,000 Energy Transfer Partners L.P........................ 4.75% 01/15/26 52,105 See Notes to Financial Statements Page 29 FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- CORPORATE BONDS AND NOTES (CONTINUED) OIL, GAS & CONSUMABLE FUELS (CONTINUED) $ 250,000 Energy Transfer Partners L.P........................ 4.20% 04/15/27 $ 250,421 175,000 Energy Transfer Partners L.P........................ 6.50% 02/01/42 196,106 50,000 Energy Transfer Partners L.P........................ 6.13% 12/15/45 54,307 250,000 Energy Transfer Partners L.P........................ 5.30% 04/15/47 248,255 250,000 EnLink Midstream Partners L.P....................... 5.45% 06/01/47 250,189 100,000 Exxon Mobil Corp.................................... 1.71% 03/01/19 100,244 500,000 Exxon Mobil Corp.................................... 2.22% 03/01/21 503,536 150,000 Exxon Mobil Corp.................................... 2.71% 03/06/25 149,092 200,000 Exxon Mobil Corp.................................... 3.04% 03/01/26 201,935 825,000 Exxon Mobil Corp.................................... 4.11% 03/01/46 872,506 220,000 Kinder Morgan Energy Partners L.P................... 3.50% 03/01/21 225,459 100,000 Kinder Morgan Energy Partners L.P................... 4.15% 02/01/24 102,939 175,000 Kinder Morgan Energy Partners L.P................... 6.95% 01/15/38 209,615 800,000 Kinder Morgan, Inc.................................. 3.05% 12/01/19 814,354 715,000 Kinder Morgan, Inc.................................. 4.30% 06/01/25 744,580 300,000 Kinder Morgan, Inc.................................. 5.55% 06/01/45 319,064 650,000 Kinder Morgan, Inc.................................. 5.05% 02/15/46 655,180 250,000 Marathon Oil Corp................................... 3.85% 06/01/25 244,440 259,000 Marathon Oil Corp................................... 5.20% 06/01/45 249,214 600,000 MPLX L.P............................................ 4.13% 03/01/27 603,208 500,000 MPLX L.P............................................ 5.20% 03/01/47 516,892 400,000 ONEOK Partners L.P.................................. 3.38% 10/01/22 404,122 500,000 ONEOK Partners L.P.................................. 4.90% 03/15/25 536,180 250,000 Phillips 66 Partners L.P............................ 3.55% 10/01/26 243,300 250,000 Phillips 66 Partners L.P............................ 4.90% 10/01/46 247,049 425,000 Pioneer Natural Resources Co........................ 3.95% 07/15/22 445,826 300,000 Plains All American Pipeline L.P./PAA Finance Corp.. 4.65% 10/15/25 308,010 250,000 Plains All American Pipeline L.P./PAA Finance Corp.. 4.50% 12/15/26 253,310 500,000 Sabine Pass Liquefaction LLC........................ 5.00% 03/15/27 532,629 250,000 Sabine Pass Liquefaction LLC (b).................... 4.20% 03/15/28 253,099 350,000 Spectra Energy Capital LLC.......................... 3.30% 03/15/23 351,744 100,000 Sunoco Logistics Partners Operations L.P............ 4.40% 04/01/21 105,162 350,000 Sunoco Logistics Partners Operations L.P............ 3.90% 07/15/26 344,064 500,000 TC PipeLines L.P.................................... 3.90% 05/25/27 499,919 250,000 Valero Energy Corp.................................. 3.40% 09/15/26 245,038 125,000 Valero Energy Corp.................................. 6.63% 06/15/37 154,850 500,000 Valero Energy Partners L.P.......................... 4.38% 12/15/26 512,057 300,000 Williams Partners L.P............................... 3.60% 03/15/22 306,816 250,000 Williams Partners L.P............................... 3.90% 01/15/25 253,145 95,000 Williams Partners L.P............................... 4.00% 09/15/25 96,912 250,000 Williams Partners L.P............................... 3.75% 06/15/27 247,965 625,000 Williams Partners L.P............................... 4.90% 01/15/45 628,159 270,000 Williams Partners L.P............................... 5.10% 09/15/45 280,771 ------------- 25,292,258 ------------- PHARMACEUTICALS - 0.4% 250,000 Johnson & Johnson................................... 2.95% 03/03/27 253,300 250,000 Johnson & Johnson................................... 3.63% 03/03/37 261,966 250,000 Johnson & Johnson................................... 3.75% 03/03/47 259,735 125,000 Merck & Co., Inc.................................... 1.85% 02/10/20 125,289 Page 30 See Notes to Financial Statements FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- CORPORATE BONDS AND NOTES (CONTINUED) PHARMACEUTICALS (CONTINUED) $ 300,000 Merck & Co., Inc.................................... 2.75% 02/10/25 $ 299,342 450,000 Merck & Co., Inc.................................... 3.70% 02/10/45 449,923 300,000 Pfizer, Inc......................................... 1.20% 06/01/18 299,479 100,000 Pfizer, Inc......................................... 1.45% 06/03/19 99,633 100,000 Pfizer, Inc......................................... 1.70% 12/15/19 100,195 100,000 Pfizer, Inc......................................... 1.95% 06/03/21 99,902 100,000 Pfizer, Inc......................................... 2.20% 12/15/21 100,253 ------------- 2,349,017 ------------- ROAD & RAIL - 0.7% 425,000 CSX Corp............................................ 3.40% 08/01/24 439,805 350,000 CSX Corp............................................ 2.60% 11/01/26 338,304 250,000 CSX Corp............................................ 3.80% 11/01/46 245,784 200,000 CSX Corp............................................ 4.50% 08/01/54 210,626 250,000 CSX Corp............................................ 4.25% 11/01/66 247,702 100,000 Kansas City Southern................................ 4.95% 08/15/45 109,473 250,000 Norfolk Southern Corp............................... 2.90% 06/15/26 246,509 300,000 Ryder System, Inc................................... 2.65% 03/02/20 302,315 250,000 Ryder System, Inc................................... 2.25% 09/01/21 247,055 500,000 Ryder System, Inc................................... 2.80% 03/01/22 502,280 300,000 Union Pacific Corp.................................. 3.75% 03/15/24 317,422 100,000 Union Pacific Corp.................................. 2.75% 03/01/26 98,866 250,000 Union Pacific Corp.................................. 3.00% 04/15/27 250,996 183,000 Union Pacific Corp.................................. 4.15% 01/15/45 192,403 225,000 Union Pacific Corp.................................. 4.05% 03/01/46 233,508 100,000 Union Pacific Corp.................................. 3.35% 08/15/46 93,469 250,000 Union Pacific Corp.................................. 4.00% 04/15/47 257,047 70,000 Union Pacific Corp.................................. 3.80% 10/01/51 68,739 ------------- 4,402,303 ------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 0.6% 250,000 Applied Materials, Inc.............................. 3.30% 04/01/27 254,372 250,000 Applied Materials, Inc.............................. 4.35% 04/01/47 266,024 250,000 Intel Corp. (a)..................................... 1.26% 05/11/20 250,130 250,000 Intel Corp.......................................... 1.85% 05/11/20 250,173 100,000 Intel Corp.......................................... 1.70% 05/19/21 98,758 250,000 Intel Corp. (a)..................................... 1.53% 05/11/22 250,351 250,000 Intel Corp.......................................... 2.35% 05/11/22 250,752 100,000 Intel Corp.......................................... 3.10% 07/29/22 103,673 375,000 Intel Corp.......................................... 2.70% 12/15/22 380,082 500,000 Intel Corp.......................................... 2.88% 05/11/24 502,349 100,000 Intel Corp.......................................... 2.60% 05/19/26 96,772 250,000 Intel Corp.......................................... 3.15% 05/11/27 251,164 150,000 Intel Corp.......................................... 4.90% 07/29/45 174,700 300,000 Intel Corp.......................................... 4.10% 05/19/46 311,719 500,000 Intel Corp.......................................... 4.10% 05/11/47 518,960 ------------- 3,959,979 ------------- SOFTWARE - 1.0% 250,000 Microsoft Corp...................................... 1.10% 08/08/19 247,113 250,000 Microsoft Corp...................................... 1.85% 02/06/20 250,732 150,000 Microsoft Corp...................................... 2.00% 11/03/20 150,611 See Notes to Financial Statements Page 31 FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- CORPORATE BONDS AND NOTES (CONTINUED) SOFTWARE (CONTINUED) $ 250,000 Microsoft Corp...................................... 1.55% 08/08/21 $ 244,752 800,000 Microsoft Corp...................................... 2.40% 02/06/22 808,037 150,000 Microsoft Corp...................................... 3.63% 12/15/23 159,029 250,000 Microsoft Corp...................................... 2.88% 02/06/24 254,289 200,000 Microsoft Corp...................................... 3.13% 11/03/25 204,285 100,000 Microsoft Corp...................................... 2.40% 08/08/26 96,354 250,000 Microsoft Corp...................................... 3.30% 02/06/27 257,827 100,000 Microsoft Corp...................................... 3.45% 08/08/36 100,267 250,000 Microsoft Corp...................................... 4.10% 02/06/37 269,823 275,000 Microsoft Corp...................................... 4.45% 11/03/45 306,745 350,000 Microsoft Corp...................................... 3.70% 08/08/46 347,257 250,000 Microsoft Corp...................................... 4.25% 02/06/47 271,360 100,000 Oracle Corp......................................... 2.25% 10/08/19 101,265 200,000 Oracle Corp......................................... 1.90% 09/15/21 198,361 100,000 Oracle Corp......................................... 2.50% 05/15/22 101,016 500,000 Oracle Corp......................................... 2.40% 09/15/23 493,935 250,000 Oracle Corp......................................... 3.40% 07/08/24 260,570 350,000 Oracle Corp......................................... 2.65% 07/15/26 336,248 50,000 Oracle Corp......................................... 3.85% 07/15/36 51,791 400,000 Oracle Corp......................................... 5.38% 07/15/40 487,518 350,000 Oracle Corp......................................... 4.00% 07/15/46 354,365 ------------- 6,353,550 ------------- SPECIALTY RETAIL - 0.6% 500,000 Home Depot (The), Inc............................... 2.00% 04/01/21 498,863 770,000 Home Depot (The), Inc............................... 4.40% 04/01/21 830,346 100,000 Home Depot (The), Inc............................... 3.35% 09/15/25 103,948 550,000 Home Depot (The), Inc............................... 3.00% 04/01/26 553,554 250,000 Home Depot (The), Inc............................... 2.13% 09/15/26 234,003 100,000 Home Depot (The), Inc............................... 4.40% 03/15/45 109,791 500,000 Home Depot (The), Inc............................... 4.25% 04/01/46 537,792 500,000 Home Depot (The), Inc............................... 3.90% 06/15/47 508,197 250,000 Home Depot (The), Inc............................... 3.50% 09/15/56 227,204 250,000 Lowe's Cos., Inc.................................... 3.10% 05/03/27 249,172 ------------- 3,852,870 ------------- TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 0.8% 250,000 Apple, Inc. (a)..................................... 1.26% 02/08/19 250,307 250,000 Apple, Inc.......................................... 1.10% 08/02/19 247,405 250,000 Apple, Inc. (a)..................................... 1.38% 02/07/20 250,705 450,000 Apple, Inc.......................................... 2.85% 05/06/21 462,928 250,000 Apple, Inc.......................................... 1.55% 08/04/21 244,387 110,000 Apple, Inc. (a)..................................... 1.68% 02/09/22 111,190 375,000 Apple, Inc.......................................... 2.40% 05/03/23 372,351 250,000 Apple, Inc.......................................... 3.00% 02/09/24 254,013 500,000 Apple, Inc.......................................... 2.85% 05/11/24 502,879 100,000 Apple, Inc.......................................... 2.45% 08/04/26 95,737 250,000 Apple, Inc.......................................... 3.35% 02/09/27 255,890 500,000 Apple, Inc.......................................... 3.20% 05/11/27 506,464 100,000 Apple, Inc.......................................... 4.45% 05/06/44 109,063 100,000 Apple, Inc.......................................... 3.45% 02/09/45 94,211 Page 32 See Notes to Financial Statements FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- CORPORATE BONDS AND NOTES (CONTINUED) TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS (CONTINUED) $ 100,000 Apple, Inc.......................................... 4.65% 02/23/46 $ 112,367 500,000 Apple, Inc.......................................... 4.25% 02/09/47 531,663 50,000 Hewlett Packard Enterprise Co....................... 2.45% 10/05/17 50,128 50,000 Hewlett Packard Enterprise Co....................... 2.85% 10/05/18 50,443 100,000 Hewlett Packard Enterprise Co....................... 3.60% 10/15/20 103,188 150,000 Hewlett Packard Enterprise Co....................... 4.40% 10/15/22 159,202 125,000 Hewlett Packard Enterprise Co....................... 4.90% 10/15/25 131,267 50,000 Hewlett Packard Enterprise Co....................... 6.35% 10/15/45 53,021 ------------- 4,948,809 ------------- TEXTILES, APPAREL & LUXURY GOODS - 0.1% 250,000 NIKE, Inc........................................... 2.38% 11/01/26 237,458 100,000 NIKE, Inc........................................... 3.88% 11/01/45 100,923 250,000 NIKE, Inc........................................... 3.38% 11/01/46 230,648 ------------- 569,029 ------------- TRADING COMPANIES & DISTRIBUTORS - 0.0% 250,000 Air Lease Corp...................................... 2.63% 07/01/22 248,073 ------------- WATER UTILITIES - 0.1% 350,000 American Water Capital Corp......................... 4.00% 12/01/46 363,875 ------------- TOTAL CORPORATE BONDS AND NOTES.............................................. 255,934,060 (Cost $253,707,797) ------------- FOREIGN CORPORATE BONDS AND NOTES - 1.9% BANKS - 0.5% 500,000 HSBC Holdings PLC (a)............................... 3.46% 03/08/21 527,225 700,000 HSBC Holdings PLC (a)............................... 2.85% 05/25/21 724,530 475,000 HSBC Holdings PLC................................... 2.65% 01/05/22 474,204 200,000 HSBC Holdings PLC (a)............................... 3.26% 03/13/23 203,922 625,000 HSBC Holdings PLC................................... 3.90% 05/25/26 645,851 350,000 HSBC Holdings PLC................................... 4.38% 11/23/26 363,865 200,000 HSBC Holdings PLC (a)............................... 4.04% 03/13/28 207,405 250,000 Royal Bank of Scotland PLC (a)...................... 3.50% 05/15/23 251,901 ------------- 3,398,903 ------------- CAPITAL MARKETS - 0.2% 200,000 Credit Suisse AG.................................... 5.40% 01/14/20 214,897 500,000 Credit Suisse Group AG (b).......................... 3.57% 01/09/23 512,899 167,000 Deutsche Bank AG (a)................................ 2.61% 01/18/19 169,001 250,000 UBS Group Funding Switzerland AG (a) (b)............ 2.41% 05/23/23 253,958 ------------- 1,150,755 ------------- DIVERSIFIED FINANCIAL SERVICES - 0.2% 444,000 GE Capital International Funding Co................. 4.42% 11/15/35 484,172 250,000 Shell International Finance, B.V.................... 2.88% 05/10/26 246,977 250,000 Shell International Finance, B.V.................... 2.50% 09/12/26 239,309 250,000 Shell International Finance, B.V.................... 4.00% 05/10/46 247,483 250,000 Shell International Finance, B.V.................... 3.75% 09/12/46 237,192 ------------- 1,455,133 ------------- See Notes to Financial Statements Page 33 FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- FOREIGN CORPORATE BONDS AND NOTES (CONTINUED) DIVERSIFIED TELECOMMUNICATION SERVICES - 0.1% $ 250,000 Telefonica Emisiones SAU............................ 4.10% 03/08/27 $ 258,802 500,000 Telefonica Emisiones SAU............................ 5.21% 03/08/47 541,973 ------------- 800,775 ------------- HEALTH CARE EQUIPMENT & SUPPLIES - 0.1% 250,000 Medtronic Global Holdings SCA....................... 1.70% 03/28/19 250,222 250,000 Medtronic Global Holdings SCA....................... 3.35% 04/01/27 255,176 ------------- 505,398 ------------- METALS & MINING - 0.2% 330,000 BHP Billiton Finance USA, Ltd....................... 5.00% 09/30/43 382,756 186,000 Rio Tinto Finance USA, Ltd.......................... 3.75% 06/15/25 195,969 350,000 Vale Overseas, Ltd.................................. 6.25% 08/10/26 378,438 ------------- 957,163 ------------- OIL, GAS & CONSUMABLE FUELS - 0.5% 100,000 BP Capital Markets PLC.............................. 2.11% 09/16/21 99,174 100,000 BP Capital Markets PLC.............................. 3.12% 05/04/26 99,227 100,000 BP Capital Markets PLC.............................. 3.02% 01/16/27 97,411 500,000 Canadian Natural Resources, Ltd..................... 2.95% 01/15/23 496,643 100,000 Canadian Natural Resources, Ltd..................... 3.80% 04/15/24 101,349 500,000 Canadian Natural Resources, Ltd..................... 3.85% 06/01/27 496,962 500,000 Canadian Natural Resources, Ltd..................... 4.95% 06/01/47 509,420 100,000 Cenovus Energy, Inc. (b)............................ 5.40% 06/15/47 93,673 250,000 Enbridge, Inc....................................... 2.90% 07/15/22 249,790 250,000 Enbridge, Inc....................................... 4.25% 12/01/26 261,031 250,000 Enbridge, Inc....................................... 3.70% 07/15/27 250,335 250,000 Enbridge, Inc....................................... 5.50% 12/01/46 280,692 200,000 Petroleos Mexicanos (b)............................. 5.38% 03/13/22 210,800 ------------- 3,246,507 ------------- PHARMACEUTICALS - 0.1% 300,000 Allergan Funding SCS................................ 3.45% 03/15/22 309,568 300,000 Allergan Funding SCS................................ 3.80% 03/15/25 310,807 ------------- 620,375 ------------- TOTAL FOREIGN CORPORATE BONDS AND NOTES...................................... 12,135,009 (Cost $11,900,560) ------------- U.S. GOVERNMENT BONDS AND NOTES - 1.1% 1,380,000 U.S. Treasury Bond.................................. 3.00% 02/15/47 1,423,852 1,000,000 U.S. Treasury Note (c).............................. 0.88% 10/15/17 999,413 460,000 U.S. Treasury Note.................................. 1.25% 05/31/19 458,931 180,000 U.S. Treasury Note.................................. 1.50% 05/15/20 179,817 528,000 U.S. Treasury Note.................................. 1.88% 04/30/22 527,959 1,945,000 U.S. Treasury Note.................................. 1.75% 05/31/22 1,933,832 710,000 U.S. Treasury Note.................................. 2.00% 05/31/24 704,370 865,000 U.S. Treasury Note.................................. 2.38% 05/15/27 870,592 ------------- TOTAL U.S. GOVERNMENT BONDS AND NOTES........................................ 7,098,766 (Cost $7,126,091) ------------- Page 34 See Notes to Financial Statements FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) ANNUALIZED PRINCIPAL YIELD ON DATE STATED VALUE DESCRIPTION OF PURCHASE MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- COMMERCIAL PAPER - 0.4% ELECTRIC UTILITIES - 0.3% $ 2,200,000 Northern States Power Co............................ 1.20% 07/03/17 $ 2,199,780 ------------- OIL, GAS & CONSUMABLE FUELS - 0.1% 275,000 ONEOK Partners L.P.................................. 1.50% 07/03/17 274,966 ------------- TOTAL COMMERCIAL PAPER....................................................... 2,474,746 (Cost $2,474,830) ------------- TOTAL INVESTMENTS - 99.2%.................................................... 643,536,525 (Cost $600,201,865) (d) NET OTHER ASSETS AND LIABILITIES - 0.8%...................................... 5,249,933 ------------- NET ASSETS - 100.0%.......................................................... $ 648,786,458 ============= ----------------------------- (a) Floating or variable rate security. The interest rate shown reflects the rate in effect at June 30, 2017. (b) This security, sold within the terms of a private placement memorandum, is exempt from registration upon resale under Rule 144A under the Securities Act of 1933, as amended, and may be resold in transactions exempt from registration, normally to qualified institutional buyers. Pursuant to procedures adopted by the Trust's Board of Trustees, this security has been determined to be liquid by First Trust Advisors L.P., the Fund's advisor. Although market instability can result in periods of increased overall market illiquidity, liquidity for each security is determined based on security-specific factors and assumptions, which require subjective judgement. At June 30, 2017, securities noted as such amounted to $9,227,944 or 1.42% of net assets. (c) All or a portion of this security is segregated as collateral for open futures contracts. (d) Aggregate cost for financial reporting purposes, which approximates the aggregate cost for federal income tax purposes. As of June 30, 2017, the aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost was $48,544,676 and the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value was $5,210,016. See Notes to Financial Statements Page 35 FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) ----------------------------- VALUATION INPUTS A summary of the inputs used to value the Fund's investments as of June 30, 2017 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements): ASSETS TABLE LEVEL 2 LEVEL 3 TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT VALUE AT QUOTED OBSERVABLE UNOBSERVABLE 6/30/2017 PRICES INPUTS INPUTS ------------ ------------ ------------ ------------ Common Stocks*.................................... $365,893,944 $365,893,944 $ -- $ -- Corporate Bonds and Notes*........................ 255,934,060 -- 255,934,060 -- Foreign Corporate Bonds and Notes*................ 12,135,009 -- 12,135,009 -- U.S. Government Bonds and Notes................... 7,098,766 -- 7,098,766 -- Commercial Paper*................................. 2,474,746 -- 2,474,746 -- ------------ ------------ ------------ ------------ Total Investments................................. 643,536,525 365,893,944 277,642,581 -- Futures Contracts**............................... 23,820 23,820 -- -- ------------ ------------ ------------ ------------ Total............................................. $643,560,345 $365,917,764 $277,642,581 $ -- ============ ============ ============ ============ LIABILITIES TABLE LEVEL 2 LEVEL 3 TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT VALUE AT QUOTED OBSERVABLE UNOBSERVABLE 6/30/2017 PRICES INPUTS INPUTS ------------ ------------ ------------ ------------ Futures Contracts**............................... $ (23,875) $ (23,875) $ -- $ -- ============ ============ ============ ============ * See Portfolio of Investments for industry breakout. ** Includes accumulated appreciation/depreciation on futures contracts as presented on the Statements of Operations. Only the current day's variation margin is presented on the Statements of Assets and Liabilities. All transfers in and out of the Levels during the period are assumed to be transferred on the last day of the period at their current value. There were no transfers between Levels at June 30, 2017. OPEN FUTURES CONTRACTS AT JUNE 30, 2017 (see Note 2D - Futures Contracts in the Notes to Financial Statements): UNREALIZED NUMBER OF EXPIRATION NOTIONAL APPRECIATION/ SHORT FUTURES CONTRACTS CONTRACTS MONTH VALUE (DEPRECIATION) -------------------------------------------------- ------------ ------------ ------------ ------------ U.S. Treasury 5-Year Notes 40 Sep-2017 $ 4,713,438 $ 9,375 U.S. Treasury 10-Year Notes 13 Sep-2017 1,631,906 2,945 U.S. Treasury CME Ultra Long Term Bonds 8 Sep-2017 1,327,000 (23,875) U.S. Treasury Ultra 10-Year Notes 92 Sep-2017 12,402,750 11,500 ------------ ------------ Total Futures Contracts $ 20,075,094 $ (55) ============ ============ Page 36 See Notes to Financial Statements FIRST TRUST MULTI INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 2017 (UNAUDITED) SHARES DESCRIPTION VALUE ----------- ----------------------------------------------------------------------------- ------------- EXCHANGE-TRADED FUNDS - 39.1% CAPITAL MARKETS - 39.1% 4,448 First Trust Low Duration Opportunities ETF (a)............................... $ 231,785 89,310 First Trust Preferred Securities and Income ETF (a).......................... 1,787,093 59,975 First Trust Senior Loan Fund (a)............................................. 2,901,591 23,820 First Trust Tactical High Yield ETF (a)...................................... 1,170,991 390 iShares 20+ Year Treasury Bond ETF........................................... 48,797 100 iShares 3-7 Year Treasury Bond ETF........................................... 12,357 590 iShares 7-10 Year Treasury Bond ETF.......................................... 62,900 4,920 iShares Floating Rate Bond ETF............................................... 250,526 11,210 iShares iBoxx $ Investment Grade Corporate Bond ETF.......................... 1,350,917 1 Vanguard Mortgage-Backed Securities ETF...................................... 53 ------------- TOTAL EXCHANGE-TRADED FUNDS.................................................. 7,817,010 (Cost $7,729,397) ------------- COMMON STOCKS - 21.2% AEROSPACE & DEFENSE - 0.8% 423 General Dynamics Corp........................................................ 83,796 486 Raytheon Co.................................................................. 78,479 ------------- 162,275 ------------- BANKS - 1.7% 1,079 JPMorgan Chase & Co.......................................................... 98,621 1,477 U.S. Bancorp................................................................. 76,686 1,584 Webster Financial Corp....................................................... 82,716 1,301 Wells Fargo & Co............................................................. 72,088 ------------- 330,111 ------------- CAPITAL MARKETS - 0.3% 165 BlackRock, Inc............................................................... 69,698 ------------- CHEMICALS - 0.6% 483 International Flavors & Fragrances, Inc...................................... 65,205 593 LyondellBasell Industries N.V., Class A...................................... 50,043 ------------- 115,248 ------------- COMMUNICATIONS EQUIPMENT - 0.4% 2,326 Cisco Systems, Inc........................................................... 72,804 ------------- CONSUMER FINANCE - 0.4% 941 Capital One Financial Corp................................................... 77,745 ------------- DIVERSIFIED TELECOMMUNICATION SERVICES - 0.3% 1,189 Verizon Communications, Inc.................................................. 53,101 ------------- ELECTRIC UTILITIES - 1.4% 457 Alliant Energy Corp.......................................................... 18,358 330 American Electric Power Co., Inc............................................. 22,925 138 Duke Energy Corp............................................................. 11,535 892 Edison International......................................................... 69,745 647 Emera, Inc. (CAD)............................................................ 24,053 571 Eversource Energy............................................................ 34,665 338 Fortis, Inc. (CAD)........................................................... 11,880 686 Hydro One Ltd. (CAD) (b)..................................................... 12,289 331 NextEra Energy, Inc.......................................................... 46,383 476 Southern (The) Co............................................................ 22,791 ------------- 274,624 ------------- See Notes to Financial Statements Page 37 FIRST TRUST MULTI INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) SHARES DESCRIPTION VALUE ----------- ----------------------------------------------------------------------------- ------------- COMMON STOCKS (CONTINUED) ELECTRICAL EQUIPMENT - 0.3% 898 Eaton Corp. PLC.............................................................. $ 69,891 ------------- ENERGY EQUIPMENT & SERVICES - 0.2% 589 Schlumberger Ltd............................................................. 38,780 ------------- FOOD & STAPLES RETAILING - 0.3% 695 CVS Health Corp.............................................................. 55,920 ------------- GAS UTILITIES - 0.3% 142 Atmos Energy Corp............................................................ 11,779 159 Chesapeake Utilities Corp.................................................... 11,917 286 New Jersey Resources Corp.................................................... 11,354 482 UGI Corp..................................................................... 23,334 ------------- 58,384 ------------- HEALTH CARE EQUIPMENT & SUPPLIES - 1.2% 1,601 Abbott Laboratories.......................................................... 77,825 878 Medtronic PLC................................................................ 77,923 945 STERIS PLC................................................................... 77,017 ------------- 232,765 ------------- HEALTH CARE PROVIDERS & SERVICES - 0.5% 592 Aetna, Inc................................................................... 89,883 ------------- HOTELS, RESTAURANTS & LEISURE - 0.8% 1,389 Carnival Corp................................................................ 91,077 1,034 Starbucks Corp............................................................... 60,293 ------------- 151,370 ------------- INDUSTRIAL CONGLOMERATES - 1.1% 2,204 General Electric Co.......................................................... 59,530 636 Honeywell International, Inc................................................. 84,772 1,220 Siemens AG, ADR.............................................................. 84,363 ------------- 228,665 ------------- INSURANCE - 0.8% 1,979 FNF Group.................................................................... 88,719 1,475 MetLife, Inc................................................................. 81,036 ------------- 169,755 ------------- IT SERVICES - 0.8% 715 Accenture PLC, Class A....................................................... 88,431 898 Fidelity National Information Services, Inc.................................. 76,689 ------------- 165,120 ------------- MACHINERY - 0.3% 382 Snap-on, Inc................................................................. 60,356 ------------- MULTI-UTILITIES - 0.7% 739 National Grid PLC, ADR....................................................... 46,424 814 Public Service Enterprise Group, Inc......................................... 35,010 256 SCANA Corp................................................................... 17,155 305 Sempra Energy................................................................ 34,389 187 WEC Energy Group, Inc........................................................ 11,478 ------------- 144,456 ------------- Page 38 See Notes to Financial Statements FIRST TRUST MULTI INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) SHARES DESCRIPTION VALUE ----------- ----------------------------------------------------------------------------- ------------- COMMON STOCKS (CONTINUED) OIL, GAS & CONSUMABLE FUELS - 2.7% 585 Chevron Corp................................................................. $ 61,033 1,961 Enbridge Income Fund Holdings, Inc. (CAD).................................... 48,677 1,214 Enbridge, Inc................................................................ 48,329 892 Exxon Mobil Corp............................................................. 72,011 1,273 Inter Pipeline Ltd. (CAD).................................................... 24,934 2,546 Kinder Morgan, Inc........................................................... 48,781 1,594 TOTAL S.A., ADR.............................................................. 79,046 3,452 TransCanada Corp............................................................. 164,557 ------------- 547,368 ------------- PHARMACEUTICALS - 1.2% 860 Eli Lilly & Co............................................................... 70,778 671 Johnson & Johnson............................................................ 88,767 881 Novartis AG, ADR............................................................. 73,537 ------------- 233,082 ------------- ROAD & RAIL - 0.3% 608 Union Pacific Corp........................................................... 66,217 ------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 0.4% 334 Broadcom Ltd................................................................. 77,839 ------------- SOFTWARE - 0.9% 1,448 Microsoft Corp............................................................... 99,811 1,512 Oracle Corp.................................................................. 75,812 ------------- 175,623 ------------- SPECIALTY RETAIL - 0.8% 623 Home Depot (The), Inc........................................................ 95,568 873 TJX (The) Cos., Inc.......................................................... 63,004 ------------- 158,572 ------------- TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 0.7% 569 Apple, Inc................................................................... 81,947 718 Western Digital Corp......................................................... 63,615 ------------- 145,562 ------------- TEXTILES, APPAREL & LUXURY GOODS - 0.3% 1,105 NIKE, Inc., Class B.......................................................... 65,195 ------------- TOBACCO - 0.7% 959 Altria Group, Inc............................................................ 71,417 992 British American Tobacco PLC, ADR............................................ 67,992 ------------- 139,409 ------------- TOTAL COMMON STOCKS.......................................................... 4,229,818 (Cost $3,756,852) ------------- REAL ESTATE INVESTMENT TRUSTS - 11.8% DIVERSIFIED REITS - 1.9% 9,245 Lexington Realty Trust....................................................... 91,618 786 PS Business Parks, Inc....................................................... 104,058 3,837 STORE Capital Corp........................................................... 86,141 2,953 Washington Real Estate Investment Trust...................................... 94,201 ------------- 376,018 ------------- See Notes to Financial Statements Page 39 FIRST TRUST MULTI INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) SHARES DESCRIPTION VALUE ----------- ----------------------------------------------------------------------------- ------------- REAL ESTATE INVESTMENT TRUSTS (CONTINUED) HEALTH CARE REITS - 1.4% 1,273 National Health Investors, Inc............................................... $ 100,822 2,767 Omega Healthcare Investors, Inc.............................................. 91,366 4,757 Physicians Realty Trust...................................................... 95,806 ------------- 287,994 ------------- HOTEL & RESORT REITS - 0.9% 2,965 Hospitality Properties Trust................................................. 86,430 5,003 Host Hotels & Resorts, Inc................................................... 91,405 ------------- 177,835 ------------- INDUSTRIAL REITS - 1.0% 3,461 Duke Realty Corp............................................................. 96,735 1,749 Prologis, Inc................................................................ 102,561 ------------- 199,296 ------------- OFFICE REITS - 1.0% 2,867 Corporate Office Properties Trust............................................ 100,431 1,854 Highwoods Properties, Inc.................................................... 94,016 ------------- 194,447 ------------- RESIDENTIAL REITS - 1.9% 2,169 Apartment Investment & Management Co., Class A............................... 93,202 510 AvalonBay Communities, Inc................................................... 98,007 1,178 Equity LifeStyle Properties, Inc............................................. 101,708 938 Mid-America Apartment Communities, Inc....................................... 98,846 ------------- 391,763 ------------- RETAIL REITS - 1.3% 2,148 National Retail Properties, Inc.............................................. 83,987 6,645 Retail Properties of America, Inc., Class A.................................. 81,135 563 Simon Property Group, Inc.................................................... 91,071 ------------- 256,193 ------------- SPECIALIZED REITS - 2.4% 1,768 CyrusOne, Inc................................................................ 98,566 848 Digital Realty Trust, Inc.................................................... 95,782 1,269 EPR Properties............................................................... 91,203 1,205 Extra Space Storage, Inc..................................................... 93,990 1,814 QTS Realty Trust, Inc., Class A.............................................. 94,927 ------------- 474,468 ------------- TOTAL REAL ESTATE INVESTMENT TRUSTS.......................................... 2,358,014 (Cost $2,175,772) ------------- Page 40 See Notes to Financial Statements FIRST TRUST MULTI INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) UNITS DESCRIPTION VALUE ----------- ----------------------------------------------------------------------------- ------------- MASTER LIMITED PARTNERSHIPS - 8.8% CHEMICALS - 0.2% 1,515 Westlake Chemical Partners, L.P.............................................. $ 37,496 ------------- GAS UTILITIES - 0.2% 1,080 AmeriGas Partners, L.P....................................................... 48,784 ------------- INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS - 0.4% 2,176 NextEra Energy Partners, L.P................................................. 80,490 ------------- OIL, GAS & CONSUMABLE FUELS - 8.0% 624 Alliance Resource Partners, L.P.............................................. 11,794 386 Buckeye Partners, L.P........................................................ 24,677 7,956 Enbridge Energy Partners, L.P................................................ 127,296 9,089 Enterprise Products Partners, L.P............................................ 246,130 1,134 EQT Midstream Partners, L.P.................................................. 84,630 3,951 Holly Energy Partners, L.P................................................... 128,328 1,892 Magellan Midstream Partners, L.P............................................. 134,843 983 NGL Energy Partners, L.P..................................................... 13,762 1,240 ONEOK Partners, L.P.......................................................... 63,327 1,981 Phillips 66 Partners, L.P.................................................... 97,901 5,386 Plains All American Pipeline, L.P............................................ 141,490 2,922 Shell Midstream Partners, L.P................................................ 88,537 3,399 Spectra Energy Partners, L.P................................................. 145,817 510 Tallgrass Energy Partners, L.P............................................... 25,546 2,728 TC PipeLines, L.P............................................................ 150,040 287 TransMontaigne Partners, L.P................................................. 12,054 2,532 Williams Partners, L.P....................................................... 101,559 ------------- 1,597,731 ------------- TOTAL MASTER LIMITED PARTNERSHIPS............................................ 1,764,501 (Cost $1,605,471) ------------- PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- U.S. GOVERNMENT BONDS AND NOTES - 8.8% $ 68,858 U.S. Treasury Inflation Indexed Bond (c)............ 1.75% 01/15/28 76,830 44,413 U.S. Treasury Inflation Indexed Bond (c)............ 2.50% 01/15/29 53,463 7,436 U.S. Treasury Inflation Indexed Bond (c)............ 3.88% 04/15/29 10,086 24,932 U.S. Treasury Inflation Indexed Bond (c)............ 3.38% 04/15/32 34,298 23,755 U.S. Treasury Inflation Indexed Bond (c)............ 2.13% 02/15/40 29,594 37,737 U.S. Treasury Inflation Indexed Bond (c)............ 2.13% 02/15/41 47,227 33,327 U.S. Treasury Inflation Indexed Bond (c)............ 0.75% 02/15/42 31,773 36,795 U.S. Treasury Inflation Indexed Bond (c)............ 0.63% 02/15/43 33,920 33,361 U.S. Treasury Inflation Indexed Bond (c)............ 1.38% 02/15/44 36,351 33,537 U.S. Treasury Inflation Indexed Bond (c)............ 0.75% 02/15/45 31,512 29,925 U.S. Treasury Inflation Indexed Bond (c)............ 1.00% 02/15/46 29,933 11,142 U.S. Treasury Inflation Indexed Bond (c)............ 0.88% 02/15/47 10,825 24,944 U.S. Treasury Inflation Indexed Note (c)............ 1.38% 07/15/18 25,353 4,555 U.S. Treasury Inflation Indexed Note (c)............ 2.13% 01/15/19 4,705 94,850 U.S. Treasury Inflation Indexed Note (c)............ 0.13% 04/15/19 94,927 24,047 U.S. Treasury Inflation Indexed Note (c)............ 1.88% 07/15/19 25,076 30,980 U.S. Treasury Inflation Indexed Note (c)............ 1.38% 01/15/20 32,126 75,173 U.S. Treasury Inflation Indexed Note (c)............ 0.13% 04/15/20 75,318 52,693 U.S. Treasury Inflation Indexed Note (c)............ 1.25% 07/15/20 54,947 See Notes to Financial Statements Page 41 FIRST TRUST MULTI INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- U.S. GOVERNMENT BONDS AND NOTES (CONTINUED) $ 58,344 U.S. Treasury Inflation Indexed Note (c)............ 1.13% 01/15/21 $ 60,602 68,086 U.S. Treasury Inflation Indexed Note (c)............ 0.13% 04/15/21 68,014 56,411 U.S. Treasury Inflation Indexed Note (c)............ 0.63% 07/15/21 57,847 63,627 U.S. Treasury Inflation Indexed Note (c)............ 0.13% 01/15/22 63,571 23,123 U.S. Treasury Inflation Indexed Note (c)............ 0.13% 04/15/22 23,027 63,793 U.S. Treasury Inflation Indexed Note (c)............ 0.13% 07/15/22 63,752 62,496 U.S. Treasury Inflation Indexed Note (c)............ 0.13% 01/15/23 61,965 61,987 U.S. Treasury Inflation Indexed Note (c)............ 0.38% 07/15/23 62,427 61,824 U.S. Treasury Inflation Indexed Note (c)............ 0.63% 01/15/24 62,746 60,959 U.S. Treasury Inflation Indexed Note (c)............ 0.13% 07/15/24 59,919 62,969 U.S. Treasury Inflation Indexed Note (c)............ 0.25% 01/15/25 61,894 51,235 U.S. Treasury Inflation Indexed Note (c)............ 2.38% 01/15/25 58,406 60,830 U.S. Treasury Inflation Indexed Note (c)............ 0.38% 07/15/25 60,413 64,826 U.S. Treasury Inflation Indexed Note (c)............ 0.63% 01/15/26 65,284 33,877 U.S. Treasury Inflation Indexed Note (c)............ 2.00% 01/15/26 37,991 54,061 U.S. Treasury Inflation Indexed Note (c)............ 0.13% 07/15/26 52,186 55,669 U.S. Treasury Inflation Indexed Note (c)............ 0.38% 01/15/27 54,762 27,279 U.S. Treasury Inflation Indexed Note (c)............ 2.38% 01/15/27 31,817 ------------- TOTAL U.S. GOVERNMENT BONDS AND NOTES........................................ 1,744,887 (Cost $1,761,215) ------------- U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES - 7.8% COLLATERALIZED MORTGAGE OBLIGATIONS - 4.3% Fannie Mae REMICS 16 Series 1988-16, Class B.......................... 9.50% 06/25/18 16 529 Series 1988-30, Class D.......................... 9.50% 12/25/18 545 222 Series 1989-69, Class G.......................... 7.60% 10/25/19 230 679 Series 1989-82, Class G.......................... 8.40% 11/25/19 717 16,103 Series 1990-37, Class K.......................... 9.50% 04/25/20 16,763 2,498 Series 1990-109, Class J......................... 7.00% 09/25/20 2,628 1,122 Series 1992-24, Class Z.......................... 6.50% 04/25/22 1,198 19 Series 1992-44, Class ZQ......................... 8.00% 07/25/22 19 2,605 Series 1993-1, Class KA.......................... 7.90% 01/25/23 2,887 1,765 Series 1993-62, Class E.......................... 7.00% 04/25/23 1,919 615 Series 1993-119, Class H......................... 6.50% 07/25/23 668 4,031 Series 1993-178, Class PK........................ 6.50% 09/25/23 4,398 3,943 Series 1995-24, Class G.......................... 6.50% 04/25/23 4,243 2,295 Series 1999-56, Class Z.......................... 7.00% 12/18/29 2,580 43,166 Series 2002-9, Class MS, IO (d).................. 6.88% 03/25/32 8,660 1,907 Series 2002-67, Class PE......................... 5.50% 11/25/32 2,133 5,282 Series 2002-90, Class A1......................... 6.50% 06/25/42 6,135 61 Series 2003-9, Class EB.......................... 5.00% 02/25/18 61 4,869 Series 2003-14, Class AQ......................... 3.50% 03/25/33 4,960 6,914 Series 2003-41, Class OA......................... 4.00% 05/25/33 7,198 146 Series 2003-92, Class HP......................... 4.50% 09/25/18 148 10,827 Series 2004-10, Class ZB......................... 6.00% 02/25/34 12,808 4,379 Series 2004-76, Class CL......................... 4.00% 10/25/19 4,414 4,620 Series 2004-92, Class S, IO (d).................. 5.48% 08/25/34 242 863 Series 2005-46, Class LW......................... 5.00% 06/25/20 878 93 Series 2005-48, Class MD......................... 5.00% 04/25/34 93 9,465 Series 2005-68, Class BC......................... 5.25% 06/25/35 9,801 Page 42 See Notes to Financial Statements FIRST TRUST MULTI INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (CONTINUED) COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED) Fannie Mae REMICS (Continued) $ 3,800 Series 2005-70, Class KJ......................... 5.50% 09/25/34 $ 3,867 21,614 Series 2005-79, Class NF (d)..................... 1.63% 09/25/35 21,701 50 Series 2005-120, Class NF (d).................... 1.32% 01/25/21 50 83,521 Series 2007-10, Class Z.......................... 6.00% 02/25/37 93,611 84,696 Series 2009-86, Class IP, IO..................... 5.50% 10/25/39 15,191 898 Series 2011-38, Class AH......................... 2.75% 05/25/20 901 3,430 Series 2012-35, Class PL......................... 2.00% 11/25/41 3,396 1,203 Series 2013-14, Class QE......................... 1.75% 03/25/43 1,153 53,604 Series 2013-31, Class NT......................... 3.00% 04/25/43 55,630 Fannie Mae REMIC Trust 22,082 Series 2007-W8, Class 1A5 (d).................... 6.33% 09/25/37 23,262 Fannie Mae Trust 6,621 Series 2004-W8, Class 3A......................... 7.50% 06/25/44 7,785 FHLMC - GNMA 490 Series 1993-5, Class HA.......................... 7.50% 02/25/23 534 1,122 Series 1994-27, Class D.......................... 7.00% 03/25/24 1,238 Freddie Mac REMICS 1,057 Series 1988-23, Class F.......................... 9.60% 04/15/20 1,097 804 Series 1989-84, Class F.......................... 9.20% 10/15/20 850 4,072 Series 1991-1074, Class I........................ 6.75% 05/15/21 4,210 2,510 Series 1991-1078, Class GZ....................... 6.50% 05/15/21 2,617 738 Series 1992-1250, Class J........................ 7.00% 05/15/22 749 25,727 Series 1992-1401, Class Q (d).................... 1.76% 10/15/22 25,996 40,467 Series 1993-1487, Class P, IO (d)................ 8.34% 03/15/23 5,966 6,826 Series 1994-1673, Class FB (d)................... 1.77% 02/15/24 6,797 1,188 Series 1996-1807, Class G........................ 9.00% 10/15/20 1,275 87 Series 1996-1847, Class LL....................... 7.50% 04/15/26 99 18,706 Series 1998-2033, Class IA, IO................... 7.00% 02/15/28 2,483 149 Series 1998-2056, Class TD....................... 6.50% 05/15/18 150 4,694 Series 1999-2130, Class KB....................... 6.38% 03/15/29 5,293 64,289 Series 1999-2174, Class PN....................... 6.00% 07/15/29 71,175 10,515 Series 2001-2277, Class B........................ 7.50% 01/15/31 12,502 4,039 Series 2002-2542, Class ES....................... 5.00% 12/15/17 4,086 493 Series 2003-2559, Class PB....................... 5.50% 08/15/30 504 2,552 Series 2003-2590, Class NV....................... 5.00% 03/15/18 2,571 1,893 Series 2003-2649, Class KA....................... 4.50% 07/15/18 1,909 28,000 Series 2003-2676, Class LL....................... 5.50% 09/15/33 31,278 23,372 Series 2004-2768, Class PW....................... 4.25% 03/15/34 25,432 2,000 Series 2004-2778, Class MM....................... 5.25% 04/15/34 2,211 1,241 Series 2004-2780, Class JA....................... 4.50% 04/15/19 1,270 779 Series 2005-2922, Class QE....................... 5.00% 05/15/34 795 20,817 Series 2005-2953, Class LZ....................... 6.00% 03/15/35 26,067 37,754 Series 2005-2958, Class QJ....................... 4.00% 04/15/20 38,476 38,981 Series 2006-3114, Class GI, IO (d)................ 5.44% 02/15/36 8,376 54,142 Series 2006-3199, Class DS, IO (d)................ 5.99% 08/15/36 10,802 3,819 Series 2006-3237, Class CB....................... 5.50% 07/15/36 4,033 23,161 Series 2010-3758, Class M........................ 4.50% 10/15/38 24,158 6,482 Series 2010-3775, Class KZ....................... 4.00% 08/15/25 6,762 9,065 Series 2011-3824, Class FA (d)................... 1.31% 03/15/26 9,067 See Notes to Financial Statements Page 43 FIRST TRUST MULTI INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (CONTINUED) COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED) Freddie Mac REMICS (Continued) $ 824 Series 2011-3972, Class NW....................... 3.00% 08/15/37 $ 833 3,215 Series 2012-3994, Class AE....................... 1.63% 02/15/22 3,203 2,534 Series 2012-4097, Class DC....................... 1.50% 06/15/41 2,449 19,722 Series 2013-4178, Class ZN....................... 3.50% 03/15/43 18,288 3,538 Series 2013-4253, Class TD....................... 2.00% 07/15/40 3,544 Freddie Mac Strips 25,146 Series 1994-169, Class IO, IO.................... 8.50% 03/01/23 4,589 Government National Mortgage Association 15,127 Series 1999-30, Class S, IO (d).................. 7.43% 08/16/29 3,082 44,048 Series 2002-92, Class PB......................... 5.50% 12/20/32 49,012 10,870 Series 2006-16, Class OP, PO..................... (e) 03/20/36 10,003 55,000 Series 2007-35, Class NE......................... 6.00% 06/16/37 65,182 9,454 Series 2009-29, Class TA......................... 4.50% 03/16/39 9,908 293 Series 2009-81, Class PA......................... 5.50% 02/16/38 304 811 Series 2009-93, Class PB......................... 3.00% 12/16/38 813 8,835 Series 2009-102, Class MA........................ 4.00% 06/16/39 9,088 4,189 Series 2010-44, Class NK......................... 4.00% 10/20/37 4,222 274 Series 2010-117, Class MA........................ 2.50% 09/16/23 275 3,826 Series 2010-121, Class PQ........................ 3.00% 02/20/39 3,862 3,721 Series 2011-136, Class GB........................ 2.50% 05/20/40 3,739 36,388 Series 2013-20, Class KI, IO..................... 5.00% 01/20/43 6,667 ------------- 862,780 ------------- PASS-THROUGH SECURITIES - 3.5% Federal Home Loan Mortgage Corporation 18,704 Pool A47829...................................... 4.00% 08/01/35 19,751 10,021 Pool C01252...................................... 6.50% 11/01/31 11,205 74,708 Pool G01731...................................... 6.50% 12/01/29 84,321 35,679 Pool G06358...................................... 4.00% 04/01/41 37,950 99 Pool G11418...................................... 6.50% 07/01/17 99 4,480 Pool O20138...................................... 5.00% 11/01/30 4,898 25,541 Pool U90316...................................... 4.00% 10/01/42 27,092 Federal National Mortgage Association 6,807 Pool 745121...................................... 5.50% 12/01/18 6,875 7,798 Pool 888366...................................... 7.00% 04/01/37 9,106 21,370 Pool 890383...................................... 4.00% 01/01/42 22,644 29,995 Pool AA9393...................................... 4.50% 07/01/39 32,567 47,992 Pool AD0659...................................... 6.00% 02/01/23 51,197 25,204 Pool AE0050...................................... 5.50% 12/01/22 26,703 13,669 Pool AH1568...................................... 4.50% 12/01/40 14,805 34,709 Pool AL0791...................................... 4.00% 02/01/41 36,878 32,544 Pool AS9194...................................... 4.50% 12/01/44 35,158 61,731 Pool AU4289...................................... 4.00% 09/01/43 65,347 9,020 Pool MA0561...................................... 4.00% 11/01/40 9,529 43,794 Pool MA1028...................................... 4.00% 04/01/42 46,227 Government National Mortgage Association 14,083 Pool 3428........................................ 5.00% 08/20/33 15,674 18,353 Pool 3500........................................ 5.50% 01/20/34 20,561 10,604 Pool 3711........................................ 5.50% 05/20/35 11,859 14,718 Pool 706201...................................... 5.50% 04/20/39 16,311 Page 44 See Notes to Financial Statements FIRST TRUST MULTI INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ----------- ---------------------------------------------------- --------- ------------ ------------- U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (CONTINUED) PASS-THROUGH SECURITIES (CONTINUED) Government National Mortgage Association (Continued) $ 19,224 Pool 736558...................................... 5.00% 02/15/40 $ 21,221 35,358 Pool 759248...................................... 4.00% 02/15/41 37,740 29,493 Pool MA3525...................................... 5.50% 03/20/46 32,933 ------------- 698,651 ------------- TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES...................... 1,561,431 (Cost $1,545,841) ------------- MORTGAGE-BACKED SECURITIES - 0.2% COLLATERALIZED MORTGAGE OBLIGATIONS - 0.2% Credit Suisse First Boston Mortgage Securities Corp. 1,594 Series 2004-4, Class 1A3......................... 5.75% 08/25/34 1,614 8,445 Series 2004-6, Class 2A1......................... 4.75% 09/25/19 8,561 JP Morgan Resecuritization Trust 3,517 Series 2009-7, Class 5A1 (d) (f)................. 6.00% 02/27/37 3,521 MASTR Alternative Loan Trust 3,856 Series 2004-10, Class 2A1........................ 5.50% 10/25/19 3,951 1,610 Series 2005-1, Class 5A1......................... 5.50% 01/25/20 1,650 MASTR Asset Securitization Trust 7,201 Series 2004-1, Class 5A4......................... 5.50% 02/25/34 7,409 RAAC Trust 2,104 Series 2005-SP1, Class 2A1....................... 5.25% 09/25/34 2,139 Structured Asset Mortgage Investments Trust 10,317 Series 1999-1, Class 2A (d)...................... 8.91% 06/25/29 10,376 Structured Asset Securities Corp. Mortgage Pass-Through Certificates 853 Series 2004-21XS, Class 2A6A..................... 5.24% 12/25/34 868 WAMU Mortgage Pass-Through Certificates 241 Series 2002-S8, Class 2A7........................ 5.25% 01/25/18 241 Wells Fargo Alternative Loan Trust 291 Series 2007-PA5, Class 2A1....................... 6.00% 11/25/22 292 Wells Fargo Mortgage Backed-Securities Trust 2,045 Series 2006-17, Class A4......................... 5.50% 11/25/21 2,081 ------------- TOTAL MORTGAGE-BACKED SECURITIES............................................. 42,703 (Cost $42,107) ------------- ASSET-BACKED SECURITIES - 0.0% AFC Home Equity Loan Trust 738 Series 1997-4, Class 1A2 (d)..................... 1.73% 12/22/27 716 Bear Stearns Asset Backed Securities Trust 3,130 Series 2005-SD1, Class 1A3 (d)................... 1.62% 08/25/43 3,139 ------------- TOTAL ASSET-BACKED SECURITIES................................................ 3,855 (Cost $3,682) ------------- TOTAL INVESTMENTS - 97.7%.................................................... 19,522,219 (Cost $18,620,337) (g) NET OTHER ASSETS AND LIABILITIES - 2.3%...................................... 461,514 ------------- NET ASSETS - 100.0%.......................................................... $ 19,983,733 ============= See Notes to Financial Statements Page 45 FIRST TRUST MULTI INCOME ALLOCATION PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) JUNE 30, 2017 (UNAUDITED) ----------------------------- (a) Investment in an affiliated fund. (b) This security is restricted in the U.S. and cannot be offered for public sale without first being registered under the Securities Act of 1933, as amended. This security is not restricted on the foreign exchange where it trades freely without any additional registration. As such, it does not require the additional disclosure required of restricted securities. (c) Security whose principal value is adjusted in accordance with changes to the country's Consumer Price Index. Interest is calculated on the basis of the current adjusted principal value. (d) Floating or variable rate security. The interest rate shown reflects the rate in effect at June 30, 2017. (e) Zero coupon security. (f) This security, sold within the terms of a private placement memorandum, is exempt from registration upon resale under Rule 144A under the Securities Act of 1933, as amended, and may be resold in transactions exempt from registration, normally to qualified institutional buyers. Pursuant to procedures adopted by the Trust's Board of Trustees, this security has been determined to be liquid by First Trust Advisors L.P., the Fund's advisor. Although market instability can result in periods of increased overall market illiquidity, liquidity for each security is determined based on security-specific factors and assumptions, which require subjective judgment. At June 30, 2017, securities noted as such amounted to $3,521 or 0.02% of net assets. (g) Aggregate cost for financial reporting purposes, which approximates the aggregate cost for federal income tax purposes. As of June 30, 2017, the aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost was $1,071,852 and the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value was $169,970. ADR American Depositary Receipt CAD Canadian Dollar - Security is denominated in Canadian Dollars and is translated into U.S. Dollars based upon the current exchange rate. IO Interest-Only Security - Principal amount shown represents par value on which interest payments are based. PO Principal-Only Security ----------------------------- VALUATION INPUTS A summary of the inputs used to value the Fund's investments as of June 30, 2017 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 6/30/2017 PRICES INPUTS INPUTS ------------ ------------ ------------ ------------ Exchange-Traded Funds*............................ $ 7,817,010 $ 7,817,010 $ -- $ -- Common Stocks*.................................... 4,229,818 4,229,818 -- -- Real Estate Investment Trusts*.................... 2,358,014 2,358,014 -- -- Master Limited Partnerships*...................... 1,764,501 1,764,501 -- -- U.S. Government Bonds and Notes................... 1,744,887 -- 1,744,887 -- U.S. Government Agency Mortgage-Backed Securities..................................... 1,561,431 -- 1,561,431 -- Mortgage-Backed Securities........................ 42,703 -- 42,703 -- Asset-Backed Securities........................... 3,855 -- 3,855 -- ------------ ------------ ------------ ------------ Total Investments................................. $ 19,522,219 $ 16,169,343 $ 3,352,876 $ -- ============ ============ ============ ============ * See Portfolio of Investments for industry breakout. All transfers in and out of the Levels during the period are assumed to be transferred on the last day of the period at their current value. There were no transfers between Levels at June 30, 2017. Page 46 See Notes to Financial Statements FIRST TRUST DORSEY WRIGHT TACTICAL CORE PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 2017 (UNAUDITED) SHARES DESCRIPTION VALUE ----------- ----------------------------------------------------------------------------- ------------- EXCHANGE-TRADED FUNDS - 97.3% CAPITAL MARKETS - 97.3% 2,979 First Trust BICK Index Fund (a).............................................. $ 77,156 2,245 First Trust Chindia ETF (a).................................................. 78,777 4,697 First Trust Developed Markets ex-US AlphaDEX(R) Fund (a)..................... 259,556 15,453 First Trust Dow Jones Internet Index Fund (a) (b)............................ 1,464,017 7,977 First Trust Emerging Markets AlphaDEX(R) Fund (a)............................ 186,981 1,816 First Trust Germany AlphaDEX(R) Fund (a)..................................... 78,724 35,130 First Trust Industrials/Producer Durables AlphaDEX(R) Fund (a)............... 1,242,197 26,823 First Trust Large Cap Growth AlphaDEX(R) Fund (a)............................ 1,469,096 25,781 First Trust Mid Cap Core AlphaDEX(R) Fund (a)................................ 1,528,813 46,994 First Trust Nasdaq Bank ETF (a).............................................. 1,242,051 23,279 First Trust NASDAQ-100-Technology Sector Index Fund (a)...................... 1,452,377 39,251 First Trust Small Cap Growth AlphaDEX(R) Fund (a)............................ 1,509,201 1,682 First Trust Switzerland AlphaDEX(R) Fund (a)................................. 82,166 46,833 First Trust Utilities AlphaDEX(R) Fund (a)................................... 1,272,453 7,346 iShares Core U.S. Aggregate Bond ETF......................................... 804,461 10,462 SPDR Bloomberg Barclays Convertible Securities ETF........................... 519,124 12,624 SPDR Bloomberg Barclays High Yield Bond ETF.................................. 469,613 12,981 SPDR Bloomberg Barclays Intermediate Term Corporate Bond ETF................. 446,676 10,385 SPDR Wells Fargo Preferred Stock ETF......................................... 467,013 ------------- TOTAL INVESTMENTS - 97.3%.................................................... 14,650,452 (Cost $13,565,397) (c) NET OTHER ASSETS AND LIABILITIES - 2.7%...................................... 409,012 ------------- NET ASSETS - 100.0%.......................................................... $ 15,059,464 ============= ----------------------------- (a) Investment in an affiliated fund. (b) Non-income producing security. (c) Aggregate cost for financial reporting purposes, which approximates the aggregate cost for federal income tax purposes. As of June 30, 2017, the aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost was $1,097,174 and the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value was $12,119. ----------------------------- VALUATION INPUTS A summary of the inputs used to value the Fund's investments as of June 30, 2017 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 6/30/2017 PRICES INPUTS INPUTS ------------ ------------ ------------ ------------ Exchange-Traded Funds*............................ $ 14,650,452 $ 14,650,452 $ -- $ -- ============ ============ ============ ============ * See Portfolio of Investments for industry breakout. All transfers in and out of the Levels during the period are assumed to be transferred on the last day of the period at their current value. There were no transfers between Levels at June 30, 2017. See Notes to Financial Statements Page 47 FIRST TRUST VARIABLE INSURANCE TRUST STATEMENTS OF ASSETS AND LIABILITIES JUNE 30, 2017 (UNAUDITED) FIRST TRUST/DOW JONES DIVIDEND FIRST TRUST FIRST TRUST & INCOME MULTI INCOME DORSEY WRIGHT ALLOCATION ALLOCATION TACTICAL CORE PORTFOLIO PORTFOLIO PORTFOLIO --------------- --------------- --------------- ASSETS: Investments, at value................................................... $ 643,536,525 $ 13,430,759 $ 2,706,887 Investments in affiliated funds, at value............................... -- 6,091,460 11,943,565 Cash and cash equivalents............................................... 4,720,458 489,094 386,749 Foreign currency, at value.............................................. -- 99 -- Receivables: Interest............................................................. 2,218,212 13,063 -- Fund shares sold..................................................... 1,100,608 8,850 63,781 Investment securities sold........................................... 744,860 98 -- Dividends............................................................ 433,674 17,760 1,502 Variation margin..................................................... 50,531 -- -- From investment advisor.............................................. -- 32,191 11,412 Reclaim.............................................................. -- 1,056 -- Prepaid expenses........................................................ 2,224 107 48 --------------- --------------- --------------- Total Assets......................................................... 652,807,092 20,084,537 15,113,944 --------------- --------------- --------------- LIABILITIES: Payables: Investment securities purchased...................................... 3,211,305 17,337 4,266 Investment advisory fees............................................. 286,491 -- -- 12b-1 service fees (Class I)......................................... 132,156 4,016 2,989 Administrative service fees.......................................... 105,728 3,239 2,418 Licensing fees....................................................... 96,910 -- 3,456 Custodian fees....................................................... 47,074 3,214 3,005 Accounting and administration fees................................... 43,345 8,150 4,463 Printing fees........................................................ 35,159 3,743 1,997 Transfer agent fees.................................................. 22,276 12,620 13,400 Audit and tax fees................................................... 17,246 31,199 13,766 Fund shares redeemed................................................. 13,155 9,799 3 Commitment fees...................................................... 6,458 4,308 -- Legal fees........................................................... 1,324 134 2,269 Financial reporting fees............................................. 771 -- 466 Trustees' fees and expenses.......................................... 63 -- 653 Other liabilities....................................................... 1,173 3,045 1,329 --------------- --------------- --------------- Total Liabilities.................................................... 4,020,634 100,804 54,480 --------------- --------------- --------------- NET ASSETS.............................................................. $ 648,786,458 $ 19,983,733 $ 15,059,464 =============== =============== =============== NET ASSETS CONSIST OF: Paid-in capital......................................................... $ 590,185,697 $ 19,309,318 $ 14,025,711 Accumulated net investment income (loss)................................ 986,888 32,704 29,429 Accumulated net realized gain (loss) on investments, futures and foreign currency transactions................................................ 14,279,268 (260,174) (80,731) Net unrealized appreciation (depreciation) on investments, futures and foreign currency translation......................................... 43,334,605 901,885 1,085,055 --------------- --------------- --------------- NET ASSETS.............................................................. $ 648,786,458 $ 19,983,733 $ 15,059,464 =============== =============== =============== Investments, at cost.................................................... $ 600,201,865 $ 12,592,925 $ 2,669,365 =============== =============== =============== Investments in affiliated funds, at cost................................ $ -- $ 6,027,412 $ 10,896,032 =============== =============== =============== Foreign currency, at cost............................................... $ -- $ 99 $ -- =============== =============== =============== CLASS I SHARES: NET ASSETS.............................................................. $ 648,768,356 $ 19,823,954 $ 15,005,478 =============== =============== =============== NET ASSET VALUE, PER SHARE.............................................. $ 13.39 $ 10.80 $ 10.57 =============== =============== =============== Number of Shares outstanding............................................ 48,439,876 1,835,459 1,419,312 =============== =============== =============== CLASS II SHARES: NET ASSETS.............................................................. $ 18,102 $ 159,779 $ 53,986 =============== =============== =============== NET ASSET VALUE, PER SHARE.............................................. $ 13.42 $ 10.80 $ 10.56 =============== =============== =============== Number of Shares outstanding............................................ 1,349 14,795 5,114 =============== =============== =============== Page 48 See Notes to Financial Statements FIRST TRUST VARIABLE INSURANCE TRUST STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2017 (UNAUDITED) FIRST TRUST/DOW JONES DIVIDEND FIRST TRUST FIRST TRUST & INCOME MULTI INCOME DORSEY WRIGHT ALLOCATION ALLOCATION TACTICAL CORE PORTFOLIO PORTFOLIO PORTFOLIO --------------- --------------- --------------- INVESTMENT INCOME: Interest................................................................ $ 3,905,553 $ 40,417 $ 839 Dividends............................................................... 3,672,088 130,876 37,213 Dividends from affiliated funds......................................... -- 127,814 44,680 Foreign withholding tax on dividend income.............................. -- (1,796) -- --------------- --------------- --------------- Total investment income.............................................. 7,577,641 297,311 82,732 --------------- --------------- --------------- EXPENSES: Investment advisory fees................................................ 1,786,280 56,150 22,214 12b-1 distribution and service fees (Class I)........................... 744,261 23,199 15,802 Administrative service fees............................................. 595,418 18,592 12,642 Accounting and administration fees...................................... 184,542 26,735 26,033 Licensing fees.......................................................... 97,637 -- 6,347 Custodian fees.......................................................... 87,108 5,750 5,955 Transfer agent fees..................................................... 44,901 25,516 24,788 Printing fees........................................................... 39,605 3,405 3,466 Legal fees.............................................................. 37,361 1,072 1,233 Commitment fees......................................................... 17,505 11,975 -- Audit and tax fees...................................................... 14,411 25,614 11,371 Trustees' fees and expenses............................................. 8,883 8,280 8,558 Financial reporting fees................................................ 4,625 -- 4,588 Other................................................................... 7,043 4,376 1,070 --------------- --------------- --------------- Total expenses....................................................... 3,669,580 210,664 144,067 Fees waived or expenses reimbursed by the investment advisor......... (96,969) (133,187) (96,734) --------------- --------------- --------------- Net expenses............................................................ 3,572,611 77,477 47,333 --------------- --------------- --------------- NET INVESTMENT INCOME (LOSS)............................................ 4,005,030 219,834 35,399 --------------- --------------- --------------- NET REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) on: Investments.......................................................... 14,865,208 114,435 (779) Investments in affiliated funds...................................... -- (7,888) (63,230) Futures.............................................................. (268,321) -- -- Foreign currency transactions........................................ -- (18) -- --------------- --------------- --------------- Net realized gain (loss)................................................ 14,596,887 106,529 (64,009) --------------- --------------- --------------- Net change in unrealized appreciation (depreciation) on: Investments.......................................................... 13,730,423 207,400 84,235 Investments in affiliated funds...................................... -- 104,878 809,921 Futures.............................................................. (5,930) -- -- Foreign currency translation......................................... -- 2 -- --------------- --------------- --------------- Net change in unrealized appreciation (depreciation).................... 13,724,493 312,280 894,156 --------------- --------------- --------------- NET REALIZED AND UNREALIZED GAIN (LOSS)................................. 28,321,380 418,809 830,147 --------------- --------------- --------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................................................... $ 32,326,410 $ 638,643 $ 865,546 =============== =============== =============== See Notes to Financial Statements Page 49 FIRST TRUST VARIABLE INSURANCE TRUST STATEMENTS OF CHANGES IN NET ASSETS FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO -------------------------------- SIX MONTHS ENDED YEAR 6/30/2017 ENDED (UNAUDITED) 12/31/2016 -------------- -------------- OPERATIONS: Net investment income (loss)......................................................... $ 4,005,030 $ 4,865,769 Net realized gain (loss)............................................................. 14,596,887 8,387,278 Net increase from payment by the advisor............................................. -- 1,000 Net change in unrealized appreciation (depreciation)................................. 13,724,493 27,976,372 ------------ ------------ Net increase (decrease) in net assets resulting from operations...................... 32,326,410 41,230,419 ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Class I.............................................................................. (3,218,863) (4,438,978) Class II............................................................................. (113) (208) ------------ ------------ (3,218,976) (4,439,186) ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAIN: Class I.............................................................................. (4,899,718) (10,878,302) Class II............................................................................. (138) (458) ------------ ------------ (4,899,856) (10,878,760) ------------ ------------ Total distributions to shareholders.................................................. (8,118,832) (15,317,946) ------------ ------------ CAPITAL TRANSACTIONS: Proceeds from shares sold............................................................ 101,445,794 269,075,333 Proceeds from shares reinvested...................................................... 8,118,670 15,317,510 Cost of shares redeemed.............................................................. (28,954,142) (9,596,894) ------------ ------------ Net increase (decrease) in net assets resulting from capital transactions............ 80,610,322 274,795,949 ------------ ------------ Total increase (decrease) in net assets.............................................. 104,817,900 300,708,422 NET ASSETS: Beginning of period.................................................................. 543,968,558 243,260,136 ------------ ------------ End of period........................................................................ $648,786,458 $543,968,558 ============ ============ Accumulated net investment income (loss) at end of period............................ $ 986,888 $ 200,834 ============ ============ Page 50 See Notes to Financial Statements FIRST TRUST VARIABLE INSURANCE TRUST STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) FIRST TRUST MULTI INCOME ALLOCATION PORTFOLIO -------------------------------- SIX MONTHS ENDED YEAR 6/30/2017 ENDED (UNAUDITED) 12/31/2016 -------------- -------------- OPERATIONS: Net investment income (loss)......................................................... $ 219,834 $ 314,186 Net realized gain (loss)............................................................. 106,529 (117,782) Net change in unrealized appreciation (depreciation)................................. 312,280 1,064,389 ------------ ------------ Net increase (decrease) in net assets resulting from operations...................... 638,643 1,260,793 ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Class I.............................................................................. (185,417) (363,323) Class II............................................................................. (1,713) (3,315) ------------ ------------ Total distributions to shareholders.................................................. (187,130) (366,638) ------------ ------------ CAPITAL TRANSACTIONS: Proceeds from shares sold............................................................ 2,729,380 6,360,314 Proceeds from shares reinvested...................................................... 185,959 364,038 Cost of shares redeemed.............................................................. (1,504,179) (1,854,130) ------------ ------------ Net increase (decrease) in net assets resulting from capital transactions............ 1,411,160 4,870,222 ------------ ------------ Total increase (decrease) in net assets.............................................. 1,862,673 5,764,377 NET ASSETS: Beginning of period.................................................................. 18,121,060 12,356,683 ------------ ------------ End of period........................................................................ $ 19,983,733 $ 18,121,060 ============ ============ Accumulated net investment income (loss) at end of period............................ $ 32,704 $ -- ============ ============ See Notes to Financial Statements Page 51 FIRST TRUST VARIABLE INSURANCE TRUST STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) FIRST TRUST DORSEY WRIGHT TACTICAL CORE PORTFOLIO -------------------------------- SIX MONTHS ENDED YEAR 6/30/2017 ENDED (UNAUDITED) 12/31/2016 -------------- -------------- OPERATIONS: Net investment income (loss)......................................................... $ 35,399 $ 98,407 Net realized gain (loss)............................................................. (64,009) 72,877 Net change in unrealized appreciation (depreciation)................................. 894,156 242,750 ------------ ------------ Net increase (decrease) in net assets resulting from operations...................... 865,546 414,034 ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Class I.............................................................................. (5,952) (96,102) Class II............................................................................. (89) (572) ------------ ------------ (6,041) (96,674) ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAIN: Class I.............................................................................. -- (97,931) Class II............................................................................. -- (477) ------------ ------------ -- (98,408) ------------ ------------ Total distributions to shareholders (6,041) (195,082) ------------ ------------ CAPITAL TRANSACTIONS: Proceeds from shares sold............................................................ 4,283,081 13,236,943 Proceeds from shares reinvested...................................................... 6,041 195,082 Cost of shares redeemed.............................................................. (499,156) (8,731,398) ------------ ------------ Net increase (decrease) in net assets resulting from capital transactions............ 3,789,966 4,700,627 ------------ ------------ Total increase (decrease) in net assets.............................................. 4,649,471 4,919,579 NET ASSETS: Beginning of period.................................................................. 10,409,993 5,490,414 ------------ ------------ End of period........................................................................ $ 15,059,464 $ 10,409,993 ============ ============ Accumulated net investment income (loss) at end of period............................ $ 29,429 $ 71 ============ ============ Page 52 See Notes to Financial Statements FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD CLASS I SHARES SIX MONTHS FOR THE ENDED YEAR ENDED DECEMBER 31, PERIOD 6/30/2017 --------------------------------------------------------- ENDED (UNAUDITED) 2016 2015 2014 2013 12/31/2012 (a) ------------ ------------ ------------ ------------ ------------ ------------ Net asset value, beginning of period..... $ 12.85 $ 11.94 $ 12.41 $ 11.37 $ 10.31 $ 10.00 -------- -------- -------- -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)............. 0.09 0.14 0.16 0.15 0.14 0.15 Net realized and unrealized gain (loss).. 0.62 1.25 (b) (0.15) 0.99 1.17 0.29 -------- -------- -------- -------- -------- -------- Total from investment operations......... 0.71 1.39 0.01 1.14 1.31 0.44 -------- -------- -------- -------- -------- -------- DISTRIBUTIONS PAID TO SHAREHOLDERS FROM: Net investment income................... (0.07) (0.13) (0.27) (0.10) (0.09) (0.07) Net realized gain........................ (0.10) (0.35) (0.21) -- (0.16) (0.04) Return of capital........................ -- -- -- -- -- (0.02) -------- -------- -------- -------- -------- -------- Total from distributions................. (0.17) (0.48) (0.48) (0.10) (0.25) (0.13) -------- -------- -------- -------- -------- -------- Net asset value, end of period........... $ 13.39 $ 12.85 $ 11.94 $ 12.41 $ 11.37 $ 10.31 ======== ======== ======== ======== ======== ======== TOTAL RETURN (c) (d)..................... 5.53% 11.74% (b) 0.09% 10.04% 12.75% 4.38% ======== ======== ======== ======== ======== ======== RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Net assets, end of period (in 000's)..... $648,768 $543,951 $243,244 $195,128 $106,079 $ 32,176 Ratio of total expenses to average net assets................................ 1.23% (e) 1.29% 1.34% 1.43% 1.65% 2.69% (e) Ratio of net expenses to average net assets................................ 1.20% (e) 1.20% 1.20% 1.20% 1.20% 1.20% (e) Ratio of net investment income (loss) to average net assets................. 1.35% (e) 1.29% 1.35% 1.40% 1.27% 2.25% (e) Portfolio turnover rate.................. 36% 96% 81% 65% 73% 34% CLASS II SHARES SIX MONTHS FOR THE ENDED YEAR ENDED DECEMBER 31, PERIOD 6/30/2017 --------------------------- ENDED (UNAUDITED) 2016 2015 12/31/2014 (f) ------------ ------------ ------------ ------------ Net asset value, beginning of period..... $ 12.87 $ 11.95 $ 12.43 $ 11.63 -------- -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)............. 0.10 0.19 0.17 0.14 Net realized and unrealized gain (loss).. 0.63 1.24 (b) (0.14) 0.77 -------- -------- -------- -------- Total from investment operations......... 0.73 1.43 0.03 0.91 -------- -------- -------- -------- DISTRIBUTIONS PAID TO SHAREHOLDERS FROM: Net investment income.................... (0.08) (0.16) (0.30) (0.11) Net realized gain........................ (0.10) (0.35) (0.21) -- -------- -------- -------- -------- Total from distributions................. (0.18) (0.51) (0.51) (0.11) -------- -------- -------- -------- Net asset value, end of period........... $ 13.42 $ 12.87 $ 11.95 $ 12.43 ======== ======== ======== ======== TOTAL RETURN (c) (d)..................... 5.73% 12.07% (b) 0.25% 7.82% ======== ======== ======== ======== RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Net assets, end of period (in 000's)..... $ 18 $ 17 $ 16 $ 11 Ratio of total expenses to average net assets................................ 0.97% (e) 1.04% 1.09% 1.21% (e) Ratio of net expenses to average net assets................................ 0.95% (e) 0.95% 0.95% 0.95% (e) Ratio of net investment income (loss) to average net assets................. 1.60% (e) 1.53% 1.64% 1.69% (e) Portfolio turnover rate.................. 36% 96% 81% 65% ----------------------------- (a) The Fund's Class I shares were seeded on April 12, 2012, and commenced operations on May 1, 2012. (b) First Trust/Dow Jones Dividend & Income Allocation Portfolio received a reimbursement from the Advisor in the amount of $1,000 in connection with a trade error, which represents less than $0.01 per share. Since the Advisor reimbursed the Fund, there was no effect on the total return. (c) Total return is based on the combination of reinvested dividends, capital gain and return of capital distributions, if any. Total return is not annualized for periods of less than one year. The returns for the Fund 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 above. (d) Total returns would have been lower if certain fees had not been waived and expenses reimbursed by the investment advisor. (e) Annualized. (f) The Fund's Class II shares were seeded on April 30, 2014, and commenced operations on May 1, 2014. See Notes to Financial Statements Page 53 FIRST TRUST MULTI INCOME ALLOCATION PORTFOLIO FINANCIAL HIGHLIGHTS (CONTINUED) FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD CLASS I SHARES SIX MONTHS FOR THE ENDED YEAR ENDED DECEMBER 31, PERIOD 6/30/2017 --------------------------- ENDED (UNAUDITED) 2016 2015 12/31/2014 (a) ------------ ------------ ------------ ------------ Net asset value, beginning of period..... $ 10.54 $ 9.86 $ 10.39 $ 10.00 -------- -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)............. 0.12 0.20 0.19 0.07 Net realized and unrealized gain (loss).. 0.24 0.71 (0.53) (b) 0.39 -------- -------- -------- -------- Total from investment operations......... 0.36 0.91 (0.34) 0.46 -------- -------- -------- -------- DISTRIBUTIONS PAID TO SHAREHOLDERS FROM: Net investment income.................... (0.10) (0.23) (0.19) (0.07) -------- -------- -------- -------- Total from distributions................. (0.10) (0.23) (0.19) (0.07) -------- -------- -------- -------- Net asset value, end of period........... $ 10.80 $ 10.54 $ 9.86 $ 10.39 ======== ======== ======== ======== TOTAL RETURN (c) (d)..................... 3.44% 9.27% (3.24)% (b) 4.57% ======== ======== ======== ======== RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Net assets, end of period (in 000's)..... $ 19,824 $ 17,965 $ 12,257 $ 6,894 Ratio of total expenses to average net assets................................ 2.25% (e) 2.22% 2.60% 6.00% (e) Ratio of net expenses to average net assets................................ 0.83% (e) 0.83% 0.90% 1.20% (e) Ratio of net investment income (loss) to average net assets................. 2.35% (e) 2.10% 2.17% 2.35% (e) Portfolio turnover rate.................. 20% 46% 93% 15% CLASS II SHARES SIX MONTHS FOR THE ENDED YEAR ENDED DECEMBER 31, PERIOD 6/30/2017 --------------------------- ENDED (UNAUDITED) 2016 2015 12/31/2014 (a) ------------ ------------ ------------ ------------ Net asset value, beginning of period..... $ 10.54 $ 9.86 $ 10.39 $ 10.00 -------- -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)............. 0.14 0.20 0.24 0.04 Net realized and unrealized gain (loss).. 0.24 0.74 (0.55) (b) 0.43 -------- -------- -------- -------- Total from investment operations......... 0.38 0.94 (0.31) 0.47 -------- -------- -------- -------- DISTRIBUTIONS PAID TO SHAREHOLDERS FROM: Net investment income.................... (0.12) (0.26) (0.22) (0.08) -------- -------- -------- -------- Total from distributions................. (0.12) (0.26) (0.22) (0.08) -------- -------- -------- -------- Net asset value, end of period........... $ 10.80 $ 10.54 $ 9.86 $ 10.39 ======== ======== ======== ======== TOTAL RETURN (c) (d)..................... 3.57% 9.53% (3.01)% (b) 4.74% ======== ======== ======== ======== RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Net assets, end of period (in 000's)..... $ 160 $ 156 $ 100 $ 105 Ratio of total expenses to average net assets................................ 1.99% (e) 1.99% 2.31% 14.44% (e) Ratio of net expenses to average net assets................................ 0.58% (e) 0.58% 0.67% 0.95% (e) Ratio of net investment income (loss) to average net assets................. 2.58% (e) 2.34% 2.32% 0.54% (e) Portfolio turnover rate.................. 20% 46% 93% 15% ----------------------------- (a) The Fund's Class I and Class II shares were seeded on April 30, 2014, and commenced operations on May 1, 2014. (b) First Trust Multi Income Allocation Portfolio received a reimbursement from the Advisor in the amount of $5,471 in connection with a trade error, which represents less than $0.01 per share. Since the Advisor reimbursed the Fund, there was no effect on the total return. (c) Total return is based on the combination of reinvested dividends, capital gain and return of capital distributions, if any. Total return is not annualized for periods of less than one year. The returns for the Fund 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 above. (d) Total returns would have been lower if certain fees had not been waived and expenses reimbursed by the investment advisor. (e) Annualized. Page 54 See Notes to Financial Statements FIRST TRUST DORSEY WRIGHT TACTICAL CORE PORTFOLIO FINANCIAL HIGHLIGHTS (CONTINUED) FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD CLASS I SHARES SIX MONTHS ENDED YEAR FOR THE 6/30/2017 ENDED PERIOD ENDED (UNAUDITED) 12/31/2016 12/31/2015 (a) ------------ ------------ ------------ Net asset value, beginning of period..... $ 9.85 $ 9.94 $ 10.00 -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)............. 0.02 0.09 0.01 Net realized and unrealized gain (loss).. 0.70 0.01 (0.07) -------- -------- -------- Total from investment operations......... 0.72 0.10 (0.06) -------- -------- -------- DISTRIBUTIONS PAID TO SHAREHOLDERS FROM: Net investment income.................... (0.00) (b) (0.09) -- Net realized gain........................ -- (0.10) -- -------- -------- -------- Total from distributions................. (0.00) (0.19) -- -------- -------- -------- Net asset value, end of period........... $ 10.57 $ 9.85 $ 9.94 ======== ======== ======== TOTAL RETURN (c) (d)..................... 7.35% 0.95% (0.60)% ======== ======== ======== RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Net assets, end of period (in 000's)..... $ 15,005 $ 10,360 $ 5,440 Ratio of total expenses to average net assets................................ 2.08% (e) 2.13% 11.71% (e) Ratio of net expenses to average net assets................................ 0.75% (e) 0.83% 0.79% (e) Ratio of net investment income (loss) to average net assets................. 0.56% (e) 0.98% 1.54% (e) Portfolio turnover rate.................. 9% 265% --% CLASS II SHARES SIX MONTHS ENDED YEAR FOR THE 6/30/2017 ENDED PERIOD ENDED (UNAUDITED) 12/31/2016 12/31/2015 (a) ------------ ------------ ------------ Net asset value, beginning of period..... $ 9.83 $ 9.95 $ 10.00 -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)............. 0.04 0.11 0.01 Net realized and unrealized gain (loss).. 0.71 (0.02) (0.06) -------- -------- -------- Total from investment operations......... 0.75 0.09 (0.05) -------- -------- -------- DISTRIBUTIONS PAID TO SHAREHOLDERS FROM: Net investment income.................... (0.02) (0.11) -- Net realized gain........................ -- (0.10) -- -------- -------- -------- Total from distributions................. (0.02) (0.21) -- -------- -------- -------- Net asset value, end of period........... $ 10.56 $ 9.83 $ 9.95 ======== ======== ======== TOTAL RETURN (c) (d)..................... 7.60% 0.88% (0.50)% ======== ======== ======== RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Net assets, end of period (in 000's)..... $ 54 $ 50 $ 50 Ratio of total expenses to average net assets................................ 48.71% (e) 57.64% 37.40% (e) Ratio of net expenses to average net assets................................ 0.50% (e) 0.57% 0.51% (e) Ratio of net investment income (loss) to average net assets................. 0.75% (e) 1.13% 0.86% (e) Portfolio turnover rate.................. 9% 265% --% ----------------------------- (a) The Fund's Class I and Class II shares were seeded on October 29, 2015, and commenced operations on October 30, 2015. (b) Amount is less than $0.01 per share. (c) Total return is based on the combination of reinvested dividends, capital gain and return of capital distributions, if any. Total return is not annualized for periods of less than one year. The returns for the Fund 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 above. (d) Total returns would have been lower if certain fees had not been waived and expenses reimbursed by the investment advisor. (e) Annualized. See Notes to Financial Statements Page 55 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) 1. ORGANIZATION First Trust Variable Insurance Trust (the "Trust") is an open-end management investment company organized as a Massachusetts business trust on December 14, 2011 and is registered with the Securities and Exchange Commission (the "SEC") under the Investment Company Act of 1940, as amended (the "1940 Act"). The Trust currently offers shares of three series (each a "Fund" and collectively, the "Funds"), First Trust/Dow Jones Dividend & Income Allocation Portfolio ("First Trust Dow Jones"), which commenced investment operations on May 1, 2012, First Trust Multi Income Allocation Portfolio ("First Trust Multi Income"), which commenced investment operations on May 1, 2014, and First Trust Dorsey Wright Tactical Core Portfolio ("First Trust Dorsey Wright"), which commenced investment operations on October 30, 2015. Each Fund's shares are sold only to variable insurance accounts (each an "Account") to fund the benefits of the variable annuity and variable life insurance contracts (each a "Contract" and collectively the "Contracts") issued by life insurance companies writing variable annuity contracts and variable life insurance contracts with which the Trust has a contract (each a "Participating Insurance Company"). First Trust Dow Jones' investment objective is to seek to provide total return by allocating among dividend-paying stocks and investment-grade bonds. First Trust Dow Jones seeks to achieve its investment objective by investing, under normal market conditions, approximately 40-60% of its net assets in equity securities and approximately 40-60% of its net assets in fixed-income securities at the time of purchase. The equity portion of the portfolio will be derived from a quantitative process that seeks to provide total return through investing generally in dividend paying stocks included in the Dow Jones U.S. Total Stock Market Index(SM). First Trust Advisors L.P. ("First Trust" or the "Advisor") reserves the right to over-weight, under-weight or exclude certain securities from the Fund that would otherwise be selected pursuant to the quantitative process in certain instances. First Trust Dow Jones' fixed-income component seeks to provide income and preserve capital through investing in a diversified investment-grade bond portfolio. Investment-grade bonds are those bonds rated "BBB-" or higher by Standard & Poor's Ratings Group or Fitch Ratings, Inc. or "Baa3" or higher by Moody's Investors Service, Inc. at the time of purchase. Under normal market conditions, at the time of purchase approximately 80% of the net assets of the Fund allocated to corporate bonds are invested in: investment-grade bonds included in the Dow Jones Equal Weight U.S. Issued Corporate Bond Index(SM) (the "Bond Index"(1)) and other investment-grade bonds of issuers whose securities are included in the Bond Index; and investment-grade bonds of issuers included in the Dow Jones Composite Average. The Fund may also invest in U.S. government and agency securities, including mortgage-backed securities. The Fund may, at certain times, also hold exchange-traded funds ("ETFs") that invest in investment-grade corporate bonds and U.S. government bonds in lieu of investing directly in bonds. First Trust Multi Income's investment objective is to maximize current income, with a secondary objective of capital appreciation. First Trust Multi Income seeks to achieve its objectives through diversified exposure to nine income generating asset classes: dividend paying stocks, preferred stocks, energy infrastructure companies and master limited partnerships ("MLPs"), real estate investment trusts ("REITs"), high yield or "junk" bonds, floating rate loans, corporate bonds, mortgage-backed securities and Treasury Inflation Protected Securities ("TIPS"). The Fund is actively managed by First Trust and implementing the strategy involves multiple portfolio managers. The Advisor tactically adjusts allocation weights in a manner deemed to offer attractive levels of total return relative to the level of expected risk. The Advisor intends to adjust asset allocation weights quarterly but may do so more or less frequently depending upon market conditions. The maximum weight of any asset class, at the time of adjustment, is 20%. The minimum weight of any asset class, at the time of adjustment, is 5%. First Trust Multi Income may, at certain times, invest in ETFs that generally provide exposure to the nine asset classes in lieu of investing directly in such asset classes. Certain of the ETFs may be advised by First Trust. As a result, First Trust will also earn advisory fees on the underlying ETFs. In general, the U.S. dollar-denominated fixed-income securities in which First Trust Multi Income invests may be issued by U.S. and non-U.S. issuers, of any credit quality, including high yield securities. The high yield securities in which the Fund invests are rated below investment-grade at the time of purchase or unrated and deemed by the Advisor to be of comparable quality, commonly referred to as "junk" bonds. The Fund also invests in the equity securities of domestic and foreign issuers listed on a U.S. or foreign securities exchange and non-U.S. securities that are listed on a U.S. securities exchange in the form of American Depository Receipts ("ADRs") and Global Depository Receipts ("GDRs"). The Fund may invest in equity securities issued by small, mid- or large capitalization companies. ----------------------------- (1) Prior to April 30, 2013, the Dow Jones Equal Weight U.S. Issued Corporate Bond Index(SM) was known as the Dow Jones Corporate Bond Index(SM). Page 56 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) First Trust Dorsey Wright's investment objective is to provide total return. First Trust Dorsey Wright seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its net assets (including investment borrowings) in ETFs and cash and cash equivalents that comprise the Dorsey Wright Tactical Tilt Moderate Core Index. It is expected that a majority of the ETFs in which the Fund invests will be advised by First Trust. Each Fund offers two classes of shares: Class I and Class II. Each class represents an interest in the same portfolio of investments but with a different combination of service (12b-1) fees, eligibility requirements and other features. 2. SIGNIFICANT ACCOUNTING POLICIES The Funds are each considered an investment company and follow accounting and reporting guidance under Financial Accounting Standards Board Accounting Standards Codification Topic 946, "Financial Services-Investment Companies." The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of the financial statements. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") 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") for each class of shares in each Fund 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 for each class is calculated by dividing the value of each Fund's total assets attributable to such class (including accrued interest and dividends), less all liabilities attributable to such class (including accrued expenses, dividends declared but unpaid, and any borrowings of each Fund) by the total number of shares of the class outstanding. Differences in the NAV of each class of each Fund's shares are generally expected to be due to the daily expense accruals of the specified service (12b-1) fees, if any, and transfer agency costs applicable to such class of shares and the resulting differential in the dividends that may be paid on each class of shares. Each Fund's investments are valued daily at market value or, in the absence of market value with respect to any portfolio securities, at fair value. Market value prices represent last sale or official closing prices from a national or foreign exchange (i.e., a regulated market) and are primarily obtained from third-party pricing services. Fair value prices represent any prices not considered market value prices and are either obtained from a third-party pricing service or are determined by the Advisor's Pricing Committee, in accordance with valuation procedures adopted by the Trust's Board of Trustees (the "Board"), and in accordance with provisions of the 1940 Act. Investments valued by the Advisor's Pricing Committee, if any, are footnoted as such in the footnotes to the Portfolio of Investments. Each Fund's investments are valued as follows: Common stocks, preferred stocks, MLPs, ETFs, REITs and other equity securities listed on any national or foreign exchange (excluding The Nasdaq Stock Market LLC ("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 or, for Nasdaq and AIM securities, the official closing price. Securities traded on more than one securities exchange are valued at the last sale price or official closing price, as applicable, at the close of the securities exchange representing the principal market for such securities. Securities traded in an over-the-counter market are fair valued at the mean of their most recent bid and asked price, if available, and otherwise at their closing bid price. Corporate bonds, corporate notes, U.S. government securities and other debt securities are fair valued on the basis of valuations provided by dealers who make markets in such securities or by a third-party pricing service approved by the Trust's Board, which may use the following valuation inputs when available: 1) benchmark yields; 2) reported trades; 3) broker/dealer quotes; 4) issuer spreads; 5) benchmark securities; 6) bids and offers; and 7) reference data including market research publications. Page 57 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) Exchange-traded futures contracts are valued at the closing price in the market where such contracts are principally traded. If no closing price is available, exchange-traded futures contracts are fair valued at the mean of their most recent bid and asked price, if available, and otherwise at their closing bid price. Commercial paper, fixed income and other debt securities having a remaining maturity of 60 days or less when purchased are fair valued at cost adjusted for amortization of premiums and accretion of discounts (amortized cost), provided the Advisor's Pricing Committee has determined that the use of amortized cost is an appropriate reflection of fair value given market and issuer-specific conditions existing at the time of the determination. Factors that may be considered in determining the appropriateness of the use of amortized cost include, but are not limited to, the following: 1) the credit conditions in the relevant market and changes thereto; 2) the liquidity conditions in the relevant market and changes thereto; 3) the interest rate conditions in the relevant market and changes thereto (such as significant changes in interest rates); 4) issuer-specific conditions (such as significant credit deterioration); and 5) any other market-based data the Advisor's Pricing Committee considers relevant. In this regard, the Advisor's Pricing Committee may use last-obtained market-based data to assist it when valuing portfolio securities using amortized cost. Certain securities may not be able to be priced by pre-established pricing methods. Such securities may be valued by the Trust's Board or its delegate, the Advisor's Pricing Committee, at fair value. These securities generally include, but are not limited to, restricted securities (securities which may not be publicly sold without registration under the Securities Act of 1933, as amended) for which a third-party pricing service is unable to provide a market or fair value price; securities whose trading has been formally suspended; a security whose market or fair value price is not available from a pre-established pricing source; a security with respect to which an event has occurred that is likely to materially affect the value of the security after the market has closed but before the calculation of a Fund's NAV or make it difficult or impossible to obtain a reliable market quotation; and a security whose price, as provided by the third-party pricing service, does not reflect the security's fair value. As a general principle, the current fair value of a security would appear to be the amount which the owner might reasonably expect to receive for the security upon its current sale. When fair value prices are used, generally they will differ from market quotations or official closing prices on the applicable exchanges. A variety of factors may be considered in determining the fair value of such securities. Fair valuation of a debt security will be based on the consideration of all available information, including, but not limited to, the following: 1) the fundamental business data relating to the issuer; 2) an evaluation of the forces which influence the market in which these securities are purchased and sold; 3) the type, size and cost of security; 4) the financial statements of the issuer; 5) the credit quality and cash flow of the issuer, based on the Advisor's or external analysis; 6) the information as to any transactions in or offers for the security; 7) the price and extent of public trading in similar securities (or equity securities) of the issuer/borrower, or comparable companies; 8) the coupon payments; 9) the quality, value and salability of collateral, if any, securing the security; 10) the business prospects of the issuer, including any ability to obtain money or resources from a parent or affiliate and an assessment of the issuer's management (for corporate debt only); 11) the prospects for the issuer's industry, and multiples (of earnings and/or cash flows) being paid for similar businesses in that industry (for corporate debt only); and 12) other relevant factors. Fair valuation of an equity 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 third-party pricing services; 6) relationships among various securities; Page 58 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) 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) closed-end fund trading of similar securities; 4) foreign currency exchange activity; 5) the trading prices of financial products that are tied to baskets of foreign securities; 6) factors relating to the event that precipitated the pricing problem; 7) whether the event is likely to recur; and 8) whether the effects of the event are isolated or whether they affect entire markets, countries or regions. The Funds 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 investments. An active market is a market in which transactions for the investment 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 investments in active markets. o Quoted prices for identical or similar investments in markets that are non-active. A non-active market is a market where there are few transactions for the investment, 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 investment (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 investment. The inputs or methodologies used for valuing investments are not necessarily an indication of the risk associated with investing in those investments. A summary of the inputs used to value each Fund's investments as of June 30, 2017, is included with each Fund'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. Amortization of premiums and accretion of discounts are recorded using the effective interest method. Distributions received from a Fund's investments in MLPs generally are comprised of return of capital and investment income. A Fund records estimated return of capital and investment income based on historical information available from each MLP. These estimates may subsequently be revised based on information received from the MLPs after their tax reporting periods are concluded. Distributions received from a Fund's investments in REITs may be comprised of return of capital, capital gains and investment income. The actual character of the amounts received during the year is not known until after the REITs' fiscal year end. A Fund records the character of distributions received from REITs during the year based on estimates available. The characterization of distributions received by a Fund may subsequently be revised based on information received from the REITs after their tax reporting periods are concluded. C. CASH AND CASH EQUIVALENTS Normally, the Funds invest substantially all of their assets to meet their investment objectives. The Funds may invest the remainder of their assets in securities with maturities of less than one year or cash equivalents, or they may hold cash. The investment in such instruments is not a principal investment strategy of First Trust Dow Jones or First Trust Multi Income. The percentage of Page 59 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) each Fund's net assets invested in such holdings varies and depends on several factors, including market conditions. For temporary defensive purposes and during periods of high cash inflows or outflows, the Funds may depart from their principal investment strategies and invest part or all of their assets in these securities, or they may hold cash. D. FUTURES CONTRACTS First Trust Dow Jones purchases or sells (i.e., is long or short) futures contracts to hedge against changes in interest rates (interest rate risk). Futures contracts are agreements between the Fund and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and at a specified date. Depending on the terms of the contract, futures contracts are settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date. Open futures contracts can also be closed out prior to settlement by entering into an offsetting transaction in a matching futures contract. If the Fund is not able to enter into an offsetting transaction, the Fund will continue to be required to maintain margin deposits on the futures contract. When the contract is closed or expires, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed or expired. This gain or loss is included in "Net realized gain (loss) on Futures" on the Statements of Operations. Upon entering into a futures contract, the Fund must deposit funds, called margin, with its custodian in the name of the clearing broker equal to a specified percentage of the current value of the contract. Open futures contacts are marked-to-market daily with the change in value recognized as a component of, "Net change in unrealized appreciation (depreciation) on Futures" on the Statements of Operations. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin and are included in "Variation margin payable or receivable" on the Statements of Assets and Liabilities. If market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contract and may realize a loss. The use of futures contracts involves the risk of imperfect correlation in movements in the price of the futures contracts, interest rates and the underlying instruments. E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Distributions from net investment income of each Fund, if any, are declared and paid semi-annually. Each Fund distributes its net realized capital gains, if any, to shareholders at least annually. All dividends payable by each Fund will be reinvested in the Fund. Distributions from income and capital gains are determined in accordance with income tax regulations, which may differ from U.S. GAAP. Certain capital accounts in the financial statements are periodically adjusted for permanent differences in order to reflect their tax character. These permanent differences are primarily due to the varying treatment of income and gain/loss on portfolio securities held by the Funds and have no impact on net assets or NAV per share. Temporary differences, which arise from recognizing certain items of income, expense and gain/loss in different periods for financial statement and tax purposes, will reverse at some point in the future. The tax character of distributions paid by each applicable Fund during the year ended December 31, 2016 was as follows: DISTRIBUTIONS PAID DISTRIBUTIONS PAID DISTRIBUTIONS PAID FROM ORDINARY FROM CAPITAL FROM RETURN INCOME GAINS OF CAPITAL ------------------ ------------------- ------------------ First Trust Dow Jones $ 8,174,962 $ 7,142,984 $ -- First Trust Multi Income 366,638 -- -- First Trust Dorsey Wright 195,082 -- -- As of December 31, 2016, the components of distributable earnings on a tax basis for each Fund were as follows: UNDISTRIBUTED ACCUMULATED CAPITAL NET UNREALIZED ORDINARY AND OTHER APPRECIATION INCOME GAIN (LOSS) (DEPRECIATION) ------------------ ------------------- ------------------ First Trust Dow Jones $ 200,834 $ 4,874,576 $ 29,317,773 First Trust Multi Income -- (60,259) 283,161 First Trust Dorsey Wright -- -- 174,248 F. INCOME TAXES Each Fund intends to continue to qualify as a regulated investment company by complying with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), which includes distributing substantially all of their net investment income and net realized gains to shareholders. Each Fund intends to comply with the provisions of Section 817(h) Page 60 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) of the Internal Revenue Code, which impose certain diversification requirements upon variable contracts that are based on segregated asset accounts. Accordingly, no provision has been made for federal and state income taxes. However, due to the timing and amount of distributions, each Fund may be subject to an excise tax of 4% of the amount by which approximately 98% of the Fund's taxable income exceeds the distributions from such taxable income for the calendar year. The Funds are subject to accounting standards that establish a minimum threshold for recognizing, and a system for measuring, the benefits of a tax position taken or expected to be taken in a tax return. Taxable years ended 2013, 2014, 2015 and 2016 remain open to federal and state audit for First Trust Dow Jones. Taxable years ended 2014, 2015 and 2016 remain open to federal and state audit for First Trust Multi Income. Also, taxable years ended 2015 and 2016 remain open to federal and state audit for First Trust Dorsey Wright. As of June 30, 2017, management has evaluated the application of these standards to the Funds and has determined that no provision for income tax is required in the Funds' financial statements for uncertain tax positions. Each Fund intends to utilize provisions of the federal income tax laws which allow it to carry realized capital losses forward indefinitely following the year of the loss and offset such loss against any future realized capital gains. Each Fund is subject to certain limitations under U.S. tax rules on the use of capital loss carryforwards and net unrealized built-in losses. These limitations apply when there has been a 50% change in ownership. At December 31, 2016, for federal income tax purposes, the Funds had capital loss carryforward available, to the extent provided by regulations, to offset capital gains as follows: NON-EXPIRING CAPITAL LOSS CARRYFORWARDS --------------- First Trust Dow Jones $ -- First Trust Multi Income 60,259 First Trust Dorsey Wright -- During the taxable year ended December 31, 2016, the following Funds utilized capital loss carryforwards in the following amounts: CAPITAL LOSS CARRYFORWARD UTILIZED --------------- First Trust Dow Jones $ -- First Trust Multi Income 53,421 First Trust Dorsey Wright -- G. EXPENSES Each Fund will pay all expenses directly related to its operations. Each Participating Insurance Company performs certain administrative services for the Funds, their Accounts and the Contracts. Each Fund pays an administrative services fee of 0.20% of average daily net assets to cover expenses incurred by Participating Insurance Companies in connection with these services. 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 Trust, on behalf of First Trust Dow Jones and First Trust Dorsey Wright, is a sub-licensee to these license agreements and is required to pay licensing fees, which are shown on the Statements of Operations. H. FOREIGN CURRENCY The books and records of the Funds are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the exchange rates prevailing at the end of the period. Purchases and sales of investments and items of income and expense are translated on the respective dates of such transactions. Unrealized gains and losses on assets and liabilities, other than investments in securities, which result from changes in foreign currency exchange rates have been included in "Net change in unrealized appreciation (depreciation) on foreign currency translation" on the Statements of Operations. Unrealized gains and losses on investments in securities which result from changes in foreign exchange rates are included with fluctuations arising from changes in market price and are shown in "Net change in unrealized appreciation (depreciation) on investments" 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 and are shown in "Net realized Page 61 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) gain (loss) on foreign currency transactions" on the Statements of Operations. The portion of foreign currency gains and losses related to fluctuation in exchange rates between the initial purchase settlement date and subsequent sale trade date is included in "Net realized gain (loss) on investments" on the Statements of Operations. I. INTEREST-ONLY SECURITIES An interest-only security ("IO Security") is the interest-only portion of a mortgage-backed security that receives some or all of the interest portion of the underlying mortgage-backed security and little or no principal. A reference principal value called a notional value is used to calculate the amount of interest due to the IO Security. IO Securities are sold at a deep discount to their notional principal amount. Generally speaking, when interest rates are falling and prepayment rates are increasing, the value of an IO Security will fall. Conversely, when interest rates are rising and prepayment rates are decreasing, generally the value of an IO Security will rise. These securities, if any, are identified on the Portfolio of Investments. J. PRINCIPAL-ONLY SECURITIES A principal-only security ("PO Security") is the principal-only portion of a mortgage-backed security that does not receive any interest, is priced at a deep discount to its redemption value and ultimately receives the redemption value. Generally speaking, when interest rates are falling and prepayment rates are increasing, the value of a PO Security will rise. Conversely, when interest rates are rising and prepayment rates are decreasing, generally the value of a PO Security will fall. These securities, if any, are identified on the Portfolio of Investments. K. NEW AND AMENDED FINANCIAL REPORTING RULES AND FORMS On October 13, 2016, the SEC adopted new rules and forms, and amended existing rules and forms. The new and amended rules and forms are intended to modernize the reporting of information provided by funds and to improve the quality and type of information that funds provide to the SEC and investors. The new and amended rules and forms will be effective for the First Trust funds, including the Funds, for reporting periods beginning on and after June 1, 2018. Management is evaluating the new and amended rules and forms to determine the impact to the Funds. 3. INVESTMENT ADVISORY FEE AND OTHER AFFILIATED TRANSACTIONS First Trust, the investment advisor to the Funds, is a limited partnership with one limited partner, Grace Partners of DuPage L.P., and one general partner, The Charger Corporation. The Charger Corporation is an Illinois corporation controlled by James A. Bowen, Chief Executive Officer of First Trust. First Trust provides each Fund with discretionary investment services and certain administrative services necessary for the management of the Funds. For its investment advisory and management services, First Trust is entitled to a monthly fee calculated at an annual rate of 0.60% of the average daily net assets for both First Trust Dow Jones and First Trust Multi Income, and 0.35% of the average daily net assets for First Trust Dorsey Wright. First Trust also provides fund reporting services to First Trust Dow Jones and First Trust Dorsey Wright for a flat annual fee in the amount of $9,250 per Fund. First Trust Multi Income and First Trust have retained Energy Income Partners, LLC ("EIP") and Stonebridge Advisors LLC ("Stonebridge") (collectively the "Sub-Advisors"), affiliates of First Trust, to serve as investment sub-advisors. In this capacity, the Sub-Advisors provide recommendations to the Advisor regarding the selection and on-going monitoring of certain securities in First Trust Multi Income's investment portfolio. EIP acts as sub-advisor for, and manages on a discretionary basis the investment and reinvestment of, only the assets of First Trust Multi Income allocated to EIP by the Advisor and furnishes an investment program in respect of and makes investment decisions only with respect to the portion of First Trust Multi Income's investment portfolio allocated to it by the Advisor. EIP, an affiliate of the Advisor, has been retained by First Trust Multi Income and the Advisor to provide recommendations regarding the selection and ongoing monitoring of the MLP, MLP affiliate and energy infrastructure securities in First Trust Multi Income's investment portfolio and to exercise discretion only with respect to assets of First Trust Multi Income allocated to EIP. Stonebridge serves as a non-discretionary sub-advisor. Stonebridge has been retained by First Trust Multi Income and the Advisor to provide recommendations regarding the selection and ongoing monitoring of the preferred and hybrid securities in First Trust Multi Income's investment portfolio. For the services provided and the expenses assumed pursuant to the investment sub-advisory agreement, First Trust will pay EIP a sub-advisory fee equal to 40% monthly in arrears of any remaining monthly investment management fee paid to the Advisor for the average daily net assets allocated to EIP after First Trust's waiver of any of its investment management fee to comply with the then-current expense cap, as defined below. For the services provided and the expenses assumed pursuant to the investment sub-advisory agreement, First Trust will pay Stonebridge a portfolio management fee equal to an annual rate of 0.20% of the Fund's average daily net assets allocated to Stonebridge. Page 62 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) During the year ended December 31, 2016, First Trust Dow Jones received a reimbursement from the Advisor of $1,000 in connection with a trade error. First Trust has agreed to waive fees and/or pay First Trust Dow Jones' and First Trust Multi Income's expenses to the extent necessary to prevent the operating expenses of Class I shares and Class II shares (excluding interest expense, brokerage commissions and other trading expenses, acquired fund fees and expenses, taxes and extraordinary expenses) from exceeding 1.20% and 0.95% (the "Expense Cap"), respectively, of each Fund's average daily net assets per year at least until May 1, 2018. First Trust has agreed to waive fees and/or pay First Trust Dorsey Wright's expenses to the extent necessary to prevent the operating expenses of Class I shares and Class II shares (excluding interest expense, brokerage commissions and other trading expenses, taxes and extraordinary expenses) from exceeding 1.30% and 1.05%, respectively, of each Fund's average daily net assets per year at least until May 1, 2018. In First Trust Dorsey Wright, because acquired fund fees and expenses are estimated, First Trust will periodically adjust the amount of the fee waiver and expense reimbursement in order to attempt to meet the Expense Cap. However, total net annual fund expense may be higher or lower than the Expense Cap. Expenses borne and fees waived by First Trust are subject to reimbursement by each Fund for up to three years from the date the fee or expense was incurred by the Fund, but no reimbursement payment will be made by the Fund at any time if it would result in the Fund's expenses exceeding the Expense Cap. These amounts, if any, are included in "Expenses previously waived or reimbursed" on the Statements of Operations. The advisory fee waivers and expense reimbursements for the six months ended June 30, 2017, and the expenses borne by First Trust subject to recovery from the applicable Fund at June 30, 2017, are included in the table below. FEES WAIVED OR EXPENSES BORNE BY FIRST TRUST SUBJECT TO RECOVERY -------------------------------------------------------------------------------------------------- SIX MONTHS YEAR YEAR SIX MONTHS ENDED ENDED ENDED ENDED FEES EXPENSES DECEMBER 31, DECEMBER 31, DECEMBER 31, JUNE 30, WAIVED REIMBURSED 2014 2015 2016 2017 TOTAL ------------ ------------ ------------ ------------ ------------ ---------- ---------- First Trust Dow Jones $ 96,969 $ -- $ 222,688 $ 347,277 $ 338,513 $ 96,969 $1,005,447 First Trust Multi Income 56,150 42,411 47,445 151,967 152,851 98,561 450,824 First Trust Dorsey Wright 22,214 74,520 -- 48,180 157,770 96,734 302,684 During the six months ended June 30, 2017, First Trust did not recover any fees that were previously waived or reimbursed. First Trust agreed to waive and/or reimburse the acquired fund fees and expenses of the shares of investment companies held by First Trust Multi Income up to 0.37% of the Fund's average daily net assets through May 1, 2018. During the six months ended June 30, 2017, First Trust reimbursed First Trust Multi Income $34,626 of fees that are not subject to recovery. First Trust Capital Partners, LLC ("FTCP"), an affiliate of First Trust, owns, through a wholly-owned subsidiary, a 15% ownership interest in each of EIP and EIP Partners, LLC, an affiliate of EIP. Stonebridge is a majority-owned affiliate of FTCP. BNY Mellon Investment Servicing (US) Inc. ("BNYM IS") serves as First Trust Dow Jones', First Trust Multi Income's and First Trust Dorsey Wright's transfer agent in accordance with certain fee arrangements. As transfer agent, BNYM IS is responsible for maintaining shareholder records for the Funds. BNYM IS is a subsidiary of The Bank of New York Mellon Corporation, a financial holding company. The Bank of New York Mellon ("BNYM") serves as First Trust Dow Jones' and First Trust Multi Income's administrator, fund accountant and custodian in accordance with certain fee arrangements. As administrator and fund accountant, BNYM is responsible for providing certain administrative and accounting services to the Funds, including maintaining the Funds' books of account, records of the Funds' securities transactions, and certain other books and records. As custodian, BNYM is responsible for custody of each Fund's assets. BNYM is a subsidiary of The Bank of New York Mellon Corporation, a financial holding company. Brown Brothers Harriman & Co. ("BBH") serves as First Trust Dorsey Wright's administrator, fund accountant and custodian. As custodian, BBH is responsible for custody of the Fund's assets. As administrator and fund accountant, BBH is responsible for providing certain administrative and accounting services to the Fund, including maintaining the Fund's books of account, records of the Fund's securities transactions, and certain other books and records. Each Trustee who is not an officer or employee of First Trust, any sub-advisor or any of their affiliates ("Independent Trustees") is paid a fixed annual retainer that is allocated equally among each fund in the First Trust Fund Complex. Each Independent Trustee is also paid an annual per fund fee that varies based on whether the fund is a closed-end or other actively managed fund, or is an index fund. Page 63 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) Additionally, the Lead Independent Trustee and the Chairmen of the Audit Committee, Nominating and Governance Committee and Valuation Committee are paid annual fees to serve in such capacities, with such compensation allocated pro rata among each fund in the First Trust Fund Complex based on net assets. Independent Trustees are reimbursed for travel and out-of-pocket expenses in connection with all meetings. The Lead Independent Trustee and Committee Chairmen rotate every three years. The officers and "Interested" Trustee receive no compensation from the Trust for acting in such capacities. 4. CAPITAL SHARE TRANSACTIONS Capital transactions for First Trust Dow Jones were as follows: SIX MONTHS ENDED YEAR ENDED JUNE 30, 2017 DECEMBER 31, 2016 SHARES VALUE SHARES VALUE ------------ ------------ ------------ ------------ Sales: Class I 7,693,195 $101,445,794 21,522,285 $269,075,266 Class II -- -- 5 67 ------------ ------------ ------------ ------------ Total Sales: 7,693,195 $101,445,794 21,522,290 $269,075,333 ============ ============ ============ ============ Dividend Reinvestment: Class I 604,961 $ 8,118,581 1,224,785 $ 15,317,280 Class II 7 89 18 230 ------------ ------------ ------------ ------------ Total Dividend Reinvestment: 604,968 $ 8,118,670 1,224,803 $ 15,317,510 ============ ============ ============ ============ Redemptions: Class I (2,202,532) $(28,954,122) (782,373) $ (9,596,410) Class II (2) (20) (42) (484) ------------ ------------ ------------ ------------ Total Redemptions: (2,202,534) $(28,954,142) (782,415) $ (9,596,894) ============ ============ ============ ============ Capital transactions for First Trust Multi Income were as follows: SIX MONTHS ENDED YEAR ENDED JUNE 30, 2017 DECEMBER 31, 2016 SHARES VALUE SHARES VALUE ------------ ------------ ------------ ------------ Sales: Class I 253,232 $ 2,729,380 607,792 $ 6,311,829 Class II -- -- 4,618 48,485 ------------ ------------ ------------ ------------ Total Sales: 253,232 $ 2,729,380 612,410 $ 6,360,314 ============ ============ ============ ============ Dividend Reinvestment: Class I 17,248 $ 185,417 34,761 $ 363,323 Class II 50 542 68 715 ------------ ------------ ------------ ------------ Total Dividend Reinvestment: 17,298 $ 185,959 34,829 $ 364,038 ============ ============ ============ ============ Redemptions: Class I (140,108) $ (1,503,974) (180,072) $ (1,854,107) Class II (19) (205) (2) (23) ------------ ------------ ------------ ------------ Total Redemptions: (140,127) $ (1,504,179) (180,074) $ (1,854,130) ============ ============ ============ ============ Page 64 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) Capital transactions for First Trust Dorsey Wright were as follows: SIX MONTHS ENDED YEAR ENDED JUNE 30, 2017 DECEMBER 31, 2016 SHARES VALUE SHARES VALUE ------------ ------------ ------------ ------------ Sales: Class I 415,605 $ 4,283,081 1,367,166 $ 13,236,943 Class II -- -- -- -- ------------ ------------ ------------ ------------ Total Sales: 415,605 $ 4,283,081 1,367,166 $ 13,236,943 ============ ============ ============ ============ Dividend Reinvestment: Class I 562 $ 5,952 19,542 $ 194,032 Class II 8 89 106 1,050 ------------ ------------ ------------ ------------ Total Dividend Reinvestment: 570 $ 6,041 19,648 $ 195,082 ============ ============ ============ ============ Redemptions: Class I (48,859) $ (499,156) (881,838) $ (8,731,398) Class II -- -- -- -- ------------ ------------ ------------ ------------ Total Redemptions: (48,859) $ (499,156) (881,838) $ (8,731,398) ============ ============ ============ ============ 5. DERIVATIVE TRANSACTIONS The following table presents the types of derivatives held by First Trust Dow Jones at June 30, 2017, the primary underlying risk exposure and the location of these instruments as presented on the Statements of Assets and Liabilities. First Trust Multi Income and First Trust Dorsey Wright did not hold any derivative instruments as of June 30, 2017. ASSET DERIVATIVES LIABILITY DERIVATIVES ---------------------------------------- ---------------------------------------- DERIVATIVE STATEMENTS OF ASSETS STATEMENTS OF ASSETS INSTRUMENT RISK EXPOSURE AND LIABILITIES LOCATION VALUE AND LIABILITIES LOCATION VALUE ---------- ------------------ --------------------------- ---------- --------------------------- ---------- Futures Interest Rate Risk Variation Margin Receivable $ 50,531 Variation Margin Payable $ -- The following table presents the amount of net realized gain (loss) and change in net unrealized appreciation (depreciation) recognized for the six months ended June 30, 2017, on derivatives instruments held by First Trust Dow Jones, as well as the primary underlying risk exposure associated with each instrument. STATEMENTS OF OPERATIONS LOCATION INTEREST RATE RISK ------------------------------------------------------------------- Net realized gain (loss) on futures $ (268,321) Net change in unrealized gain (loss) on futures (5,930) During the six months ended June 30, 2017, the amount of notional values of futures contracts opened and closed were $46,887,796 and $42,274,210, respectively. First Trust Dow Jones does not have the right to offset financial assets and financial liabilities related to futures contracts on the Statements of Assets and Liabilities. Page 65 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) 6. AFFILIATED TRANSACTIONS First Trust Multi Income and First Trust Dorsey Wright invest in securities of affiliated funds. Dividend income and realized gains and losses from affiliated funds are presented on the Statements of Operations. Each Fund's investment performance and risks are directly related to the investment performance and risks of the affiliated funds. Amounts relating to these investments in First Trust Multi Income at June 30, 2017, and for the period then ended are as follows: SHARE ACTIVITY ------------------------------------------------ BALANCE AT BALANCE AT VALUE AT DIVIDEND REALIZED SECURITY NAME 12/31/2016 PURCHASES SALES 6/30/2017 6/30/2017 INCOME GAIN (LOSS) ------------------------------------------ ----------- ---------- ---------- ----------- ----------- ----------- ----------- First Trust Low Duration Opportunities ETF 600 9,472 (5,624) 4,448 $ 231,785 $ 2,036 $ 476 First Trust Preferred Securities and Income ETF 64,727 25,473 (890) 89,310 1,787,093 44,649 348 First Trust Senior Loan Fund 59,444 3,681 (3,150) 59,975 2,901,591 49,686 (1,756) First Trust Tactical High Yield ETF 25,954 1,596 (3,730) 23,820 1,170,991 31,443 (6,956) ------------------------------------- $ 6,091,460 $ 127,814 $ (7,888) ===================================== Amounts relating to these investments in First Trust Dorsey Wright at June 30, 2017, and for the period then ended are as follows: SHARE ACTIVITY ------------------------------------------------ BALANCE AT BALANCE AT VALUE AT DIVIDEND REALIZED SECURITY NAME 12/31/2016 PURCHASES SALES 6/30/2017 6/30/2017 INCOME GAIN (LOSS) ------------------------------------------ ----------- ---------- ---------- ----------- ----------- ----------- ----------- First Trust BICK Index Fund -- 2,979 -- 2,979 $ 77,156 $ 183 $ -- First Trust Brazil AlphaDEX(R) Fund 3,508 1,042 (4,550) -- -- 370 1,727 First Trust Chindia ETF 1,666 579 -- 2,245 78,777 246 -- First Trust Developed Markets ex-US AlphaDEX(R) Fund 2,576 2,121 -- 4,697 259,556 1,446 -- First Trust Dow Jones Internet Index Fund 11,472 3,981 -- 15,453 1,464,017 -- -- First Trust Emerging Markets AlphaDEX(R) Fund 5,922 2,055 -- 7,977 186,981 1,790 -- First Trust Energy AlphaDEX(R) Fund 60,848 11,590 (72,438) -- -- 2,521 (65,044) First Trust Germany AlphaDEX(R) Fund 1,348 468 -- 1,816 78,724 1,095 -- First Trust Industrials/Producer Durables AlphaDEX(R) Fund 26,079 9,051 -- 35,130 1,242,197 2,993 -- First Trust Large Cap Growth AlphaDEX(R) Fund 19,913 6,910 -- 26,823 1,469,096 2,669 -- First Trust Latin America AlphaDEX(R) Fund 2,700 713 (3,413) -- -- 357 87 First Trust Mid Cap Core AlphaDEX(R) Fund 19,138 6,643 -- 25,781 1,528,813 5,064 -- First Trust Nasdaq Bank ETF -- 46,994 -- 46,994 1,242,051 4,009 -- First Trust NASDAQ-100-Technology Sector Index Fund 17,281 5,998 -- 23,279 1,452,377 4,832 -- First Trust Small Cap Growth AlphaDEX(R) Fund 29,139 10,112 -- 39,251 1,509,201 -- -- First Trust Switzerland AlphaDEX(R) Fund 1,248 434 -- 1,682 82,166 1,297 -- First Trust Utilities AlphaDEX(R) Fund 34,767 12,066 -- 46,833 1,272,453 15,808 -- ------------------------------------- $11,943,565 $ 44,680 $ (63,230) ===================================== 7. 12B-1 SERVICE PLAN The Trust has adopted a plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act, which provides that Class I shares of each of the Funds will be subject to an annual service fee. Page 66 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) First Trust Portfolios L.P. ("FTP"), an affiliate of First Trust, serves as the distributor of shares of the Funds. FTP uses the service fee to compensate each Participating Insurance Company for providing account services to policy owners. These services include establishing and maintaining Contract owners' accounts, supplying information to Contract owners, delivering Fund materials to Contract owners, answering inquiries, and providing other personal services to Contract owners. Each Fund may spend up to 0.25% per year of the average daily net assets of its Class I shares 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 of a Fund's Class I shares including, without limitation, compensation of its sales force, expenses of printing and distributing the Prospectus to persons other than Contract owners, expenses of preparing, printing and distributing advertising and sales literature and reports to Contract owners used in connection with the sale of a Fund's Class I Shares, certain other expenses associated with the servicing of Class I shares of a Fund, and any service-related expenses that may be authorized from time to time by the Board. During the six months ended June 30, 2017, all service fees received by FTP were paid to the Participating Insurance Companies, 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 Trust's Board 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. 8. PURCHASES AND SALES OF SECURITIES Cost of purchases and proceeds from sales of investment securities, excluding U.S. Government securities and short-term investments, for the six months ended June 30, 2017, were as follows: PURCHASES SALES --------------- --------------- First Trust Dow Jones $ 270,071,636 $ 176,373,246 First Trust Multi Income 4,247,795 3,319,123 First Trust Dorsey Wright 4,896,514 1,180,106 Cost of purchases and proceeds from sales of U.S. Government investment securities, excluding short-term investments, for the six months ended June 30, 2017, were as follows: PURCHASES SALES --------------- --------------- First Trust Dow Jones $ 34,086,787 $ 32,591,399 First Trust Multi Income 867,453 414,575 First Trust Dorsey Wright -- -- 9. BORROWINGS The Trust, on behalf of First Trust Dow Jones and First Trust Multi Income, along with First Trust Series Fund and First Trust Exchange-Traded Fund IV, has a $200 million Credit Agreement with BNYM (the "BNYM Line of Credit") to be a liquidity backstop during periods of high redemption volume. A commitment fee of 0.15% of the daily amount of the excess of the commitment amount over the outstanding principal balance of the loans will be charged by BNYM, which First Trust will allocate amongst the funds that have access to the BNYM Line of Credit. These fees are reflected in the Statements of Operations in the Commitment fees line item. To the extent that either fund accesses the BNYM Line of Credit, there would also be an interest fee charged. Neither First Trust Dow Jones or First Trust Multi Income drew on the BNYM Line of Credit during the six months ended June 30, 2017. 10. INDEMNIFICATION The Trust has a variety of indemnification obligations under contracts with its service providers. The Trust's maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. 11. SUBSEQUENT EVENTS Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were issued, and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements that have not already been disclosed. Page 67 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) PROXY VOTING POLICIES AND PROCEDURES A description of the policies and procedures that the Trust uses to determine how to vote proxies and information on how the Trust 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 Trust's website located at http://www.ftportfolios.com; and (3) on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. PORTFOLIO HOLDINGS The Trust 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 Trust's Form N-Qs are available (1) by calling (800) 988-5891; (2) on the Trust'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 Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC ("S&P") and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"). The trademarks have been licensed to S&P Dow Jones Indices LLC and have been sublicensed for use for certain purposes by First Trust Advisors L.P. ("First Trust"). The DOW JONES EQUAL WEIGHT U.S. ISSUED CORPORATE BOND INDEX(SM), DOW JONES U.S. TOTAL STOCK MARKET INDEX(SM) AND DOW JONES COMPOSITE AVERAGE are products of S&P Dow Jones Indices LLC and has been licensed for use by First Trust. The First Trust/Dow Jones Dividend & Income Allocation Portfolio is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P, or any of their respective affiliates (collectively, "S&P Dow Jones Indices"). Neither S&P Dow Jones Indices nor its affiliates make any representation or warranty, express or implied, to the owners of the First Trust/Dow Jones Dividend & Income Allocation Portfolio or any member of the public regarding the advisability of investing in securities generally or in the First Trust/Dow Jones Dividend & Income Allocation Portfolio particularly or the ability of the DOW JONES EQUAL WEIGHT U.S. ISSUED CORPORATE BOND INDEX(SM), DOW JONES U.S. TOTAL STOCK MARKET INDEX(SM) AND DOW JONES COMPOSITE AVERAGE to track general market performance. S&P Dow Jones Indices only relationship to First Trust with respect to the DOW JONES EQUAL WEIGHT U.S. ISSUED CORPORATE BOND INDEX(SM), DOW JONES U.S. TOTAL STOCK MARKET INDEX(SM) AND DOW JONES COMPOSITE AVERAGE is the licensing of the Index and certain trademarks, service marks and/or trade names of S&P Dow Jones Indices. The DOW JONES EQUAL WEIGHT U.S. ISSUED CORPORATE BOND INDEX(SM), DOW JONES U.S. TOTAL STOCK MARKET INDEX(SM) AND DOW JONES COMPOSITE AVERAGE is determined, composed and calculated by S&P Dow Jones Indices without regard to First Trust or the First Trust/Dow Jones Dividend & Income Allocation Portfolio. S&P Dow Jones Indices has no obligation to take the needs of First Trust or the owners of the First Trust/Dow Jones Dividend & Income Allocation Portfolio into consideration in determining, composing or calculating the DOW JONES EQUAL WEIGHT U.S. ISSUED CORPORATE BOND INDEX(SM), DOW JONES U.S. TOTAL STOCK MARKET INDEX(SM) AND DOW JONES COMPOSITE AVERAGE. Neither S&P Dow Jones Indices nor its affiliates are responsible for and have not participated in the determination of the prices, and amount of the First Trust/Dow Jones Dividend & Income Allocation Portfolio or the timing of the issuance or sale of the First Trust/Dow Jones Dividend & Income Allocation Portfolio or in the determination or calculation of the equation by which the First Trust/Dow Jones Dividend & Income Allocation Portfolio is to be managed. S&P Dow Jones Indices has no obligation or liability in connection with the administration, marketing or trading of the First Trust/Dow Jones Dividend & Income Allocation Portfolio. There is no assurance that investment products based on the DOW JONES EQUAL WEIGHT U.S. ISSUED CORPORATE BOND INDEX(SM), DOW JONES U.S. TOTAL STOCK MARKET INDEX(SM) AND DOW JONES COMPOSITE AVERAGE will accurately track index performance or provide positive investment returns. S&P Dow Jones Indices LLC is not an investment advisor. Inclusion of a security within an index is not a recommendation by S&P Dow Jones Indices to buy, sell, or hold such security, nor is it considered to be investment advice. NEITHER S&P DOW JONES INDICES NOR ITS AFFILIATES GUARANTEES THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE DOW JONES EQUAL WEIGHT U.S. ISSUED CORPORATE BOND INDEX(SM), DOW JONES U.S. TOTAL STOCK MARKET INDEX(SM) AND DOW JONES COMPOSITE AVERAGE OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P DOW JONES INDICES MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY FIRST TRUST, OWNERS OF THE FIRST TRUST/DOW JONES DIVIDEND & INCOME ALLOCATION PORTFOLIO, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE DOW JONES EQUAL WEIGHT U.S. ISSUED CORPORATE BOND INDEX(SM), DOW JONES U.S. TOTAL STOCK MARKET INDEX(SM) AND DOW JONES COMPOSITE AVERAGE OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING Page 68 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND FIRST TRUST, OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES. The First Trust Dorsey Wright Tactical Core Portfolio (the "Portfolio") is not sponsored, endorsed, sold or promoted by Dorsey Wright & Associates, LLC ("Licensor"). Licensor makes no representation or warranty, express or implied, to the owners of the Portfolio or any member of the public regarding the advisability of trading in the Portfolio. Licensor's only relationship to First Trust Advisors L.P. ("First Trust") is the licensing of certain trademarks and trade names of Licensor and of the Dorsey Wright Tactical Tilt Moderate Core Index which is determined, composed and calculated by Licensor without regard to First Trust or the Portfolio, Licensor has no obligation to take the needs of First Trust or the owners of the Portfolio into consideration in determining, composing or calculating Dorsey Wright Tactical Tilt Moderate Core Index. Licensor is not responsible for and has not participated in the determination of the timing of, prices at, or quantities of the Portfolio to be listed or in the determination or calculation of the equation by which the Portfolio are to be converted into cash. Licensor has no obligation or liability in connection with the administration, marketing or trading of the Portfolio. LICENSOR DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE DORSEY WRIGHT TACTICAL TILT MODERATE CORE OR ANY DATA INCLUDED THEREIN AND LICENSOR SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. LICENSOR MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY FIRST TRUST, OWNERS OF THE FIRST TRUST DORSEY WRIGHT TACTICAL CORE PORTFOLIO, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE DORSEY WRIGHT TACTICAL TILT MODERATE CORE INDEX OR ANY DATA INCLUDED THEREIN. LICENSOR MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE DORSEY WRIGHT TACTICAL TILT MODERATE CORE INDEX OR ANY DATA INCLUDED THEREIN, WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL LICENSOR HAVE ANY LIABILITY FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN LICENSOR AND FIRST TRUST. RISK CONSIDERATIONS Risks are inherent in all investing. The following summarizes some of the risks that should be considered for the Funds. For additional information about the risks associated with investing in the Funds, please see the Funds' prospectuses and statements of additional information, as well as other regulatory filings. AFFILIATED FUND RISK. The First Trust Multi Income Allocation Portfolio and the First Trust Dorsey Wright Tactical Core Portfolio invest in securities of affiliated ETFs, which involves additional expenses that would not be present in a direct investment in such affiliated ETFs. Furthermore, the Funds' investment performance and risks are directly related to the investment performance and risks of the affiliated ETFs. CALL RISK. If an issuer calls higher-yielding debt instruments held by the Funds, performance could be adversely impacted. CONVERTIBLE SECURITIES RISK. The ETFs in which the First Trust Multi Income Allocation Portfolio and the First Trust Dorsey Wright Tactical Core Portfolio invest may invest in convertible securities. Convertible securities have characteristics of both equity and debt securities and, as a result, are exposed to certain additional risks. The market values of convertible securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. However, a convertible security's market value also tends to reflect the market price of the common stock of the issuing company, particularly when the stock price is greater than the convertible security's conversion price (i.e., the predetermined price or exchange ratio at which the convertible security can be converted or exchanged for the underlying common stock). Convertible securities are also exposed to the risk that an issuer is unable to meet its obligation to make dividend or principal payments when due as a result of changing financial or market conditions. Convertible securities generally offer lower interest or dividend yields than non-convertible debt securities of similar credit quality because of their potential for capital appreciation. CREDIT RISK. The Funds are subject to credit risk. Credit risk is the risk that an issuer of a security will be unable or unwilling to make dividend, interest and/or principal payments when due and the related risk that the value of a security may decline because of concerns about the issuer's ability to make such payments. CURRENCY RISK. The ETFs in which the First Trust Multi Income Allocation Portfolio and the First Trust Dorsey Wright Tactical Core Portfolio invest may hold investments that are denominated in non-U.S. currencies, or in securities that provide exposure to such currencies, currency exchange rates or interest rates denominated in such currencies. Changes in currency exchange rates and the Page 69 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) relative value of non-U.S. currencies will affect the value of the Funds' investment and the value of your Fund shares. Currency exchange rates can be very volatile and can change quickly and unpredictably. As a result, the value of an investment in the Funds may change quickly and without warning and you may lose money. DEPOSITORY RECEIPTS RISK. The First Trust Multi Income Allocation Portfolio and the First Trust Dorsey Wright Tactical Core Portfolio invest in equity securities in the form of Depositary Receipts, which may be less liquid than the underlying securities in their primary trading market. Any distributions paid to the holders of Depositary Receipts are usually subject to a fee charged by the depositary. Holders of Depositary Receipts may have limited voting rights, and investment restrictions in certain countries may adversely impact the value of Depositary Receipts because such restrictions may limit the ability to convert the securities into Depositary Receipts and vice versa. Such restrictions may cause the securities of the underlying issuer to trade at a discount or premium to the market price of the Depositary Receipts. DIVIDEND RISK. The Funds are subject to dividend risk. There is no guarantee that the issuers of the Funds' equity securities will declare dividends in the future or that, if declared, they will either remain at current levels or increase over time. ENERGY INFRASTRUCTURE COMPANIES RISK. The First Trust Multi Income Allocation Portfolio invests in energy infrastructure companies. These companies principally include publicly-traded MLPs and limited liability companies taxed as partnerships, MLP affiliates, Canadian income trusts and their successor companies, pipeline companies, utilities, and other companies that derive at least 50% of their revenues from operating or providing services in support of infrastructure assets such as pipeline, power transmission and petroleum and natural gas storage in the petroleum, natural gas and power generation industries. The Fund invests in energy infrastructure companies and is subject to certain risks inherent in investing in these types of securities. Energy infrastructure companies may be directly affected by energy commodity prices, especially those companies that own the underlying energy commodity. A decrease in the production or availability of natural gas, natural gas liquids, crude oil, coal or other energy commodities or a decrease in the volume of such commodities available for transportation, processing, storage or distribution may adversely impact the financial performance of energy infrastructure companies. Energy infrastructure companies are subject to significant federal, state and local government regulation in virtually every aspect of their operations, including how facilities are constructed, maintained and operated, environmental and safety controls, and the prices they may charge for products and services. Various governmental authorities have the power to enforce compliance with these regulations and the permits issued under them and violators are subject to administrative, civil and criminal penalties, including civil fines, injunctions or both. Stricter laws, regulations or enforcement policies could be enacted in the future which would likely increase compliance costs and may adversely affect the financial performance of energy infrastructure companies. Natural disasters, such as hurricanes in the Gulf of Mexico, also may impact energy infrastructure companies. Certain energy infrastructure companies in the utilities industry are subject to imposition of rate caps, increased competition due to deregulation, difficulty in obtaining an adequate return on invested capital or in financing large construction projects, limitations on operations and increased costs and delays attributable to environmental considerations, and the capital market's ability to absorb utility debt. In addition, taxes, government regulation, international politics, price and supply fluctuations, volatile interest rates and energy conservation may cause difficulties for these companies. Such issuers have been experiencing certain of these problems to varying degrees. EQUITY SECURITIES RISK. Because the Funds and the ETFs in which the First Trust Multi Income Allocation Portfolio and the First Trust Dorsey Wright Tactical Core Portfolio invest hold equity securities, the value of the Funds' shares will fluctuate with changes in the value of these equity securities. Equity securities prices fluctuate for several reasons, including changes in investors' perceptions of the financial condition of an issuer or the general condition of the relevant stock market, such as market volatility, or when political or economic events affecting the issuers occur. In addition, common stock prices may be particularly sensitive to rising interest rates, as the cost of capital rises and borrowing costs increase. The equity markets have experienced recent volatility that may lead to sharp declines in the value of the underlying ETFs and the Funds. ETF RISK. An ETF trades like common stock and represents a portfolio of securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities, although lack of liquidity in an ETF could result in it being more volatile. ETFs have management fees and other operating expenses that increase their costs. In general, as a shareholder in other investment companies, the Funds bear their ratable share of the underlying fund's expenses, and are subject to duplicative expenses to the extent a Fund invests in other ETFs. FINANCIAL COMPANIES RISK. Financial companies are especially subject to the adverse effects of economic recession, currency exchange rates, government regulation, decreases in the availability of capital, volatile interest rates, portfolio concentrations in geographic markets and in commercial and residential real estate loans, and competition from new entrants in their fields of business. FIXED INCOME SECURITIES RISK. An investment in the Funds involves risk associated with an investment in fixed income securities including the risk that certain of the securities in the Funds may not have the benefit of covenants that would prevent the issuer from engaging in capital restructurings or borrowing transactions in connection with corporate acquisitions, leveraged buyouts or restructurings. This limitation could reduce the ability of the issuer to meet its payment obligations and might result in increased credit risk. In addition, certain of the securities may be redeemed or prepaid by the issuer, resulting in lower interest payments by the Funds and reduced distributions to shareholders. Page 70 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) FLOATING RATE LOAN RISK. The Funds and the ETFs in which the First Trust Multi Income Allocation Portfolio and the First Trust Dorsey Wright Tactical Core Portfolio invest may invest in floating rate loans, which may include high yield securities, or "junk" loans. An investment in floating rate loans subjects the Funds to credit risk, which is heightened for loans in which the Funds invest because companies that issue such loans tend to be highly leveraged and thus are more susceptible to the risks of interest deferral and/or bankruptcy. The loans are usually rated below investment grade but may also be unrated. An economic downturn would generally lead to a higher non-payment rate, and a loan may lose significant market value before a default occurs. Moreover, any specific collateral used to secure a loan may decline in value or become illiquid, which would adversely affect the loan's value. Loans are subject to a number of risks described elsewhere in this report, including liquidity risk and the risk of investing in below investment grade debt instruments. Floating rate loans are subject to prepayment risk. The degree to which borrowers prepay loans, whether as a contractual requirement or at their election, may be affected by general business conditions, the financial condition of the borrower and competitive conditions among loan investors, among others. Floating rate loans may also not be considered "securities" under the 1940 Act and therefore prevent the Funds from relying on the anti-fraud provisions of the Act. FUND OF FUNDS RISK. The First Trust Multi Income Allocation Portfolio and the First Trust Dorsey Wright Tactical Core Portfolio invest in securities of other ETFs, which involves additional expenses that would not be present in a direct investment in such ETFs. Furthermore, the Funds' investment performance and risks are directly related to the investment performance and risks of the underlying ETFs in which the Funds invest. HIGH YIELD SECURITIES RISK. The First Trust Multi Income Allocation Portfolio and the First Trust Dorsey Wright Tactical Core Portfolio invest in high yield securities, or "junk" bonds, which are subject to greater market fluctuations and risk of loss than securities with higher ratings, and therefore, may be highly speculative. These securities are issued by companies that may have limited operating history, narrowly focused operations, and/or other impediments to the timely payment of periodic interest and principal at maturity. If the economy slows down or dips into recession, the issuers of high yield securities may not have sufficient resources to continue making timely payment of periodic interest and principal at maturity. The market for high yield securities is generally smaller and less liquid than that for investment grade securities. High yield securities are generally not listed on a national securities exchange but trade in the over-the-counter markets. Due to the smaller, less liquid market for high yield securities, the bid-offer spread on such securities is generally greater than it is for investment grade securities and the purchase or sale of such securities may take longer to complete. ILLIQUID SECURITIES RISK. Some of the securities held by the First Trust Multi Income Allocation Portfolio may be illiquid. Illiquid securities involve the risk that the securities will not be able to be sold at the time desired by the Fund or at prices approximately the value at which the Fund is carrying the securities on its books. INCOME RISK. Income from the Funds' fixed income investments could decline during periods of falling interest rates. INDEX CONSTITUENT RISK. The Funds may be a constituent of one or more indices. As a result, the Funds may be included in one or more index-tracking ETFs or mutual funds. Being a component security of such a vehicle could greatly affect the trading activity involving a Fund, the size of the Fund and the market volatility of the Fund. Inclusion in an index could significantly increase demand for a Fund and removal from an index could result in outsized selling activity in a relatively short period of time. As a result, a Fund's NAV could be negatively impacted and the Fund's market price may be significantly below the Fund's net asset value during certain periods. In addition, index rebalances may potentially result in increased trading activity. To the extent buying or selling activity increases, a Fund can be exposed to increased brokerage costs and adverse tax consequences and the market price of the Fund can be negatively affected. INDEX REBALANCE RISK. Pursuant to the methodology that the Funds' index providers use to calculate and maintain the Fund's underlying index, the Fund may own a significant portion of the First Trust ETF's included in the Funds. Such ETFs may be removed from the underlying index in the event that it does not comply with the eligibility requirements of the underlying index. As a result, a Fund may be forced to sell shares of certain First Trust ETFs at inopportune times or for prices other than at current market values or may elect not to sell such shares on the day that they are removed from the underlying index, due to market conditions or otherwise. Due to these factors, the variation between a Fund's annual return and the return of the underlying index may increase significantly. Apart from scheduled rebalances, the index provider may carry out additional ad hoc rebalances to the underlying index to, for example, correct an error in the selection of constituents. When a Fund in turn rebalances its portfolio, any transaction costs and market exposure arising from such portfolio rebalancing will be borne by the Fund and its shareholders. Unscheduled rebalances may also expose a Fund to additional tracking error risk. Therefore, errors and additional ad hoc rebalances carried out by the index provider may increase a Fund's costs and market exposure. INTEREST RATE RISK. Interest rate risk is the risk that the value of the fixed-income securities in the Funds will decline because of rising market interest rates. Interest rate risk is generally lower for shorter term investments and higher for longer term investments. Mortgage-related securities are particularly subject to the risk that interest rate volatility may adversely impact the valuation and price of such securities. Additionally, the return on the floating rate loans in which the Funds may invest will decline during a period of falling interest rates. Page 71 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) INVESTMENT COMPANIES RISK. The Funds may invest in the shares of other investment companies, and therefore, the Funds' investment performance and risks may be related to the investment performance and risks of the underlying funds. In general, as a shareholder in other investment companies, the Funds bear their ratable share of the underlying Fund's expenses, and would be subject to duplicative expenses to the extent the Funds invest in other investment companies. LIQUIDITY RISK. The First Trust Multi Income Allocation Portfolio and the First Trust Dorsey Wright Tactical Core Portfolio invest a portion of their assets in other funds which invest in lower-quality debt issued by companies that are highly leveraged. Lower-quality debt tends to be less liquid than higher-quality debt. Moreover, smaller debt issues tend to be less liquid than larger debt issues. If the economy experiences a sudden downturn, or if the debt markets for such companies become distressed, the Funds may have particular difficulty selling their assets in sufficient amounts, at reasonable prices and in a sufficiently timely manner to raise the cash necessary to meet any potentially heavy redemption requests by shareholders. LOAN PREPAYMENT RISK. Loans are subject to prepayment risk. The degree to which borrowers prepay loans, whether as a contractual requirement or at their election, may be affected by general business conditions, the financial condition of the borrower and competitive conditions among loan investors, among others. As such prepayments cannot be predicted with accuracy. Upon a prepayment, either in part or in full, the actual outstanding debt on which the Funds derive interest income will be reduced. The Funds may not be able to reinvest the proceeds received on terms as favorable as the prepaid loan. LOAN RISK. An investment in loans subjects the Funds to credit risk, which is heightened for loans in which the Funds invest because companies that issue such loans tend to be highly leveraged and thus are more susceptible to the risks of interest deferral, default and/or bankruptcy. The loans are usually rated below investment grade but may also be unrated. An economic downturn would generally lead to a higher non-payment rate, and a loan may lose significant market value before a default occurs. Moreover, any specific collateral used to secure a loan may decline in value or become illiquid, which would adversely affect the loan's value. Unlike the securities markets, there is no central clearinghouse for loan trades, and the loan market has not established enforceable settlement standards or remedies for failure to settle. Therefore, portfolio transactions in loans may have uncertain settlement time periods. Loans are subject to a number of risks described elsewhere in this report, including liquidity risk and the risk of investing in below investment grade debt instruments. MANAGEMENT RISK. The Funds are subject to management risk because they have actively managed portfolios. The Advisor will apply investment techniques and risk analyses in making investment decisions for the Funds, but there can be no guarantee that the Funds will achieve their investment objectives. MARKET RISK. Market risk is the risk that a particular security owned by a Fund or shares of the Funds in general may fall in value. 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 securities prices. Overall Fund share values could decline generally or could underperform other investments. MLP RISK. The First Trust Multi Income Allocation Portfolio's investment in MLP units involves risks which differ from an investment in common stock of a corporation. Holders of MLP units have limited control and voting rights on matters affecting the partnership. In addition, there are certain tax risks associated with an investment in MLP units and conflicts of interest may exist between common unit holders and the general partner, including those arising from incentive distribution payments. In addition, there is the risk that an MLP could be, contrary to its intention, taxed as a corporation, resulting in decreased returns from such MLP. MLP TAX RISK. With respect to First Trust Multi Income Allocation Portfolio, the Fund's ability to meet its investment objectives depends, in part, on the level of taxable income and distributions it receives from the MLP and MLP-related entities in which the Fund invests, a factor over which the Fund has no control. The benefit the Fund derives from its investment in MLPs is dependent on the MLPs being treated as partnerships for federal income tax purposes. As a partnership, an MLP has no income tax liability at the entity level. If, as a result of a change in an MLP's business, an MLP were treated as a corporation for federal income tax purposes, such MLP would be obligated to pay federal income tax on its income at the applicable corporate tax rate. If an MLP was classified as a corporation for federal income tax purposes, the amount of cash available for distribution with respect to its units would be reduced and any such distributions received by the Fund would be taxed entirely as dividend income if paid out of the earnings of the MLP. Therefore, treatment of an MLP as a corporation for federal income tax purposes would result in a material reduction in the after-tax return to the Fund, likely causing a substantial reduction in the value of the shares of a Fund. MORTGAGE SECURITIES RISK. The ETFs in which the First Trust Multi Income Allocation Portfolio and the First Trust Dorsey Wright Tactical Core Portfolio invest in mortgage-related securities, including mortgage-backed securities, which may make the Funds more susceptible to adverse economic, political or regulatory events that affect the value of real estate. The First Trust/Dow Jones Dividend & Income Allocation Portfolio and First Trust Multi Income Allocation Portfolio may invest in such securities. Changes in local, state and federal policies could negatively impact the mortgage-related securities market, which include various government initiated and sponsored homeowner assistance programs and eminent domain issues. Mortgage related securities may also face liquidity issues when a Fund seeks to sell such securities, but is unable to find buyers at a bid-ask spread to make the transaction feasible. These securities are also subject to the risk that the underlying borrowers may default on their mortgages, resulting in a non-payment of principal and interest. Finally, the mortgage-related securities market may be negatively impacted by regulatory changes including those that are related to the mandate Page 72 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) or existence of the government-sponsored enterprises, Fannie Mae, Freddie Mac and Ginnie Mae. Mortgage-related securities are subject to prepayment risk. The degree to which borrowers prepay loans, whether as a contractual requirement or at their election, may be affected by general business conditions, the financial condition of the borrower and competitive conditions among loan investors, among others. As such, prepayments cannot be predicted with accuracy. Upon a prepayment, either in part or in full, the actual outstanding debt on which a Fund derives interest income will be reduced. In declining interest rate environments, the extent to which borrowers prepay a mortgage generally increases, which increase reinvestment risk, or the risk that the proceeds received are not reinvested on terms as favorable as the prepaid loan. Conversely, mortgage-related securities are subject to the risk that the rate of mortgage prepayments decreases, which extends the average life of a security and increases the interest rate risk exposure. MUNICIPAL BONDS RISK. Certain of the ETFs in which the First Trust Dorsey Wright Tactical Core Portfolio invests may invest in municipal bonds. In addition to being subject to credit, income and interest rate risk (as described in the prospectus), municipal bonds are subject to tax risk. Interest income from municipal bonds is normally not subject to regular federal income tax, but income from municipal bonds held by the underlying ETFs could be declared taxable because of, among other things, unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities or noncompliant conduct of a bond issuer. Consequently, the attractiveness of municipal bonds in relation to other investment alternatives is affected by changes in federal income tax rates or changes in the tax-exempt status of interest income from municipal bonds. NON-CORRELATION RISK. The Funds' returns may not match the return of an Index for a number of reasons. For example, the Funds incur operating expenses not applicable to the Indexes, and may incur costs in buying and selling securities, especially when rebalancing the Funds' portfolio holdings to reflect changes in the composition of the Indexes. In addition, the Funds' portfolio holdings may not exactly replicate the securities included in the Indexes or the ratios between the securities included in the Indexes. NON-DIVERSIFICATION RISK. The First Trust Dorsey Wright Tactical Core Portfolio is classified as "non-diversified" under the 1940 Act. As a result, the First Trust Dorsey Wright Tactical Core Portfolio is only limited as to the percentage of its assets that may be invested in the securities of any one issuer by the diversification requirements imposed by the Internal Revenue Code of 1986, as amended (the "Code"). The First Trust Dorsey Wright Tactical Core Portfolio may invest a relatively high percentage of its assets in a limited number of issuers. As a result, the First Trust Dorsey Wright Tactical Core Portfolio may be more susceptible to a single adverse economic or regulatory occurrence affecting one or more of these issuers, experience increased volatility and be highly invested in certain issuers. NON-U.S. SECURITIES AND EMERGING MARKETS RISK. The First Trust Multi Income Allocation Portfolio and the First Trust Dorsey Wright Tactical Core Portfolio invest in securities of non-U.S. issuers. Non-U.S. securities are subject to higher volatility than securities of domestic issuers due to possible adverse political, social or economic developments; restrictions on foreign investment or exchange of securities; lack of liquidity; currency exchange rates; excessive taxation; government seizure of assets; different legal or accounting standards and less government supervision and regulation of exchanges in foreign countries. These risks may be heightened for securities of companies located in, or with significant operations in, emerging market countries. PREFERRED SECURITIES RISK. The First Trust Multi Income Allocation Portfolio may invest in preferred securities and certain of the ETFs held by the First Trust Multi Income Allocation Portfolio and the First Trust Dorsey Wright Tactical Core Portfolio invest in preferred securities. Preferred securities combine some of the characteristics of both common stocks and bonds. Preferred securities are typically subordinated to bonds and other debt instruments in a company's capital structure in terms of priority to corporate income, and therefore will be subject to greater credit risk than those debt instruments. Preferred securities are also subject to credit risk, interest rate risk and income risk. REIT RISK. The First Trust Multi Income Allocation Portfolio invests in REITs, and as a result, the Fund is subject to the risks associated with investing in real estate, which may include, but are not limited to, fluctuations in the value of underlying properties; defaults by borrowers or tenants; market saturation; changes in general and local operating expenses; and other economic, political or regulatory occurrences affecting companies in the real estate industry. In addition to risks related to investments in real estate generally, investing in REITs involves certain other risks related to their structure and focus, which include, but are not limited to, dependency upon management skills, limited diversification, the risks of locating and managing financing for projects, heavy cash flow dependency, possible default by borrowers, the costs and potential losses of self-liquidation of one or more holdings, the risk of a possible lack of mortgage funds and associated interest rate risks, overbuilding, property vacancies, increases in property taxes and operating expenses, changes in zoning laws, losses due to environmental damages, changes in neighborhood values and appeal to purchases, the possibility of failing to maintain exemptions from registration under the 1940 Act and, in many cases, relatively small market capitalization, which may result in less market liquidity and greater price volatility. REITs are also subject to the risk that the real estate market may experience an economic downturn generally, which may have a material effect on the real estate in which the REITs invest and their underlying portfolio securities. SMALL FUND RISK. The Funds currently have fewer assets than larger funds, and like other relatively smaller funds, large inflows and outflows may impact the Funds' market exposure for limited periods of time. This impact may be positive or negative, depending on the direction of market movement during the period affected. Page 73 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) SMALLER COMPANY RISK. The Funds and certain of the ETFs in which the First Trust Multi Income Allocation Portfolio and the First Trust Dorsey Wright Tactical Core Portfolio invest in small- and mid-capitalization companies. Such companies may be more vulnerable to adverse general market or economic developments, and their securities may be less liquid and may experience greater price volatility than larger, more established companies as a result of several factors, including limited trading volumes, products or financial resources, management inexperience and less publicly available information. Accordingly, such companies are generally subject to greater market risk than larger, more established companies. TIPS RISK. The First Trust Multi Income Allocation Portfolio invests in TIPs. TIPS are inflation-indexed fixed-income securities issued by the U.S. Department of Treasury and are subject to the same risks as other fixed income investments. In a falling inflationary environment, both interest payments and the value of the TIPS will decline. BOARD CONSIDERATIONS REGARDING APPROVAL OF CONTINUATION OF INVESTMENT MANAGEMENT AND INVESTMENT SUB-ADVISORY AGREEMENTS The Board of Trustees (the "Board") of First Trust Variable Insurance Trust (the "Trust"), including the Independent Trustees, unanimously approved the continuation of the Investment Management Agreement (the "Advisory Agreement") with First Trust Advisors L.P. ("First Trust" or the "Advisor") on behalf of each of First Trust/Dow Jones Dividend & Income Allocation Portfolio, First Trust Multi Income Allocation Portfolio and First Trust Dorsey Wright Tactical Core Portfolio (each a "Fund" and together the "Funds"); the Investment Sub-Advisory Agreement (the "Stonebridge Sub-Advisory Agreement") among the Trust, on behalf of First Trust Multi Income Allocation Portfolio, the Advisor and Stonebridge Advisors LLC ("Stonebridge"); and the Investment Sub-Advisory Agreement (the "Energy Income Partners Sub-Advisory Agreement") among the Trust, on behalf of First Trust Multi Income Allocation Portfolio, the Advisor and Energy Income Partners, LLC ("Energy Income Partners") for a one-year period ending June 30, 2018 at a meeting held on June 12, 2017. The Stonebridge Sub-Advisory Agreement and the Energy Income Partners Sub-Advisory Agreement are collectively referred to as the "Sub-Advisory Agreements." Stonebridge and Energy Income Partners are individually referred to as a "Sub-Advisor" and are collectively referred to as the "Sub-Advisors." The Sub-Advisory Agreements together with the Advisory Agreement are referred to as the "Agreements." The Board determined that the continuation of the Advisory Agreement is in the best interests of each Fund and the continuation of the Sub-Advisory Agreements is in the best interests of First Trust Multi Income Allocation Portfolio in light of the extent and quality of the services provided and such other matters as the Board considered to be relevant in the exercise of its reasonable business judgment. To reach this determination, the Board considered its duties under the Investment Company Act of 1940, as amended (the "1940 Act"), as well as under the general principles of state law in reviewing and approving advisory contracts; the requirements of the 1940 Act in such matters; the fiduciary duty of investment advisors with respect to advisory agreements and compensation; the standards used by courts in determining whether investment company boards have fulfilled their duties; and the factors to be considered by the Board in voting on such agreements. At meetings held on April 24, 2017 and June 12, 2017, the Board, including the Independent Trustees, reviewed materials provided by the Advisor and each of the Sub-Advisors responding to requests for information from counsel to the Independent Trustees that, among other things, outlined the services provided by the Advisor to the Funds and by the Sub-Advisors to First Trust Multi Income Allocation Portfolio (including the relevant personnel responsible for these services and their experience); the advisory fee rate payable by each Fund and the sub-advisory fee rates for First Trust Multi Income Allocation Portfolio as compared to fees charged to a peer group of funds provided by Management Practice, Inc. ("MPI"), an independent source (the "MPI Peer Group"), and as compared to fees charged to other clients of the Advisor and the Sub-Advisor; expenses of each Fund as compared to expense ratios of the funds in the Fund's MPI Peer Group; performance information for each Fund; the nature of expenses incurred in providing services to the Funds and the potential for economies of scale, if any; financial data on the Advisor and each Sub-Advisor; any fall out benefits to the Advisor and its affiliate, First Trust Portfolios L.P. ("FTP"), and the Sub-Advisors; and information on the Advisor's and each Sub-Advisor's compliance program. The Board reviewed initial materials with the Advisor at a special meeting held on April 24, 2017, prior to which the Independent Trustees and their counsel met separately to discuss the information provided by the Advisor and each of the Sub-Advisors. Following the April meeting, independent legal counsel on behalf of the Independent Trustees requested certain clarifications and supplements to the materials provided, and the information provided in response to those requests was considered at an executive session of the Independent Trustees and independent legal counsel held prior to the June 12, 2017 meeting, as well as at the meeting held that day. The Board applied its business judgment to determine whether the arrangements between the Trust and the Advisor continue to be reasonable business arrangements from the perspective of the Funds and the Funds' shareholders. Similarly, the Board applied its business judgment to determine whether the arrangements among the Trust, the Advisor and each of the Sub-Advisors continue to be reasonable business arrangements from the perspective of First Trust Multi Income Allocation Portfolio and the Fund's shareholders. The Board determined that, given the totality of the information provided with respect to the Agreements, the Board had received sufficient information to renew the Agreements. The Board considered that shareholders chose to invest or remain invested in the Funds knowing that the Advisor manages the Funds and knowing that the Sub-Advisors serve as such for First Trust Multi Income Allocation Portfolio and knowing the advisory fee. Page 74 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) In reviewing the Agreements, the Board considered the nature, extent and quality of the services provided by the Advisor and each Sub-Advisor under the Agreements. With respect to the Advisory Agreement, the Board considered that the Advisor is responsible for the overall management and administration of the Trust and the Funds and reviewed all of the services provided by the Advisor to the Funds, including oversight of the Sub-Advisors for First Trust Multi Income Allocation Portfolio, as well as the background and experience of the persons responsible for such services. The Board noted that the Advisor oversees the Sub-Advisors' management of First Trust Multi Income Allocation Portfolio's investments, including portfolio risk monitoring and performance review. In reviewing the services provided, the Board noted the compliance program that had been developed by the Advisor and considered that it includes a robust program for monitoring the Advisor's, the Sub-Advisors' and the Funds' compliance with the 1940 Act, as well as each Fund's compliance with its investment objective and policies. The Board also considered a report from the Advisor with respect to its risk management functions related to the operation of the Funds. Finally, as part of the Board's consideration of the Advisor's services, the Advisor, in its written materials and at the April 24, 2017 meeting, described to the Board the scope of its ongoing investment in additional infrastructure and personnel to maintain and improve the quality of services provided to the Funds and the other funds in the First Trust Fund Complex. With respect to the Sub-Advisory Agreements for First Trust Multi Income Allocation Portfolio, the Board considered the services that each Sub-Advisor provides to the Fund, noting that Energy Income Partners is responsible for the day-to-day management of a portion of the Fund's investments and that Stonebridge serves in a non-discretionary capacity for a portion of the Fund's investments. The Board noted the background and experience of each Sub-Advisor's portfolio management team and the Board's prior meetings with members of each portfolio management team. In light of the information presented and the considerations made, the Board concluded that the nature, extent and quality of the services provided to the Funds by the Advisor and to First Trust Multi Income Allocation Portfolio by the Sub-Advisors under the Agreements have been and are expected to remain satisfactory and that the Advisor and, for First Trust Multi Income Allocation Portfolio, the Sub-Advisors, have managed the Funds consistent with each Fund's respective investment objectives and policies. The Board considered the advisory fee rate payable by each Fund under the Advisory Agreement and, for First Trust Multi Income Allocation Portfolio, considered the sub-advisory fees paid under the Sub-Advisory Agreements for the services provided, noting that the sub-advisory fees are paid by the Advisor from its advisory fee. The Board considered that the Advisor had agreed to extend the current expense caps for Class I and Class II shares of each Fund at least until May 1, 2019. The Board noted that expenses borne or advisory fees waived by First Trust are subject to reimbursement by the applicable Fund for up to three years from the date the expense was incurred or advisory fee was waived, but no reimbursement payment would be made by the Fund if it would result in the Fund exceeding an expense ratio equal to the expense cap in place at the time of the reimbursement or at the time the expenses were borne or advisory fees were waived by First Trust. The Board also noted that the Advisor had extended through May 1, 2018 its agreement to reduce the advisory fee payable by First Trust Multi Income Allocation Portfolio in the amount of 0.37% of the Fund's average daily net assets. The Board received and reviewed information for each Fund showing the advisory fee rates and expense ratios of the peer funds in the MPI Peer Group, as well as advisory fee rates charged by the Advisor and the Sub-Advisors to other fund and non-fund clients, as applicable. With respect to each Fund's MPI Peer Group, the Board discussed with representatives of the Advisor how the MPI Peer Group was assembled. Based on the information provided, the Board noted that the advisory fee payable by First Trust/Dow Jones Dividend & Income Allocation Portfolio was equal to the median advisory fee of the peer funds in the Fund's MPI Peer Group, that the advisory fee payable by First Trust Multi Income Allocation Portfolio was below the median advisory fee of the peer funds in the Fund's MPI Peer Group and that the advisory fee payable by First Trust Dorsey Wright Tactical Core Portfolio was above the median advisory fee of the peer funds in the Fund's MPI Peer Group. The Board also noted that with respect to the total (net) expense ratio of each Fund's Class I shares, the net expense ratio of First Trust Multi Income Allocation Portfolio was below the median expense net ratio of the peer funds in the Fund's MPI Peer Group and the net expense ratio of each of First Trust/Dow Jones Dividend & Income Allocation Portfolio and First Trust Dorsey Wright Tactical Core Portfolio was above the median net expense ratio of the peer funds in the Fund's MPI Peer Group. With respect to fees charged to other clients, the Board considered differences between the Funds and other clients that limited their comparability. In considering the advisory fee rates overall, the Board also considered the Advisor's statement that it seeks to meet investor needs through innovative and value-added investment solutions and the Advisor's description of its long-term commitment to each Fund. The Board considered performance information for the Funds. The Board noted the process it has established for monitoring the Funds' performance and portfolio risk on an ongoing basis, which includes quarterly performance reporting from the Advisor for the Funds and the Sub-Advisors for First Trust Multi Income Allocation Portfolio. The Board determined that this process continues to be effective for reviewing the Funds' performance. The Board received and reviewed information comparing each Fund's performance for periods ended December 31, 2016 to the performance of the Fund's MPI Peer Group and to that of benchmark indexes, including one or more blended benchmarks. Based on the information provided, the Board noted that First Trust/Dow Jones Dividend & Income Allocation Portfolio (Class I shares) outperformed the MPI Peer Group average for the one- and three year periods ended December 31, 2016. The Board noted that First Trust Multi Income Allocation Portfolio (Class I shares) outperformed the MPI Peer Group average for the one-year period ended December 31, 2016. The Board noted that First Trust Dorsey Wright Tactical Core Portfolio (Class I shares) underperformed the MPI Peer Group average for the one-year period ended December 31, 2016. Page 75 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST VARIABLE INSURANCE TRUST JUNE 30, 2017 (UNAUDITED) On the basis of all the information provided on the fees, expenses and performance of the Funds and the ongoing oversight by the Board, the Board concluded that the advisory fee for each Fund and the sub-advisory fees for First Trust Multi Income Allocation Portfolio continue to be reasonable and appropriate in light of the nature, extent and quality of the services provided by the Advisor to each Fund under the Advisory Agreement and provided to First Trust Multi Income Allocation Portfolio by the Sub-Advisors under the Sub-Advisory Agreements. The Board considered information and discussed with the Advisor whether there were any economies of scale in connection with providing advisory services to each Fund and noted the Advisor's statement that it expects its expenses to increase over the next twelve months as the Advisor continues to make investments in personnel and infrastructure. The Board considered the revenues and allocated costs (including the allocation methodology) of the Advisor in serving as investment advisor to each Fund for the twelve months ended December 31, 2016 and the estimated profitability level for each Fund calculated by the Advisor based on such data, as well as complex-wide and product-line profitability data for the same period. The Board noted the inherent limitations in the profitability analysis and concluded that, based on the information provided, the Advisor's profitability level for each Fund was not unreasonable. The Board considered that the Advisor had identified as a fall out benefit to the Advisor and FTP their exposure to investors and brokers who, absent their exposure to the Funds, may have had no dealings with the Advisor or FTP. The Board also considered the majority ownership interest of an affiliate of the Advisor in Stonebridge and the investment by an affiliate of the Advisor in Energy Income Partners and potential fall-out benefits to the Advisor from such interests. The Board noted that FTP is compensated for services provided to the Funds through Rule 12b 1 distribution and service fees payable by Class I shares, and that the Advisor receives compensation from the Funds for providing fund reporting services pursuant to a separate Fund Reporting Services Agreement. The Board also noted that the Advisor does not utilize soft dollars in connection with its management of the Funds' portfolios. The Board concluded that the character and amount of potential fall-out benefits to the Advisor were not unreasonable. With respect to the Stonebridge Sub-Advisory Agreement, the Board considered Stonebridge's expenses in providing services to the Fund and noted Stonebridge's recent hiring of additional personnel and commitment to add additional resources if assets increase. The Board did not review the profitability of Stonebridge with respect to the Fund. The Board noted that the Advisor pays Stonebridge from its advisory fee, and its understanding that the First Trust Multi Income Allocation Portfolio's sub-advisory fee rate was the product of an arm's length negotiation. The Board concluded that the profitability analysis for the Advisor was more relevant. The Board considered fall-out benefits that may be realized by Stonebridge from its relationship with First Trust Multi Income Allocation Portfolio, including potential fall-out benefits to Stonebridge from the ownership interest of an affiliate of the Advisor in Stonebridge. The Board noted that Stonebridge does not provide trade execution services on behalf of First Trust Multi Income Allocation Portfolio. The Board concluded that the character and amount of potential fall-out benefits to Stonebridge were not unreasonable. With respect to the Energy Income Partners Sub-Advisory Agreement, the Board considered that Energy Income Partners' investment services expenses are primarily fixed, and that Energy Income Partners has made recent investments in personnel and infrastructure and expects its expenses to increase over the next twelve months as it continues to make invests in personnel and infrastructure. The Board did not review the profitability of Energy Income Partners with respect to the Fund. The Board noted that the Advisor pays Energy Income Partners from its advisory fee, and its understanding that the First Trust Multi Income Allocation Portfolio's sub-advisory fee rate was the product of an arm's length negotiation. The Board concluded that the profitability analysis for the Advisor was more relevant. The Board considered fall-out benefits that may be realized by Energy Income Partners from its relationship with First Trust Multi Income Allocation Portfolio, including the potential fall-out benefits to Energy Income Partners from the ownership interest of an affiliate of the Advisor in Energy Income Partners. The Board noted that Energy Income Partners does not provide trade execution services on behalf of First Trust Multi Income Allocation Portfolio. The Board concluded that the character and amount of potential fall-out benefits to Energy Income Partners were not unreasonable. Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, unanimously determined that the terms of the Agreements continue to be fair and reasonable and that the continuation of the Agreements is in the best interests of the applicable Funds. No single factor was determinative in the Board's analysis. Page 76 FIRST TRUST INVESTMENT ADVISOR First Trust Advisors L.P. 120 E. Liberty Drive, Suite 400 Wheaton, IL 60187 INVESTMENT SUB-ADVISORS FIRST TRUST MULTI INCOME ALLOCATION PORTFOLIO Energy Income Partners, LLC Stonebridge Advisors LLC 10 Wright Street 10 Westport Road, Suite C101 Westport, CT 06880 Wilton, CT 06897 ADMINISTRATOR, FUND ACCOUNTANT, & CUSTODIAN FIRST TRUST/DOW JONES DIVIDEND & INCOME FIRST TRUST DORSEY WRIGHT ALLOCATION PORTFOLIO TACTICAL CORE PORTFOLIO FIRST TRUST MULTI INCOME ALLOCATION PORTFOLIO Brown Brothers Harriman & Co. The Bank of New York Mellon 50 Post Office Square 101 Barclay Street, 20th Floor Boston, MA 02110 New York, NY 10286 TRANSFER AGENT BNY Mellon Investment Servicing (US) Inc. 301 Bellevue Parkway Wilmington, DE 19809 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. Not applicable. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. 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) Not applicable. (a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. (a)(3) Not applicable. (b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes- Oxley Act of 2002 are attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (registrant) First Trust Variable Insurance Trust ------------------------------------------------- By (Signature and Title)* /s/ James M. Dykas ---------------------------------------- James M. Dykas, President and Chief Executive Officer (principal executive officer) Date: August 21, 2017 ------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ James M. Dykas ---------------------------------------- James M. Dykas, President and Chief Executive Officer (principal executive officer) Date: August 21, 2017 ------------------- By (Signature and Title)* /s/ Donald P. Swade ---------------------------------------- Donald P. Swade, Treasurer, Chief Financial Officer and Chief Accounting Officer (principal financial officer) Date: August 21, 2017 ------------------- * Print the name and title of each signing officer under his or her signature.