FIRST TRUST First Trust Exchange-Traded Fund IV -------------------------------------------------------------------------------- First Trust North American Energy Infrastructure Fund (EMLP) First Trust EIP Carbon Impact ETF (ECLN) Annual Report For the Year Ended October 31, 2021 Energy Income Partners, LLC --------------------------- -------------------------------------------------------------------------------- TABLE OF CONTENTS -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV ANNUAL REPORT OCTOBER 31, 2021 Shareholder Letter........................................................... 1 Fund Performance Overview First Trust North American Energy Infrastructure Fund (EMLP).............. 2 First Trust EIP Carbon Impact ETF (ECLN).................................. 4 Notes to Fund Performance Overview........................................... 6 Portfolio Commentary......................................................... 7 Understanding Your Fund Expenses............................................. 10 Portfolio of Investments First Trust North American Energy Infrastructure Fund (EMLP).............. 11 First Trust EIP Carbon Impact ETF (ECLN).................................. 13 Statements of Assets and Liabilities......................................... 15 Statements of Operations..................................................... 16 Statements of Changes in Net Assets.......................................... 17 Financial Highlights......................................................... 18 Notes to Financial Statements................................................ 19 Report of Independent Registered Public Accounting Firm...................... 26 Additional Information....................................................... 27 Board of Trustees and Officers............................................... 34 Privacy Policy............................................................... 36 CAUTION REGARDING FORWARD-LOOKING STATEMENTS This report contains certain forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding the goals, beliefs, plans or current expectations of First Trust Advisors L.P. ("First Trust" or the "Advisor") and/or Energy Income Partners, LLC ("EIP" or the "Sub-Advisor") and their respective 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 First Trust Exchange-Traded Fund IV (the "Trust") described in this report (each such series is referred to as a "Fund" and collectively, as the "Funds") 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-Advisor and their respective representatives only as of the date hereof. We undertake no obligation to publicly revise or update these forward-looking statements to reflect events and circumstances that arise after the date hereof. PERFORMANCE AND RISK DISCLOSURE There is no assurance that any Fund described in this report will achieve its investment objective. 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's shares may therefore be less than what you paid for them. Accordingly, you can lose money 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 www.ftportfolios.com or speak with your financial advisor. Investment returns, net asset value and share price 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 www.ftportfolios.com. HOW TO READ THIS REPORT This report contains information that may help you evaluate your investment. It includes details about each Fund and presents data and analysis that provide insight into each Fund's performance and investment approach. By reading the portfolio commentary from the portfolio management team of the Funds, you may obtain an understanding of how the market environment affected 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 the Advisor and/or Sub-Advisor 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, and other Fund regulatory filings. -------------------------------------------------------------------------------- SHAREHOLDER LETTER -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV ANNUAL LETTER FROM THE CHAIRMAN AND CEO OCTOBER 31, 2021 Dear Shareholders: First Trust is pleased to provide you with the annual report for the First Trust North American Energy Infrastructure Fund and the First Trust EIP Carbon Impact ETF (the "Funds"), which contains detailed information about the Funds for the twelve months ended October 31, 2021. Inflation has arrived, and its entrance was grand, to say the least. The Consumer Price Index came in at 6.2% year-over-year in October 2021, according to data from the U.S. Bureau of Labor Statistics. The last time it topped the 6.0% mark was in December 1990 (6.1%), over 30 years ago. As is often the case with major shifts in the economy and markets, there is debate over what is truly behind them. For many months, as inflation was trending higher, Federal Reserve (the "Fed") Chairman Jerome Powell held the view that the rising inflationary pressures largely stemmed from global supply chain bottlenecks induced by the coronavirus ("COVID-19") pandemic. Perhaps the best example of this is the unprecedented backlog of container ships that have dropped anchor outside the California ports of Los Angeles and Long Beach. Together, these ports service 40% of all the container ships bound for the U.S. In normal times, no ships are anchored waiting to unload their goods. Shortages of trucks and drivers have also contributed to the slowdown at the ports. The takeaway is that goods are not being delivered to warehouses and store shelves in a timely fashion and that is helping to drive prices higher for consumers. Simply put, inflation is the byproduct of too much money chasing too few goods. We'll return to this axiom shortly. Chairman Powell originally believed the bottlenecks would be remedied relatively quickly as the global economy reopened and people went back to work. That, in turn, would allow inflationary pressures to dissipate, which has not happened. Around the end of October, Chairman Powell finally acknowledged that inflation will likely remain elevated through mid-2022. This realization is what motivated the Fed to announce that it would begin to taper its monthly bond buying program (quantitative easing) starting in November 2021. It has been purchasing roughly $80 billion of Treasuries and $40 billion of mortgage-backed securities in the open market every month since June 2020. The Fed will shave $15 billion off that combined total every month until the buying has ceased, which should be around mid-2022. If all goes to plan, the next stage in the evolution of the Fed's monetary policy would involve initiating interest rate hikes. While the supply chain bottlenecks have clearly played a role in the spike in inflation by limiting the amount of goods available to consume, the biggest contributing factor is likely the surge in the U.S. money supply, according to Brian Wesbury, Chief Economist at First Trust. M2 is a measure of the money supply that includes cash, checking deposits and liquid assets easily convertible to cash. The M2 measure of money has exploded by 36% since February 2020, well above the 6% pre-COVID-19 annualized norm. The trillions of dollars of stimulus distributed by the U.S. government to help backstop the economy during the pandemic has contributed to higher inflation. On Wednesday, November 10, 2021, President Joe Biden admitted that his $1.9 trillion COVID-19 stimulus package has done just that. Remember, too much money chasing too few goods leads to inflation. Keep in mind, President Biden has recently successfully navigated a $1.2 trillion bipartisan infrastructure bill through Congress and has another roughly $1.75 trillion Build Back Better Act (social spending) piece of legislation pending. That means there is at least another $1.2 trillion dollars flowing into the economy over the next few years, and maybe more. Data from FactSet indicates that the number of S&P 500(R) Index companies mentioning inflation on their 2021 third quarter earnings call hit a 10-year high, according to Business Insider. To date, 285 of the 461 companies that have reported their results have cited concerns over rising inflation. The Materials, Consumer Staples and Energy sectors had the highest percentage of companies mentioned on these earnings calls at 90%, 88% and 86%, respectively. Suffice it to say, investors should add inflation to the list of criteria to assist them in positioning their portfolios moving forward. Thank you for giving First Trust the opportunity to play a role in your financial future. We value our relationship with you and will report on the Funds again in six months. 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 -------------------------------------------------------------------------------- FUND PERFORMANCE OVERVIEW (UNAUDITED) -------------------------------------------------------------------------------- FIRST TRUST NORTH AMERICAN ENERGY INFRASTRUCTURE FUND (EMLP) The First Trust North American Energy Infrastructure Fund (the "Fund") is an actively managed exchange-traded fund. The Fund's investment objective is to seek total return. The Fund will invest, under normal market conditions, at least 80% of its net assets (including investment borrowings) in equity securities of companies deemed by Energy Income Partners, LLC ("EIP" or the "Sub-Advisor") to be engaged in the energy infrastructure sector, which principally include publicly-traded master limited partnerships or limited liability companies taxed as partnerships ("MLPs"), MLP affiliates, pipeline companies, utilities, and other companies that derive the majority of their revenues from operating or providing services in support of infrastructure assets such as pipelines, power transmission and petroleum and natural gas storage in the petroleum, natural gas and power generation industries (collectively, "Energy Infrastructure Companies"). In addition, under normal market conditions, the Fund will invest at least 80% of its net assets (including investment borrowings) in equity securities of companies headquartered or incorporated in the United States and Canada. ------------------------------------------------------------------------------------------------------------------------------------ PERFORMANCE ------------------------------------------------------------------------------------------------------------------------------------ AVERAGE ANNUAL CUMULATIVE TOTAL RETURNS TOTAL RETURNS 1 Year Ended 5 Years Ended Inception (6/20/12) 5 Years Ended Inception (6/20/12) 10/31/21 10/31/21 to 10/31/21 10/31/21 to 10/31/21 FUND PERFORMANCE NAV 31.97% 4.43% 6.35% 24.21% 77.98% Market Price 32.14% 4.43% 6.36% 24.20% 78.10% INDEX PERFORMANCE Blended Benchmark(1) 45.60% 6.80% 6.60% 38.97% 81.90% S&P 500(R) Index 42.91% 18.93% 16.24% 137.90% 309.38% ------------------------------------------------------------------------------------------------------------------------------------ (See Notes to Fund Performance Overview on page 6.) ----------------------------- (1) The Blended Benchmark consists of the following two indices: 50% of the PHLX Utility Sector Index which is a market capitalization weighted index composed of geographically diverse public U.S. utility stocks; and 50% of the Alerian MLP Total Return Index which is a float-adjusted, capitalization-weighted composite of the most prominent energy Master Limited Partnerships (MLPs). Indices are unmanaged and an investor cannot invest directly in an index. All index returns assume that distributions are reinvested when they are received. The Blended Benchmark returns are calculated by using the monthly return of the two indices during each period shown above. At the beginning of each month the two indices are rebalanced to a 50-50 ratio to account for divergence from that ratio that occurred during the course of each month. The monthly returns are then compounded for each period shown above, giving the performance for the Blended Benchmark for each period shown above. Page 2 -------------------------------------------------------------------------------- FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST NORTH AMERICAN ENERGY INFRASTRUCTURE FUND (EMLP) (CONTINUED) ----------------------------------------------------------- % OF TOTAL LONG-TERM INDUSTRY CLASSIFICATION INVESTMENTS ----------------------------------------------------------- Electric Power & Transmission 38.6% Natural Gas Transmission 28.6 Petroleum Product Transmission 12.3 Crude Oil Transmission 9.0 Nat. Gas Gathering & Processing 5.3 Oil & Gas Production 0.1 Marine 0.1 Propane 0.0* Coal 0.0* Other 6.0 ------- Total 100.0% ======= * Amount is less than 0.1%. ----------------------------------------------------------- % OF TOTAL LONG-TERM TOP TEN HOLDINGS INVESTMENTS ----------------------------------------------------------- Enterprise Products Partners, L.P. 6.5% Magellan Midstream Partners, L.P. 6.5 NextEra Energy Partners, L.P. 6.1 TC Energy Corp. 5.5 Plains GP Holdings, L.P., Class A 4.6 Sempra Energy 3.6 Quanta Services, Inc. 3.5 NextEra Energy, Inc. 3.5 Public Service Enterprise Group, Inc. 3.4 Cheniere Energy, Inc. 3.2 ------- Total 46.4% ======= Performance of a $10,000 Initial Investment June 20, 2012 - October 31, 2021 First Trust North American Blended S&P 500(R) Energy Infrastructure Fund Benchmark Index 6/20/12 $10,000 $10,000 $10,000 10/31/12 10,690 10,582 10,495 4/30/13 12,379 12,241 12,008 10/31/13 12,138 12,064 13,347 4/30/14 13,341 13,381 14,463 10/31/14 14,861 14,383 15,652 4/30/15 15,005 13,803 16,341 10/31/15 12,793 12,040 16,467 4/30/16 13,004 12,531 16,538 10/31/16 14,330 13,087 17,209 4/30/17 14,896 14,126 19,501 10/31/17 14,768 13,897 21,276 4/30/18 13,914 13,586 22,089 10/31/18 14,171 14,142 22,840 4/30/19 15,869 15,242 25,068 10/31/19 16,188 15,288 26,111 4/30/20 13,590 12,513 25,286 10/31/20 13,487 12,493 28,645 4/30/21 16,776 16,893 36,909 10/31/21 17,798 18,190 40,938 Performance figures assume reinvestment of all distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the indices do not actually hold a portfolio of securities and therefore do not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance does not predict future performance. FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS Information showing the number of days the market price of the Fund's shares was greater (at a premium) and less (at a discount) than the Fund's net asset value for the most recently completed year, and the most recently completed calendar quarters since that year (or life of the Fund, if shorter) is available at https://www.ftportfolios.com/Retail/etf/home.aspx. Page 3 -------------------------------------------------------------------------------- FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EIP CARBON IMPACT ETF (ECLN) The First Trust EIP Carbon Impact ETF (the "Fund") seeks to achieve a competitive risk-adjusted total return balanced between dividends and capital appreciation. Under normal market conditions, the Fund will invest at least 80% of its net assets (including investment borrowings) in the equity securities of companies identified by the Fund's investment sub-advisor, Energy Income Partners, LLC ("EIP" or the "Sub Advisor"), as having or seeking to have a positive carbon impact. ------------------------------------------------------------------------------------------------------------------------------------ PERFORMANCE ------------------------------------------------------------------------------------------------------------------------------------ AVERAGE ANNUAL CUMULATIVE TOTAL RETURNS TOTAL RETURNS 1 Year Ended Inception (8/19/19) Inception (8/19/19) 10/31/21 to 10/31/21 to 10/31/21 FUND PERFORMANCE NAV 15.49% 10.98% 25.77% Market Price 15.53% 11.00% 25.81% INDEX PERFORMANCE PHLX Utility Sector Index 11.11% 8.51% 19.68% S&P 500(R) Index 42.91% 25.02% 63.44% ------------------------------------------------------------------------------------------------------------------------------------ (See Notes to Fund Performance Overview on page 6.) Page 4 -------------------------------------------------------------------------------- FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EIP CARBON IMPACT ETF (ECLN) (CONTINUED) ----------------------------------------------------------- % OF TOTAL LONG-TERM INDUSTRY CLASSIFICATION INVESTMENTS ----------------------------------------------------------- Electric Power & Transmission 59.4% Natural Gas Transmission 27.9 Nat.Gas Gathering & Processing 2.7 Petroleum Product Transmission 0.5 Crude Oil Transmission 0.1 Propane 0.1 Marine 0.0* Other 9.3 ------- Total 100.0% ======= * Amount is less than 0.1%. ----------------------------------------------------------- % OF TOTAL LONG-TERM TOP TEN HOLDINGS INVESTMENTS ----------------------------------------------------------- NextEra Energy Partners, L.P. 7.7% NextEra Energy, Inc. 6.0 Iberdrola S.A., ADR 4.7 Enel S.p.A., ADR 4.6 Cheniere Energy, Inc. 4.2 Atmos Energy Corp. 4.1 Quanta Services, Inc. 4.1 Cheniere Energy Partners, L.P. 4.0 American Electric Power Co., Inc. 3.4 Xcel Energy, Inc. 3.4 ------- Total 46.2% ======= PERFORMANCE OF A $10,000 INITIAL INVESTMENT AUGUST 19, 2019 - OCTOBER 31, 2021 First Trust EIP PHLX Utility S&P 500(R) Carbon Impact ETF Sector Index Index 8/19/19 $10,000 $10,000 $10,000 10/31/19 10,304 10,489 10,424 4/30/20 9,818 9,586 10,095 10/31/20 10,890 10,771 11,436 4/30/21 12,155 11,677 14,736 10/31/21 12,577 11,968 16,344 Performance figures assume reinvestment of all distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the indices do not actually hold a portfolio of securities and therefore do not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance does not predict future performance. FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS Information showing the number of days the market price of the Fund's shares was greater (at a premium) and less (at a discount) than the Fund's net asset value for the most recently completed year, and the most recently completed calendar quarters since that year (or life of the Fund, if shorter) is available at https://www.ftportfolios.com/Retail/etf/home.aspx. Page 5 -------------------------------------------------------------------------------- NOTES TO FUND PERFORMANCE OVERVIEW (UNAUDITED) -------------------------------------------------------------------------------- Total returns for the periods since inception are calculated from the inception date of each Fund. "Average Annual Total Returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative Total Returns" represent the total change in value of an investment over the periods indicated. Each Fund's per share net asset value ("NAV") is the value of one share of the Fund and is computed by dividing the value of all assets of the Fund (including accrued interest and dividends), less all liabilities (including accrued expenses and dividends declared but unpaid), by the total number of outstanding shares. The price used to calculate market return ("Market Price") is determined by using the midpoint of the national best bid and offer price ("NBBO") as of the time that the Fund's NAV is calculated. Under SEC rules, the NBBO consists of the highest displayed buy and lowest sell prices among the various exchanges trading the Fund at the time the Fund's NAV is calculated. Prior to January 1, 2019, the price used was the midpoint between the highest bid and the lowest offer on the stock exchange on which shares of the Fund were listed for trading as of the time that the Fund's NAV was calculated. Since shares of each Fund did not trade in the secondary market until after the Fund's inception, for the period from inception to the first day of secondary market trading in shares of the Fund, the NAV of each Fund is used as a proxy for the secondary market trading price to calculate market returns. NAV and market returns assume that all distributions have been reinvested in each Fund at NAV and Market Price, respectively. An index is a statistical composite that tracks a specified financial market or sector. Unlike each Fund, the indices do not actually hold a portfolio of securities and therefore do not incur the expenses incurred by each Fund. These expenses negatively impact the performance of each Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The total returns presented reflect the reinvestment of dividends on securities in the indices. The returns presented do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of each Fund will vary with changes in market conditions. Shares of each Fund may be worth more or less than their original cost when they are redeemed or sold in the market. Each Fund's past performance is no guarantee of future performance. Page 6 -------------------------------------------------------------------------------- PORTFOLIO COMMENTARY -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV ANNUAL REPORT OCTOBER 31, 2021 (UNAUDITED) ADVISOR First Trust Advisors, L.P. ("First Trust") is the investment advisor to the First Trust North American Energy Infrastructure Fund ("EMLP") and the First Trust EIP Carbon Impact ETF ("ECLN") (each a "Fund"). First Trust is responsible for the ongoing monitoring of each Fund's investment portfolio, managing each Fund's business affairs and providing certain administrative services necessary for the management of each Fund. SUB-ADVISOR ENERGY INCOME PARTNERS, LLC Energy Income Partners, LLC ("EIP"), located in Westport, CT, was founded in 2003 to provide professional asset management services in publicly traded energy-related infrastructure companies with above average dividend payout ratios operating pipelines and related storage and handling facilities, electric power transmission and distribution as well as long contracted or regulated power generation from renewables and other sources. The corporate structure of the portfolio companies include C-corporations, partnerships and energy infrastructure real estate investment trusts. EIP mainly focuses on investments in assets that receive steady fee-based or regulated income from their corporate and individual customers. EIP manages or supervises approximately $4.4 billion of assets as of October 31, 2021. EIP advises two privately offered partnerships for U.S. high net worth individuals and an open-end mutual fund. EIP also manages separately managed accounts and provides its model portfolio to unified managed accounts. Finally, in addition to the Funds, EIP serves as a sub-advisor to four closed-end management investment companies, two actively managed exchange-traded funds, a sleeve of an actively managed exchange-traded fund and a sleeve of a series of a variable insurance trust. EIP is a registered investment advisor with the Securities and Exchange Commission. PORTFOLIO MANAGEMENT TEAM JAMES J. MURCHIE, CO-FOUNDER, CHIEF EXECUTIVE OFFICER, CO-PORTFOLIO MANAGER, AND PRINCIPAL OF ENERGY INCOME PARTNERS, LLC EVA PAO, CO-FOUNDER, CO-PORTFOLIO MANAGER AND PRINCIPAL OF ENERGY INCOME PARTNERS, LLC JOHN TYSSELAND, CO-PORTFOLIO MANAGER AND PRINCIPAL OF ENERGY INCOME PARTNERS, LLC The portfolio managers are primarily and jointly responsible for the day-to-day management of the Funds. COMMENTARY FIRST TRUST NORTH AMERICAN ENERGY INFRASTRUCTURE FUND The Fund's investment objective is to seek total return. The Fund pursues its investment objective by investing, under normal market conditions, at least 80% of its net assets (including investment borrowings) in equity securities of companies deemed by EIP to be engaged in the energy infrastructure sector. These companies principally include publicly traded master limited partnerships and limited liability companies taxed as partnerships ("MLPs"), MLP affiliates, pipeline companies, utilities, and other companies that derive the majority of their revenues from operating or providing services in support of infrastructure assets such as pipelines, power transmission and petroleum and natural gas storage in the petroleum, natural gas and power generation industries (collectively, "Energy Infrastructure Companies"). The Fund will invest principally in Energy Infrastructure Companies. Under normal market conditions, the Fund will invest at least 80% of its net assets (including investment borrowings) in equity securities of companies headquartered or incorporated in the United States and Canada. There can be no assurance that the Fund's investment objective will be achieved. The Fund may not be appropriate for all investors. MARKET RECAP As measured by the Alerian MLP Total Return Index (the "MLP Index") and the PHLX Utility Sector Index (the "UTY Index"), the total return for energy-related MLPs and utilities for the 12-month period ended October 31, 2021 was 85.70% and 11.11%, respectively. These figures are according to data collected from Alerian Capital Management and Bloomberg. As measured by the S&P 500(R) Index (the "Index"), the broader equity market over the same period returned 42.91%. PERFORMANCE ANALYSIS On a net asset value ("NAV") basis for the 12-month period ended October 31, 2021, the Fund provided a total return of 31.97%, including the reinvestment of dividends. This compares, according to collected data, to a total return of 45.60%(1) for the compounded average of the two indices (the "Blended Benchmark") (85.70% for the MLP Index and 11.11% for the UTY Index), and 42.91% for the Index. ----------------------------- (1) The total return is the monthly rebalanced return for the MLP Index and UTY Index. Page 7 -------------------------------------------------------------------------------- PORTFOLIO COMMENTARY (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV ANNUAL REPORT OCTOBER 31, 2021 (UNAUDITED) The Fund declared quarterly distributions during the fiscal year as follows: $0.2291 per share in December 2020; $0.2150 per share in March 2021; $0.2041 per share in June 2021; and $0.2086 per share in September 2021. The Fund's NAV total return of 31.97% underperformed the 45.60% average return of the Blended Benchmark. Underperformance of the Fund over this period is partially explained by underweight positions in more cyclical MLPs that outperformed as commodity prices continued to recover from pandemic lows set in the prior year. The Blended Benchmark has a higher weighting of companies that are positively correlated to crude oil and natural gas prices that were up 134% and 62%, respectively, over the 12-month period. EIP has sought to consistently run a more conservative portfolio compared to the Blended Benchmark. This conservatism is reflected in holding a more diversified set of higher quality companies that themselves have more conservative balance sheets, lower dividend payout ratios, less exposure to commodity prices and more stable cash flows. The Fund's portfolio is dominated by companies that own natural or legal monopolies in both the pipeline and power sectors operating under state and federal cost-of-service regulation or long-term contracts. These companies include regulated utilities that have stable earnings, limited exposure to commodity prices, and high payouts. Most of these companies helped dampen volatility throughout 2020 but have underperformed as commodity prices have bounced back. MARKET AND FUND OUTLOOK Despite the Fund underperforming the Index, we believe the Fund is well positioned relative to the Index. The portfolio was trading at a 32% discount at the end of the period compared to the Index based on 12-month earnings expectations (14.3x vs 21.0x) (Source: Bloomberg as of October 31, 2021) with yields that are 3.5x the yield of the Index (4.5% vs. 1.3%). Equities that trade at lower yields and higher P/E multiples have longer durations than equities that trade at higher yields and lower P/E multiples, leading us to believe that higher inflation and interest rate increases should, in our view, favor the stocks in the portfolio relative to the Index. EIP also believes the inflation protection offered by regulated pipeline and power utilities in the portfolio will be rewarded by the market. Traditional businesses, like consumer staples, typically absorb increasing input costs then pass those costs onto customers by raising prices. There is often a lag effect as this occurs leading to margin compression. Regulated pipeline and power utilities are cost-plus businesses that charge a price to customers equal to the sum-total of their costs, including the cost of debt and an allowed return on equity. In EIP's opinion, this type of business model is a natural inflation hedge since no matter what happens to the general level of prices, they ultimately get passed along to customers. In EIP's opinion, the outlook for electricity and natural gas, which directly affects the majority of the portfolio's equities, remains strong and is increasingly aligned with public sentiment and environmental policy. Cheaper sources of cleaner electricity continue to displace coal, which is likely to continue to decline as an energy source, in our view, and to which we have limited portfolio earnings exposure. EIP believes electric and natural gas utilities are experiencing attractive rates of earnings growth as they invest capital to incorporate cheaper, cleaner, safer, and more reliable sources of energy. EIP is optimistic about the technological breakthroughs in energy and invests in companies like renewable developers and network utilities where renewable resources are abundant, that benefit from the lower cost and higher performance of renewables, batteries, and other new grid-related innovations. EIP is not a venture capitalist though; companies in the Fund's portfolio must have a track record of profitability and a willingness to share some portion of that profitability through distributions. While the names in the portfolio change over time, the strategy and the sources of earnings stability and growth remain the same: investing in monopoly infrastructure that provides the low-cost way of shipping the lowest cost form of energy. Page 8 -------------------------------------------------------------------------------- PORTFOLIO COMMENTARY (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EIP CARBON IMPACT ETF The Fund's investment objective is to seek to achieve a competitive risk-adjusted total return balanced between dividends and capital appreciation. The Fund pursues its investment objective by investing, under normal market conditions, at least 80% of its net assets (including investment borrowings) in equity securities of companies identified by EIP as having or seeking to have a positive carbon impact. EIP defines positive carbon impact companies as companies that reduce, have a publicly available plan to reduce, or enable the reduction of carbon and other greenhouse gas ("GHG") emissions from the production, transportation, conversion, storage and use of energy. The Fund's investments will be concentrated in the industries constituting the energy infrastructure sector. These companies principally include: utilities; natural gas pipeline companies; manufacturers, contracted developers and/or owners of renewable energy; and other companies that derive the majority of their earnings from manufacturing, operating or providing services in support of infrastructure assets and/or infrastructure activities such as renewable energy equipment, energy storage, carbon capture and sequestration, fugitive methane abatement and energy transmission and distribution equipment. The Fund will generally not invest in companies comprising the following industries: coal production, oil exploration and production, or crude oil storage, transportation and delivery. The Fund's portfolio will be principally composed of equity securities, including common stock, depositary receipts, and units issued by master limited partnerships ("MLPs"). Such securities may be issued by small, mid and large capitalization companies operating in developed market countries. MARKET RECAP As measured by the S&P 500(R) Index (the "Index") and the PHLX Utility Sector Index (the "UTY Index"), the total return for the 12-month period ended October 31, 2021 was 42.91% and 11.11%, respectively. These figures are according to data collected from Bloomberg. PERFORMANCE ANALYSIS On a net asset value ("NAV") basis for the 12-month period ended October 31, 2021, the Fund provided a total return of 15.49%, including the reinvestment of dividends. The Fund's NAV total return of 15.49% underperformed the Index by 2,742 basis points ("bps") and outperformed the UTY Index by 438 bps. Outperformance of the Fund relative to the UTY Index due to an overweight position in renewable developers and an underweight position in utilities. EIP believes that rapidly evolving state and federal energy policies and regulations, paired with technological innovation, continue to drive the transition to an energy system that is safer, cleaner and more reliable. EIP also believes investors in regulated utilities, renewable developers and other energy infrastructure companies have an opportunity to participate in these changes. EIP is optimistic that companies involved in activities aimed at reducing carbon and other GHG emissions have good growth potential. The Fund declared quarterly distributions during the fiscal year as follows: $0.0808 per share in December 2020; $0.0776 per share in March 2021; $0.0967 per share in June 2021; and $0.1035 per share in September 2021. MARKET AND FUND OUTLOOK In EIP's opinion, the outlook for electricity and natural gas, which directly affects the majority of the portfolio's equities, remains strong and is increasingly aligned with public sentiment and environmental policy. Cheaper sources of cleaner electricity continue to substitute for coal, which is likely to continue to decline as an energy source, in our view, and to which we have no portfolio earnings exposure. EIP believes electric and natural gas utilities are experiencing attractive rates of earnings growth as they invest capital to incorporate cheaper, cleaner, safer, and more reliable sources of energy. EIP is optimistic about the technological breakthroughs in energy and invests in companies like renewable developers and network utilities where renewable resources are abundant, that benefit from the lower cost and higher performance of renewables, batteries, and other new grid-related innovations. EIP is not a venture capitalist though; companies in the Fund's portfolio must have a track record of profitability and a willingness to share some portion of that profitability through distributions. While the names in the portfolio change over time, the strategy and the sources of earnings stability and growth remain the same: investing in monopoly infrastructure that provides the low-cost way of shipping the lowest cost form of energy. Page 9 FIRST TRUST EXCHANGE-TRADED FUND IV UNDERSTANDING YOUR FUND EXPENSES OCTOBER 31, 2021 (UNAUDITED) As a shareholder of First Trust North American Energy Infrastructure Fund or First Trust EIP Carbon Impact ETF (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 of investing in the Funds and to compare these costs with the ongoing costs of investing in other 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 October 31, 2021. ACTUAL EXPENSES The first line in the following table provides information about actual account values and actual expenses. You may use the information in this line, 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 first line under the heading entitled "Expenses Paid During the Six-Month Period" to estimate the expenses you paid on your account during this six-month period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line in the following table provides 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 costs 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 brokerage commissions. Therefore, the second line in 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. ---------------------------------------------------------------------------------------------------------------------------- ANNUALIZED EXPENSE RATIO EXPENSES PAID BEGINNING ENDING BASED ON THE DURING THE ACCOUNT VALUE ACCOUNT VALUE SIX-MONTH SIX-MONTH MAY 1, 2021 OCTOBER 31, 2021 PERIOD PERIOD (a) ---------------------------------------------------------------------------------------------------------------------------- FIRST TRUST NORTH AMERICAN ENERGY INFRASTRUCTURE FUND (EMLP) Actual $1,000.00 $1,060.90 0.95% $4.93 Hypothetical (5% return before expenses) $1,000.00 $1,020.42 0.95% $4.84 FIRST TRUST EIP CARBON IMPACT ETF (ECLN) Actual $1,000.00 $1,034.70 0.95% $4.87 Hypothetical (5% return before expenses) $1,000.00 $1,020.42 0.95% $4.84 (a) Expenses are equal to the annualized expense ratio as indicated in the table multiplied by the average account value over the period (May 1, 2021 through October 31, 2021), multiplied by 184/365 (to reflect the six-month period). Page 10 FIRST TRUST NORTH AMERICAN ENERGY INFRASTRUCTURE FUND (EMLP) PORTFOLIO OF INVESTMENTS OCTOBER 31, 2021 SHARES DESCRIPTION VALUE ------------------------------------------------------------ COMMON STOCKS -- 67.7% CONSTRUCTION & ENGINEERING -- 3.5% 618,260 Quanta Services, Inc. $ 74,982,573 -------------- ELECTRIC UTILITIES -- 19.4% 810,629 Alliant Energy Corp. 45,857,282 621,459 American Electric Power Co., Inc. 52,643,792 13,096 Duke Energy Corp. 1,335,923 37,235 Emera, Inc. (CAD) 1,732,378 2,009,815 Enel S.p.A., ADR 16,741,759 72,469 Eversource Energy 6,152,618 432,573 Exelon Corp. 23,008,558 44,516 Fortis, Inc. (CAD) 1,981,566 381,166 Iberdrola S.A., ADR 18,052,022 478,631 IDACORP, Inc. 49,930,786 855,524 NextEra Energy, Inc. 73,001,863 37,414 Orsted A/S, ADR 1,762,574 703,066 PPL Corp. 20,248,301 1,013,345 Southern (The) Co. 63,151,660 573,475 Xcel Energy, Inc. 37,040,750 -------------- 412,641,832 -------------- GAS UTILITIES -- 9.2% 2,562,201 AltaGas Ltd. (CAD) 53,041,039 556,735 Atmos Energy Corp. 51,286,428 10,717 Chesapeake Utilities Corp. 1,404,677 396,490 New Jersey Resources Corp. 14,991,287 466,602 ONE Gas, Inc. 31,402,315 981,673 UGI Corp. 42,614,425 -------------- 194,740,171 -------------- INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS -- 0.7% 205,594 AES (The) Corp. 5,166,577 208,293 Clearway Energy, Inc., Class A 6,871,586 93,012 Northland Power, Inc. (CAD) 2,990,423 -------------- 15,028,586 -------------- MULTI-UTILITIES -- 16.3% 634,339 ATCO Ltd., Class I (CAD) 21,527,342 43,275 Black Hills Corp. 2,872,594 71,144 Canadian Utilities Ltd., Class A (CAD) 2,060,854 2,140,527 CenterPoint Energy, Inc. 55,739,323 682,671 CMS Energy Corp. 41,199,195 65,158 Dominion Energy, Inc. 4,947,447 496,448 DTE Energy Co. 56,272,381 1,119,668 Public Service Enterprise Group, Inc. 71,434,818 604,307 Sempra Energy 77,127,702 156,885 WEC Energy Group, Inc. 14,129,063 -------------- 347,310,719 -------------- OIL, GAS & CONSUMABLE FUELS -- 17.8% 655,474 Cheniere Energy, Inc. 67,776,012 438,047 DT Midstream, Inc. 21,008,734 902,703 Enbridge, Inc. 37,787,147 SHARES DESCRIPTION VALUE ------------------------------------------------------------ OIL, GAS & CONSUMABLE FUELS (CONTINUED) 573,831 Equitrans Midstream Corp. $ 5,916,198 645,671 Keyera Corp. (CAD) 16,548,710 1,760,911 Kinder Morgan, Inc. 29,495,259 598,553 ONEOK, Inc. 38,079,942 2,144,706 TC Energy Corp. 116,028,595 1,668,724 Williams (The) Cos., Inc. 46,874,457 -------------- 379,515,054 -------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 0.3% 25,615 Enphase Energy, Inc. (a) 5,933,203 -------------- WATER UTILITIES -- 0.5% 63,408 American Water Works Co., Inc. 11,044,406 -------------- TOTAL COMMON STOCKS --67.7% 1,441,196,544 (Cost $1,148,636,116) -------------- MASTER LIMITED PARTNERSHIPS -- 31.7% CHEMICALS -- 0.8% 630,107 Westlake Chemical Partners, L.P. 16,206,352 -------------- INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS -- 6.1% 1,503,854 NextEra Energy Partners, L.P. (b) 129,782,600 -------------- OIL, GAS & CONSUMABLE FUELS -- 24.8% 819,028 Cheniere Energy Partners, L.P. 36,078,183 6,448,235 Energy Transfer, L.P. 61,322,715 6,034,325 Enterprise Products Partners, L.P. 136,858,491 352,869 Hess Midstream, L.P., Class A (b) 8,881,713 1,548,384 Holly Energy Partners, L.P. 28,521,233 2,790,022 Magellan Midstream Partners, L.P. 136,711,078 8,839,342 Plains GP Holdings, L.P., Class A (b) 96,348,828 847,317 Shell Midstream Partners, L.P. 10,540,624 764,860 Teekay LNG Partners, L.P. (b) 13,071,457 -------------- 528,334,322 -------------- TOTAL MASTER LIMITED PARTNERSHIPS -- 31.7% 674,323,274 (Cost $513,508,344) -------------- MONEY MARKET FUNDS -- 0.3% 7,563,926 Morgan Stanley Institutional Liquidity Funds - Treasury Portfolio - Institutional Class - 0.01% (c) 7,563,926 (Cost $7,563,926) -------------- TOTAL INVESTMENTS -- 99.7% 2,123,083,744 (Cost $1,669,708,386) (d) NET OTHER ASSETS AND LIABILITIES -- 0.3% 6,051,250 -------------- NET ASSETS -- 100.0% $2,129,134,994 ============== See Notes to Financial Statements Page 11 FIRST TRUST NORTH AMERICAN ENERGY INFRASTRUCTURE FUND (EMLP) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 (a) Non-income producing security. (b) This security is taxed as a "C" corporation for federal income tax purposes. (c) Rate shown reflects yield as of October 31, 2021. (d) Aggregate cost for federal income tax purposes is $1,711,159,304. As of October 31, 2021, the aggregate gross unrealized appreciation for all investments in which there was an excess of value over tax cost was $455,991,408 and the aggregate gross unrealized depreciation for all investments in which there was an excess of tax cost over value was $44,066,968. The net unrealized appreciation was $411,924,440. ADR - American Depositary Receipt Currency Abbreviations: CAD - Canadian Dollar ----------------------------- VALUATION INPUTS A summary of the inputs used to value the Fund's investments as of October 31, 2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements): LEVEL 2 LEVEL 3 LEVEL 1 SIGNIFICANT SIGNIFICANT QUOTED OBSERVABLE UNOBSERVABLE PRICES INPUTS INPUTS ------------------------------------------ Common Stocks* $1,441,196,544 $ -- $ -- Master Limited Partnerships* 674,323,274 -- -- Money Market Funds 7,563,926 -- -- ------------------------------------------ Total Investments $2,123,083,744 $ -- $ -- ========================================== * See Portfolio of Investments for industry breakout. Page 12 See Notes to Financial Statements FIRST TRUST EIP CARBON IMPACT ETF (ECLN) PORTFOLIO OF INVESTMENTS OCTOBER 31, 2021 SHARES DESCRIPTION VALUE ------------------------------------------------------------ COMMON STOCKS -- 85.1% CONSTRUCTION & ENGINEERING -- 4.0% 6,859 Quanta Services, Inc. $ 831,860 -------------- ELECTRIC UTILITIES -- 33.0% 9,869 Alliant Energy Corp. 558,289 8,256 American Electric Power Co., Inc. 699,366 474 Edison International 29,829 2,124 Emera, Inc. (CAD) 98,820 111,578 Enel S.p.A., ADR 929,445 597 Eversource Energy 50,685 2,280 Fortis, Inc. (CAD) 101,491 4,130 Hydro One Ltd. (CAD) (a) (b) 98,678 20,299 Iberdrola S.A., ADR 961,361 5,457 IDACORP, Inc. 569,274 14,327 NextEra Energy, Inc. 1,222,523 223 Orsted A/S (DKK) (a) (b) 31,466 16,659 PPL Corp. 479,779 4,868 Southern (The) Co. 303,374 10,752 Xcel Energy, Inc. 694,472 -------------- 6,828,852 -------------- GAS UTILITIES -- 10.2% 23,136 AltaGas Ltd. (CAD) 478,947 9,077 Atmos Energy Corp. 836,173 1,603 Chesapeake Utilities Corp. 210,105 3,633 New Jersey Resources Corp. 137,364 6,652 ONE Gas, Inc. 447,680 -------------- 2,110,269 -------------- INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS -- 6.5% 8,395 AES (The) Corp. 210,966 1,902 Brookfield Renewable Corp., Class A (CAD) 78,779 10,284 Clearway Energy, Inc., Class A 339,269 16,504 EDP Renovaveis S.A. (EUR) 459,796 1,940 Encavis AG (EUR) 40,592 6,460 Northland Power, Inc. (CAD) 207,695 -------------- 1,337,097 -------------- MORTGAGE REAL ESTATE INVESTMENT TRUSTS -- 1.0% 3,313 Hannon Armstrong Sustainable Infrastructure Capital, Inc. 200,105 -------------- MULTI-UTILITIES -- 18.5% 7,794 ATCO Ltd., Class I (CAD) 264,502 21,042 CenterPoint Energy, Inc. 547,934 6,599 CMS Energy Corp. 398,250 2,567 Dominion Energy, Inc. 194,912 5,343 DTE Energy Co. 605,629 10,577 Public Service Enterprise Group, Inc. 674,813 4,699 Sempra Energy 599,733 6,087 WEC Energy Group, Inc. 548,195 -------------- 3,833,968 -------------- SHARES DESCRIPTION VALUE ------------------------------------------------------------ OIL, GAS & CONSUMABLE FUELS -- 7.9% 8,183 Cheniere Energy, Inc. $ 846,122 8,169 DT Midstream, Inc. 391,785 14,162 Williams (The) Cos., Inc. 397,811 -------------- 1,635,718 -------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 1.3% 1,183 Enphase Energy, Inc. (c) 274,018 -------------- WATER UTILITIES -- 2.7% 3,134 American Water Works Co., Inc. 545,880 -------------- TOTAL COMMON STOCKS -- 85.1% 17,597,767 (Cost $16,474,971) -------------- MASTER LIMITED PARTNERSHIPS -- 12.9% INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS -- 9.0% 7,785 Brookfield Renewable Partners, L.P. (CAD) 312,067 18,151 NextEra Energy Partners, L.P. (d) 1,566,431 -------------- 1,878,498 -------------- OIL, GAS & CONSUMABLE FUELS -- 3.9% 18,240 Cheniere Energy Partners, L.P. 803,472 -------------- TOTAL MASTER LIMITED PARTNERSHIPS -- 12.9% 2,681,970 (Cost $2,275,342) -------------- MONEY MARKET FUNDS -- 2.0% 410,782 Morgan Stanley Institutional Liquidity Funds - Treasury Portfolio - Institutional Class - 0.01% (e) 410,782 (Cost $410,782) -------------- TOTAL INVESTMENTS -- 100.0% 20,690,519 (Cost $19,161,095) (f) NET OTHER ASSETS AND LIABILITIES -- (0.0)% (8,542) -------------- NET ASSETS -- 100.0% $ 20,681,977 ============== (a) This security is exempt from registration upon resale under Rule 144A of the Securities Act of 1933, as amended (the "1933 Act") and may be resold in transactions exempt from registration, normally to qualified institutional buyers. 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. (b) This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the 1933 Act. (c) Non-income producing security. See Notes to Financial Statements Page 13 FIRST TRUST EIP CARBON IMPACT ETF (ECLN) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 (d) This security is taxed as a "C" corporation for federal income tax purposes. (e) Rate shown reflects yield as of October 31, 2021. (f) Aggregate cost for federal income tax purposes is $19,322,390. As of October 31, 2021, the aggregate gross unrealized appreciation for all investments in which there was an excess of value over tax cost was $1,843,931 and the aggregate gross unrealized depreciation for all investments in which there was an excess of tax cost over value was $475,802. The net unrealized appreciation was $1,368,129. ADR - American Depositary Receipt Currency Abbreviations: CAD - Canadian Dollar DKK - Danish Krone EUR - Euro ----------------------------- VALUATION INPUTS A summary of the inputs used to value the Fund's investments as of October 31, 2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements): LEVEL 2 LEVEL 3 LEVEL 1 SIGNIFICANT SIGNIFICANT QUOTED OBSERVABLE UNOBSERVABLE PRICES INPUTS INPUTS ------------------------------------------ Common Stocks* $ 17,597,767 $ -- $ -- Master Limited Partnerships* 2,681,970 -- -- Money Market Funds 410,782 -- -- ------------------------------------------ Total Investments $ 20,690,519 $ -- $ -- ========================================== * See Portfolio of Investments for industry breakout. Page 14 See Notes to Financial Statements FIRST TRUST EXCHANGE-TRADED FUND IV STATEMENTS OF ASSETS AND LIABILITIES OCTOBER 31, 2021 FIRST TRUST NORTH FIRST TRUST AMERICAN ENERGY EIP CARBON INFRASTRUCTURE FUND IMPACT ETF (EMLP) (ECLN) --------------------- --------------------- ASSETS: Investments, at value.................................................. $ 2,123,083,744 $ 20,690,519 Cash................................................................... 1,279,964 -- Receivables: Investment securities sold.......................................... -- 61,828 Dividends........................................................... 6,450,506 7,024 Reclaims............................................................ 16,031 674 ----------------- ----------------- Total Assets..................................................... 2,130,830,245 20,760,045 ----------------- ----------------- LIABILITIES: Due to custodian....................................................... -- 61,832 Investment advisory fees payable....................................... 1,695,251 16,236 ----------------- ----------------- Total Liabilities................................................ 1,695,251 78,068 ----------------- ----------------- NET ASSETS............................................................. $ 2,129,134,994 $ 20,681,977 ================= ================= NET ASSETS CONSIST OF: Paid-in capital........................................................ $ 2,189,632,592 $ 19,328,613 Par value.............................................................. 851,050 8,500 Accumulated distributable earnings (loss).............................. (61,348,648) 1,344,864 ----------------- ----------------- NET ASSETS............................................................. $ 2,129,134,994 $ 20,681,977 ================= ================= NET ASSET VALUE, per share............................................. $ 25.02 $ 24.33 ================= ================= Number of shares outstanding (unlimited number of shares authorized, par value $0.01 per share).............................. 85,105,000 850,002 ================= ================= Investments, at cost................................................... $ 1,669,708,386 $ 19,161,095 ================= ================= Foreign currency, at cost (proceeds)................................... $ -- $ (62,476) ================= ================= See Notes to Financial Statements Page 15 FIRST TRUST EXCHANGE-TRADED FUND IV STATEMENTS OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 2021 FIRST TRUST NORTH FIRST TRUST AMERICAN ENERGY EIP CARBON INFRASTRUCTURE FUND IMPACT ETF (EMLP) (ECLN) --------------------- --------------------- INVESTMENT INCOME: Dividends.............................................................. $ 34,346,573 $ 244,467 Foreign withholding tax................................................ (2,312,711) (10,817) ----------------- ----------------- Total investment income................................................ 32,033,862 233,650 ----------------- ----------------- EXPENSES: Investment advisory fees............................................... 18,346,011 101,231 ----------------- ----------------- Total expenses...................................................... 18,346,011 101,231 ----------------- ----------------- NET INVESTMENT INCOME (LOSS)........................................... 13,687,851 132,419 ----------------- ----------------- REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) on: Investments......................................................... (16,894,597) (139,350) In-kind redemptions................................................. 28,008,666 -- Foreign currency transactions....................................... (198,210) (2,117) ----------------- ----------------- Net realized gain (loss)............................................ 10,915,859 (141,467) ----------------- ----------------- Net change in unrealized appreciation (depreciation) on: Investments......................................................... 488,244,461 1,379,792 Foreign currency translation........................................ 3,739 427 ----------------- ----------------- Net change in unrealized appreciation (depreciation)................... 488,248,200 1,380,219 ----------------- ----------------- NET REALIZED AND UNREALIZED GAIN (LOSS)................................ 499,164,059 1,238,752 ----------------- ----------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................................................... $ 512,851,910 $ 1,371,171 ================= ================= Page 16 See Notes to Financial Statements FIRST TRUST EXCHANGE-TRADED FUND IV STATEMENTS OF CHANGES IN NET ASSETS FIRST TRUST FIRST TRUST NORTH AMERICAN ENERGY EIP CARBON INFRASTRUCTURE FUND IMPACT ETF (EMLP) (ECLN) -------------------------------- --------------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 10/31/2021 10/31/2020 10/31/2021 10/31/2020 -------------- -------------- -------------- --------------- OPERATIONS: Net investment income (loss)........................... $ 13,687,851 $ 24,398,545 $ 132,419 $ 29,664 Net realized gain (loss)............................... 10,915,859 (175,456,336) (141,467) (8,200) Net change in unrealized appreciation (depreciation)... 488,248,200 (338,518,753) 1,380,219 92,447 -------------- -------------- -------------- --------------- Net increase (decrease) in net assets resulting from operations..................................... 512,851,910 (489,576,544) 1,371,171 113,911 -------------- -------------- -------------- --------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Investment operations.................................. (71,059,859) (68,217,610) (173,970) (32,791) Return of capital...................................... -- (31,788,050) -- (11,860) -------------- -------------- -------------- --------------- Total distributions to shareholders.................... (71,059,859) (100,005,660) (173,970) (44,651) -------------- -------------- -------------- --------------- SHAREHOLDER TRANSACTIONS: Proceeds from shares sold.............................. 122,958,569 234,222,012 17,345,173 -- Cost of shares redeemed................................ (123,512,268) (522,103,189) -- -- -------------- -------------- -------------- --------------- Net increase (decrease) in net assets resulting from shareholder transactions....................... (553,699) (287,881,177) 17,345,173 -- -------------- -------------- -------------- --------------- Total increase (decrease) in net assets................ 441,238,352 (877,463,381) 18,542,374 69,260 NET ASSETS: Beginning of period.................................... 1,687,896,642 2,565,360,023 2,139,603 2,070,343 -------------- -------------- -------------- --------------- End of period.......................................... $2,129,134,994 $1,687,896,642 $ 20,681,977 $ 2,139,603 ============== ============== ============== =============== CHANGES IN SHARES OUTSTANDING: Shares outstanding, beginning of period................ 85,755,000 103,305,000 100,002 100,002 Shares sold............................................ 5,200,000 9,650,000 750,000 -- Shares redeemed........................................ (5,850,000) (27,200,000) -- -- -------------- -------------- -------------- --------------- Shares outstanding, end of period...................... 85,105,000 85,755,000 850,002 100,002 ============== ============== ============== =============== See Notes to Financial Statements Page 17 FIRST TRUST EXCHANGE-TRADED FUND IV FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD FIRST TRUST NORTH AMERICAN ENERGY INFRASTRUCTURE FUND (EMLP) YEAR ENDED OCTOBER 31, ------------------------------------------------------------------------ 2021 2020 2019 2018 2017 ------------ ------------ ------------ ------------ ------------ Net asset value, beginning of period $ 19.68 $ 24.83 $ 22.64 $ 24.55 $ 24.76 ---------- ---------- ---------- ---------- ---------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) 0.19 0.20 0.36 0.35 0.44 Net realized and unrealized gain (loss) 6.01 (4.33) 2.81 (1.33) 0.32 ---------- ---------- ---------- ---------- ---------- Total from investment operations 6.20 (4.13) 3.17 (0.98) 0.76 ---------- ---------- ---------- ---------- ---------- DISTRIBUTIONS PAID TO SHAREHOLDERS FROM: Net investment income (0.86) (0.70) (0.29) (0.45) (0.48) Return of capital -- (0.32) (0.69) (0.48) (0.49) ---------- ---------- ---------- ---------- ---------- Total distributions (0.86) (1.02) (0.98) (0.93) (0.97) ---------- ---------- ---------- ---------- ---------- Net asset value, end of period $ 25.02 $ 19.68 $ 24.83 $ 22.64 $ 24.55 ========== ========== ========== ========== ========== TOTAL RETURN (a) 31.97% (16.69)% 14.22% (4.03)% 3.06% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $2,129,135 $1,687,897 $2,565,360 $2,117,805 $1,910,977 RATIOS TO AVERAGE NET ASSETS: Ratio of total expenses to average net assets 0.95% 0.95% 0.95% 0.95% 0.95% Ratio of net investment income (loss) to average net assets 0.71% 1.13% 1.52% 1.40% 1.59% Portfolio turnover rate (b) 52% 46% 33% 35% 24% FIRST TRUST EIP CARBON IMPACT ETF (ECLN) YEAR ENDED OCTOBER 31, --------------------------- PERIOD ENDED 2021 2020 10/31/2019 (c) ------------ ------------ -------------- Net asset value, beginning of period $ 21.40 $ 20.70 $ 20.09 ---------- ---------- ---------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) 0.31 0.30 0.05 Net realized and unrealized gain (loss) 2.98 0.85 0.56 ---------- ---------- ---------- Total from investment operations 3.29 1.15 0.61 ---------- ---------- ---------- DISTRIBUTIONS PAID TO SHAREHOLDERS FROM: Net investment income (0.36) (0.33) -- Return of capital -- (0.12) -- ---------- ---------- ---------- Total distributions (0.36) (0.45) -- ---------- ---------- ---------- Net asset value, end of period $ 24.33 $ 21.40 $ 20.70 ========== ========== ========== TOTAL RETURN (a) 15.49% 5.69% 3.04% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $ 20,682 $ 2,140 $ 2,070 RATIOS TO AVERAGE NET ASSETS: Ratio of total expenses to average net assets 0.95% 0.95% 0.95% (d) Ratio of net investment income (loss) to average net assets 1.24% 1.45% 1.18% (d) Portfolio turnover rate (b) 56% 23% 3% (a) Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all distributions at net asset value during the period, and redemption at net asset value on the last day of the period. The returns presented do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Total return is calculated for the time period presented and is not annualized for periods of less than a year. (b) Portfolio turnover is calculated for the time period presented and is not annualized for periods of less than a year and does not include securities received or delivered from processing creations or redemptions and in-kind transactions. (c) Inception date is August 19, 2019, which is consistent with the commencement of investment operations and is the date the initial creation units were established. (d) Annualized. Page 18 See Notes to Financial Statements -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV OCTOBER 31, 2021 1. ORGANIZATION First Trust Exchange-Traded Fund IV (the "Trust") is an open-end management investment company organized as a Massachusetts business trust on September 15, 2010, and is registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended (the "1940 Act"). The Trust currently consists of ten funds that are offering shares. This report covers the two funds (each a "Fund" and collectively, the "Funds") listed below. The shares of each Fund are listed and traded on the NYSE Arca, Inc. ("NYSE Arca"). First Trust North American Energy Infrastructure Fund -- (ticker "EMLP") First Trust EIP Carbon Impact ETF -- (ticker "ECLN") Each Fund represents a separate series of shares of beneficial interest in the Trust. Unlike conventional mutual funds, each Fund issues and redeems shares on a continuous basis, at net asset value ("NAV"), only in large blocks of shares known as "Creation Units." Each Fund is an actively managed exchange-traded fund. EMLP's investment objective is to seek total return. EMLP will invest, under normal market conditions, at least 80% of its net assets (including investment borrowings) in equity securities of companies deemed by Energy Income Partners, LLC ("EIP" or the "Sub-Advisor") to be engaged in the energy infrastructure sector, which principally include publicly-traded master limited partnerships and limited liability companies taxed as partnerships ("MLPs"), MLP affiliates, pipeline companies, utilities, and other companies that derive the majority of their revenues from operating or providing services in support of infrastructure assets such as pipelines, power transmission and petroleum and natural gas storage in the petroleum, natural gas and power generation industries (collectively, "Energy Infrastructure Companies"). In addition, under normal market conditions, the Fund will invest at least 80% of its net assets (including investment borrowings) in equity securities of companies headquartered or incorporated in the United States and Canada. ECLN's investment objective is to seek to achieve a competitive risk-adjusted total return balanced between dividends and capital appreciation. ECLN will invest, under normal market conditions, at least 80% of its net assets (including investment borrowings) in equity securities of companies identified by EIP as having or seeking to have a positive carbon impact, defined as companies that reduce, have a publicly available plan to reduce, or enable the reduction of carbon and other greenhouse gas emissions from the production, transportation, conversion, storage and use of energy. ECLN's investments will be concentrated in the industries constituting the energy infrastructure sector, which principally include utilities, natural gas pipeline companies, manufacturers, contracted developers and/or owners of renewable energy, and other companies that derive the majority of their earnings from manufacturing, operating or providing services in support of infrastructure assets and/or infrastructure activities such as renewable energy equipment, energy storage, carbon capture and sequestration, fugitive methane abatement and energy transmission and distribution equipment. 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 the 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 Each Fund's NAV 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. Foreign securities are priced using data reflecting the earlier closing of the principal markets for those securities. Each Fund's NAV is calculated by dividing the value of all assets of each Fund (including accrued interest and dividends), less all liabilities (including accrued expenses and dividends declared but unpaid), by the total number of shares outstanding. Each Fund's investments are valued daily at market value or, in the absence of the 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 Pricing Committee of the Funds' investment advisor, First Trust Advisors L.P. ("First Trust" or the "Advisor"), Page 19 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV OCTOBER 31, 2021 in accordance with valuation procedures adopted by the Trust's Board of Trustees, 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, MLPs 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 trading on foreign exchanges or over-the-counter markets that close prior to the NYSE close may be valued using a systematic fair valuation model provided by a third-party pricing service. If these foreign securities meet certain criteria in relation to the valuation model, their valuation is systematically adjusted to reflect the impact of movement in the U.S. market after the close of the foreign markets. Shares of open-end funds are valued at fair value which is based on NAV per share. 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. Certain securities may not be able to be priced by pre-established pricing methods. Such securities may be valued by the Trust's Board of Trustees 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 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, 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; 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 or exchange-traded 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. Because foreign markets may be open on different days than the days during which investors may transact in the shares of a Fund, the value of the Fund's securities may change on the days when investors are not able to transact in the shares of the Fund. The value of securities denominated in foreign currencies is converted into U.S. dollars using exchange rates determined daily as of the close of regular trading on the NYSE. Page 20 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV OCTOBER 31, 2021 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 October 31, 2021, 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, if any, is recorded on the accrual basis. 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 income. The actual character of the amounts received during the year are not known until after the REITs' fiscal year end. A Fund records the character of distributions received from the REITs during the year based on estimates available. The characterization of distributions received by a Fund may be subsequently revised based on information received from the REITs after their tax reporting periods conclude. C. 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 is included in "Net realized gain (loss) on foreign currency transactions" on the Statements of Operations. The portion of foreign currency gains and losses related to fluctuations 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. D. DIVIDENDS AND DISTRIBUTION TO SHAREHOLDERS Dividends from net investment income of each Fund, if any, are declared and paid quarterly, or as the Board of Trustees may determine from time to time. Distributions of net realized gains earned by each Fund, if any, are distributed at least annually. Distributions from net investment income and realized capital gains are determined in accordance with federal 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 Page 21 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV OCTOBER 31, 2021 treatment of income and gain/loss on significantly modified 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 time in the future. The tax character of distributions paid by each Fund during the fiscal year ended October 31, 2021 was as follows: Distributions Distributions Distributions paid from paid from paid from Ordinary Income Capital Gains Return of Capital --------------- ------------- ----------------- First Trust North American Energy Infrastructure Fund $ 71,059,859 $ -- $ -- First Trust EIP Carbon Impact ETF 173,970 -- -- The tax character of distributions paid by each Fund during the fiscal year ended October 31, 2020 was as follows: Distributions Distributions Distributions paid from paid from paid from Ordinary Income Capital Gains Return of Capital --------------- ------------- ----------------- First Trust North American Energy Infrastructure Fund $ 68,217,610 $ -- $ 31,788,050 First Trust EIP Carbon Impact ETF 32,791 -- 11,860 As of October 31, 2021, the components of distributable earnings on a tax basis for each Fund were as follows: Accumulated Undistributed Capital and Net Unrealized Ordinary Other Appreciation Income Gain (Loss) (Depreciation) --------------- ------------- ----------------- First Trust North American Energy Infrastructure Fund $ (42,502,994) $(430,769,976) $ 411,924,322 First Trust EIP Carbon Impact ETF 18,341 (42,033) 1,368,556 E. 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, which includes distributing substantially all of its net investment income and net realized gains to shareholders. 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 each Fund's taxable income exceeds the distributions from such taxable income for the calendar year. Each Fund intends to utilize provisions of the federal income tax laws, which allow it to carry a realized capital loss 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 October 31, 2021, EMLP and ECLN had non-expiring capital loss carryforwards available for federal income tax purposes of $430,769,976 and $42,033, respectively. 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. For EMLP, the taxable years ended 2018, 2019, 2020, and 2021 remain open to federal and state audit. For ECLN, the taxable years ended 2019, 2020 and 2021 remain open to federal and state audit. As of October 31, 2021, 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. During the taxable year ended October 31, 2021, the following Fund utilized non-expiring capital loss carryforwards in the following amount: Capital Loss Carryforward Utilized --------------- First Trust North American Energy Infrastructure Fund $ 23,621,213 Page 22 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV OCTOBER 31, 2021 Certain losses realized during the current fiscal year may be deferred and treated as occurring on the first day of the following fiscal year for federal income tax purposes. For the fiscal year ended October 31, 2021, the following Fund incurred and elected to defer late year ordinary or capital losses as follows: Qualified Late Year Losses ------------------------------------ Ordinary Losses Capital Losses ----------------- ---------------- First Trust North American Energy Infrastructure Fund $ 42,502,994 $ -- In order to present paid-in capital and accumulated distributable earnings (loss) (which consists of accumulated net investment income (loss), accumulated net realized gain (loss) on investments and net unrealized appreciation (depreciation) on investments) on the Statements of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to paid-in capital, accumulated net investment income (loss) and accumulated net realized gain (loss) on investments. These adjustments are primarily due to the difference between book and tax treatments of income and gains on various investment securities held by the Funds and in-kind transactions. The results of operations and net assets were not affected by these adjustments. For the fiscal year ended October 31, 2021, the adjustments for each Fund were as follows: Accumulated Accumulated Net Realized Net Investment Gain (Loss) Paid-in Income (Loss) on Investments Capital --------------- -------------- --------------- First Trust North American Energy Infrastructure Fund $ (3,674,279) $ (7,372,721) $ 11,047,000 First Trust EIP Carbon Impact ETF 45,663 (39,498) (6,165) F. EXPENSES Expenses, other than the investment advisory fee and other excluded expenses, are paid by the Advisor (see Note 3). 3. INVESTMENT ADVISORY FEE, AFFILIATED TRANSACTIONS AND OTHER FEE ARRANGEMENTS 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 is responsible for the ongoing monitoring of the securities in each Fund's portfolio, managing the Funds' business affairs and providing certain administrative services necessary for the management of the Funds. The Trust, on behalf of the Funds, and First Trust have retained EIP, an affiliate of First Trust, to serve as the Funds' investment sub-advisor. In this capacity, EIP is responsible for the selection and ongoing monitoring of the securities in each Fund's investment portfolio. Pursuant to the Investment Management Agreement between the Trust and the Advisor, First Trust will supervise EIP and its management of the investment of each Fund's assets and will pay EIP for its services as the Funds' sub-advisor. First Trust will also be responsible for each Fund's expenses, including the cost of transfer agency, custody, fund administration, legal, audit and other services, but excluding fee payments under the Investment Management Agreement, interest, taxes, acquired fund fees and expenses, if any, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution and service fees payable pursuant to a Rule 12b-1 plan, if any, and extraordinary expenses. Each Fund has agreed to pay First Trust an annual unitary management fee equal to 0.95% of its average daily net assets. EIP receives a sub-advisory fee for EMLP from First Trust equal to 45% of any remaining monthly investment management fee paid to First Trust after the Fund's average Fund expenses accrued during the most recent twelve months are subtracted from the investment management fee in a given month. EIP receives a sub-advisory fee for ECLN from First Trust equal to an annual rate of 0.475% of the Fund's average daily net assets less one-half of the Fund's expenses, for which EIP is responsible. 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. The Trust has multiple service agreements with The Bank of New York Mellon ("BNYM"). Under the service agreements, BNYM performs custodial, fund accounting, certain administrative services, and transfer agency services for each Fund. As custodian, BNYM is responsible for custody of each Fund's assets. As fund accountant and administrator, BNYM is responsible for maintaining the books and records of each Fund's securities and cash. As transfer agent, BNYM is responsible for maintaining shareholder records for each Fund. BNYM is a subsidiary of The Bank of New York Mellon Corporation, a financial holding company. Page 23 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV OCTOBER 31, 2021 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, a defined-outcome fund or is an index fund. Additionally, the Lead Independent Trustee and the Chairs 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 Chairs rotate every three years. The officers and "Interested" Trustee receive no compensation from the Trust for acting in such capacities. 4. PURCHASES AND SALES OF SECURITIES For the fiscal year ended October 31, 2021, the cost of purchases and proceeds from sales of investments for each Fund, excluding short-term investments and in-kind transactions, were as follows: Purchases Sales --------------- --------------- First Trust North American Energy Infrastructure Fund $ 999,190,008 $ 983,735,849 First Trust EIP Carbon Impact ETF 6,307,786 5,823,317 For the fiscal year ended October 31, 2021, the cost of in-kind purchases and proceeds from in-kind sales for each Fund were as follows: Purchases Sales --------------- --------------- First Trust North American Energy Infrastructure Fund $ 121,441,699 $ 121,142,940 First Trust EIP Carbon Impact ETF 16,700,218 -- 5. CREATIONS, REDEMPTIONS AND TRANSACTION FEES Each Fund generally issues and redeems its shares in primary market transactions through a creation and redemption mechanism and does not sell or redeem individual shares. Instead, financial entities known as "Authorized Participants" have contractual arrangements with a Fund or one of the Fund's service providers to purchase and redeem Fund shares directly with the Fund in large blocks of shares known as "Creation Units." Prior to the start of trading on every business day, a Fund publishes through the National Securities Clearing Corporation ("NSCC") the "basket" of securities, cash or other assets that it will accept in exchange for a Creation Unit of the Fund's shares. An Authorized Participant that wishes to effectuate a creation of a Fund's shares deposits with the Fund the "basket" of securities, cash or other assets identified by the Fund that day, and then receives the Creation Unit of the Fund's shares in return for those assets. After purchasing a Creation Unit, the Authorized Participant may continue to hold a Fund's shares or sell them in the secondary market. The redemption process is the reverse of the purchase process: the Authorized Participant redeems a Creation Unit of a Fund's shares for a basket of securities, cash or other assets. The combination of the creation and redemption process with secondary market trading in a Fund's shares and underlying securities provides arbitrage opportunities that are designed to help keep the market price of a Fund's shares at or close to the NAV per share of the Fund. Each Fund imposes fees in connection with the purchase of Creation Units. These fees may vary based upon various fact-based circumstances, including, but not limited to, the composition of the securities included in the Creation Unit or the countries in which the transactions are settled. The price for each Creation Unit will equal the daily NAV per share of a Fund times the number of shares in a Creation Unit, plus the fees described above and, if applicable, any operational processing and brokerage costs, transfer fees, stamp taxes and part or all of the spread between the expected bid and offer side of the market related to the securities comprising the creation basket. Each Fund also imposes fees in connection with the redemption of Creation Units. These fees may vary based upon various fact-based circumstances, including, but not limited to, the composition of the securities included in the Creation Unit or the countries in which the transactions are settled. The price received for each Creation Unit will equal the daily NAV per share of a Fund times the number of shares in a Creation Unit, minus the fees described above and, if applicable, any operational processing and brokerage costs, transfer fees, stamp taxes and part or all of the spread between the expected bid and offer side of the market related to the securities comprising the redemption basket. Investors who use the services of a broker or other such intermediary in addition to an Page 24 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV OCTOBER 31, 2021 Authorized Participant to effect a redemption of a Creation Unit may also be assessed an amount to cover the cost of such services. The redemption fee charged by a Fund will comply with Rule 22c-2 of the 1940 Act which limits redemption fees to no more than 2% of the value of the shares redeemed. 6. DISTRIBUTION PLAN The Board of Trustees adopted a Distribution and Service Plan pursuant to Rule 12b-1 under the 1940 Act. In accordance with the Rule 12b-1 plan, the Funds are authorized to pay an amount up to 0.25% of their average daily net assets each year to reimburse First Trust Portfolios L.P. ("FTP"), the distributor of the Funds, for amounts expended to finance activities primarily intended to result in the sale of Creation Units or the provision of investor services. FTP may also use this amount to compensate securities dealers or other persons that are Authorized Participants for providing distribution assistance, including broker-dealer and shareholder support and educational and promotional services. No 12b-1 fees are currently paid by the Funds, and pursuant to a contractual arrangement, no 12b-1 fees will be paid any time before March 31, 2023. 7. INDEMNIFICATION The Trust, on behalf of the Funds, 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. 8. 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 was the following subsequent event: On November 18, 2021, First Trust Limited Duration Investment Grade Corporate ETF, an additional series of the Trust, began trading under the symbol "FSIG" on NYSE Arca. Page 25 -------------------------------------------------------------------------------- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -------------------------------------------------------------------------------- TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF FIRST TRUST EXCHANGE-TRADED FUND IV: OPINION ON THE FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS We have audited the accompanying statements of assets and liabilities of First Trust North American Energy Infrastructure Fund and First Trust EIP Carbon Impact ETF (the "Funds"), each a series of the First Trust Exchange-Traded Fund IV, including the portfolios of investments, as of October 31, 2021, the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for the periods indicated in the table below, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of the Funds as of October 31, 2021, and the results of their operations for the year then ended, and the changes in their net assets for each of the two years in the period then ended, and the financial highlights for the periods listed in the table below in conformity with accounting principles generally accepted in the United States of America. ------------------------------------------------------------------------------------------------------------------------------ INDIVIDUAL FUNDS INCLUDED FINANCIAL IN THE TRUST HIGHLIGHTS ------------------------------------------------------------------------------------------------------------------------------ First Trust North American Energy For the years ended October 31, 2021, 2020, 2019, 2018 and 2017 Infrastructure Fund ------------------------------------------------------------------------------------------------------------------------------ First Trust EIP Carbon Impact ETF For the years ended October 31, 2021, 2020 and for the period from August 19, 2019 (commencement of operations) through October 31, 2019. ------------------------------------------------------------------------------------------------------------------------------ BASIS FOR OPINION These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on the Funds' financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2021, by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinion. /s/ Deloitte & Touche LLP Chicago, Illinois December 21, 2021 We have served as the auditor of one or more First Trust investment companies since 2001. Page 26 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV OCTOBER 31, 2021 (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 each Fund voted proxies relating to its 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 each Fund's website at www.ftportfolios.com; and (3) on the Securities and Exchange Commission's ("SEC") website at www.sec.gov. PORTFOLIO HOLDINGS Each Fund files portfolio holdings information for each month in a fiscal quarter within 60 days after the end of the relevant fiscal quarter on Form N-PORT. Portfolio holdings information for the third month of each fiscal quarter will be publicly available on the SEC's website at www.sec.gov. Each Fund's complete schedule of portfolio holdings for the second and fourth quarters of each fiscal year is included in the semi-annual and annual reports to shareholders, respectively, and is filed with the SEC on Form N-CSR. The semi-annual and annual report for each Fund is available to investors within 60 days after the period to which it relates. Each Fund's Forms N-PORT and Forms N-CSR are available on the SEC's website listed above. FEDERAL TAX INFORMATION For the taxable year ended October 31, 2021, the following percentages of income dividend paid by the Funds qualify for the dividends received deduction available to corporations: Dividends Received Deduction ---------------------------- First Trust North American Energy Infrastructure Fund 23.52% First Trust EIP Carbon Impact ETF 91.01% For the taxable year ended October 31, 2021, the following percentages of income dividend paid by the Funds are hereby designated as qualified dividend income: Qualified Dividend Income ---------------------------- First Trust North American Energy Infrastructure Fund 44.96% First Trust EIP Carbon Impact ETF 100.00% A portion of each of the Funds' 2021 ordinary dividends (including short-term capital gains) paid to its shareholders during the fiscal year ended October 31, 2021, may be eligible for the Qualified Business Income Deduction (QBI) under Internal Revenue Code Section 199A for the aggregate dividends each Fund received from the underlying Real Estate Investment Trusts (REITs) these Funds invest in. RISK CONSIDERATIONS RISKS ARE INHERENT IN ALL INVESTING. CERTAIN GENERAL RISKS THAT MAY BE APPLICABLE TO A FUND ARE IDENTIFIED BELOW, BUT NOT ALL OF THE MATERIAL RISKS RELEVANT TO EACH FUND ARE INCLUDED IN THIS REPORT AND NOT ALL OF THE RISKS BELOW APPLY TO EACH FUND. THE MATERIAL RISKS OF INVESTING IN EACH FUND ARE SPELLED OUT IN ITS PROSPECTUS, STATEMENT OF ADDITIONAL INFORMATION AND OTHER REGULATORY FILINGS. BEFORE INVESTING, YOU SHOULD CONSIDER EACH FUND'S INVESTMENT OBJECTIVE, RISKS, CHARGES AND EXPENSES, AND READ EACH FUND'S PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION CAREFULLY. YOU CAN DOWNLOAD EACH FUND'S PROSPECTUS AT WWW.FTPORTFOLIOS.COM OR CONTACT FIRST TRUST PORTFOLIOS L.P. AT (800) 621-1675 TO REQUEST A PROSPECTUS, WHICH CONTAINS THIS AND OTHER INFORMATION ABOUT EACH FUND. CONCENTRATION RISK. To the extent that a fund is able to invest a significant percentage of its assets in a single asset class or the securities of issuers within the same country, state, region, industry or sector, an adverse economic, business or political development may affect the value of the fund's investments more than if the fund were more broadly diversified. A fund that tracks an index will be concentrated to the extent the fund's corresponding index is concentrated. A concentration makes a fund more susceptible to any single occurrence and may subject the fund to greater market risk than a fund that is more broadly diversified. 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. Page 27 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV OCTOBER 31, 2021 (UNAUDITED) CYBER SECURITY RISK. The funds are susceptible to potential operational risks through breaches in cyber security. A breach in cyber security refers to both intentional and unintentional events that may cause a fund to lose proprietary information, suffer data corruption or lose operational capacity. Such events could cause a fund to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss. In addition, cyber security breaches of a fund's third-party service providers, such as its administrator, transfer agent, custodian, or sub-advisor, as applicable, or issuers in which the fund invests, can also subject a fund to many of the same risks associated with direct cyber security breaches. DEFINED OUTCOME FUNDS RISK. To the extent a fund's investment strategy is designed to deliver returns tied to the price performance of an underlying ETF, an investor may not realize the returns the fund seeks to achieve if that investor does not hold shares for the entire target outcome period. In the event an investor purchases shares after the first day of the target outcome period or sells shares prior to the end of the target outcome period, the buffer that the fund seeks to provide against a decline in the value of the underlying ETF may not be available, the enhanced returns that the fund seeks to provide (if any) may not be available and the investor may not participate in a gain in the value of the underlying ETF up to the cap for the investor's investment period. Additionally, the fund will not participate in gains of the underlying ETF above the cap and a shareholder may lose their entire investment. If the fund seeks enhanced returns, there are certain time periods when the value of the fund may fall faster than the value of the underlying ETF, and it is very unlikely that, on any given day during which the underlying ETF share price increases in value, the fund's share price will increase at the same rate as the enhanced returns sought by the fund, which is designed for an entire target outcome period. Trading flexible exchange options involves risks different from, or possibly greater than, the risks associated with investing directly in securities, such as less liquidity and correlation and valuation risks. A fund may experience substantial downside from specific flexible exchange option positions and certain positions may expire worthless. DERIVATIVES RISK. To the extent a fund uses derivative instruments such as futures contracts, options contracts and swaps, the fund may experience losses because of adverse movements in the price or value of the underlying asset, index or rate, which may be magnified by certain features of the derivative. These risks are heightened when a fund's portfolio managers use derivatives to enhance the fund's return or as a substitute for a position or security, rather than solely to hedge (or offset) the risk of a position or security held by the fund. EQUITY SECURITIES RISK. To the extent a fund invests in equity securities, the value of the fund's shares will fluctuate with changes in the value of the 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. Equity securities may decline significantly in price over short or extended periods of time, and such declines may occur in the equity market as a whole, or they may occur in only a particular country, company, industry or sector of the market. ETF RISK. The shares of an ETF trade like common stock and represent an interest in 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 and ETFs have management fees that increase their costs. Shares of an ETF trade on an exchange at market prices rather than net asset value, which may cause the shares to trade at a price greater than net asset value (premium) or less than net asset value (discount). In times of market stress, decisions by market makers to reduce or step away from their role of providing a market for an ETF's shares, or decisions by an ETF's authorized participants that they are unable or unwilling to proceed with creation and/or redemption orders of an ETF's shares, could result in shares of the ETF trading at a discount to net asset value and in greater than normal intraday bid-ask spreads. FIXED INCOME SECURITIES RISK. To the extent a fund invests in fixed income securities, the fund will be subject to credit risk, income risk, interest rate risk, liquidity risk and prepayment risk. Income risk is the risk that income from a fund's fixed income investments could decline during periods of falling interest rates. Interest rate risk is the risk that the value of a fund's fixed income securities will decline because of rising interest rates. Liquidity risk is the risk that a security cannot be purchased or sold at the time desired, or cannot be purchased or sold without adversely affecting the price. Prepayment risk is the risk that the securities will be redeemed or prepaid by the issuer, resulting in lower interest payments received by the fund. In addition to these risks, high yield securities, or "junk" bonds, are subject to greater market fluctuations and risk of loss than securities with higher ratings, and the market for high yield securities is generally smaller and less liquid than that for investment grade securities. Page 28 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV OCTOBER 31, 2021 (UNAUDITED) INDEX OR MODEL CONSTITUENT RISK. Certain funds may be a constituent of one or more indices or ETF models. As a result, such a fund may be included in one or more index-tracking exchange-traded funds 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 increase demand for the 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 net asset value could be negatively impacted and the fund's market price may be significantly below its net asset value during certain periods. In addition, index rebalances may potentially result in increased trading activity in a fund's shares. INDEX PROVIDER RISK. To the extent a fund seeks to track an index, it is subject to Index Provider Risk. There is no assurance that the Index Provider will compile the Index accurately, or that the Index will be determined, maintained, constructed, reconstituted, rebalanced, composed, calculated or disseminated accurately. To correct any such error, the Index Provider may carry out an unscheduled rebalance or other modification of the Index constituents or weightings, which may increase the fund's costs. The Index Provider does not provide any representation or warranty in relation to the quality, accuracy or completeness of data in the Index, and it does not guarantee that the Index will be calculated in accordance with its stated methodology. Losses or costs associated with any Index Provider errors generally will be borne by the fund and its shareholders. INVESTMENT COMPANIES RISK. To the extent a fund invests in the securities of other investment vehicles, the fund will incur additional fees and expenses that would not be present in a direct investment in those investment vehicles. Furthermore, the fund's investment performance and risks are directly related to the investment performance and risks of the investment vehicles in which the fund invests. LIBOR RISK. To the extent a fund invests in floating or variable rate obligations that use the London Interbank Offered Rate ("LIBOR") as a reference interest rate, it is subject to LIBOR Risk. The United Kingdom's Financial Conduct Authority, which regulates LIBOR, will cease making LIBOR available as a reference rate over a phase-out period that will begin immediately after December 31, 2021. The unavailability or replacement of LIBOR may affect the value, liquidity or return on certain fund investments and may result in costs incurred in connection with closing out positions and entering into new trades. Any potential effects of the transition away from LIBOR on the fund or on certain instruments in which the fund invests can be difficult to ascertain, and they may vary depending on a variety of factors, and they could result in losses to the fund. MANAGEMENT RISK. To the extent that a fund is actively managed, it is subject to management risk. In managing an actively-managed fund's investment portfolio, the fund's portfolio managers will apply investment techniques and risk analyses that may not have the desired result. There can be no guarantee that a fund will meet its investment objective. MARKET RISK. Securities held by a fund, as well as shares of a fund itself, are subject to market fluctuations caused by factors such as general economic conditions, political events, regulatory or market developments, changes in interest rates and perceived trends in securities prices. Shares of a fund could decline in value or underperform other investments as a result of the risk of loss associated with these market fluctuations. In addition, local, regional or global events such as war, acts of terrorism, spread of infectious diseases or other public health issues, recessions, or other events could have a significant negative impact on a fund and its investments. Such events may affect certain geographic regions, countries, sectors and industries more significantly than others. The outbreak of the respiratory disease designated as COVID-19 in December 2019 has caused significant volatility and declines in global financial markets, which have caused losses for investors. While the development of vaccines has slowed the spread of the virus and allowed for the resumption of "reasonably" normal business activity in the United States, many countries continue to impose lockdown measures in an attempt to slow the spread. Additionally, there is no guarantee that vaccines will be effective against emerging variants of the disease. NON-U.S. SECURITIES RISK. To the extent a fund invests in non-U.S. securities, it is subject to additional risks not associated with securities of domestic 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; capital controls; lack of liquidity; currency exchange rates; excessive taxation; government seizure of assets; the imposition of sanctions by foreign governments; different legal or accounting standards; and less government supervision and regulation of exchanges in foreign countries. Investments in non-U.S. securities may involve higher costs than investments in U.S. securities, including higher transaction and custody costs, as well as additional taxes imposed by non-U.S. governments. These risks may be heightened for securities of companies located, or with significant operations, in emerging market countries. Page 29 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV OCTOBER 31, 2021 (UNAUDITED) OPERATIONAL RISK. Each fund is subject to risks arising from various operational factors, including, but not limited to, human error, processing and communication errors, errors of a fund's service providers, counterparties or other third-parties, failed or inadequate processes and technology or systems failures. Each fund relies on third-parties for a range of services, including custody. Any delay or failure relating to engaging or maintaining such service providers may affect a fund's ability to meet its investment objective. Although the funds and the funds' investment advisor seek to reduce these operational risks through controls and procedures, there is no way to completely protect against such risks. PASSIVE INVESTMENT RISK. To the extent a fund seeks to track an index, the fund will invest in the securities included in, or representative of, the index regardless of their investment merit. A fund generally will not attempt to take defensive positions in declining markets. NOT FDIC INSURED NOT BANK GUARANTEED MAY LOSE VALUE ADVISORY AND SUB-ADVISORY AGREEMENTS BOARD CONSIDERATIONS REGARDING APPROVAL OF CONTINUATION OF INVESTMENT MANAGEMENT AND SUB-ADVISORY AGREEMENTS The Board of Trustees of First Trust Exchange-Traded Fund IV (the "Trust"), including the Independent Trustees, unanimously approved the continuation of the Investment Management Agreements (as applicable to a specific Fund, the "Advisory Agreement" and collectively, the "Advisory Agreements") with First Trust Advisors L.P. (the "Advisor") and the Investment Sub-Advisory Agreements (as applicable to a specific Fund, the "Sub-Advisory Agreement" and collectively, the "Sub-Advisory Agreements" and together with the Advisory Agreements, the "Agreements") among the Trust, the Advisor and Energy Income Partners, LLC (the "Sub-Advisor") on behalf of the following two series of the Trust (each a "Fund" and collectively, the "Funds"): First Trust North American Energy Infrastructure Fund (EMLP) First Trust EIP Carbon Impact ETF (ECLN) The Board approved the continuation of the applicable Agreements for each Fund for a one-year period ending June 30, 2022 at a meeting held on June 6-7, 2021. The Board determined for each Fund that the continuation of the applicable Agreements is in the best interests of the Fund in light of the nature, extent and quality of the services provided and such other matters as the Board considered to be relevant in the exercise of its business judgment. To reach this determination for each Fund, 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 26, 2021 and June 6-7, 2021, the Board, including the Independent Trustees, reviewed materials provided by the Advisor and the Sub-Advisor responding to requests for information from counsel to the Independent Trustees, submitted on behalf of the Independent Trustees, that, among other things, outlined: the services provided by the Advisor and the Sub-Advisor to each Fund (including the relevant personnel responsible for these services and their experience); the unitary fee rate payable by each Fund as compared to fees charged to a peer group of funds (the "Expense Group") and a broad peer universe of funds (the "Expense Universe"), each assembled by Broadridge Financial Solutions, Inc. ("Broadridge"), an independent source, and as compared to fees charged to other clients of the Advisor, including other exchange-traded funds ("ETFs") managed by the Advisor; the sub-advisory fee rate as compared to fees charged to other clients of the Sub-Advisor; the expense ratio of each Fund as compared to expense ratios of the funds in the Fund's Expense Group and Expense Universe; performance information for each Fund, including comparisons of each Fund's performance to that of one or more relevant benchmark indexes and to that of a performance group of funds and a broad performance universe of funds (the "Performance Universe"), each assembled by Broadridge; the nature of expenses incurred in providing services to each Fund and the potential for the Advisor and the Sub-Advisor to realize economies of scale, if any; profitability and other financial data for the Advisor; financial data for the Sub-Advisor; any fall-out benefits to the Advisor and its affiliates, First Trust Portfolios L.P. ("FTP") and First Trust Capital Partners, LLC ("FTCP"), and the Sub-Advisor; and information on the Advisor's and the Sub-Advisor's compliance programs. The Board reviewed initial materials with the Advisor at the meeting held on April 26, 2021, prior to which the Independent Trustees and their counsel met separately to discuss the information provided by the Advisor and the Sub-Advisor. Following the April meeting, counsel to the Independent Trustees, on behalf of the Independent Trustees, requested certain clarifications and supplements to the materials provided, and Page 30 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV OCTOBER 31, 2021 (UNAUDITED) the information provided in response to those requests was considered at an executive session of the Independent Trustees and their counsel held prior to the June 6-7, 2021 meeting, as well as at the June meeting. The Board applied its business judgment to determine whether the arrangements between the Trust and the Advisor and among the Trust, the Advisor and the Sub-Advisor continue to be reasonable business arrangements from each Fund's perspective. 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 a Fund knowing that the Advisor and the Sub-Advisor manage the Fund and knowing the Fund's unitary fee. In reviewing the applicable Agreements for each Fund, the Board considered the nature, extent and quality of the services provided by the Advisor and the Sub-Advisor under the applicable Agreements. With respect to the Advisory Agreements, the Board considered that the Advisor is responsible for the overall management and administration of the Trust and each Fund and reviewed all of the services provided by the Advisor to the Funds, including the oversight of the Sub-Advisor, as well as the background and experience of the persons responsible for such services. The Board noted that the Advisor oversees the Sub-Advisor's day-to-day management of each Fund'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-Advisor's and each Fund's compliance with the 1940 Act, as well as each Fund's compliance with its investment objective, policies and restrictions. 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 26, 2021 meeting, described to the Board the scope of its ongoing investment in additional personnel and infrastructure 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, the Board noted that each Fund is an actively-managed ETF and the Sub-Advisor actively manages the Fund's investments. In addition to the written materials provided by the Sub-Advisor, at the June 6-7, 2021 meeting, the Board also received a presentation from representatives of the Sub-Advisor, who discussed the services that the Sub-Advisor provides to each Fund, including the Sub-Advisor's day-to-day management of the Funds' investments. In considering the Sub-Advisor's management of the Funds, the Board noted the background and experience of the Sub-Advisor's 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 Trust and each Fund by the Advisor and the Sub-Advisor under the Agreements have been and are expected to remain satisfactory and that the Sub-Advisor, under the oversight of the Advisor, has managed each Fund consistent with its investment objective, policies and restrictions. The Board considered the unitary fee rate payable by each Fund under the applicable Advisory Agreement for the services provided. The Board noted that the sub-advisory fee for each Fund is paid by the Advisor from the Fund's unitary fee. The Board considered that as part of the unitary fee the Advisor is responsible for each Fund's expenses, including the cost of sub-advisory, transfer agency, custody, fund administration, legal, audit and other services and license fees, if any, but excluding the fee payment under the applicable Advisory Agreement and interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution and service fees pursuant to a Rule 12b-1 plan, if any, and extraordinary expenses, if any. The Board received and reviewed information showing the advisory fee rates and expense ratios of the peer funds in the Expense Groups, as well as advisory and unitary fee rates charged by the Advisor and the Sub-Advisor to other fund (including ETFs) and non-fund clients, as applicable. Because each Fund pays a unitary fee, the Board determined that expense ratios were the most relevant comparative data point. Based on the information provided, the Board noted that the unitary fee rate for each Fund was below the median total (net) expense ratio of the peer funds in its respective Expense Group. With respect to the Expense Groups, the Board, at the April 26, 2021 meeting, discussed with the Advisor limitations in creating peer groups for actively managed ETFs including that the Expense Group for each Fund contained both actively managed ETFs and open-end mutual funds, and different business models that may affect the pricing of services among ETF sponsors. The Board also noted that, for each Fund, not all peer funds employ an advisor/sub-advisor management structure. The Board took these limitations and differences into account in considering the peer data. With respect to fees charged to other non-ETF clients, the Board considered differences between the Funds and other non-ETF clients that limited their comparability. In considering the unitary 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 demonstrated long-term commitment to each Fund and the other funds in the First Trust Fund Complex. The Board considered performance information for each Fund. The Board noted the process it has established for monitoring each Fund's performance and portfolio risk on an ongoing basis, which includes quarterly performance reporting from the Advisor and Sub-Advisor for the Funds. The Board determined that this process continues to be effective for reviewing each Fund's performance. The Page 31 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV OCTOBER 31, 2021 (UNAUDITED) Board received and reviewed information comparing EMLP's performance for periods ended December 31, 2020 to the performance of the funds in its Performance Universe and to that of a blended benchmark index. Based on the information provided, the Board noted that EMLP outperformed the Performance Universe median for the one-, three- and five-year periods ended December 31, 2020 and underperformed the blended benchmark index for the one- and three-year periods ended December 31, 2020 and outperformed the blended benchmark index for the five-year period ended December 31, 2020. The Board also received and reviewed information comparing ECLN's performance for the one-year period ended December 31, 2020 to the performance of the funds in its Performance Universe and to that of a benchmark index. The Board noted that ECLN outperformed the Performance Universe median and the benchmark index for the one-year period ended December 31, 2020. On the basis of all the information provided on the unitary fee and performance of each Fund and the ongoing oversight by the Board, the Board concluded that the unitary fee for each Fund (out of which the Sub-Advisor is compensated) continues to be reasonable and appropriate in light of the nature, extent and quality of the services provided by the Advisor and the Sub-Advisor to each Fund under the Agreements. The Board considered information and discussed with the Advisor whether there were any economies of scale in connection with providing advisory services to the Funds and noted the Advisor's statement that it believes its expenses will likely increase during the next twelve months as the Advisor continues to hire personnel and build infrastructure, including technology, to improve the services to the Funds. The Board noted that any reduction in fixed costs associated with the management of the Funds would benefit the Advisor, but that the unitary fee structure provides a level of certainty in expenses for the Funds. 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, 2020 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. In addition, the Board considered fall-out benefits described by the Advisor that may be realized from its relationship with the Funds. The Board noted that FTCP has an ownership interest in the Sub-Advisor and considered potential fall-out benefits to the Advisor from such ownership interest. The Board also 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 concluded that the character and amount of potential fall-out benefits to the Advisor were not unreasonable. The Board considered that the Sub-Advisor's investment services expenses are primarily fixed in nature, and that the Sub-Advisor has made recent investments in personnel and infrastructure and anticipates that its expenses will continue to rise due to additions to personnel and system upgrades. The Board did not review the profitability of the Sub-Advisor with respect to each Fund. The Board noted that the Advisor pays the Sub-Advisor for each Fund from its unitary fee and its understanding that each Fund'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 the Sub-Advisor from its relationship with the Funds, including soft-dollar arrangements, and considered a summary of such arrangements. The Board also considered the potential fall-out benefits to the Sub-Advisor from the ownership interest of FTCP in the Sub-Advisor. The Board concluded that the character and amount of potential fall-out benefits to the Sub-Advisor 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 each Fund. No single factor was determinative in the Board's analysis. BOARD OF TRUSTEES Effective November 1, 2021, Denise M. Keefe was appointed as a Trustee of the Trust. Ms. Keefe is Executive Vice President of Advocate Aurora Health and President of Advocate Aurora Continuing Health Division (together, "Advocate"), one of the largest integrated healthcare systems in the U.S. serving Illinois and Wisconsin. Ms. Keefe has been employed by Advocate since 1993 and is responsible for the Continuing Health Division's strategic direction, fiscal management, business development, revenue enhancement, operational efficiencies, and human resource management of 4,000 employees. Ms. Keefe also currently serves on the boards of several organizations within the Advocate Aurora Continuing Health Division and other health care organizations, including RML Long Term Acute Care Hospitals (since 2014) and Senior Helpers (since 2021). Prior thereto, Ms. Keefe was Corporate Vice President, Marketing and Business Development for the Visiting Nurse Association of Chicago (1989 - 1992) and a former Board Member of Sherman West Court Skilled Nursing Facility. Page 32 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV OCTOBER 31, 2021 (UNAUDITED) REMUNERATION First Trust Advisors L.P. ("First Trust") is authorised and regulated by the U.S. Securities and Exchange Commission and is entitled to market shares of certain First Trust Exchanged-Traded Fund IV funds it manages (the "Funds") in certain member states in the European Economic Area in accordance with the cooperation arrangements in Article 42 of the Alternative Investment Fund Managers Directive (the "Directive"). First Trust is required under the Directive to make disclosures in respect of remuneration. The following disclosures are made in line with First Trust's interpretation of currently available regulatory guidance on remuneration disclosures. During the year ended December 31, 2020, the amount of remuneration paid (or to be paid) by First Trust Advisors L.P. in respect of the Funds is $1,045,682. This figure is comprised of $62,581 paid (or to be paid) in fixed compensation and $983,101 paid (or to be paid) in variable compensation. There were a total of 24 beneficiaries of the remuneration described above. Those amounts include $546,032 paid (or to be paid) to senior management of First Trust Advisors L.P. and $499,650 paid (or to be paid) to other employees whose professional activities have a material impact on the risk profiles of First Trust Advisors L.P. or the Funds (collectively, "Code Staff"). Code Staff included in the aggregated figures disclosed above are rewarded in line with First Trust's remuneration policy (the "Remuneration Policy") which is determined and implemented by First Trust's senior management. The Remuneration Policy reflects First Trust's ethos of good governance and encapsulates the following principal objectives: i. to provide a clear link between remuneration and performance of First Trust and to avoid rewarding for failure; ii. to promote sound and effective risk management consistent with the risk profiles of the funds managed by First Trust; and iii. to remunerate staff in line with the business strategy, objectives, values and interests of First Trust and the funds managed by First Trust in a manner that avoids conflicts of interest. First Trust assesses various risk factors which it is exposed to when considering and implementing remuneration for Code Staff and considers whether any potential award to such person(s) would give rise to a conflict of interest. First Trust does not reward failure, or consider the taking of risk or failure to take risk in its remuneration of Code Staff. First Trust assesses performance for the purposes of determining payments in respect of performance-related remuneration of Code Staff by reference to a broad range of measures including (i) individual performance (using financial and non-financial criteria), and (ii) the overall performance of First Trust. Remuneration is not based upon the performance of the Funds. The elements of remuneration are balanced between fixed and variable and the senior management sets fixed salaries at a level sufficient to ensure that variable remuneration incentivises and rewards strong individual performance but does not encourage excessive risk taking. No individual is involved in setting his or her own remuneration. Page 33 -------------------------------------------------------------------------------- BOARD OF TRUSTEES AND OFFICERS -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV OCTOBER 31, 2021 (UNAUDITED) The following tables identify the Trustees and Officers of the Trust. Unless otherwise indicated, the address of all persons is 120 East Liberty Drive, Suite 400, Wheaton, IL 60187. The Trust's statement of additional information includes additional information about the Trustees and is available, without charge, upon request, by calling (800) 988-5891. NUMBER OF OTHER PORTFOLIOS IN TRUSTEESHIPS OR THE FIRST TRUST DIRECTORSHIPS NAME, TERM OF OFFICE AND FUND COMPLEX HELD BY TRUSTEE YEAR OF BIRTH AND YEAR FIRST ELECTED PRINCIPAL OCCUPATIONS OVERSEEN BY DURING PAST POSITION WITH THE TRUST OR APPOINTED DURING PAST 5 YEARS TRUSTEE 5 YEARS ------------------------------------------------------------------------------------------------------------------------------------ INDEPENDENT TRUSTEES ------------------------------------------------------------------------------------------------------------------------------------ Richard E. Erickson, Trustee o Indefinite Term Physician, Officer, Wheaton Orthopedics; 215 None (1951) Limited Partner, Gundersen Real Estate o Since Inception Limited Partnership (June 1992 to December 2016) Thomas R. Kadlec, Trustee o Indefinite Term President, ADM Investors Services, Inc. 215 Director of ADM (1957) (Futures Commission Merchant) Investor Services, o Since Inception Inc., ADM Investor Services International, Futures Industry Association, and National Futures Association Robert F. Keith, Trustee o Indefinite Term President, Hibs Enterprises (Financial 215 Director of Trust (1956) and Management Consulting) Company of o Since Inception Illinois Niel B. Nielson, Trustee o Indefinite Term Senior Advisor (August 2018 to Present), 215 None (1954) Managing Director and Chief Operating o Since Inception Officer (January 2015 to August 2018), Pelita Harapan Educational Foundation (Educational Products and Services) ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED TRUSTEE ------------------------------------------------------------------------------------------------------------------------------------ James A. Bowen(1), Trustee, o Indefinite Term Chief Executive Officer, First Trust 215 None Chairman of the Board Advisors L.P. and First Trust (1955) o Since Inception Portfolios L.P.; Chairman of the Board of Directors, BondWave LLC (Software Development Company) and Stonebridge Advisors LLC (Investment Advisor) ----------------------------- (1) Mr. Bowen is deemed an "interested person" of the Trust due to his position as Chief Executive Officer of First Trust Advisors L.P., investment advisor of the Trust. Page 34 -------------------------------------------------------------------------------- BOARD OF TRUSTEES AND OFFICERS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV OCTOBER 31, 2021 (UNAUDITED) NAME AND POSITION AND OFFICES TERM OF OFFICE AND PRINCIPAL OCCUPATIONS YEAR OF BIRTH WITH TRUST LENGTH OF SERVICE DURING PAST 5 YEARS ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS(2) ------------------------------------------------------------------------------------------------------------------------------------ James M. Dykas President and Chief o Indefinite Term Managing Director and Chief Financial Officer (1966) Executive Officer (January 2016 to Present), Controller (January 2011 o Since January 2016 to January 2016), Senior Vice President (April 2007 to January 2016), First Trust Advisors L.P. and First Trust Portfolios L.P.; Chief Financial Officer (January 2016 to Present), BondWave LLC (Software Development Company) and Stonebridge Advisors LLC (Investment Advisor) Donald P. Swade Treasurer, Chief Financial o Indefinite Term Senior Vice President (July 2016 to Present), Vice (1972) Officer and Chief Accounting President (April 2012 to July 2016), First Trust Officer o Since January 2016 Advisors L.P. and First Trust Portfolios L.P. W. Scott Jardine Secretary and Chief o Indefinite Term General Counsel, First Trust Advisors L.P. and First (1960) Legal Officer Trust Portfolios L.P.; Secretary and General o Since Inception Counsel, BondWave LLC; Secretary, Stonebridge Advisors LLC Daniel J. Lindquist Vice President o Indefinite Term Managing Director, First Trust Advisors L.P. and (1970) First Trust Portfolios L.P. o Since Inception Kristi A. Maher Chief Compliance Officer o Indefinite Term Deputy General Counsel, First Trust Advisors L.P. (1966) and Assistant Secretary and First Trust Portfolios L.P. o Since Inception Roger F. Testin Vice President o Indefinite Term Senior Vice President, First Trust Advisors L.P. and (1966) First Trust Portfolios L.P. o Since Inception Stan Ueland Vice President o Indefinite Term Senior Vice President, First Trust Advisors L.P. and (1970) First Trust Portfolios L.P. o Since Inception ----------------------------- (2) The term "officer" means the president, vice president, secretary, treasurer, controller or any other officer who performs a policy making function. Page 35 -------------------------------------------------------------------------------- PRIVACY POLICY -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND IV OCTOBER 31, 2021 (UNAUDITED) PRIVACY POLICY First Trust values our relationship with you and considers your privacy an important priority in maintaining that relationship. We are committed to protecting the security and confidentiality of your personal information. SOURCES OF INFORMATION We collect nonpublic personal information about you from the following sources: o Information we receive from you and your broker-dealer, investment professional or financial representative through interviews, applications, agreements or other forms; o Information about your transactions with us, our affiliates or others; o Information we receive from your inquiries by mail, e-mail or telephone; and o Information we collect on our website through the use of "cookies". For example, we may identify the pages on our website that your browser requests or visits. INFORMATION COLLECTED The type of data we collect may include your name, address, social security number, age, financial status, assets, income, tax information, retirement and estate plan information, transaction history, account balance, payment history, investment objectives, marital status, family relationships and other personal information. DISCLOSURE OF INFORMATION We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law. In addition to using this information to verify your identity (as required under law), the permitted uses may also include the disclosure of such information to unaffiliated companies for the following reasons: o In order to provide you with products and services and to effect transactions that you request or authorize, we may disclose your personal information as described above to unaffiliated financial service providers and other companies that perform administrative or other services on our behalf, such as transfer agents, custodians and trustees, or that assist us in the distribution of investor materials such as trustees, banks, financial representatives, proxy services, solicitors and printers. o We may release information we have about you if you direct us to do so, if we are compelled by law to do so, or in other legally limited circumstances (for example to protect your account from fraud). In addition, in order to alert you to our other financial products and services, we may share your personal information within First Trust. USE OF WEBSITE ANALYTICS We currently use third party analytics tools, Google Analytics and AddThis to gather information for purposes of improving First Trust's website and marketing our products and services to you. These tools employ cookies, which are small pieces of text stored in a file by your web browser and sent to websites that you visit, to collect information, track website usage and viewing trends such as the number of hits, pages visited, videos and PDFs viewed and the length of user sessions in order to evaluate website performance and enhance navigation of the website. We may also collect other anonymous information, which is generally limited to technical and web navigation information such as the IP address of your device, internet browser type and operating system for purposes of analyzing the data to make First Trust's website better and more useful to our users. The information collected does not include any personal identifiable information such as your name, address, phone number or email address unless you provide that information through the website for us to contact you in order to answer your questions or respond to your requests. To find out how to opt-out of these services click on: Google Analytics and AddThis. CONFIDENTIALITY AND SECURITY With regard to our internal security procedures, First Trust restricts access to your nonpublic personal information to those First Trust employees who need to know that information to provide products or services to you. We maintain physical, electronic and procedural safeguards to protect your nonpublic personal information. POLICY UPDATES AND INQUIRIES As required by federal law, we will notify you of our privacy policy annually. We reserve the right to modify this policy at any time, however, if we do change it, we will tell you promptly. For questions about our policy, or for additional copies of this notice, please go to www.ftportfolios.com, or contact us at 1-800-621-1675 (First Trust Portfolios) or 1-800-222-6822 (First Trust Advisors). March 2021 Page 36 FIRST TRUST First Trust Exchange-Traded Fund IV INVESTMENT ADVISOR First Trust Advisors L.P. 120 East Liberty Drive, Suite 400 Wheaton, IL 60187 INVESTMENT SUB-ADVISOR Energy Income Partners, LLC 10 Wright Street Westport, CT 06880 ADMINISTRATOR, CUSTODIAN, FUND ACCOUNTANT & TRANSFER AGENT The Bank of New York Mellon 240 Greenwich Street New York, NY 10286 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Deloitte & Touche LLP 111 S. Wacker Drive Chicago, IL 60606 LEGAL COUNSEL Chapman and Cutler LLP 111 W. Monroe Street Chicago, IL 60603 [BLANK BACK COVER]