FIRST TRUST First Trust Exchange-Traded Fund IV -------------------------------------------------------------------------------- First Trust Enhanced Short Maturity ETF (FTSM) Annual Report For the Year Ended October 31, 2021 -------------------------------------------------------------------------------- TABLE OF CONTENTS -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) ANNUAL REPORT OCTOBER 31, 2021 Shareholder Letter........................................................... 1 Fund Performance Overview.................................................... 2 Portfolio Commentary......................................................... 5 Understanding Your Fund Expenses............................................. 7 Portfolio of Investments..................................................... 8 Statement of Assets and Liabilities.......................................... 26 Statement of Operations...................................................... 27 Statements of Changes in Net Assets.......................................... 28 Financial Highlights......................................................... 29 Notes to Financial Statements................................................ 30 Report of Independent Registered Public Accounting Firm...................... 37 Additional Information....................................................... 38 Board of Trustees and Officers............................................... 44 Privacy Policy............................................................... 46 CAUTION REGARDING FORWARD-LOOKING STATEMENTS This report contains certain forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding the goals, beliefs, plans or current expectations of First Trust Advisors L.P. ("First Trust" or the "Advisor") and its representatives, taking into account the information currently available to them. Forward-looking statements include all statements that do not relate solely to current or historical fact. For example, forward-looking statements include the use of words such as "anticipate," "estimate," "intend," "expect," "believe," "plan," "may," "should," "would" or other words that convey uncertainty of future events or outcomes. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the series of First Trust Exchange-Traded Fund IV (the "Trust") described in this report (First Trust Enhanced Short Maturity ETF; hereinafter referred to as the "Fund") to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. When evaluating the information included in this report, you are cautioned not to place undue reliance on these forward-looking statements, which reflect the judgment of the Advisor and its 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 the Fund will achieve its investment objective. The 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 the Fund. See "Risk Considerations" in the Additional Information section of this report for a discussion of certain other risks of investing in the Fund. 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 the Fund's webpage at www.ftportfolios.com. HOW TO READ THIS REPORT This report contains information that may help you evaluate your investment in the Fund. It includes details about the Fund and presents data and analysis that provide insight into the Fund's performance and investment approach. By reading the portfolio commentary from the portfolio management team of the Fund, you may obtain an understanding of how the market environment affected the Fund's performance. The statistical information that follows may help you understand the Fund's performance compared to that of a relevant market benchmark. It is important to keep in mind that the opinions expressed by personnel of the 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 the Fund are spelled out in the prospectus, the statement of additional information, and other Fund regulatory filings. -------------------------------------------------------------------------------- SHAREHOLDER LETTER -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) 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 Enhanced Short Maturity ETF (the "Fund"), which contains detailed information about the Fund 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 Fund 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 ENHANCED SHORT MATURITY ETF (FTSM) The investment objective of First Trust Enhanced Short Maturity ETF (the "Fund") is to seek current income, consistent with preservation of capital and daily liquidity. Under normal market conditions, the Fund intends to achieve its investment objective by investing at least 80% of its net assets in a portfolio of U.S. dollar-denominated fixed- and variable-rate debt securities, including securities issued or guaranteed by the U.S. government or its agencies, instrumentalities or U.S. government-sponsored entities, residential and commercial mortgage-backed securities, asset-backed securities, U.S. corporate bonds, fixed income securities issued by non-U.S. corporations and governments, municipal obligations, privately issued securities and other debt securities bearing fixed or floating interest rates. The Fund may also invest in money market securities. Shares of the Fund are listed on The Nasdaq Stock Market LLC under the ticker symbol "FTSM." The Fund's investment advisor, First Trust Advisors L.P. (the "Advisor"), selects securities for the portfolio by evaluating fixed income sectors and macro market trends while completing bottom-up analysis of individual securities. Portfolio securities are selected based upon relative value in the context of overall portfolio duration. Key inputs for the screens in the securities selection process include, but are not limited to, credit quality, yield, interest rate sensitivity and liquidity. The Fund's holdings are systematically monitored for meaningful changes in performance and risk measures. A security will generally be sold when the Advisor believes that a security can be substituted for a similar investment that represents better relative value; it lacks adequate compensation for embedded credit risk; or when rebalancing the portfolio to maintain diversification. Under normal market conditions, the Fund's average duration is expected to be less than one year and the average maturity of the Fund's portfolio is expected to be less than three years. ------------------------------------------------------------------------------------------------------------------------------------ PERFORMANCE ------------------------------------------------------------------------------------------------------------------------------------ AVERAGE ANNUAL CUMULATIVE TOTAL RETURNS TOTAL RETURNS 1 Year Ended 5 Years Ended Inception (8/5/14) 5 Years Ended Inception (8/5/14) 10/31/21 10/31/21 to 10/31/21 10/31/21 to 10/31/21 FUND PERFORMANCE NAV 0.22% 1.52% 1.24% 7.86% 9.36% Market Price 0.17% 1.52% 1.24% 7.84% 9.32% INDEX PERFORMANCE ICE BofA 0-1 Year U.S. Treasury Index 0.11% 1.31% 1.01% 6.73% 7.51% ------------------------------------------------------------------------------------------------------------------------------------ Total returns for the period since inception are calculated from the inception date of the 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. The total returns would have been lower if certain fees had not been waived and expenses reimbursed by the Advisor. The 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 the 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 the 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 the Fund at NAV and Market Price, respectively. An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the 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 the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund's past performance is no guarantee of future performance. Page 2 -------------------------------------------------------------------------------- FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) -------------------------------------------------------- % OF TOTAL ASSET CLASSIFICATION INVESTMENTS & CASH -------------------------------------------------------- Corporate Bonds and Notes 43.8% Commercial Paper 26.7 Foreign Corporate Bonds and Notes 14.9 Asset-Backed Securities 7.8 Mortgage-Backed Securities 3.8 U.S. Government Agency Mortgage- Backed Securities 1.3 Municipal Bonds 0.6 U.S. Government Notes 0.6 Certificates of Deposit 0.3 Cash 0.1 Senior Floating-Rate Loan Interests 0.1 ------- Total 100.0% ======= -------------------------------------------------------- % OF TOTAL CREDIT QUALITY(1) INVESTMENTS & CASH -------------------------------------------------------- Government and Agency 1.9% AAA 5.9 AA+ 1.0 AA 0.4 AA- 2.5 A+ 3.6 A 5.3 A- 12.2 BBB+ 16.3 BBB 11.4 BBB- 6.5 BB+ 0.2 Not Rated 32.7 Cash 0.1 ------- Total 100.00% ======= -------------------------------------------------------- % OF TOTAL TOP TEN HOLDINGS INVESTMENTS -------------------------------------------------------- ETP Legacy, L.P. 0.8% Morgan Stanley, Global Medium-Term Note, SOFR + 0.70% 0.7 Maxim Integrated Products, Inc. 0.6 Bank of Nova Scotia (The), SOFR + 0.45% 0.6 BPCE S.A., Medium-Term Note, 3 Mo. LIBOR + 0.88% 0.6 MET Tower Global Funding, SOFR + 0.55% 0.6 New York Life Global Funding, 3 Mo. LIBOR + 0.28% 0.6 U.S. Treasury Note, 0.13%, 04/30/2022 0.6 Exelon Generation Co. LLC 0.5 FREMF Mortgage Trust, Series 2012-K17, Class B 0.5 ------- Total 6.1% ======= ----------------------------- (1) The ratings are by Standard & Poor's Ratings Group, a division of The McGraw-Hill Companies, Inc. A credit rating is an assessment provided by a nationally recognized statistical rating organization (NRSRO) of the creditworthiness of an issuer with respect to debt obligations. Ratings are measured highest to lowest on a scale that generally ranges from AAA to D for long-term ratings and A-1+ to C for short-term ratings. Investment grade is defined as those issuers that have a long-term credit rating of BBB- or higher or a short-term credit rating of A-3 or higher. The credit ratings shown relate to the credit worthiness of the issuers of the underlying securities in the Fund, and not to the Fund or its shares. U.S. Treasury and U.S. Agency mortgage-backed securities appear under "Government". Credit ratings are subject to change. Page 3 -------------------------------------------------------------------------------- FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) PERFORMANCE OF A $10,000 INITIAL INVESTMENT AUGUST 5, 2014 - OCTOBER 31, 2021 First Trust Enhanced ICE BofA 0-1 Year Short Maturity ETF U.S. Treasury Index 8/5/14 $10,000 $10,000 10/31/14 10,016 10,002 4/30/15 10,047 10,011 10/31/15 10,045 10,020 4/30/16 10,079 10,045 10/31/16 10,138 10,073 4/30/17 10,206 10,096 10/31/17 10,289 10,147 4/30/18 10,371 10,207 10/31/18 10,486 10,311 4/30/19 10,624 10,449 10/31/19 10,767 10,594 4/30/20 10,780 10,732 10/31/20 10,912 10,739 4/30/21 10,932 10,749 10/31/21 10,936 10,751 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 index does not actually hold a portfolio of securities and therefore does 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 4 -------------------------------------------------------------------------------- PORTFOLIO COMMENTARY -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) ANNUAL REPORT OCTOBER 31, 2021 (UNAUDITED) ADVISOR First Trust Advisors L.P. ("First Trust") is the investment advisor to the First Trust Enhanced Short Maturity ETF (the "Fund" or "FTSM"). In this capacity, First Trust is responsible for the selection and ongoing monitoring of the investments in the Fund's portfolio and certain other services necessary for the management of the portfolio. PORTFOLIO MANAGEMENT TEAM TODD LARSON, CFA - SENIOR VICE PRESIDENT, PORTFOLIO MANAGER, FIRST TRUST INVESTMENT GRADE FIXED INCOME GROUP JEREMIAH CHARLES - SENIOR VICE PRESIDENT, SENIOR PORTFOLIO MANAGER, FIRST TRUST SECURITIZED PRODUCTS GROUP JAMES SNYDER - SENIOR VICE PRESIDENT, SENIOR PORTFOLIO MANAGER, FIRST TRUST SECURITIZED PRODUCTS GROUP ERIC MAISEL, CFA - SENIOR VICE PRESIDENT, PORTFOLIO MANAGER, FIRST TRUST INVESTMENT GRADE FIXED INCOME GROUP COMMENTARY The Fund is an actively managed exchange-traded fund that seeks current income, consistent with preservation of capital and daily liquidity. MARKET RECAP During the 12-month period ended October 31, 2021, financial markets responded to continued progress in the economic recovery from the pandemic. Business surveys reflected expansion, fiscal stimulus helped fuel household spending, and corporate operating results were broadly robust and helped equity indexes, like the S&P 500(R) Index, reach a series of record highs. Even so, stocks, fixed-income securities, and other risky assets came under pressure periodically due to concerns that rising inflation and falling unemployment could prompt central bankers to pare back easing monetary policies. Notwithstanding increasing vaccinations, the threat of the coronavirus ("COVID-19") endured. In July 2021, COVID-19 cases and hospitalizations began to rise, spurred by the highly contagious Delta variant. The "Delta Surge" led to worries in financial markets that mobility restrictions would resurface and undermine the pace of economic activity. Thankfully, the outbreak did not lead to widespread lockdowns. The economy remained open with consumer spending underpinned by government stimulus and high savings rates. Job creation continued although labor and supply shortages were a growing theme, and the persistence of supply chain disruptions and rising input costs caught the market's attention and that of the Federal Reserve (the "Fed"). At their September 2021 meeting, the Fed stated it was satisfied that "substantial further progress" toward inflation and employment goals had been met and signaled that the process of tapering its balance sheet would begin by year-end. This development, along with inflation proving to be more persistent than the Fed originally expected, factored into Treasury yields moving higher in the closing months of the 12-month period ended October 31, 2021. Over the full twelve months, the 10-Year U.S. Treasury yield increased 70 basis points ("bps") to 1.55% while the 2-Year Treasury yield increased 34 bps to 0.49%. Meanwhile, corporate credit valuations were supported by the improving economy and rebounding financial results. This backdrop, along with liquidity provided by central bank accommodation, were positive factors impacting corporate credit spreads. Under these conditions, the ICE BofA U.S. Corporate Bond Index option adjusted spread ("OAS") narrowed 45 bps to an historically low level of 89 bps. In money markets, rates remained low owing to an abundance of cash and too few assets. The financial system remained awash in cash due to the Fed's quantitative easing ("QE") while at the same time, the Treasury reduced the supply of Treasury bills as limits imposed by the Federal debt ceiling drew steadily closer. The size of the Fed's balance sheet reached $8.5 trillion - an increase of $4.4 trillion since February 2020 when the COVID-19 pandemic began - resulting in record high reserves in the financial system. Markets across various asset classes experienced the effects of this excess liquidity through lower yields and narrower spreads. The massive take-up in the Fed's overnight reverse repo facility ("RRP") is another manifestation of the excess. At the end of October 2021, $1.5 trillion was parked with the Fed, mostly from money market funds that had no better investment alternative. By contrast, a year ago, the RRP facility had a balance of almost zero. PERFORMANCE ANALYSIS The Fund's net asset value ("NAV") and market performance was 0.22% and 0.17% respectively for the 12-month period ended October 31, 2021, versus the ICE BofA 0-1 Year U.S. Treasury Index's (the "Benchmark") return of 0.11%. Page 5 -------------------------------------------------------------------------------- PORTFOLIO COMMENTARY (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) ANNUAL REPORT OCTOBER 31, 2021 (UNAUDITED) The Fund's allocation to corporate credit was the leading source of outperformance over the same period with floating-rate corporate bonds delivering the best results in the environment of rising yields. Positive results were realized in all corporate industry classifications with the largest contributions coming from the Banking, Consumer Cyclical, Consumer Non-cyclical, and Insurance sectors. Securitized debt also generated above-benchmark returns with the largest contribution coming from asset-backed securities. Agency and Non-Agency Commercial Mortgage-Backed Securities ("CMBS") were also additive to results as were Non-Agency Collateralized Mortgage Obligations ("CMOs"). From a rating quality perspective, BBB rated bonds delivered slightly better returns compared to those rated A and higher. Although yield curve changes detracted from relative return, the Fund's commercial paper holdings outperformed and served its role as a storehouse of liquidity and stability. Throughout the reporting period, the Fund maintained a diversified allocation with an emphasis on securities having a high level of liquidity. Overall credit risk was kept low as the investment strategy focused on high quality, short-term holdings. The Fund's weighted average maturity was kept around 0.7 years and effective duration approximately 0.4 years. MARKET AND FUND OUTLOOK We continue to view interest rate risk as the leading source of concern for fixed-income investors in the months ahead. The Fed is poised to begin tapering later this year and is expected to conclude that process during the middle of 2022. It is our expectation that rate hikes will follow shortly thereafter. Should input and labor costs persist, the Fed may respond by accelerating tapering, or tightening sooner or more rapidly than markets expect. When it comes to valuations, fundamentally, we are constructive on corporate and consumer-related credit when considering the pace of economic growth, rising employment and wages, fiscal stimulus, and corporate balance sheets that are benefiting from revenue and earnings growth. Valuations largely reflect this constructive outlook along with confidence that the Fed will successfully withdraw accommodation without disrupting markets in a material way. In this environment, our preference is to maintain low interest rate exposure and capture yield with floating-rate securities and short-maturity fixed rate bonds. We expect curve positioning to be an important component of total return in the year ahead, as well as security selection, sector allocation and the yield advantage the Fund enjoys above its Benchmark. Strategic positioning across the yield curve and among market sectors will complement rigorous credit underwriting that goes into the security selection process. We expect the Fund will maintain its duration underweight relative to its Benchmark while keeping corporate credit (both commercial paper and corporate bonds) as the largest exposure. The Fund will also seek to maintain its allocation to securitized debt (ABS/MBS) for diversification purposes and where valuations represent compelling opportunities relative to U.S. Treasuries and corporate credit. As always, the focus will be in the senior part of the capital structure. As we evaluate new investment opportunities, our research will seek to identify opportunities that we believe offer the best risk/reward balance, and decisions will continue to be based on the analysis of data that results in sound, evidence-based conclusions. We believe the Fund is well positioned to add value relative to its Benchmark. Page 6 FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) UNDERSTANDING YOUR FUND EXPENSES OCTOBER 31, 2021 (UNAUDITED) As a shareholder of First Trust Enhanced Short Maturity ETF (the "Fund"), 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 Fund 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 the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the 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 Fund 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 (a) PERIOD (b) ---------------------------------------------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) Actual $1,000.00 $1,000.30 0.25% $1.26 Hypothetical (5% return before expenses) $1,000.00 $1,023.95 0.25% $1.28 (a) These expense ratios reflect expense waivers. See Note 3 in the Notes to the Financial Statements. (b) 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 7 FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) PORTFOLIO OF INVESTMENTS OCTOBER 31, 2021 PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ ---------------- CORPORATE BONDS AND NOTES -- 44.2% AEROSPACE/DEFENSE -- 0.7% $ 2,919,000 Boeing (The) Co................................................. 2.13% 03/01/22 $ 2,930,844 19,500,000 Boeing (The) Co................................................. 2.70% 05/01/22 19,698,440 5,595,000 Boeing (The) Co................................................. 2.20% 10/30/22 5,661,351 1,676,000 Boeing (The) Co................................................. 1.17% 02/04/23 1,678,171 ---------------- 29,968,806 ---------------- AGRICULTURE -- 1.0% 19,036,000 Altria Group, Inc............................................... 2.85% 08/09/22 19,388,188 12,452,000 BAT Capital Corp., 3 Mo. LIBOR + 0.88% (a)...................... 1.00% 08/15/22 12,516,591 10,000,000 BAT Capital Corp................................................ 2.76% 08/15/22 10,152,256 ---------------- 42,057,035 ---------------- AIRLINES -- 0.1% 3,000,000 Southwest Airlines Co........................................... 2.75% 11/16/22 3,062,356 ---------------- AUTO MANUFACTURERS -- 5.1% 20,000,000 American Honda Finance Corp., Medium-Term Note, 3 Mo. LIBOR + 0.37% (a)...................................... 0.50% 05/10/23 20,081,431 6,159,000 BMW US Capital LLC, SOFR + 0.53% (a) (b)........................ 0.58% 04/01/24 6,215,344 7,000,000 BMW US Capital LLC, SOFR + 0.38% (a) (b)........................ 0.43% 08/12/24 7,046,220 5,000,000 Daimler Finance North America LLC, 3 Mo. LIBOR + 0.67% (a) (b)................................................ 0.79% 11/05/21 5,000,299 8,599,000 Daimler Finance North America LLC (b)........................... 3.75% 11/05/21 8,601,490 5,934,000 Daimler Finance North America LLC (b)........................... 2.85% 01/06/22 5,960,093 9,180,000 Daimler Finance North America LLC, 3 Mo. LIBOR + 0.90% (a) (b)................................................ 1.02% 02/15/22 9,202,066 20,303,000 Daimler Finance North America LLC (b)........................... 2.55% 08/15/22 20,644,112 8,000,000 General Motors Financial Co., Inc., 3 Mo. LIBOR + 1.10% (a).................................................... 1.22% 11/06/21 8,001,258 9,037,000 General Motors Financial Co., Inc............................... 4.20% 11/06/21 9,040,651 2,994,000 General Motors Financial Co., Inc............................... 3.15% 06/30/22 3,039,406 13,200,000 General Motors Financial Co., Inc............................... 3.55% 07/08/22 13,472,533 7,000,000 General Motors Financial Co., Inc............................... 3.25% 01/05/23 7,191,935 15,000,000 General Motors Financial Co., Inc., SOFR + 0.76% (a)............ 0.81% 03/08/24 15,095,604 14,108,000 Hyundai Capital America (b)..................................... 3.95% 02/01/22 14,224,834 3,470,000 Hyundai Capital America (b)..................................... 3.10% 04/05/22 3,508,798 3,423,000 Hyundai Capital America (b)..................................... 1.15% 11/10/22 3,438,107 6,885,000 Hyundai Capital America (b)..................................... 2.38% 02/10/23 7,019,339 7,000,000 Hyundai Capital America (b)..................................... 1.00% 09/17/24 6,932,800 6,150,000 Nissan Motor Acceptance Corp. (b)............................... 2.80% 01/13/22 6,177,812 3,000,000 Nissan Motor Acceptance Corp., 3 Mo. LIBOR + 0.64% (a) (b)................................................ 0.75% 03/08/24 3,003,342 10,000,000 Toyota Motor Credit Corp., Series B, SOFR + 0.29% (a)........... 0.34% 09/13/24 10,031,791 10,000,000 Toyota Motor Credit Corp., Medium-Term Note..................... 1.15% 05/26/22 10,046,764 3,242,000 Volkswagen Group of America Finance LLC (b)..................... 4.00% 11/12/21 3,245,315 7,759,000 Volkswagen Group of America Finance LLC (b)..................... 2.90% 05/13/22 7,862,228 7,140,000 Volkswagen Group of America Finance LLC (b)..................... 2.70% 09/26/22 7,281,655 5,000,000 Volkswagen Group of America Finance LLC (b)..................... 3.13% 05/12/23 5,173,764 ---------------- 226,538,991 ---------------- BANKS -- 8.1% 5,000,000 Bank of America Corp. (c)....................................... 3.55% 03/05/24 5,188,175 10,000,000 Bank of America Corp., SOFR + 0.69% (a)......................... 0.74% 04/22/25 10,079,803 20,696,000 Bank of America Corp., Global Medium-Term Note (c).............. 2.82% 07/21/23 21,022,957 Page 8 See Notes to Financial Statements FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ ---------------- CORPORATE BONDS AND NOTES (CONTINUED) BANKS (CONTINUED) $ 1,000,000 Bank of America Corp., Medium-Term Note, 3 Mo. LIBOR + 0.79% (a)............................................ 0.91% 03/05/24 $ 1,007,922 15,000,000 Bank of America Corp., Medium-Term Note, 3 Mo. Bloomberg Short Term Bank Yield + 0.43% (a).................. 0.53% 05/28/24 15,041,400 5,385,000 Capital One N.A., 3 Mo. LIBOR + 0.82% (a)....................... 0.95% 08/08/22 5,411,491 2,099,000 Citigroup, Inc., 3 Mo. LIBOR + 1.07% (a)........................ 1.18% 12/08/21 2,099,006 9,959,000 Citigroup, Inc., 3 Mo. LIBOR + 0.96% (a)........................ 1.08% 04/25/22 9,990,209 19,515,000 Citigroup, Inc.................................................. 4.05% 07/30/22 20,034,856 5,000,000 Citigroup, Inc., SOFR + 0.87% (a)............................... 0.92% 11/04/22 5,037,414 12,384,000 Citigroup, Inc. (c)............................................. 2.31% 11/04/22 12,385,134 5,500,000 Citigroup, Inc. (c)............................................. 2.88% 07/24/23 5,590,336 750,000 Citizens Bank N.A............................................... 2.65% 05/26/22 758,417 5,000,000 Fifth Third Bancorp............................................. 2.60% 06/15/22 5,060,281 15,000,000 Goldman Sachs Group, (The), Inc................................. 0.48% 01/27/23 14,964,825 15,000,000 Goldman Sachs Group, (The), Inc., SOFR + 0.43% (a).............. 0.48% 03/08/23 15,011,833 15,355,000 Goldman Sachs Group, (The), Inc. (c)............................ 2.91% 07/24/23 15,601,906 12,500,000 Goldman Sachs Group, (The), Inc., SOFR + 0.50% (a).............. 0.55% 09/10/24 12,522,092 4,000,000 Goldman Sachs Group, (The), Inc., SOFR + 0.49% (a).............. 0.54% 10/21/24 4,001,283 12,322,000 JPMorgan Chase & Co............................................. 2.97% 01/15/23 12,388,361 6,935,000 JPMorgan Chase & Co. (c)........................................ 2.78% 04/25/23 7,011,022 6,000,000 JPMorgan Chase & Co............................................. 3.38% 05/01/23 6,242,166 12,000,000 JPMorgan Chase & Co., SOFR + 0.58% (a).......................... 0.63% 03/16/24 12,044,474 10,000,000 JPMorgan Chase & Co., SOFR + 0.54% (a).......................... 0.58% 06/01/25 10,046,561 7,378,000 Morgan Stanley.................................................. 2.75% 05/19/22 7,474,986 28,938,000 Morgan Stanley, Global Medium-Term Note, SOFR + 0.70% (a).................................................... 0.75% 01/20/23 28,994,595 15,000,000 Morgan Stanley, Global Medium-Term Note (c)..................... 0.79% 01/22/25 14,917,907 7,555,000 Synchrony Bank.................................................. 3.00% 06/15/22 7,652,679 10,000,000 Truist Bank, 3 Mo. LIBOR + 0.59% (a)............................ 0.71% 05/17/22 10,023,722 3,000,000 Truist Bank, SOFR + 0.73% (a)................................... 0.78% 03/09/23 3,024,117 5,000,000 Truist Bank, SOFR + 0.20% (a)................................... 0.25% 01/17/24 5,001,714 12,137,000 Truist Financial Corp., Medium-Term Note........................ 3.05% 06/20/22 12,318,109 12,000,000 Truist Financial Corp., Medium-Term Note, SOFR + 0.40% (a).................................................... 0.45% 06/09/25 12,016,982 12,857,000 Wells Fargo & Co................................................ 3.07% 01/24/23 12,933,112 5,375,000 Wells Fargo & Co., Series M..................................... 3.45% 02/13/23 5,563,030 10,030,000 Wells Fargo & Co., Medium-Term Note............................. 3.50% 03/08/22 10,143,023 ---------------- 358,605,900 ---------------- BIOTECHNOLOGY -- 0.7% 1,530,000 Amgen, Inc...................................................... 2.70% 05/01/22 1,541,469 5,155,000 Amgen, Inc...................................................... 2.65% 05/11/22 5,207,891 7,789,000 Gilead Sciences, Inc., 3 Mo. LIBOR + 0.52% (a).................. 0.65% 09/29/23 7,789,361 15,000,000 Gilead Sciences, Inc............................................ 0.75% 09/29/23 14,984,874 ---------------- 29,523,595 ---------------- BUILDING MATERIALS -- 0.1% 5,000,000 Martin Marietta Materials, Inc.................................. 0.65% 07/15/23 5,001,503 ---------------- CHEMICALS -- 0.1% 1,000,000 FMC Corp........................................................ 3.95% 02/01/22 1,002,594 1,275,000 Sherwin-Williams (The) Co....................................... 2.75% 06/01/22 1,288,840 3,140,000 Westlake Chemical Corp.......................................... 0.88% 08/15/24 3,140,138 ---------------- 5,431,572 ---------------- See Notes to Financial Statements Page 9 FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ ---------------- CORPORATE BONDS AND NOTES (CONTINUED) COMPUTERS -- 0.0% $ 1,660,000 HP, Inc......................................................... 4.05% 09/15/22 $ 1,706,557 ---------------- DIVERSIFIED FINANCIAL SERVICES -- 2.3% 7,070,000 AIG Global Funding (b).......................................... 2.30% 07/01/22 7,164,939 977,000 Air Lease Corp.................................................. 3.75% 02/01/22 979,287 10,899,000 Ally Financial, Inc............................................. 4.63% 05/19/22 11,141,484 14,495,000 American Express Co., 3 Mo. LIBOR + 0.62% (a)................... 0.75% 05/20/22 14,531,430 15,592,000 Discover Financial Services..................................... 5.20% 04/27/22 15,952,555 2,500,000 Intercontinental Exchange, Inc.................................. 2.35% 09/15/22 2,538,028 17,047,000 Nasdaq, Inc..................................................... 0.45% 12/21/22 17,031,127 15,000,000 Secured Forward-Backed Note 2021-05, Series 1, 3 Mo. LIBOR + 0.30% (a) (d)........................................ 0.43% 12/28/21 15,008,700 14,639,000 Synchrony Financial............................................. 2.85% 07/25/22 14,864,968 ---------------- 99,212,518 ---------------- ELECTRIC -- 5.9% 10,410,000 Alabama Power Co., Series 17A................................... 2.45% 03/30/22 10,483,797 15,118,000 American Electric Power Co., Inc., Series I..................... 3.65% 12/01/21 15,159,823 5,804,000 American Transmission Systems, Inc. (b)......................... 5.25% 01/15/22 5,855,766 1,360,000 CenterPoint Energy Houston Electric LLC......................... 2.25% 08/01/22 1,372,763 16,020,000 CenterPoint Energy, Inc......................................... 2.50% 09/01/22 16,257,877 7,070,000 CenterPoint Energy, Inc., SOFR + 0.65% (a)...................... 0.70% 05/13/24 7,077,247 9,529,000 Dominion Energy, Inc., Series B................................. 2.75% 01/15/22 9,556,209 7,000,000 Dominion Energy, Inc., Series D, 3 Mo. LIBOR + 0.53% (a).................................................... 0.65% 09/15/23 7,005,077 5,900,000 Duke Energy Corp., 3 Mo. LIBOR + 0.65% (a)...................... 0.76% 03/11/22 5,912,217 3,574,000 Duke Energy Corp................................................ 2.40% 08/15/22 3,624,433 8,626,000 Duke Energy Corp................................................ 3.05% 08/15/22 8,749,325 3,000,000 Duke Energy Corp., SOFR + 0.25% (a)............................. 0.30% 06/10/23 3,001,207 3,155,000 Duke Energy Florida LLC, Series A, 3 Mo. LIBOR + 0.25% (a).................................................... 0.37% 11/26/21 3,155,642 18,702,000 Entergy Corp.................................................... 4.00% 07/15/22 19,034,540 23,956,000 Exelon Generation Co. LLC....................................... 3.40% 03/15/22 24,161,691 7,302,000 NextEra Energy Capital Holdings, Inc............................ 2.90% 04/01/22 7,378,095 5,260,000 NextEra Energy Capital Holdings, Inc., SOFR + 0.54% (a).................................................... 0.59% 03/01/23 5,281,578 15,040,000 NextEra Energy Capital Holdings, Inc............................ 0.65% 03/01/23 15,063,057 10,000,000 NextEra Energy Capital Holdings, Inc., SOFR + 0.40% (a).................................................... 0.45% 11/03/23 10,006,458 15,000,000 Oklahoma Gas and Electric Co.................................... 0.55% 05/26/23 14,961,011 14,540,000 Pacific Gas and Electric Co., 3 Mo. LIBOR + 1.38% (a)........... 1.50% 11/15/21 14,541,472 4,018,000 Pacific Gas and Electric Co., 3 Mo. LIBOR + 1.48% (a)........... 1.60% 06/16/22 4,018,811 12,526,000 Pacific Gas and Electric Co..................................... 1.75% 06/16/22 12,498,081 4,200,000 PPL Electric Utilities Corp., SOFR + 0.33% (a).................. 0.38% 06/24/24 4,202,856 2,357,000 Public Service Enterprise Group, Inc............................ 2.00% 11/15/21 2,357,766 6,923,000 Sempra Energy................................................... 2.88% 10/01/22 7,027,333 15,000,000 Southern California Edison Co., SOFR + 0.64% (a)................ 0.69% 04/03/23 15,037,610 4,000,000 Southern California Edison Co., Series F, SOFR + 0.35% (a).................................................... 0.40% 06/13/22 4,002,098 4,000,000 Southern California Edison Co., Series J........................ 0.70% 08/01/23 3,994,125 ---------------- 260,777,965 ---------------- Page 10 See Notes to Financial Statements FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ ---------------- CORPORATE BONDS AND NOTES (CONTINUED) FOOD -- 0.3% $ 10,000,000 Conagra Brands, Inc............................................. 0.50% 08/11/23 $ 9,961,065 1,432,000 Kroger (The) Co................................................. 3.40% 04/15/22 1,441,076 ---------------- 11,402,141 ---------------- GAS -- 0.5% 10,200,000 CenterPoint Energy Resources Corp., 3 Mo. LIBOR + 0.50% (a).................................................... 0.62% 03/02/23 10,202,864 7,000,000 CenterPoint Energy Resources Corp............................... 0.70% 03/02/23 6,983,268 5,000,000 Southern California Gas Co., 3 Mo. LIBOR + 0.35% (a)............ 0.47% 09/14/23 5,000,896 ---------------- 22,187,028 ---------------- HEALTH CARE PRODUCTS -- 1.6% 7,232,000 Boston Scientific Corp.......................................... 3.38% 05/15/22 7,346,056 16,000,000 PerkinElmer, Inc................................................ 0.55% 09/15/23 15,958,115 6,000,000 Thermo Fisher Scientific, Inc., SOFR + 0.35% (a)................ 0.40% 04/18/23 6,001,685 10,000,000 Thermo Fisher Scientific, Inc., SOFR + 0.39% (a)................ 0.44% 10/18/23 10,007,753 10,000,000 Thermo Fisher Scientific, Inc................................... 0.80% 10/18/23 10,003,492 1,000,000 Thermo Fisher Scientific, Inc., SOFR + 0.53% (a)................ 0.58% 10/18/24 1,001,685 20,731,000 Zimmer Biomet Holdings, Inc..................................... 3.15% 04/01/22 20,869,254 ---------------- 71,188,040 ---------------- HEALTH CARE SERVICES -- 0.5% 11,754,000 Anthem, Inc..................................................... 3.13% 05/15/22 11,926,573 9,500,000 Humana, Inc..................................................... 0.65% 08/03/23 9,494,801 ---------------- 21,421,374 ---------------- INSURANCE -- 2.4% 13,125,000 Athene Global Funding, 3 Mo. LIBOR + 1.23% (a) (b).............. 1.36% 07/01/22 13,224,020 5,246,000 Athene Global Funding (b)....................................... 3.00% 07/01/22 5,327,820 5,000,000 Athene Global Funding, SOFR + 0.70% (a) (b)..................... 0.75% 05/24/24 5,027,689 3,000,000 Brighthouse Financial Global Funding, SOFR + 0.76% (a) (b)................................................ 0.81% 04/12/24 3,026,182 25,000,000 MET Tower Global Funding, SOFR + 0.55% (a) (b).................. 0.60% 01/17/23 25,121,159 2,000,000 Metropolitan Life Global Funding I, SOFR + 0.57% (a) (b)................................................ 0.62% 01/13/23 2,008,687 7,000,000 Metropolitan Life Global Funding I, SOFR + 0.30% (a) (b)................................................ 0.35% 09/27/24 7,013,321 25,000,000 New York Life Global Funding, 3 Mo. LIBOR + 0.28% (a) (b)................................................ 0.40% 01/10/23 25,063,396 13,054,000 Principal Life Global Funding II, SOFR + 0.45% (a) (b).......... 0.50% 04/12/24 13,104,099 5,000,000 Principal Life Global Funding II, SOFR + 0.38% (a) (b).......... 0.43% 08/23/24 5,010,640 3,625,000 Reliance Standard Life Global Funding II (b).................... 2.63% 07/22/22 3,673,844 ---------------- 107,600,857 ---------------- INTERNET -- 0.2% 6,633,000 TD Ameritrade Holding Corp., 3 Mo. LIBOR + 0.43% (a).................................................... 0.56% 11/01/21 6,633,000 ---------------- LODGING -- 0.2% 7,000,000 Hyatt Hotels Corp., SOFR + 1.05% (a)............................ 1.10% 10/01/23 7,023,369 3,000,000 Hyatt Hotels Corp............................................... 1.30% 10/01/23 3,003,130 ---------------- 10,026,499 ---------------- MACHINERY-CONSTRUCTION & MINING -- 0.1% 3,000,000 Caterpillar Financial Services Corp., Medium-Term Note.......... 0.95% 05/13/22 3,010,983 ---------------- See Notes to Financial Statements Page 11 FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ ---------------- CORPORATE BONDS AND NOTES (CONTINUED) MACHINERY-DIVERSIFIED -- 0.9% $ 15,000,000 John Deere Capital Corp., Medium-Term Note, 3 Mo. LIBOR + 0.49% (a)............................................ 0.60% 06/13/22 $ 15,042,500 10,000,000 John Deere Capital Corp., Medium-Term Note, SOFR + 0.12% (a).................................................... 0.17% 07/10/23 10,005,965 5,000,000 Otis Worldwide Corp., 3 Mo. LIBOR + 0.45% (a)................... 0.58% 04/05/23 5,000,393 10,000,000 Rockwell Automation, Inc........................................ 0.35% 08/15/23 9,982,516 ---------------- 40,031,374 ---------------- MEDIA -- 0.9% 20,879,000 Charter Communications Operating LLC / Charter Communications Operating Capital............................. 4.46% 07/23/22 21,306,990 11,612,000 Charter Communications Operating LLC / Charter Communications Operating Capital, 3 Mo. LIBOR + 1.65% (a).................................................... 1.78% 02/01/24 11,929,884 5,000,000 Walt Disney (The) Co., 3 Mo. LIBOR + 0.39% (a).................. 0.51% 09/01/22 5,014,725 ---------------- 38,251,599 ---------------- MISCELLANEOUS MANUFACTURING -- 0.1% 4,188,000 General Electric Co., Global Medium-Term Note................... 3.15% 09/07/22 4,289,125 ---------------- OIL & GAS -- 1.1% 9,169,000 BP Capital Markets America, Inc., 3 Mo. LIBOR + 0.65% (a).................................................... 0.77% 09/19/22 9,210,384 12,796,000 Chevron Corp.................................................... 2.41% 03/03/22 12,843,835 16,153,000 ConocoPhillips Co., 3 Mo. LIBOR + 0.90% (a)..................... 1.02% 05/15/22 16,216,961 10,308,000 Phillips 66, Series WI.......................................... 4.30% 04/01/22 10,475,998 ---------------- 48,747,178 ---------------- PHARMACEUTICALS -- 2.6% 10,148,000 AbbVie, Inc., 3 Mo. LIBOR + 0.46% (a)........................... 0.59% 11/19/21 10,149,352 18,715,000 AbbVie, Inc..................................................... 2.15% 11/19/21 18,731,278 12,000,000 AbbVie, Inc., 3 Mo. LIBOR + 0.65% (a)........................... 0.78% 11/21/22 12,079,863 19,780,000 Astrazeneca Finance LLC......................................... 0.70% 05/28/24 19,784,324 17,825,000 Bayer US Finance II LLC (b)..................................... 3.88% 12/15/23 18,829,243 6,000,000 Bristol-Myers Squibb Co., 3 Mo. LIBOR + 0.38% (a)............... 0.50% 05/16/22 6,016,043 1,129,000 Cigna Corp...................................................... 3.75% 07/15/23 1,185,866 6,609,000 CVS Health Corp................................................. 3.50% 07/20/22 6,715,755 21,939,000 Viatris, Inc.................................................... 1.13% 06/22/22 22,018,560 ---------------- 115,510,284 ---------------- PIPELINES -- 2.8% 3,420,000 Energy Transfer, L.P. / Regency Energy Finance Corp............. 5.88% 03/01/22 3,434,694 9,800,000 Energy Transfer, L.P. / Regency Energy Finance Corp............. 5.00% 10/01/22 10,079,015 6,442,000 Enterprise Products Operating LLC............................... 3.50% 02/01/22 6,492,365 6,185,000 Enterprise Products Operating LLC............................... 4.05% 02/15/22 6,249,438 7,000,000 Enterprise Products Operating LLC............................... 3.35% 03/15/23 7,220,364 16,903,000 Kinder Morgan Energy Partners, L.P.............................. 4.15% 03/01/22 17,105,225 3,150,000 ONEOK Partners, L.P............................................. 3.38% 10/01/22 3,204,091 20,268,000 Plains All American Pipeline, L.P. / PAA Finance Corp........... 3.65% 06/01/22 20,467,601 9,700,000 Southern Natural Gas Co. LLC (b)................................ 0.63% 04/28/23 9,673,029 20,019,000 Williams Cos., (The), Inc....................................... 3.60% 03/15/22 20,143,551 16,770,000 Williams Cos., (The), Inc....................................... 3.35% 08/15/22 17,022,041 ---------------- 121,091,414 ---------------- Page 12 See Notes to Financial Statements FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ ---------------- CORPORATE BONDS AND NOTES (CONTINUED) REAL ESTATE INVESTMENT TRUSTS -- 0.3% $ 15,190,000 Public Storage, SOFR + 0.47% (a)................................ 0.52% 04/23/24 $ 15,203,704 ---------------- RETAIL -- 0.3% 5,000,000 7-Eleven, Inc., 3 Mo. LIBOR + 0.45% (a) (b)..................... 0.58% 08/10/22 5,001,067 5,682,000 AutoZone, Inc................................................... 3.70% 04/15/22 5,719,899 3,957,000 O'reilly Automotive, Inc........................................ 3.80% 09/01/22 4,031,872 ---------------- 14,752,838 ---------------- SEMICONDUCTORS -- 1.7% 5,000,000 Analog Devices, Inc., SOFR + 0.25% (a).......................... 0.30% 10/01/24 5,007,290 10,000,000 Intel Corp., 3 Mo. LIBOR + 0.35% (a)............................ 0.48% 05/11/22 10,018,301 25,352,000 Maxim Integrated Products, Inc.................................. 3.38% 03/15/23 26,105,365 7,000,000 Microchip Technology, Inc....................................... 4.33% 06/01/23 7,357,009 5,820,000 Microchip Technology, Inc. (b).................................. 0.98% 09/01/24 5,761,645 18,400,000 Skyworks Solutions, Inc......................................... 0.90% 06/01/23 18,405,803 ---------------- 72,655,413 ---------------- SOFTWARE -- 1.8% 2,270,000 Autodesk, Inc................................................... 3.60% 12/15/22 2,326,693 4,192,000 Cadence Design Systems, Inc..................................... 4.38% 10/15/24 4,545,766 1,500,000 Fiserv, Inc..................................................... 3.50% 10/01/22 1,529,753 16,712,000 Infor, Inc. (b)................................................. 1.45% 07/15/23 16,848,954 17,376,000 Oracle Corp..................................................... 2.50% 05/15/22 17,516,493 4,000,000 Roper Technologies, Inc......................................... 2.80% 12/15/21 4,003,683 8,287,000 Roper Technologies, Inc......................................... 0.45% 08/15/22 8,288,684 18,780,000 VMware, Inc..................................................... 2.95% 08/21/22 19,098,104 7,000,000 VMware, Inc..................................................... 0.60% 08/15/23 6,988,828 ---------------- 81,146,958 ---------------- TELECOMMUNICATIONS -- 1.1% 16,931,000 AT&T, Inc....................................................... 3.00% 06/30/22 17,133,055 9,936,000 AT&T, Inc., SOFR + 0.64% (a).................................... 0.69% 03/25/24 9,946,401 10,000,000 AT&T, Inc., 3 Mo. LIBOR + 1.18% (a)............................. 1.29% 06/12/24 10,205,555 11,421,000 Verizon Communications, Inc., SOFR + 0.50% (a).................. 0.55% 03/22/24 11,480,191 ---------------- 48,765,202 ---------------- TRANSPORTATION -- 0.5% 1,312,000 Ryder System, Inc., Medium-Term Note............................ 2.80% 03/01/22 1,320,075 20,227,000 Ryder System, Inc., Medium-Term Note............................ 2.50% 09/01/22 20,545,693 ---------------- 21,865,768 ---------------- TRUCKING & LEASING -- 0.2% 9,005,000 GATX Corp., 3 Mo. LIBOR + 0.72% (a)............................. 0.84% 11/05/21 9,005,450 1,440,000 Penske Truck Leasing Co., L.P. / PTL Finance Corp. (b).......... 4.88% 07/11/22 1,482,736 ---------------- 10,488,186 ---------------- TOTAL CORPORATE BONDS AND NOTES.............................................................. 1,948,155,763 (Cost $1,946,588,603) ---------------- ANNUALIZED PRINCIPAL YIELD ON DATE STATED VALUE DESCRIPTION OF PURCHASE MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ ---------------- COMMERCIAL PAPER -- 26.9% AGRICULTURE -- 0.5% 20,000,000 BAT International Finance PLC................................... 0.16% 11/01/21 20,000,000 ---------------- See Notes to Financial Statements Page 13 FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 ANNUALIZED PRINCIPAL YIELD ON DATE STATED VALUE DESCRIPTION OF PURCHASE MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ ---------------- COMMERCIAL PAPER (CONTINUED) AUTO MANUFACTURERS -- 1.3% $ 10,000,000 General Motors Financial Co., Inc............................... 0.30% 11/04/21 $ 9,999,750 18,500,000 Harley-Davidson Financial Services, Inc......................... 0.26% 11/05/21 18,499,465 15,000,000 Harley-Davidson Financial Services, Inc......................... 0.24% 11/09/21 14,999,200 15,000,000 Harley-Davidson Financial Services, Inc......................... 0.26% 11/18/21 14,998,158 ---------------- 58,496,573 ---------------- BEVERAGES -- 0.3% 14,000,000 Constellation Brands, Inc....................................... 0.19% 11/05/21 13,999,704 ---------------- CHEMICALS -- 2.2% 15,000,000 EI du Pont de Nemours and Co.................................... 0.33% 12/01/21 14,995,991 15,000,000 FMC Corp........................................................ 0.35% 11/01/21 15,000,000 10,000,000 FMC Corp........................................................ 0.41% 11/05/21 9,999,555 20,000,000 International Flavors & Fragrances, Inc......................... 0.30% 11/29/21 19,995,332 15,000,000 International Flavors & Fragrances, Inc......................... 0.30% 12/10/21 14,995,125 20,000,000 International Flavors & Fragrances, Inc......................... 0.30% 12/15/21 19,992,666 ---------------- 94,978,669 ---------------- DIVERSIFIED FINANCIAL SERVICES -- 2.7% 18,000,000 Aviation Capital Group LLC...................................... 0.19% 11/01/21 18,000,000 15,000,000 CNPC Finance HK Ltd............................................. 0.27% 11/08/21 14,999,212 16,564,000 CNPC Finance HK Ltd............................................. 0.31% 11/15/21 16,562,003 15,000,000 CNPC Finance HK Ltd............................................. 0.30% 11/29/21 14,996,500 18,000,000 Intercontinental Exchange, Inc.................................. 0.18% 11/01/21 18,000,000 20,000,000 Intercontinental Exchange, Inc.................................. 0.19% 11/04/21 19,999,683 15,000,000 Mitsubishi HC Capital America, Inc.............................. 0.23% 11/23/21 14,997,892 ---------------- 117,555,290 ---------------- ELECTRIC -- 2.1% 15,000,000 Dominion Energy, Inc............................................ 0.15% 11/03/21 14,999,875 8,000,000 Edison International............................................ 0.34% 11/08/21 7,999,471 10,000,000 Enel Finance America LLC........................................ 0.36% 11/16/21 9,998,539 15,000,000 Enel Finance America LLC........................................ 0.42% 03/21/22 14,976,025 23,000,000 Public Service Enterprise Group, Inc............................ 0.16% 11/09/21 22,999,182 20,000,000 Public Service Enterprise Group, Inc............................ 0.25% 01/18/22 19,989,165 ---------------- 90,962,257 ---------------- ELECTRONICS -- 1.8% 15,000,000 Arrow Electronics, Inc.......................................... 0.25% 11/09/21 14,999,166 15,000,000 Jabil, Inc...................................................... 0.43% 11/09/21 14,998,600 20,000,000 Jabil, Inc...................................................... 0.46% 11/17/21 19,995,999 20,000,000 Jabil, Inc...................................................... 0.46% 11/18/21 19,995,749 10,000,000 Jabil, Inc...................................................... 0.46% 11/19/21 9,997,750 ---------------- 79,987,264 ---------------- FOOD -- 1.9% 20,458,000 Conagra Brands, Inc............................................. 0.22% - 0.24% 11/15/21 20,456,130 15,000,000 Conagra Brands, Inc............................................. 0.30% 01/21/22 14,989,873 9,500,000 Smithfield Foods, Inc........................................... 0.23% 11/10/21 9,499,454 15,000,000 Smithfield Foods, Inc........................................... 0.25% 11/16/21 14,998,437 15,000,000 Smithfield Foods, Inc........................................... 0.25% 11/18/21 14,998,229 10,000,000 Smithfield Foods, Inc........................................... 0.25% 11/22/21 9,998,542 ---------------- 84,940,665 ---------------- Page 14 See Notes to Financial Statements FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 ANNUALIZED PRINCIPAL YIELD ON DATE STATED VALUE DESCRIPTION OF PURCHASE MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ ---------------- COMMERCIAL PAPER (CONTINUED) HEALTH CARE PRODUCTS -- 0.8% $ 20,000,000 Baxter International, Inc....................................... 0.26% 01/13/22 $ 19,989,454 15,000,000 Danaher Corp.................................................... 0.20% 11/15/21 14,998,833 ---------------- 34,988,287 ---------------- HEALTH CARE SERVICES -- 0.3% 15,000,000 Humana, Inc..................................................... 0.18% 11/04/21 14,999,775 ---------------- MINING -- 1.2% 10,000,000 Glencore Funding LLC............................................ 0.23% 11/03/21 9,999,872 15,000,000 Glencore Funding LLC............................................ 0.25% 11/08/21 14,999,271 10,000,000 Glencore Funding LLC............................................ 0.25% 11/17/21 9,998,888 10,000,000 Glencore Funding LLC............................................ 0.24% 12/08/21 9,997,533 10,000,000 Glencore Funding LLC............................................ 0.25% 01/13/22 9,994,930 ---------------- 54,990,494 ---------------- MISCELLANEOUS MANUFACTURING -- 1.1% 10,000,000 Parker-Hannifin Corp............................................ 0.25% 11/05/21 9,999,722 20,000,000 Parker-Hannifin Corp............................................ 0.24% 12/07/21 19,995,200 20,000,000 Parker-Hannifin Corp............................................ 0.33% 01/20/22 19,985,332 ---------------- 49,980,254 ---------------- OIL & GAS -- 1.2% 15,000,000 Sinopec Century Bright Capital Investment America LLC........... 0.23% 11/12/21 14,998,946 15,000,000 Sinopec Century Bright Capital Investment America LLC........... 0.25% 11/29/21 14,997,083 10,000,000 Sinopec Century Bright Capital Investment Ltd................... 0.21% 11/18/21 9,999,008 15,000,000 Suncor Energy, Inc.............................................. 0.19% 11/10/21 14,999,288 ---------------- 54,994,325 ---------------- PHARMACEUTICALS -- 1.4% 15,000,000 Cigna Corp...................................................... 0.20% 11/17/21 14,998,666 15,000,000 Cigna Corp...................................................... 0.25% 02/11/22 14,989,369 10,000,000 Viatris, Inc.................................................... 0.39% 11/10/21 9,999,050 15,000,000 Viatris, Inc.................................................... 0.38% 11/19/21 14,997,150 6,000,000 Viatris, Inc.................................................... 0.28% 12/01/21 5,998,600 ---------------- 60,982,835 ---------------- PIPELINES -- 2.5% 10,000,000 Enbridge US, Inc................................................ 0.20% 11/02/21 9,999,945 18,000,000 Enbridge US, Inc................................................ 0.20% 11/30/21 17,997,100 15,000,000 Enbridge US, Inc................................................ 0.20% 12/03/21 14,997,333 14,000,000 Enbridge US, Inc................................................ 0.20% 12/10/21 13,996,966 35,000,000 ETP Legacy, L.P................................................. 0.35% 11/01/21 35,000,000 20,000,000 ONEOK, Inc...................................................... 0.27% 11/08/21 19,998,950 ---------------- 111,990,294 ---------------- REAL ESTATE INVESTMENT TRUSTS -- 2.8% 20,000,000 Alexandria Real Estate Equities, Inc............................ 0.16% 11/03/21 19,999,822 20,000,000 Crown Castle International Corp................................. 0.25% 11/10/21 19,998,750 15,000,000 Crown Castle International Corp................................. 0.30% 11/17/21 14,998,000 20,000,000 Healthpeak Properties, Inc...................................... 0.17% 11/02/21 19,999,905 20,000,000 Healthpeak Properties, Inc...................................... 0.20% 12/01/21 19,996,667 10,000,000 Welltower, Inc.................................................. 0.16% 11/02/21 9,999,956 18,100,000 Welltower, Inc.................................................. 0.15% 11/05/21 18,099,698 ---------------- 123,092,798 ---------------- See Notes to Financial Statements Page 15 FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 ANNUALIZED PRINCIPAL YIELD ON DATE STATED VALUE DESCRIPTION OF PURCHASE MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ ---------------- COMMERCIAL PAPER (CONTINUED) RETAIL -- 0.3% $ 15,000,000 Walgreens Boots Alliance, Inc................................... 0.18% 11/03/21 $ 14,999,850 ---------------- SOFTWARE -- 1.8% 10,000,000 Fidelity National Information Services, Inc..................... 0.20% 11/02/21 9,999,944 10,000,000 Fidelity National Information Services, Inc..................... 0.20% 11/08/21 9,999,611 12,400,000 Fidelity National Information Services, Inc..................... 0.20% 11/10/21 12,399,380 15,000,000 Fidelity National Information Services, Inc..................... 0.21% 12/02/21 14,997,287 14,975,000 Fidelity National Information Services, Inc..................... 0.21% 12/06/21 14,971,943 15,000,000 Fiserv, Inc..................................................... 0.17% 11/16/21 14,998,938 ---------------- 77,367,103 ---------------- TELECOMMUNICATIONS -- 0.7% 10,000,000 Rogers Communications, Inc...................................... 0.17% 11/16/21 9,999,292 20,000,000 Rogers Communications, Inc...................................... 0.29% 01/27/22 19,985,981 ---------------- 29,985,273 ---------------- TOTAL COMMERCIAL PAPER....................................................................... 1,189,291,710 (Cost $1,189,291,709) ---------------- PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ ---------------- FOREIGN CORPORATE BONDS AND NOTES -- 15.0% AGRICULTURE -- 0.1% 6,248,000 BAT International Finance PLC (b)............................... 3.25% 06/07/22 6,352,618 ---------------- AUTO MANUFACTURERS -- 0.2% 5,500,000 BMW Finance N.V., 3 Mo. LIBOR + 0.79% (a) (b)................... 0.91% 08/12/22 5,532,094 2,809,000 BMW Finance N.V. (b)............................................ 2.25% 08/12/22 2,850,510 ---------------- 8,382,604 ---------------- BANKS -- 12.9% 2,500,000 ANZ New Zealand Int'l Ltd./London, 3 Mo. LIBOR + 1.00% (a) (b)................................................ 1.12% 01/25/22 2,506,051 4,000,000 Australia & New Zealand Banking Group Ltd., 3 Mo. LIBOR + 0.49% (a) (b)........................................ 0.62% 11/21/22 4,018,009 10,000,000 Bank of Montreal, Medium-Term Note, SOFR + 0.32% (a).................................................... 0.37% 07/09/24 10,028,527 25,000,000 Bank of Nova Scotia (The), SOFR + 0.45% (a)..................... 0.49% 04/15/24 25,128,432 8,000,000 Bank of Nova Scotia (The), SOFR + 0.38% (a)..................... 0.43% 07/31/24 8,029,895 5,000,000 Banque Federative du Credit Mutuel S.A., SOFR + 0.41% (a) (b)................................................ 0.46% 02/04/25 5,012,365 3,181,000 Barclays Bank PLC............................................... 1.70% 05/12/22 3,201,090 9,446,000 Barclays PLC.................................................... 3.68% 01/10/23 9,502,301 11,102,000 Barclays PLC (c)................................................ 4.61% 02/15/23 11,230,518 2,343,000 Barclays PLC (c)................................................ 4.34% 05/16/24 2,466,738 25,000,000 BPCE S.A., Medium-Term Note, 3 Mo. LIBOR + 0.88% (a).................................................... 1.00% 05/31/22 25,123,933 17,625,000 Canadian Imperial Bank of Commerce, SOFR + 0.80% (a).................................................... 0.85% 03/17/23 17,755,547 8,500,000 Canadian Imperial Bank of Commerce, SOFR + 0.34% (a).................................................... 0.39% 06/22/23 8,514,758 7,000,000 Commonwealth Bank of Australia, 3 Mo. LIBOR + 0.70% (a) (b)................................................ 0.82% 03/10/22 7,016,460 13,425,000 Cooperatieve Rabobank UA (b).................................... 3.88% 09/26/23 14,230,636 Page 16 See Notes to Financial Statements FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ ---------------- FOREIGN CORPORATE BONDS AND NOTES (CONTINUED) BANKS (CONTINUED) $ 9,816,000 Cooperatieve Rabobank UA/NY, 3 Mo. LIBOR + 0.83% (a).................................................... 0.95% 01/10/22 $ 9,832,109 3,407,000 Credit Suisse AG/New York NY.................................... 2.10% 11/12/21 3,408,677 15,000,000 Credit Suisse AG/New York NY, SOFR + 0.38% (a).................. 0.43% 08/09/23 15,046,504 5,000,000 Credit Suisse AG/New York NY.................................... 0.52% 08/09/23 4,992,557 5,000,000 Credit Suisse Group AG (b) (c).................................. 3.00% 12/14/23 5,117,402 17,401,000 Credit Suisse Group Funding Guernsey Ltd........................ 3.80% 09/15/22 17,899,906 5,000,000 Danske Bank A/S (b) (c)......................................... 0.98% 09/10/25 4,963,324 3,911,000 Deutsche Bank AG/New York NY.................................... 3.30% 11/16/22 4,015,991 3,812,000 Deutsche Bank AG/New York NY.................................... 3.95% 02/27/23 3,962,342 9,273,000 Deutsche Bank AG/New York NY, Series D.......................... 5.00% 02/14/22 9,388,542 6,000,000 DNB Bank ASA, 3 Mo. LIBOR + 0.62% (a) (b)....................... 0.74% 12/02/22 6,036,650 6,200,000 Federation des Caisses Desjardins du Quebec, SOFR + 0.43% (a) (b)................................................ 0.48% 05/21/24 6,213,557 2,980,000 ING Groep N.V., 3 Mo. LIBOR + 1.15% (a)......................... 1.28% 03/29/22 2,994,811 9,135,000 ING Groep N.V................................................... 3.15% 03/29/22 9,237,587 6,000,000 ING Groep N.V., 3 Mo. LIBOR + 1.00% (a)......................... 1.13% 10/02/23 6,096,887 5,259,000 Lloyds Bank PLC................................................. 2.25% 08/14/22 5,339,302 12,749,000 Lloyds Banking Group PLC (c).................................... 2.86% 03/17/23 12,859,739 14,770,000 Lloyds Banking Group PLC (c).................................... 2.91% 11/07/23 15,104,096 10,000,000 Macquarie Group Ltd. (b) (c).................................... 3.19% 11/28/23 10,258,784 5,000,000 Macquarie Group Ltd. (b) (c).................................... 1.20% 10/14/25 4,971,773 1,500,000 Mitsubishi UFJ Financial Group, Inc., 3 Mo. LIBOR + 0.92% (a).................................................... 1.05% 02/22/22 1,503,853 13,685,000 Mitsubishi UFJ Financial Group, Inc., 3 Mo. LIBOR + 0.79% (a).................................................... 0.91% 07/25/22 13,752,410 9,446,000 Mitsubishi UFJ Financial Group, Inc............................. 2.67% 07/25/22 9,601,595 10,991,000 Mitsubishi UFJ Financial Group, Inc., 3 Mo. LIBOR + 0.74% (a).................................................... 0.86% 03/02/23 11,080,915 6,295,000 Mizuho Financial Group, Inc. (c)................................ 2.72% 07/16/23 6,387,835 3,306,000 Mizuho Financial Group, Inc. (c)................................ 0.85% 09/08/24 3,306,395 21,542,000 National Bank of Canada (c)..................................... 0.90% 08/15/23 21,595,638 5,000,000 National Bank of Canada, SOFR + 0.49% (a)....................... 0.54% 08/06/24 5,016,041 2,175,000 NatWest Markets PLC, SOFR + 1.66% (a) (b)....................... 1.71% 09/29/22 2,203,554 5,440,000 NatWest Markets PLC (b)......................................... 3.63% 09/29/22 5,597,312 7,600,000 NatWest Markets PLC, 3 Mo. LIBOR + 1.47% (a).................... 1.59% 05/15/23 7,651,966 14,885,000 NatWest Markets PLC, SOFR + 0.53% (a) (b)....................... 0.58% 08/12/24 14,948,631 13,890,000 Nordea Bank Abp (b)............................................. 4.25% 09/21/22 14,337,343 8,000,000 Royal Bank of Canada, SOFR + 0.36% (a).......................... 0.41% 07/29/24 8,021,085 9,000,000 Royal Bank of Canada, Global Medium-Term Note, 3 Mo. LIBOR + 0.47% (a)............................................ 0.60% 04/29/22 9,020,934 18,454,000 Royal Bank of Canada, Global Medium-Term Note, SOFR + 0.30% (a).................................................. 0.35% 01/19/24 18,480,867 1,300,000 Santander UK Group Holdings PLC................................. 3.57% 01/10/23 1,307,627 4,000,000 Skandinaviska Enskilda Banken AB, 3 Mo. LIBOR + 0.65% (a) (b)................................................ 0.76% 12/12/22 4,028,004 4,139,000 Sumitomo Mitsui Financial Group, Inc., 3 Mo. LIBOR + 0.97% (a).................................................... 1.09% 01/11/22 4,146,283 11,743,000 Sumitomo Mitsui Financial Group, Inc............................ 2.78% 07/12/22 11,940,866 4,607,000 Sumitomo Mitsui Financial Group, Inc............................ 3.10% 01/17/23 4,745,989 10,000,000 Sumitomo Mitsui Trust Bank Ltd., SOFR + 0.44% (a) (b)................................................ 0.49% 09/16/24 10,031,117 See Notes to Financial Statements Page 17 FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ ---------------- FOREIGN CORPORATE BONDS AND NOTES (CONTINUED) BANKS (CONTINUED) $ 5,000,000 UBS AG, SOFR + 0.45% (a) (b).................................... 0.50% 08/09/24 $ 5,028,654 11,482,000 UBS AG/London (b)............................................... 1.75% 04/21/22 11,542,005 3,000,000 UBS AG/London, SOFR + 0.32% (a) (b)............................. 0.37% 06/01/23 3,009,556 15,681,000 UBS Group AG, 3 Mo. LIBOR + 1.53% (a) (b)....................... 1.66% 02/01/22 15,743,613 7,332,000 UBS Group AG (b)................................................ 3.49% 05/23/23 7,448,831 13,715,000 UBS Group AG (b) (c)............................................ 2.86% 08/15/23 13,955,980 5,000,000 Westpac Banking Corp., 3 Mo. LIBOR + 0.71% (a).................. 0.84% 06/28/22 5,023,639 7,000,000 Westpac Banking Corp., 3 Mo. LIBOR + 0.39% (a).................. 0.51% 01/13/23 7,031,075 ---------------- 568,995,413 ---------------- BEVERAGES -- 0.7% 14,861,000 Heineken NV (b)................................................. 3.40% 04/01/22 15,045,754 11,000,000 JDE Peet's N.V. (b)............................................. 0.80% 09/24/24 10,878,015 5,955,000 Pernod Ricard SA (b)............................................ 4.25% 07/15/22 6,111,788 ---------------- 32,035,557 ---------------- CHEMICALS -- 0.1% 5,575,000 Nutrien Ltd..................................................... 1.90% 05/13/23 5,669,625 ---------------- DIVERSIFIED FINANCIAL SERVICES -- 0.1% 4,775,000 AerCap Ireland Capital DAC / AerCap Global Aviation Trust........................................................ 3.95% 02/01/22 4,801,351 ---------------- MINING -- 0.3% 10,889,000 Glencore Finance Canada Ltd. (b)................................ 4.25% 10/25/22 11,262,928 ---------------- MISCELLANEOUS MANUFACTURING -- 0.4% 9,200,000 Siemens Financieringsmaatschappij N.V., 3 Mo. LIBOR + 0.61% (a) (b)................................................ 0.73% 03/16/22 9,220,110 6,000,000 Siemens Financieringsmaatschappij N.V., SOFR + 0.43% (a) (b)................................................ 0.48% 03/11/24 6,044,974 ---------------- 15,265,084 ---------------- OIL & GAS -- 0.0% 1,250,000 Canadian Natural Resources Ltd.................................. 2.95% 01/15/23 1,280,522 ---------------- PIPELINES -- 0.2% 2,000,000 Enbridge, Inc., SOFR + 0.40% (a)................................ 0.45% 02/17/23 2,004,558 5,442,000 Enbridge, Inc................................................... 0.55% 10/04/23 5,429,191 ---------------- 7,433,749 ---------------- TOTAL FOREIGN CORPORATE BONDS AND NOTES...................................................... 661,479,451 (Cost $660,624,427) ---------------- ASSET-BACKED SECURITIES -- 7.9% American Credit Acceptance Receivables Trust 1,038,199 Series 2020-3, Class A (b)................................... 0.62% 10/13/23 1,038,349 5,156,624 Series 2020-4, Class A (b)................................... 0.53% 03/13/24 5,159,168 8,512,426 Series 2021-3, Class A (b)................................... 0.33% 06/13/25 8,506,859 11,500,000 Series 2021-4, Class A (b)................................... 0.45% 09/15/25 11,509,263 Avis Budget Rental Car Funding AESOP LLC 1,343,333 Series 2016-2A, Class A (b).................................. 2.72% 11/20/22 1,344,851 12,000,000 Series 2017-2A, Class A (b).................................. 2.97% 03/20/24 12,340,046 CarMax Auto Owner Trust 2,985,713 Series 2020-3, Class A2A..................................... 0.49% 06/15/23 2,986,571 Carvana Auto Receivables Trust 9,500,000 Series 2021-P2, Class A2..................................... 0.30% 07/10/24 9,494,664 Page 18 See Notes to Financial Statements FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ ---------------- ASSET-BACKED SECURITIES (CONTINUED) Countrywide Asset-Backed Certificates $ 702,023 Series 2004-SD4, Class M1, 1 Mo. LIBOR + 1.13% (a) (b)............................................. 1.21% 12/25/34 $ 703,149 Dell Equipment Finance Trust 14,870,041 Series 2020-2, Class A2 (b).................................. 0.47% 10/24/22 14,882,899 Drive Auto Receivables Trust 8,000,000 Series 2021-2, Class A2...................................... 0.36% 05/15/24 8,002,974 DT Auto Owner Trust 5,570,786 Series 2020-3A, Class A (b).................................. 0.54% 04/15/24 5,575,709 Exeter Automobile Receivables Trust 2,354,025 Series 2020-3A, Class A3..................................... 0.52% 10/16/23 2,354,450 7,165,000 Series 2020-3A, Class C...................................... 1.32% 07/15/25 7,213,506 10,000,000 Series 2021-3A, Class A2..................................... 0.34% 01/16/24 10,000,890 First Investors Auto Owner Trust 8,062,871 Series 2021-1A, Class A (b).................................. 0.45% 03/16/26 8,059,458 Flagship Credit Auto Trust 14,641,262 Series 2020-4, Class A (b)................................... 0.53% 04/15/25 14,650,614 11,567,503 Series 2021-3, Class A (b)................................... 0.36% 07/15/27 11,543,059 Ford Credit Auto Lease Trust 9,366,508 Series 2020-A, Class A3...................................... 1.85% 03/15/23 9,395,802 696,861 Series 2020-B, Class A2A..................................... 0.50% 12/15/22 697,009 Foursight Capital Automobile Receivables Trust 4,396,176 Series 2021-1, Class A2 (b).................................. 0.40% 08/15/24 4,396,651 8,500,000 Series 2021-2, Class A2 (b).................................. 0.40% 04/15/25 8,496,764 GLS Auto Receivables Issuer Trust 1,926,462 Series 2020-4A, Class A (b).................................. 0.52% 02/15/24 1,927,910 16,137,203 Series 2021-3A, Class A (b).................................. 0.42% 01/15/25 16,141,707 GLS Auto Receivables Trust 9,764,000 Series 2021-2A, Class A (b).................................. 0.31% 11/15/24 9,754,128 GSAA Home Equity Trust 223,225 Series 2005-MTR1, Class A4, 1 Mo. LIBOR + 0.74% (a)................................................. 0.83% 10/25/35 223,763 Honda Auto Receivables Owner Trust 69,566 Series 2020-1, Class A2...................................... 1.63% 10/21/22 69,631 HPEFS Equipment Trust 877,604 Series 2020-1A, Class A2 (b)................................. 1.73% 02/20/30 878,484 Hyundai Auto Lease Securitization Trust 20,000,000 Series 2019-B, Class B (b)................................... 2.13% 11/15/23 20,092,006 Mercedes-Benz Auto Lease Trust 6,608,730 Series 2019-B, Class A3...................................... 2.00% 10/17/22 6,629,937 Mill City Mortgage Loan Trust 462,247 Series 2016-1, Class A1 (b).................................. 2.50% 04/25/57 463,471 MVW Owner Trust 2,532,107 Series 2018-1A, Class A (b).................................. 3.45% 01/21/36 2,611,121 Nationstar Home Equity Loan Trust 876,320 Series 2006-B, Class AV4, 1 Mo. LIBOR + 0.28% (a)............ 0.37% 09/25/36 876,406 OSCAR US Funding Trust IX LLC 5,189,290 Series 2018-2A, Class A4 (b)................................. 3.63% 09/10/25 5,302,170 OSCAR US Funding Trust VII LLC 1,263,788 Series 2017-2A, Class A4 (b)................................. 2.76% 12/10/24 1,278,004 OSCAR US Funding Trust VIII LLC 1,982,073 Series 2018-1A, Class A4 (b)................................. 3.50% 05/12/25 2,016,720 OSCAR US Funding X LLC 5,244,264 Series 2019-1A, Class A3 (b)................................. 3.18% 05/10/23 5,298,476 See Notes to Financial Statements Page 19 FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ ---------------- ASSET-BACKED SECURITIES (CONTINUED) OSCAR US Funding XI LLC $ 5,400,864 Series 2019-2A, Class A3 (b)................................. 2.59% 09/11/23 $ 5,458,588 OSCAR US Funding XIII LLC 19,000,000 Series 2021-2A, Class A2 (b)................................. 0.39% 08/12/24 18,980,810 Santander Consumer Auto Receivables Trust 476,781 Series 2020-AA, Class A (b).................................. 1.37% 10/15/24 478,917 9,909,794 Series 2020-BA, Class A3 (b)................................. 0.46% 08/15/24 9,918,826 Santander Drive Auto Receivables Trust 8,500,000 Series 2020-4, Class A3...................................... 0.48% 07/15/24 8,504,854 13,000,000 Series 2021-4, Class A2...................................... 0.37% 08/15/24 12,999,736 Santander Retail Auto Lease Trust 7,630,000 Series 2019-C, Class A4 (b).................................. 1.93% 11/20/23 7,712,619 8,150,000 Series 2021-B, Class A2 (b).................................. 0.31% 01/22/24 8,143,074 Securitized Term Auto Receivables Trust 825,805 Series 2019-1A, Class A3 (b)................................. 2.99% 02/27/23 829,507 Sierra Timeshare Receivables Funding LLC 6,668,779 Series 2018-2A, Class A (b).................................. 3.50% 06/20/35 6,865,624 Towd Point Mortgage Trust 2,334,670 Series 2015-6, Class A1B (b)................................. 2.75% 04/25/55 2,340,085 2,892,670 Series 2016-2, Class A1 (b).................................. 3.00% 08/25/55 2,909,638 521,505 Series 2016-3, Class A1 (b).................................. 2.25% 04/25/56 522,890 Tricolor Auto Securitization Trust 8,693,299 Series 2021-1A, Class A (b).................................. 0.74% 04/15/24 8,693,833 Verizon Owner Trust 234,946 Series 2018-A, Class A1A..................................... 3.23% 04/20/23 235,778 Westlake Automobile Receivables Trust 3,213,680 Series 2020-1A, Class A2 (b)................................. 1.44% 09/15/23 3,219,756 13,750,000 Series 2021-2A, Class A2A (b)................................ 0.32% 04/15/25 13,748,060 World Omni Select Auto Trust 3,834,913 Series 2020-A, Class A2...................................... 0.47% 06/17/24 3,837,277 ---------------- TOTAL ASSET-BACKED SECURITIES................................................................ 347,316,511 (Cost $347,793,223) ---------------- MORTGAGE-BACKED SECURITIES -- 3.8% COLLATERALIZED MORTGAGE OBLIGATIONS -- 2.6% BRAVO Residential Funding Trust 8,952,150 Series 2021-NQM1, Class A1 (b)............................... 0.94% 02/25/49 8,984,942 CIM Trust 2,981,571 Series 2019-INV1, Class A2, 1 Mo. LIBOR + 1.00% (a) (b)............................................. 1.09% 02/25/49 2,985,865 1,308,989 Series 2019-INV2, Class A11, 1 Mo. LIBOR + 0.95% (a) (b).............................................. 1.04% 05/25/49 1,311,359 8,051,316 Series 2019-INV3, Class A11, 1 Mo. LIBOR + 1.00% (a) (b)............................................. 1.04% 08/25/49 8,065,648 COLT Mortgage Loan Trust 3,395,252 Series 2020-1, Class A1 (b).................................. 2.49% 02/25/50 3,397,308 939,828 Series 2020-1R, Class A2 (b)................................. 1.51% 09/25/65 942,017 6,893,896 Series 2020-2R, Class A1 (b)................................. 1.33% 10/26/65 6,912,961 Credit Suisse Mortgage Trust 8,963,822 Series 2019-AFC1, Class A1, steps up to 3.57% on 08/26/23 (b) (e).......................................... 2.57% 07/25/49 9,052,842 9,070,718 Series 2020-NQM1, Class A1, steps up to 2.21% on 09/26/24 (b) (e).......................................... 1.21% 05/25/65 9,094,217 Page 20 See Notes to Financial Statements FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ ---------------- MORTGAGE-BACKED SECURITIES (CONTINUED) COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED) Deephaven Residential Mortgage Trust $ 3,211,944 Series 2019-4A, Class A1 (b)................................. 2.79% 10/25/59 $ 3,219,487 GCAT Trust 8,194,302 Series 2020-NQM1, Class A1, steps up to 3.25% on 02/26/24 (b) (e).......................................... 2.25% 01/25/60 8,247,037 JP Morgan Mortgage Trust 5,680,082 Series 2019-7, Class A11, 1 Mo. LIBOR + 0.90% (a) (b)............................................. 0.99% 02/25/50 5,695,308 388,162 Series 2019-8, Class A11, 1 Mo. LIBOR + 0.85% (a) (b)............................................. 0.94% 03/25/50 389,232 5,831,989 Series 2019-INV1, Class A11, 1 Mo. LIBOR + 0.95% (a) (b)............................................. 1.04% 10/25/49 5,869,323 2,021,858 Series 2019-LTV2, Class A11, 1 Mo. LIBOR + 0.90% (a) (b)............................................. 0.99% 12/25/49 2,026,334 1,455,219 Series 2019-LTV3, Class A11, 1 Mo. LIBOR + 0.85% (a) (b)............................................. 0.94% 03/25/50 1,456,555 6,300,242 Series 2020-2, Class A11, 1 Mo. LIBOR + 0.80% (a) (b)............................................. 0.89% 07/25/50 6,312,541 2,043,326 Series 2020-LTV1, Class A11, 1 Mo. LIBOR + 1.00% (a) (b)............................................. 1.09% 06/25/50 2,055,139 OBX Trust 4,999,951 Series 2019-EXP3, Class 2A1A, 1 Mo. LIBOR + 0.90% (a) (b)............................................. 0.99% 10/25/59 5,019,297 541,950 Series 2020-EXP1, Class 2A1A, 1 Mo. LIBOR + 0.75% (a) (b)............................................. 0.84% 02/25/60 543,278 3,115,406 Series 2020-INV1, Class A11, 1 Mo. LIBOR + 0.90% (a) (b)............................................. 0.99% 12/25/49 3,120,767 Residential Mortgage Loan Trust 1,124,533 Series 2019-3, Class A2 (b).................................. 2.94% 09/25/59 1,132,051 Starwood Mortgage Residential Trust 10,924,325 Series 2020-1, Class A1 (b).................................. 2.28% 02/25/50 11,007,272 Verus Securitization Trust 3,300,365 Series 2019-4, Class A2, steps up to 3.85% on 10/26/23 (b) (e).......................................... 2.85% 11/25/59 3,349,205 2,037,620 Series 2019-INV2, Class A2, steps up to 3.95% on 08/25/23 (b) (e).......................................... 3.12% 07/25/59 2,054,190 1,955,426 Series 2020-4, Class A2, steps up to 2.91% on 07/26/24 (b) (e).......................................... 1.91% 05/25/65 1,964,233 ---------------- 114,208,408 ---------------- COMMERCIAL MORTGAGE-BACKED SECURITIES -- 1.2% Citigroup Commercial Mortgage Trust 736,257 Series 2012-GC8, Class AAB................................... 2.61% 09/10/45 739,962 COMM Mortgage Trust 4,559,008 Series 2013-CR9, Class ASB................................... 3.83% 07/10/45 4,676,718 GS Mortgage Securities Corp II 2,725,000 Series 2013-GC10, Class A5................................... 2.94% 02/10/46 2,787,057 JP Morgan Chase Commercial Mortgage Securities Trust 7,277,965 Series 2012-C8, Class A3..................................... 2.83% 10/15/45 7,366,700 13,767,645 Series 2012-HSBC, Class A (b)................................ 3.09% 07/05/32 13,931,884 KNDL Mortgage Trust 4,100,000 Series 2019-KNSQ, Class A, 1 Mo. LIBOR + 0.80% (a) (b)............................................. 0.89% 05/15/36 4,103,324 See Notes to Financial Statements Page 21 FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ ---------------- MORTGAGE-BACKED SECURITIES (CONTINUED) COMMERCIAL MORTGAGE-BACKED SECURITIES (CONTINUED) Morgan Stanley Capital I Trust $ 10,743,000 Series 2017-CLS, Class A, 1 Mo. LIBOR + 0.70% (a) (b)............................................. 0.79% 11/15/34 $ 10,739,871 UBS Commercial Mortgage Trust 6,679,573 Series 2012-C1, Class A3..................................... 3.40% 05/10/45 6,685,058 VNDO Mortgage Trust 4,028,082 Series 2012-6AVE, Class A (b)................................ 3.00% 11/15/30 4,105,341 ---------------- 55,135,915 ---------------- TOTAL MORTGAGE-BACKED SECURITIES............................................................. 169,344,323 (Cost $170,280,975) ---------------- U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES -- 1.3% COLLATERALIZED MORTGAGE OBLIGATIONS -- 0.3% Federal Home Loan Mortgage Corporation 612,112 Series 2003-2723, Class KN................................... 5.00% 12/15/23 629,037 965,152 Series 2004-2783, Class YB................................... 5.00% 04/15/24 995,522 4,508 Series 2012-4011, Class KM................................... 2.00% 03/15/22 4,513 558,193 Series 2014-4387, Class DE................................... 2.00% 01/15/32 566,814 Federal National Mortgage Association 2,831 Series 2009-14, Class EB..................................... 4.50% 03/25/24 2,885 1,406 Series 2009-52, Class AJ..................................... 4.00% 07/25/24 1,428 29 Series 2011-15, Class HT..................................... 5.50% 03/25/26 29 1,671,918 Series 2013-74, Class EL..................................... 3.00% 04/25/41 1,687,129 3,341,427 Series 2014-20, Class NA..................................... 3.00% 06/25/33 3,466,301 3,287,856 Series 2015-28, Class GC..................................... 2.50% 06/25/34 3,358,311 ---------------- 10,711,969 ---------------- COMMERCIAL MORTGAGE-BACKED SECURITIES -- 1.0% Federal Home Loan Mortgage Corporation Multifamily Structured Pass Through Certificates 166,609 Series 2013-K025, Class A1................................... 1.88% 04/25/22 166,604 2,667,763 Series 2013-K027, Class A1................................... 1.79% 09/25/22 2,680,718 3,108,624 Series 2013-K032, Class A1................................... 3.02% 02/25/23 3,155,149 3,139,664 Series 2013-K034, Class A1................................... 2.67% 02/25/23 3,173,500 3,719,046 Series 2013-KSMC, Class A1................................... 1.95% 01/25/23 3,756,022 3,330,275 Series 2014-K036, Class A1................................... 2.78% 04/25/23 3,385,573 4,074,685 Series 2017-K727, Class A1................................... 2.63% 10/25/23 4,129,166 FREMF Mortgage Trust 23,047,000 Series 2012-K17, Class B (b) (f)............................. 4.49% 12/25/44 23,100,999 1,895,000 Series 2012-K19, Class B (b) (f)............................. 4.01% 05/25/45 1,914,310 ---------------- 45,462,041 ---------------- PASS-THROUGH SECURITIES -- 0.0% Federal Home Loan Mortgage Corporation 287 Pool G13204.................................................. 6.00% 11/01/22 289 9 Pool G14035.................................................. 5.50% 12/01/21 9 18,371 Pool G15435.................................................. 5.00% 11/01/24 19,035 7,339 Pool G15821.................................................. 5.00% 07/01/25 7,607 14,835 Pool G15874.................................................. 5.00% 06/01/26 15,382 Federal National Mortgage Association 8 Pool 888932.................................................. 4.50% 11/01/22 8 3,738 Pool 890403.................................................. 6.00% 05/01/23 3,769 36,146 Pool 962078.................................................. 4.50% 03/01/23 37,677 Page 22 See Notes to Financial Statements FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ ---------------- U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (CONTINUED) PASS-THROUGH SECURITIES (CONTINUED) Federal National Mortgage Association (Continued) $ 11 Pool AD0285.................................................. 5.00% 09/01/22 $ 11 17 Pool AD0402.................................................. 5.00% 02/01/23 17 195 Pool AE0237.................................................. 5.50% 11/01/23 197 5,962 Pool AE0812.................................................. 5.00% 07/01/25 6,183 31,539 Pool AL5764.................................................. 5.00% 09/01/25 32,684 17,160 Pool AL5812.................................................. 5.50% 05/01/25 17,286 12,581 Pool AL6212.................................................. 4.50% 01/01/27 13,114 39,426 Pool AL6798.................................................. 5.00% 09/01/25 40,851 67 Pool AL8539.................................................. 4.50% 01/01/27 70 250,733 Pool BM1299.................................................. 5.00% 03/01/27 259,907 38,366 Pool MA1030.................................................. 3.00% 04/01/22 40,206 Government National Mortgage Association 11,298 Pool 783524.................................................. 5.00% 09/15/24 11,570 ---------------- 505,872 ---------------- TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES...................................... 56,679,882 (Cost $57,598,918) ---------------- MUNICIPAL BONDS -- 0.6% ARIZONA -- 0.4% 18,000,000 Mizuho Floater/Residual Trust (b)............................... 0.49% 09/01/26 18,000,000 ---------------- OTHER -- 0.2% 8,000,000 Mizuho Floater/Residual Trust (b)............................... 0.34% 09/01/26 8,000,000 ---------------- TOTAL MUNICIPAL BONDS........................................................................ 26,000,000 (Cost $26,000,000) ---------------- U.S. GOVERNMENT NOTES -- 0.6% 25,000,000 U.S. Treasury Note.............................................. 0.13% 04/30/22 25,002,575 ---------------- TOTAL U.S. GOVERNMENT NOTES.................................................................. 25,002,575 (Cost $25,009,149) ---------------- CERTIFICATES OF DEPOSIT -- 0.3% BANKS -- 0.3% 15,000,000 Nordea Bank Abp, 3 Mo. LIBOR + 0.32% (a)........................ 0.45% 11/19/21 15,002,980 ---------------- TOTAL CERTIFICATES OF DEPOSIT................................................................ 15,002,980 (Cost $15,000,000) ---------------- PRINCIPAL STATED VALUE DESCRIPTION RATE (g) MATURITY (h) VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ ---------------- SENIOR FLOATING-RATE LOAN INTERESTS -- 0.1% TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS -- 0.1% 5,000,000 Dell International LLC, Term Loan B-2, 1 Mo. LIBOR + 1.75%, 0.25% Floor........................................... 2.00% 09/19/25 4,996,150 ---------------- TOTAL SENIOR FLOATING-RATE LOAN INTERESTS.................................................... 4,996,150 (Cost $5,000,000) ---------------- TOTAL INVESTMENTS -- 100.7%.................................................................. 4,443,269,345 (Cost $4,443,187,004) (i) NET OTHER ASSETS AND LIABILITIES -- (0.7)%................................................... (32,290,225) ---------------- NET ASSETS -- 100.0%......................................................................... $ 4,410,979,120 ================ See Notes to Financial Statements Page 23 FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 ----------------------------- (a) Floating or variable rate security. (b) This security, sold within the terms of a private placement memorandum, 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. Pursuant to procedures adopted by the Trust's Board of Trustees, this security has been determined to be liquid by First Trust Advisors L.P., the Fund's Advisor. Although market instability can result in periods of increased overall market illiquidity, liquidity for each security is determined based on security specific factors and assumptions, which require subjective judgment. At October 31, 2021, securities noted as such amounted to $1,022,171,656 or 23.2% of net assets. (c) Fixed-to-floating or fixed-to-variable rate security. The interest rate shown reflects the fixed rate in effect at October 31, 2021. At a predetermined date, the fixed rate will change to a floating rate or a variable rate. (d) This security, sold within the terms of a private placement memorandum, is exempt from registration upon resale under Rule 144A under the 1933 Act, and may be resold in transactions exempt from registration, normally to qualified institutional buyers (see Note 2C - Restricted Securities in the Notes to Financial Statements). (e) Step-up security. A security where the coupon increases or steps up at a predetermined date. The coupon rate is determined based on the underlying investments. The coupon rate resets periodically. (f) Collateral Strip Rate security. Coupon is based on the weighted net interest rate of the investment's underlying collateral. The interest rate resets periodically. (g) Senior Floating-Rate Loan Interests ("Senior Loans") in which the Fund invests generally pay interest at rates which are periodically predetermined by reference to a base lending rate plus a premium. These base lending rates are generally (i) the lending rate offered by one or more major European banks, such as the LIBOR, (ii) the prime rate offered by one or more United States banks or (iii) the certificate of deposit rate. Certain Senior Loans are subject to a LIBOR floor that establishes a minimum LIBOR rate. When a range of rates is disclosed, the Fund holds more than one contract within the same tranche with identical LIBOR period, spread and floor, but different LIBOR reset. (h) Senior Loans generally are subject to mandatory and/or optional prepayment. As a result, the actual remaining maturity of Senior Loans may be substantially less than the stated maturities shown. (i) Aggregate cost for federal income tax purposes is $4,443,201,034. 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 $4,288,366 and the aggregate gross unrealized depreciation for all investments in which there was an excess of tax cost over value was $4,220,055. The net unrealized appreciation was $68,311. LIBOR - London Interbank Offered Rate SOFR - Secured Overnight Financing Rate Page 24 See Notes to Financial Statements FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 ----------------------------- 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 TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT VALUE AT QUOTED OBSERVABLE UNOBSERVABLE 10/31/2021 PRICES INPUTS INPUTS -------------- -------------- -------------- -------------- Corporate Bonds and Notes*......................... $1,948,155,763 $ -- $1,948,155,763 $ -- Commercial Paper*.................................. 1,189,291,710 -- 1,189,291,710 -- Foreign Corporate Bonds and Notes*................. 661,479,451 -- 661,479,451 -- Asset-Backed Securities............................ 347,316,511 -- 347,316,511 -- Mortgage-Backed Securities......................... 169,344,323 -- 169,344,323 -- U.S. Government Agency Mortgage-Backed Securities...................................... 56,679,882 -- 56,679,882 -- Municipal Bonds**.................................. 26,000,000 -- 26,000,000 -- U.S. Government Notes.............................. 25,002,575 -- 25,002,575 -- Certificates of Deposit*........................... 15,002,980 -- 15,002,980 -- Senior Floating-Rate Loan Interests*............... 4,996,150 -- 4,996,150 -- -------------- -------------- -------------- -------------- Total Investments.................................. $4,443,269,345 $ -- $4,443,269,345 $ -- ============== ============== ============== ============== * See Portfolio of Investments for industry breakout. ** See Portfolio of Investments for state breakout. See Notes to Financial Statements Page 25 FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 2021 ASSETS: Investments, at value..................................................... $4,443,269,345 Cash...................................................................... 5,835,324 Receivables: Investment securities sold............................................. 14,522,983 Interest............................................................... 12,518,404 -------------- Total Assets........................................................ 4,476,146,056 -------------- LIABILITIES: Payables: Investment securities purchased........................................ 45,222,863 Capital shares purchased............................................... 17,969,840 Distributions to shareholders.......................................... 1,031,096 Investment advisory fees............................................... 943,137 -------------- Total Liabilities................................................... 65,166,936 -------------- NET ASSETS................................................................ $4,410,979,120 ============== NET ASSETS CONSIST OF: Paid-in capital........................................................... $4,422,486,410 Par value................................................................. 736,497 Accumulated distributable earnings (loss)................................. (12,243,787) -------------- NET ASSETS................................................................ $4,410,979,120 ============== NET ASSET VALUE, per share................................................ $ 59.89 ============== Number of shares outstanding (unlimited number of shares authorized, par value $0.01 per share)............................................. 73,649,724 ============== Investments, at cost...................................................... $4,443,187,004 ============== Page 26 See Notes to Financial Statements FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) STATEMENT OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 2021 INVESTMENT INCOME: Interest.................................................................. $ 33,871,076 -------------- Total investment income................................................ 33,871,076 -------------- EXPENSES: Investment advisory fees.................................................. 21,279,569 -------------- Total expenses......................................................... 21,279,569 Less fees waived by the investment advisor............................. (9,457,586) -------------- Net expenses........................................................... 11,821,983 -------------- NET INVESTMENT INCOME (LOSS).............................................. 22,049,093 -------------- NET REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) on investments................................... 3,911,818 Net change in unrealized appreciation (depreciation) on investments....... (15,146,530) -------------- NET REALIZED AND UNREALIZED GAIN (LOSS)................................... (11,234,712) -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................................................ $ 10,814,381 ============== See Notes to Financial Statements Page 27 FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) STATEMENTS OF CHANGES IN NET ASSETS YEAR YEAR ENDED ENDED 10/31/2021 10/31/2020 --------------- --------------- OPERATIONS: Net investment income (loss).............................................. $ 22,049,093 $ 70,548,391 Net realized gain (loss).................................................. 3,911,818 (13,118,451) Net change in unrealized appreciation (depreciation)...................... (15,146,530) 5,207,190 --------------- --------------- Net increase (decrease) in net assets resulting from operations........... 10,814,381 62,637,130 --------------- --------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Investment operations..................................................... (21,658,425) (71,207,363) --------------- --------------- SHAREHOLDER TRANSACTIONS: Proceeds from shares sold................................................. 242,910,481 1,187,006,127 Cost of shares redeemed................................................... (989,870,234) (1,075,402,505) --------------- --------------- Net increase (decrease) in net assets resulting from shareholder transactions........................................................... (746,959,753) 111,603,622 --------------- --------------- Total increase (decrease) in net assets................................... (757,803,797) 103,033,389 NET ASSETS: Beginning of period....................................................... 5,168,782,917 5,065,749,528 --------------- --------------- End of period............................................................. $ 4,410,979,120 $ 5,168,782,917 =============== =============== CHANGES IN SHARES OUTSTANDING: Shares outstanding, beginning of period................................... 86,099,724 84,299,724 Shares sold............................................................... 4,050,000 19,850,000 Shares redeemed........................................................... (16,500,000) (18,050,000) --------------- --------------- Shares outstanding, end of period......................................... 73,649,724 86,099,724 =============== =============== Page 28 See Notes to Financial Statements FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD YEAR ENDED OCTOBER 31, ----------------------------------------------------------------------- 2021 2020 2019 2018 2017 ------------ ------------ ------------ ------------ ------------ Net asset value, beginning of period.................... $ 60.03 $ 60.09 $ 59.97 $ 60.02 $ 59.93 ---------- ---------- ---------- ---------- ---------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)............................ 0.28 0.85 1.48 1.15 0.76 Net realized and unrealized gain (loss)................. (0.15) (0.05) 0.11 (0.01) 0.12 ---------- ---------- ---------- ---------- ---------- Total from investment operations........................ 0.13 0.80 1.59 1.14 0.88 ---------- ---------- ---------- ---------- ---------- DISTRIBUTIONS PAID TO SHAREHOLDERS FROM: Net investment income................................... (0.27) (0.86) (1.47) (1.19) (0.79) Return of capital....................................... -- -- -- (0.00)(a) -- ---------- ---------- ---------- ---------- ---------- Total distributions..................................... (0.27) (0.86) (1.47) (1.19) (0.79) ---------- ---------- ---------- ---------- ---------- Net asset value, end of period.......................... $ 59.89 $ 60.03 $ 60.09 $ 59.97 $ 60.02 ========== ========== ========== ========== ========== TOTAL RETURN (b)........................................ 0.22% 1.34% 2.68% 1.92% 1.48% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in 000's).................... $4,410,979 $5,168,783 $5,065,750 $3,070,454 $1,158,324 RATIOS TO AVERAGE NET ASSETS: Ratio of total expenses to average net assets........... 0.45% 0.45% 0.45% 0.45% 0.45% Ratio of net expenses to average net assets............. 0.25% 0.38% 0.39% 0.33% 0.25% Ratio of net investment income (loss) to average net assets........................................... 0.47% 1.41% 2.47% 2.04% 1.33% Portfolio turnover rate (c)............................. 82% 73% 73% 45% 56% (a) Amount represents less than $0.01 per share. (b) 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. The total returns would have been lower if certain fees had not been waived by the investment advisor. (c) 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. See Notes to Financial Statements Page 29 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) 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 First Trust Enhanced Short Maturity ETF (the "Fund"), a diversified series of the Trust, which trades under the ticker "FTSM" on The Nasdaq Stock Market LLC ("Nasdaq"). The Fund represents a separate series of shares of beneficial interest in the Trust. Unlike conventional mutual funds, the Fund issues and redeems shares on a continuous basis, at net asset value ("NAV"), only in large blocks of shares known as "Creation Units." The Fund is an actively managed exchange-traded fund ("ETF"). The Fund's investment objective is to seek current income, consistent with preservation of capital and daily liquidity. Under normal market conditions, the Fund intends to achieve its investment objective by investing at least 80% of its net assets in a portfolio of U.S. dollar-denominated fixed- and variable-rate debt securities, including securities issued or guaranteed by the U.S. government or its agencies, instrumentalities or U.S. government-sponsored entities, residential and commercial mortgage-backed securities, asset-backed securities, U.S. corporate bonds, fixed income securities issued by non-U.S. corporations and governments, municipal obligations, privately issued securities and other debt securities bearing fixed or floating interest rates. The Fund may also invest in money market securities. The Fund may invest in investment companies, such as ETFs, that invest primarily in debt securities. The Fund intends to limit its investments in privately-issued, non-agency sponsored mortgage- and asset-backed securities to 20% of its net assets. The Fund may also invest up to 20% of its net assets in floating rate loans representing amounts borrowed by companies or other entities from banks and other lenders. A significant portion of these loans may be rated below investment grade or unrated. Floating rate loans held by the Fund may be senior or subordinate obligations of the borrower and may or may not be secured by collateral. Under normal market conditions, the Fund's average duration is expected to be less than one year and the average maturity of the Fund's portfolio is expected to be less than three years. There can be no assurance that the Fund will achieve its investment objective. The Fund may not be appropriate for all investors. 2. SIGNIFICANT ACCOUNTING POLICIES The Fund is considered an investment company and follows 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 Fund 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 The 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. Domestic debt securities and foreign securities are priced using data reflecting the earlier closing of the principal markets for those securities. The Fund's NAV is calculated 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 shares outstanding. The Fund's investments are valued daily at market value or, in the absence of market value with respect to any portfolio securities, at fair value. Market value prices represent last sale or official closing prices from a national or foreign exchange (i.e., a regulated market) and are primarily obtained from third-party pricing services. Fair value prices represent any prices not considered market value prices and are either obtained from a third-party pricing service or are determined by the Pricing Committee of the Fund's investment advisor, First Trust Advisors L.P. ("First Trust" or the "Advisor"), 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. The Fund's investments are valued as follows: Corporate bonds, corporate notes, U.S. government securities, mortgage-backed securities, asset-backed securities, certificates of deposit and other debt securities are fair valued on the basis of valuations provided by dealers who make markets in such securities or by a third-party pricing service approved by the Trust's Board of Trustees, which may use the following valuation inputs when available: 1) benchmark yields; 2) reported trades; 3) broker/dealer quotes; Page 30 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) OCTOBER 31, 2021 4) issuer spreads; 5) benchmark securities; 6) bids and offers; and 7) reference data including market research publications. 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. Commercial paper is fair valued at cost adjusted for amortization of premiums and accretion of discounts (amortized cost), provided the Advisor's Pricing Committee has determined that the use of amortized cost is an appropriate reflection of fair value given market and issuer-specific conditions existing at the time of the determination. Factors that may be considered in determining the appropriateness of the use of amortized cost include, but are not limited to, the following: 1) the credit conditions in the relevant market and changes thereto; 2) the liquidity conditions in the relevant market and changes thereto; 3) the interest rate conditions in the relevant market and changes thereto (such as significant changes in interest rates); 4) issuer-specific conditions (such as significant credit deterioration); and 5) any other market-based data the Advisor's Pricing Committee considers relevant. In this regard, the Advisor's Pricing Committee may use last-obtained market-based data to assist it when valuing portfolio securities using amortized cost. Senior Floating-Rate Loan Interests ("Senior Loans")(1) are not listed on any securities exchange or board of trade. Senior Loans are typically bought and sold by institutional investors in individually negotiated private transactions that function in many respects like an over-the-counter secondary market, although typically no formal market-makers exist. This market, while having grown substantially since its inception, generally has fewer trades and less liquidity than the secondary market for other types of securities. Some Senior Loans have few or no trades, or trade infrequently, and information regarding a specific Senior Loan may not be widely available or may be incomplete. Accordingly, determinations of the market value of Senior Loans may be based on infrequent and dated information. Because there is less reliable, objective data available, elements of judgment may play a greater role in valuation of Senior Loans than for other types of securities. Typically, Senior Loans are fair valued using information provided by a third-party pricing service. The third-party pricing service primarily uses over-the-counter pricing from dealer runs and broker quotes from indicative sheets to value the Senior Loans. 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 (the "1933 Act")) 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 the 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 fundamental business data relating to the borrower/issuer; 2) an evaluation of the forces which influence the market in which these securities are purchased and sold; 3) the type, size and cost of a security; 4) the financial statements of the borrower/issuer; 5) the credit quality and cash flow of the borrower/issuer, based on the Advisor's or external analysis; 6) the information as to any transactions in or offers for the security; 7) the price and extent of public trading in similar securities of the borrower/issuer, or comparable companies; 8) the coupon payments; 9) the quality, value and salability of collateral, if any, securing the security; 10) the business prospects of the borrower/issuer, including any ability to obtain money or resources from a parent or affiliate and an assessment of the borrower's/issuer's management (for corporate debt only); ----------------------------- (1) The terms "security" and "securities" used throughout the Notes to Financial Statements include Senior Loans. Page 31 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) OCTOBER 31, 2021 11) the prospects for the borrower's/issuer's industry, and multiples (of earnings and/or cash flows) being paid for similar businesses in that industry (for corporate debt only); 12) the borrower's/issuer's competitive position within the industry; 13) the borrower's/issuer's ability to access additional liquidity through public and/or private markets; and 14) other relevant factors. The Fund is 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 the Fund's investments as of October 31, 2021, is included with the Fund's Portfolio of Investments. B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME Securities transactions are recorded as of the trade date. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income is recorded daily on the accrual basis. Amortization of premiums and accretion of discounts are recorded using the effective interest method. The United Kingdom's Financial Conduct Authority, which regulates the London Interbank Offered Rates ("LIBOR"), announced on March 5, 2021 that all non-USD LIBOR reference rates and the 1-week and 2-month USD LIBOR reference rates will cease to be provided or no longer be representative immediately after December 31, 2021 and the remaining USD LIBOR settings will cease to be provided or no longer be representative immediately after June 30, 2023. The International Swaps and Derivatives Association, Inc. ("ISDA") confirmed that the March 5, 2021 announcement constituted an index cessation event under the Interbank Offered Rates ("IBOR") Fallbacks Supplement and the ISDA 2020 IBOR Fallbacks Protocol for all 35 LIBOR settings and confirmed that the spread adjustment to be used in ISDA fallbacks was fixed as of the date of the announcement. In the United States, the Alternative Reference Rates Committee (the "ARRC"), a group of market participants convened by the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York in cooperation with other federal and state government agencies, has since 2014 undertaken efforts to identify U.S. dollar reference interest rates as alternatives to LIBOR and to facilitate the mitigation of LIBOR-related risks. In June 2017, the ARRC identified the Secured Overnight Financing Rate ("SOFR"), a broad measure of the cost of cash overnight borrowing collateralized by U.S. Treasury securities, as the preferred alternative for U.S. dollar LIBOR. The Federal Reserve Bank of New York began daily publishing of SOFR in April 2018. At this time, it is not possible to predict the full impact of the elimination of LIBOR and the establishment of an alternative reference rate on the Fund or its investments. C. RESTRICTED SECURITIES The Fund invests in restricted securities, which are securities that may not be offered for public sale without first being registered under the 1933 Act. Prior to registration, restricted securities may only be resold in transactions exempt from registration under Rule 144A under the 1933 Act, normally to qualified institutional buyers. As of October 31, 2021, the Fund held restricted securities as shown in the following table that the Advisor has deemed illiquid pursuant to procedures adopted by the Trust's Board of Trustees. Although market instability can result in periods of increased overall market illiquidity, liquidity for each security is determined based on security-specific factors and assumptions, which require subjective judgment. The Fund does not have the right Page 32 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) OCTOBER 31, 2021 to demand that such securities be registered. These securities are valued according to the valuation procedures as stated in the Portfolio Valuation note (Note 2A) and are not expressed as a discount to the carrying value of a comparable unrestricted security. There are no unrestricted securities with the same maturity dates and yields for these issuers. ACQUISITION PRINCIPAL CURRENT CARRYING % OF NET SECURITY DATE VALUE PRICE COST VALUE ASSETS --------------------------------------------------------------------------------------------------------------------------- Secured Forward-Backed Note 2021-05, Series 1, 3 Mo. LIBOR + 0.30%, 0.43%, 12/28/21 06/18/2021 $ 15,000,000 $ 100.06 $ 15,000,000 $ 15,008,700 0.34% D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income, if any, are declared and paid monthly by the Fund, or as the Board of Trustees may determine from time to time. Distributions of net realized gains earned by the Fund, if any, are distributed at least annually. Distributions in cash may be reinvested automatically in additional whole shares only if the broker through whom the shares were purchased makes such option available. Such shares will generally be reinvested by the broker based upon the market price of those shares and investors may be subject to customary brokerage commissions charged by the broker. 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 treatment of income and gain/loss on portfolio securities held by the Fund 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 during the fiscal years ended October 31, 2021 and 2020 was as follows: Distributions paid from: 2021 2020 Ordinary income................................. $ 23,640,819 $ 77,424,693 Capital gains................................... -- -- Return of capital............................... -- -- As of October 31, 2021, the components of distributable earnings on a tax basis for the Fund were as follows: Undistributed ordinary income................... $ 388,091 Accumulated capital and other gain (loss)....... (12,700,189) Net unrealized appreciation (depreciation)...... 68,311 E. INCOME TAXES The 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, the Fund may be subject to an excise tax of 4% of the amount by which approximately 98% of the Fund's taxable income exceeds the distributions from such taxable income for the calendar year. The Fund is 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. The taxable years ended 2018, 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 Fund and has determined that no provision for income tax is required in the Fund's financial statements for uncertain tax positions. The 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. The 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, the Fund had non-expiring capital loss carryforwards available for federal income tax purposes of $12,700,189. During the taxable year ended October 31, 2021, the Fund utilized non-expiring capital loss carryforwards in the amount of $3,785,668. Page 33 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) 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 Fund had no net late year ordinary or capital losses. 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 Statement 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. For the fiscal year ended October 31, 2021, there were no tax adjustments made to accumulated distributable earnings (loss) accounts due to differences between book and tax treatments. 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 Fund, 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 selection and ongoing monitoring of the securities in the Fund's portfolio, managing the Fund's business affairs and providing certain administrative services necessary for the management of the Fund. Pursuant to the Investment Management Agreement between the Trust and Advisor, First Trust manages the investment of the Fund's assets and is responsible for the 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 with the exception of those attributable to affiliated funds, 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. The Fund has agreed to pay First Trust an annual unitary management fee equal to 0.45% of its average daily net assets. Pursuant to two separate contractual agreements, First Trust has agreed to waive management fees of 0.20% of average daily net assets until March 1, 2023. The waiver agreement may be terminated by action of the Trust's Board of Trustees at any time upon 60 days' written notice by the Trust on behalf of the Fund or by the Fund's investment advisor only after March 1, 2023. Pursuant to a contractual agreement between the Trust, on behalf of the Fund, and First Trust, the management fees paid to First Trust will be reduced by the portion of the management fees earned by First Trust from the Fund for assets invested in other investment companies advised by First Trust. This contractual agreement shall continue until the earlier of (i) its termination at the direction of the Trust's Board of Trustees or (ii) upon termination of the Fund's management agreement with First Trust; however, it is expected to remain in place at least until March 1, 2023. First Trust does not have the right to recover the fees waived that are attributable to the assets invested in other investment companies advised by First Trust. During the fiscal year ended October 31, 2021, the Advisor waived fees of $9,457,586. 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 the Fund. As custodian, BNYM is responsible for custody of the Fund's assets. As fund accountant and administrator, BNYM is responsible for maintaining the books and records of the Fund's securities and cash. As transfer agent, BNYM is responsible for maintaining shareholder records for the Fund. BNYM is a subsidiary of The Bank of New York Mellon Corporation, a financial holding company. 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 will rotate every three years. The officers and "Interested" Trustee receive no compensation from the Trust for acting in such capacities. Page 34 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) OCTOBER 31, 2021 4. PURCHASES AND SALES OF SECURITIES The costs of purchases of U.S. Government securities and non-U.S. Government securities, excluding short-term investments, for the fiscal year ended October 31, 2021, were $50,021,652 and $2,359,896,905, respectively. The proceeds from sales and paydowns of U.S. Government securities and non-U.S. Government securities, excluding short-term investments, for the fiscal year ended October 31, 2021, were $238,465,294 and $2,830,329,293, respectively. For the fiscal year ended October 31, 2021, the Fund had no in-kind transactions. 5. CREATIONS, REDEMPTIONS AND TRANSACTION FEES The 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 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, the 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 the 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 the 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 the 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 the Fund's shares and underlying securities provides arbitrage opportunities that are designed to help keep the market price of the Fund's shares at or close to the NAV per share of the Fund. The 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 the 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. The 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 the 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 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 the 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 Fund is authorized to pay an amount up to 0.25% of its average daily net assets each year to reimburse First Trust Portfolios L.P. ("FTP"), the distributor of the Fund, 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 Fund, 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 Fund, 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. Page 35 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) OCTOBER 31, 2021 8. SUBSEQUENT EVENTS Management has evaluated the impact of all subsequent events on the Fund 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, Inc. Page 36 -------------------------------------------------------------------------------- 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 statement of assets and liabilities of First Trust Enhanced Short Maturity ETF (the "Fund"), a series of the First Trust Exchange-Traded Fund IV, including the portfolio of investments, as of October 31, 2021, the related statement 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 each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of October 31, 2021, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended in conformity with accounting principles generally accepted in the United States of America. BASIS FOR OPINION These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's 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 Fund 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 Fund is not required to have, nor were we engaged to perform, an audit of its 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 Fund's 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; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion. /s/ Deloitte & Touche LLP Chicago, Illinois December 22, 2021 We have served as the auditor of one or more First Trust investment companies since 2001. Page 37 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) 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 the 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 the Fund's website at www.ftportfolios.com; and (3) on the Securities and Exchange Commission's ("SEC") website at www.sec.gov. PORTFOLIO HOLDINGS The 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. The 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 the Fund is available to investors within 60 days after the period to which it relates. The Fund's Forms N-PORT and Forms N-CSR are available on the SEC's website listed above. FEDERAL TAX INFORMATION Distributions paid to foreign shareholders during the Fund's fiscal year ended October 31, 2021 that were properly designated by the Fund as "interest-related dividends" or "short-term capital gain dividends," may not be subject to federal income tax provided that the income was earned directly by such foreign shareholders. Of the ordinary income (including short-term capital gain) distributions made by the Fund during the fiscal year ended October 31, 2021, none qualify for the corporate dividends received deduction available to corporate shareholders or as qualified dividend income. 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. 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 Page 38 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) OCTOBER 31, 2021 (UNAUDITED) 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. 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. Page 39 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) OCTOBER 31, 2021 (UNAUDITED) 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. 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 AGREEMENT BOARD CONSIDERATIONS REGARDING APPROVAL OF CONTINUATION OF INVESTMENT MANAGEMENT AGREEMENT 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 Agreement (the "Agreement") with First Trust Advisors L.P. (the "Advisor") on behalf of the First Trust Enhanced Short Maturity ETF (the "Fund"). The Board approved the continuation of the Agreement for a one-year Page 40 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) OCTOBER 31, 2021 (UNAUDITED) period ending June 30, 2022 at a meeting held on June 6-7, 2021. The Board determined that the continuation of the Agreement 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, 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 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 to the Fund (including the relevant personnel responsible for these services and their experience); the unitary fee rate payable by the 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 expense ratio of the Fund as compared to expense ratios of the funds in the Fund's Expense Group and Expense Universe; performance information for the Fund, including comparisons of the 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 the Fund and the potential for the Advisor to realize economies of scale, if any; profitability and other financial data for the Advisor; any fall-out benefits to the Advisor and its affiliate, First Trust Portfolios L.P. ("FTP"); and information on the Advisor's compliance program. 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. 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 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 arrangement between the Trust and the Advisor continues to be a reasonable business arrangement from the Fund's perspective. The Board determined that, given the totality of the information provided with respect to the Agreement, the Board had received sufficient information to renew the Agreement. The Board considered that shareholders chose to invest or remain invested in the Fund knowing that the Advisor manages the Fund and knowing the Fund's unitary fee. In reviewing the Agreement, the Board considered the nature, extent and quality of the services provided by the Advisor under the Agreement. The Board considered that the Advisor is responsible for the overall management and administration of the Trust and the Fund and reviewed all of the services provided by the Advisor to the Fund, as well as the background and experience of the persons responsible for such services. The Board noted that the Fund is an actively-managed ETF and considered the background and experience of the persons responsible for the day-to-day management of the Fund's investments. 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 and the Fund's compliance with the 1940 Act, as well as the 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 Fund. 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 Fund and the other funds in the First Trust Fund Complex. 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 the Fund by the Advisor under the Agreement have been and are expected to remain satisfactory and that the Advisor has managed the Fund consistent with its investment objective, policies and restrictions. The Board considered the unitary fee rate payable by the Fund under the Agreement for the services provided. The Board considered that as part of the unitary fee the Advisor is responsible for the Fund's expenses, including the cost of transfer agency, custody, fund administration, legal, audit and other services and license fees, if any, but excluding the fee payment under the 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 noted that the Advisor had previously agreed to waive a portion of its unitary fee in an aggregate amount equal to 0.200% of the Fund's average daily net assets until at least March 1, 2022 and also to reduce the unitary fee to the extent of acquired fund fees and expenses of shares of investment companies advised by the Advisor that are held by the Fund. The Board received and Page 41 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) OCTOBER 31, 2021 (UNAUDITED) reviewed information showing the advisory or unitary fee rates and expense ratios of the peer funds in the Expense Group, as well as advisory and unitary fee rates charged by the Advisor to other fund (including ETFs) and non-fund clients, as applicable. Because the 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 the Fund, after taking into account the contractual fee waivers, was below the median total (net) expense ratio of the peer funds in the Expense Group. With respect to the Expense Group, the Board, at the April 26, 2021 meeting, discussed with the Advisor limitations in creating peer groups for actively-managed ETFs and different business models that may affect the pricing of services among ETF sponsors. 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 Fund and other non-ETF clients that limited their comparability. In considering the unitary fee rate 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 the Fund and the other funds in the First Trust Fund Complex. The Board considered performance information for the Fund. The Board noted the process it has established for monitoring the Fund's performance and portfolio risk on an ongoing basis, which includes quarterly performance reporting from the Advisor for the Fund. The Board determined that this process continues to be effective for reviewing the Fund's performance. The Board received and reviewed information comparing the Fund's performance for periods ended December 31, 2020 to the performance of the funds in the Performance Universe and to that of a benchmark index. Based on the information provided, the Board noted that the Fund underperformed the Performance Universe median for the one-, three- and five-year periods ended December 31, 2020. The Board also noted that the Fund outperformed the benchmark index for the one-, three- and five-year periods ended December 31, 2020. On the basis of all the information provided on the unitary fee and performance of the Fund and the ongoing oversight by the Board, the Board concluded that the unitary fee for the Fund continues to be reasonable and appropriate in light of the nature, extent and quality of the services provided by the Advisor to the Fund under the Agreement. The Board considered information and discussed with the Advisor whether there were any economies of scale in connection with providing advisory services to the Fund 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 Fund. The Board noted that any reduction in fixed costs associated with the management of the Fund would benefit the Advisor, but that the unitary fee structure provides a level of certainty in expenses for the Fund. The Board considered the revenues and allocated costs (including the allocation methodology) of the Advisor in serving as investment advisor to the Fund for the twelve months ended December 31, 2020 and the estimated profitability level for the 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 the 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 Fund. The Board considered that the Advisor had identified as a fall-out benefit to the Advisor and FTP their exposure to investors and brokers who, absent their exposure to the Fund, may have had no dealings with the Advisor or FTP, and noted that the Advisor does not utilize soft dollars in connection with the Fund. The Board concluded that the character and amount of potential fall-out benefits to the 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 Agreement continue to be fair and reasonable and that the continuation of the Agreement is in the best interests of the Fund. No single factor was determinative in the Board's analysis. 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 funds it manages, including First Trust Enhanced Short Maturity ETF (the "Fund"), 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. Page 42 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) OCTOBER 31, 2021 (UNAUDITED) During the year ended December 31, 2020, the amount of remuneration paid (or to be paid) by First Trust in respect of the Fund is $7,171,537. This figure is comprised of $605,310 paid (or to be paid) in fixed compensation and $6,566,227 paid (or to be paid) in variable compensation. There were a total of 28 beneficiaries of the remuneration described above. Those amounts include $1,357,367 paid (or to be paid) to senior management of First Trust and $5,814,170 paid (or to be paid) to other employees whose professional activities have a material impact on the risk profiles of First Trust or the Fund (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 Fund. 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. 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 43 -------------------------------------------------------------------------------- BOARD OF TRUSTEES AND OFFICERS -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) 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 44 -------------------------------------------------------------------------------- BOARD OF TRUSTEES AND OFFICERS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) 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 45 -------------------------------------------------------------------------------- PRIVACY POLICY -------------------------------------------------------------------------------- FIRST TRUST ENHANCED SHORT MATURITY ETF (FTSM) 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 46 This page intentionally left blank. This page intentionally left blank. FIRST TRUST First Trust Exchange-Traded Fund IV INVESTMENT ADVISOR First Trust Advisors L.P. 120 East Liberty Drive, Suite 400 Wheaton, IL 60187 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]