FIRST TRUST
First Trust Exchange-Traded Fund VIII
INVESTMENT ADVISOR
First Trust Advisors L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
INVESTMENT SUB-ADVISOR
Cboe Vest(SM) Financial LLC
1765 Greensboro Station Pl, 9th Floor
McLean, VA 22102
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
320 South Canal Street
Chicago, IL 60606
[BLANK BACK COVER]
FIRST TRUST
First Trust Exchange-Traded Fund VIII
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FT Cboe Vest Fund of Buffer ETFs (BUFR)
FT Cboe Vest Fund of Deep Buffer ETFs (BUFD)
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Semi-Annual Report
For the Six Months Ended
February 28, 2022
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TABLE OF CONTENTS
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FIRST TRUST EXCHANGE-TRADED FUND VIII
SEMI-ANNUAL REPORT
FEBRUARY 28, 2022
Shareholder Letter........................................................... 1
Fund Performance Overview:
FT Cboe Vest Fund of Buffer ETFs (BUFR).................................. 2
FT Cboe Vest Fund of Deep Buffer ETFs (BUFD)............................. 3
Notes to Fund Performance Overview........................................... 4
Portfolio Management......................................................... 5
Understanding Your Fund Expenses............................................. 6
Portfolio of Investments:
FT Cboe Vest Fund of Buffer ETFs (BUFR).................................. 7
FT Cboe Vest Fund of Deep Buffer ETFs (BUFD)............................. 8
Statements of Assets and Liabilities......................................... 9
Statements of Operations..................................................... 10
Statements of Changes in Net Assets.......................................... 11
Financial Highlights......................................................... 12
Notes to Financial Statements................................................ 13
Additional Information....................................................... 20
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This report contains certain forward-looking statements within the meaning of
the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934,
as amended. Forward-looking statements include statements regarding the goals,
beliefs, plans or current expectations of First Trust Advisors L.P. ("First
Trust" or the "Advisor") and/or Cboe Vest(SM) Financial LLC ("Cboe Vest" or the
"Sub-Advisor") and their respective representatives, taking into account the
information currently available to them. Forward-looking statements include all
statements that do not relate solely to current or historical fact. For example,
forward-looking statements include the use of words such as "anticipate,"
"estimate," "intend," "expect," "believe," "plan," "may," "should," "would" or
other words that convey uncertainty of future events or outcomes.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
the series of First Trust Exchange-Traded Fund VIII (the "Trust") described in
this report (each such series is referred to as a "Fund" and collectively, as
the "Funds") to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. When
evaluating the information included in this report, you are cautioned not to
place undue reliance on these forward-looking statements, which reflect the
judgment of the Advisor and/or Sub-Advisor and their respective representatives
only as of the date hereof. We undertake no obligation to publicly revise or
update these forward-looking statements to reflect events and circumstances that
arise after the date hereof.
PERFORMANCE AND RISK DISCLOSURE
There is no assurance that any Fund described in this report will achieve its
investment objective. Each Fund is subject to market risk, which is the
possibility that the market values of securities owned by the Fund will decline
and that the value of the Fund's shares may therefore be less than what you paid
for them. Accordingly, you can lose money investing in a Fund. See "Risk
Considerations" in the Additional Information section of this report for a
discussion of certain other risks of investing in the Funds.
Performance data quoted represents past performance, which is no guarantee of
future results, and current performance may be lower or higher than the figures
shown. For the most recent month-end performance figures, please visit
www.ftportfolios.com or speak with your financial advisor. Investment returns,
net asset value and share price will fluctuate and Fund shares, when sold, may
be worth more or less than their original cost.
The Advisor may also periodically provide additional information on Fund
performance on each Fund's webpage at www.ftportfolios.com.
HOW TO READ THIS REPORT
This report contains information that may help you evaluate your investment. It
includes details about each Fund and presents data and analysis that provide
insight into each Fund's performance and investment approach.
The statistical information that follows may help you understand each 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 and/or Sub-Advisor are just that: informed opinions. They should not be
considered to be promises or advice. The opinions, like the statistics, cover
the period through the date on the cover of this report. The material risks of
investing in each Fund are spelled out in the prospectus, statement of
additional information, and other Fund regulatory filings.
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SHAREHOLDER LETTER
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FIRST TRUST EXCHANGE-TRADED FUND VIII
SEMI-ANNUAL LETTER FROM THE CHAIRMAN AND CEO
FEBRUARY 28, 2022
Dear Shareholders:
First Trust is pleased to provide you with the semi-annual report for certain
series of the First Trust Exchange-Traded Fund VIII (the "Funds"), which
contains detailed information about the Funds for the six-month period ended
February 28, 2022.
Interest rates, bond yields and inflation are trending higher in the U.S., and
perhaps what matters most is that all three are moving in tandem, which has not
happened for quite some time. To start, let us focus on bond yields, which, like
interest rates and inflation, have traded at or near their historic lows for
many years. Over the past decade, we have seen the yield on the 10-Year Treasury
Note ("T-Note") climb from its artificial lows to the 3.00% level on two
occasions only to have it reverse course soon thereafter. In 2013, the yield on
the benchmark government bond rose from 1.75% at the start of the year to 3.03%
at the close of trading on December 31, 2013. One year later it stood at 2.17%.
In 2018, the yield rose from 2.41% at the start of the year to a 2018 high of
3.24% on November 8, 2018. At the end of 2019, it yielded 1.92%. In 2022, it has
reached as high as 2.78% on April 11, representing a significant move from 1.51%
at the start of the year. The point is that we have endured substantial upward
moves in the yield on the 10-Year T-Note, but they were not sustained.
Short-term interest rates, as controlled by the Federal Reserve (the "Fed") via
its Federal Funds target rate, only accompanied bond yields higher in one of
those two instances. In 2013, bond yields rose but the Fed did not raise
short-term interest rates at all. In 2017 and 2018, the Fed executed multiple
interest rate hikes, but reversed course in 2019, undoing the entirety of its
2017-2018 tightening phase. On March 16, 2022, the Fed initiated a 25-basis
point ("bps") hike in the Federal Funds target rate. The median member of the
Federal Open Market Committee is signaling another six hikes, totaling 150 bps,
through year-end, according to Brian Wesbury, Chief Economist at First Trust.
That would equate to 175 bps in aggregate in 2022. The Fed also signaled it
could raise interest rates an additional 75-100 bps in 2023. So, for all intents
and purposes, unless something dramatic happens, such as an escalation of the
war between Russia and Ukraine, we believe interest rates are heading much
higher. With respect to inflation, as measured by the Consumer Price Index
("CPI"), it was essentially a non-event when bond yields rose in 2013 and 2018.
The year-over-year changes in the CPI in 2013 and 2018 were 1.5% and 1.9%,
respectively, according to data from the U.S. Bureau of Labor Statistics. The
CPI has averaged 3.0% per year since 1926. In February 2022, the CPI stood at
7.9%. The last time it was this high was 1982.
The current climate for interest rates, bond yields and inflation, indicates
that this time around could be different than what we experienced in 2013 and
2018. By that I mean that higher levels of all three might be sustainable.
Having said that, I do not believe that investors need to shift into panic mode.
The Fed's guidance is reassuring to us in that, as of now, it intends to raise
short-term interest rates slowly and methodically. While we believe the bond
market may be in for a bumpy ride over the next year or so, higher rates and
yields are not necessarily death knells for the stock market. In general, I
believe that investors should be able to make better decisions about where to
position their money moving forward thanks to the in-depth guidance from the
Fed. It could not be more transparent, in my opinion.
Thank you for giving First Trust the opportunity to play a role in your
financial future. We value our relationship with you and will report on the
Funds again in six months.
Sincerely,
/s/ James A. Bowen
James A. Bowen
Chairman of the Board of Trustees
Chief Executive Officer of First Trust Advisors L.P.
Page 1
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FUND PERFORMANCE OVERVIEW (UNAUDITED)
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FT CBOE VEST FUND OF BUFFER ETFS (BUFR)
The investment objective of the FT Cboe Vest Fund of Buffer ETFs (the "Fund") is
to seek to provide investors with capital appreciation. The Fund seeks to
achieve its investment objective by providing investors with US large-cap equity
market exposure while limiting downside risk through a laddered portfolio of
twelve FT Cboe Vest U.S. Equity Buffer ETFs ("Underlying ETFs"). Under normal
market conditions the Fund will invest substantially all of its assets in the
Underlying ETFs, which seek to provide investors with returns (before fees,
expenses and taxes) that match the price return of the SPDR(R) S&P 500(R) ETF
Trust ("SPY"), up to a predetermined upside cap, while providing a buffer
against the first 10% (before fees, expenses and taxes) of SPY losses, over a
defined one-year period. The Fund itself does not provide any buffer against
losses. The Fund simply seeks to provide diversified exposure to the Underlying
ETFs in a single investment. The Fund is classified as non-diversified under the
Investment Company Act of 1940, as amended. The shares of the Fund are listed
and traded on the Cboe BZX Exchange, Inc., under the ticker symbol "BUFR."
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PERFORMANCE
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AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
6 Months Ended 1 Year Ended (8/10/20) (8/10/20)
2/28/22 2/28/22 to 2/28/22 to 2/28/22
FUND PERFORMANCE
NAV -0.60% 7.22% 9.73% 15.51%
Market Price -0.90% 7.18% 9.67% 15.41%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return -3.29% 14.77% 18.49% 30.16%
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(See Notes to Fund Performance Overview on page 4.)
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
AUGUST 10, 2020 - FEBRUARY 28, 2022
FT Cboe Vest Fund of S&P 500(R) Index -
Buffer ETFs Price Return
8/10/20 $10,000 $10,000
8/31/20 10,180 10,416
2/28/21 10,773 11,341
8/31/21 11,621 13,458
2/28/22 11,551 13,016
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 2
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FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
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FT CBOE VEST FUND OF DEEP BUFFER ETFS (BUFD)
The investment objective of the FT Cboe Vest Fund of Deep Buffer ETFs (the
"Fund") is to seek to provide investors with capital appreciation. The Fund
seeks to achieve its investment objective by providing investors with US
large-cap equity market exposure while limiting downside risk through a laddered
portfolio of twelve FT Cboe Vest U.S. Equity Deep Buffer ETFs ("Underlying
ETFs"). Under normal market conditions the Fund will invest substantially all of
its assets in the Underlying ETFs, which seek to provide investors with returns
(before fees, expenses and taxes) that match the price return of the SPDR(R) S&P
500(R) ETF Trust ("SPY"), up to a predetermined upside cap, while providing a
buffer against losses between -5% and -30% (before fees, expenses and taxes) of
SPY, over a defined one-year period. The Fund itself does not provide any buffer
against losses. The Fund simply seeks to provide diversified exposure to the
Underlying ETFs in a single investment. The Fund is classified as
non-diversified under the Investment Company Act of 1940, as amended. The shares
of the Fund are listed and traded on the Cboe BZX Exchange, Inc., under the
ticker symbol "BUFD."
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PERFORMANCE
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AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
6 Months Ended 1 Year Ended (1/20/21) (1/20/21)
2/28/22 2/28/22 to 2/28/22 to 2/28/22
FUND PERFORMANCE
NAV -0.38% 4.04% 3.46% 3.84%
Market Price -0.57% 3.99% 3.50% 3.89%
INDEX PERFORMANCE
S&P 500(R) Index - Price Return -3.29% 14.77% 12.17% 13.55%
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(See Notes to Fund Performance Overview on page 4.)
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
JANUARY 20, 2021 - FEBRUARY 28, 2022
FT Cboe Vest Fund of S&P 500(R) Index -
Deep Buffer ETFs Price Return
1/20/21 $10,000 $10,000
2/28/21 9,980 9,894
8/31/21 10,424 11,742
2/28/22 10,384 11,355
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 3
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NOTES TO FUND PERFORMANCE OVERVIEW (UNAUDITED)
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Total returns for the periods since inception are calculated from the inception
date of each Fund. "Average Annual Total Returns" represent the average annual
change in value of an investment over the periods indicated. "Cumulative Total
Returns" represent the total change in value of an investment over the periods
indicated.
Each Fund's per share net asset value ("NAV") is the value of one share of the
Fund and is computed by dividing the value of all assets of the Fund (including
accrued interest and dividends), less all liabilities (including accrued
expenses and dividends declared but unpaid), by the total number of outstanding
shares. The price used to calculate market return ("Market Price") is determined
by using the midpoint of the national best bid and offer price ("NBBO") as of
the time that the Fund's NAV is calculated. Under SEC rules, the NBBO consists
of the highest displayed buy and lowest sell prices among the various exchanges
trading the Fund at the time the Fund's NAV is calculated. Since shares of each
Fund did not trade in the secondary market until after the Fund's inception, for
the period from inception to the first day of secondary market trading in shares
of the Fund, the NAV of each Fund is used as a proxy for the secondary market
trading price to calculate market returns. NAV and market returns assume that
all distributions have been reinvested in each Fund at NAV and Market Price,
respectively.
An index is a statistical composite that tracks a specified financial market or
sector. Unlike each Fund, the indices do not actually hold a portfolio of
securities and therefore do not incur the expenses incurred by each Fund. These
expenses negatively impact the performance of each Fund. Also, market returns do
not include brokerage commissions that may be payable on secondary market
transactions. If brokerage commissions were included, market returns would be
lower. The total returns presented reflect the reinvestment of dividends on
securities in the indices. The returns presented do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption or
sale of Fund shares. The investment return and principal value of shares of each
Fund will vary with changes in market conditions. Shares of each Fund may be
worth more or less than their original cost when they are redeemed or sold in
the market. Each Fund's past performance is no guarantee of future performance.
Page 4
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PORTFOLIO MANAGEMENT
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FIRST TRUST EXCHANGE-TRADED FUND VIII
SEMI-ANNUAL REPORT
FEBRUARY 28, 2022 (UNAUDITED)
ADVISOR
First Trust Advisors L.P. ("First Trust" or the "Advisor") is the investment
advisor to FT Cboe Vest Fund of Buffer ETFs ("BUFR"), and FT Cboe Vest Fund of
Deep Buffer ETFs ("BUFD") (each a "Fund" and collectively, the "Funds"). First
Trust is responsible for the ongoing monitoring of each Fund's investment
portfolio, managing each Fund's business affairs and providing certain
administrative services necessary for the management of each Fund.
SUB-ADVISOR
Cboe VestSM Financial LLC ("Cboe Vest" or the "Sub-Advisor") serves as the
investment sub-advisor to the Funds. In this capacity, Cboe Vest is responsible
for the selection and ongoing monitoring of the securities in each Fund's
investment portfolio. Cboe Vest, with principal offices at 1765 Greensboro
Station Pl, 9th Floor, McLean, Virginia 22102, was founded in 2012. Cboe Vest
had approximately $6.0 billion under management or committed to management as of
February 28, 2022.
PORTFOLIO MANAGEMENT TEAM
KARAN SOOD, MANAGING DIRECTOR OF CBOE VEST
HOWARD RUBIN, MANAGING DIRECTOR OF CBOE VEST
Page 5
FIRST TRUST EXCHANGE-TRADED FUND VIII
UNDERSTANDING YOUR FUND EXPENSES
FEBRUARY 28, 2022 (UNAUDITED)
As a shareholder of FT Cboe Vest Fund of Buffer ETFs or FT Cboe Vest Fund of
Deep Buffer ETFs (each a "Fund" and collectively, the "Funds"), you incur two
types of costs: (1) transaction costs; and (2) ongoing costs, including
management fees, distribution and/or service (12b-1) fees, if any, and other
Fund expenses. This Example is intended to help you understand your ongoing
costs of investing in the Funds and to compare these costs with the ongoing
costs of investing in other funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held through the six-month period ended February 28, 2022.
ACTUAL EXPENSES
The first line in the following table provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During the Six-Month
Period" to estimate the expenses you paid on your account during this six-month
period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line in the following table provides information about hypothetical
account values and hypothetical expenses based on each Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
each Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Funds and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs such as brokerage
commissions. Therefore, the second line in the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
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ANNUALIZED
EXPENSE RATIO EXPENSES PAID
BEGINNING ENDING BASED ON THE DURING THE
ACCOUNT VALUE ACCOUNT VALUE SIX-MONTH SIX-MONTH
SEPTEMBER 1, 2021 FEBRUARY 28, 2022 PERIOD (a) PERIOD (a) (b)
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FT CBOE VEST FUND OF BUFFER ETFS (BUFR)
Actual $1,000.00 $ 994.00 0.20% $0.99
Hypothetical (5% return before expenses) $1,000.00 $1,023.80 0.20% $1.00
FT CBOE VEST FUND OF DEEP BUFFER ETFS (BUFD)
Actual $1,000.00 $ 996.20 0.20% $0.99
Hypothetical (5% return before expenses) $1,000.00 $1,023.80 0.20% $1.00
(a) Annualized expense ratio and expenses paid during the six-month period do
not include fees and expenses of the underlying funds in which the Fund
invests.
(b) Expenses are equal to the annualized expense ratio as indicated in the
table multiplied by the average account value over the period (September
1, 2021 through February 28, 2022), multiplied by 181/365 (to reflect the
six-month period).
Page 6
FT CBOE VEST FUND OF BUFFER ETFS (BUFR)
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 2022 (UNAUDITED)
SHARES DESCRIPTION VALUE
----------- ----------------------------------------- -------------
EXCHANGE-TRADED FUNDS -- 100%
CAPITAL MARKETS -- 100%
1,569,340 FT Cboe Vest U.S. Equity Buffer
ETF - January (a) (b) $ 53,554,512
1,420,111 FT Cboe Vest U.S. Equity Buffer
ETF - February (a) (b) 53,095,394
1,651,537 FT Cboe Vest U.S. Equity Buffer
ETF - March (a) (b) 53,767,273
1,702,333 FT Cboe Vest U.S. Equity Buffer
ETF - April (a) (b) 53,494,282
1,446,322 FT Cboe Vest U.S. Equity Buffer
ETF - May (a) (b) 53,629,620
1,457,239 FT Cboe Vest U.S. Equity Buffer
ETF - June (a) (b) 53,626,395
1,522,937 FT Cboe Vest U.S. Equity Buffer
ETF - July (a) (b) 53,519,814
1,449,036 FT Cboe Vest U.S. Equity Buffer
ETF - August (a) (b) 53,686,784
1,556,856 FT Cboe Vest U.S. Equity Buffer
ETF - September (a) (b) 53,633,689
1,567,549 FT Cboe Vest U.S. Equity Buffer
ETF - October (a) (b) 53,610,176
1,447,871 FT Cboe Vest U.S. Equity Buffer
ETF - November (a) (b) 53,585,706
1,610,975 FT Cboe Vest U.S. Equity Buffer
ETF - December (a) (b) 53,484,370
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TOTAL EXCHANGE-TRADED FUNDS
-- 100.0% 642,688,015
(Cost $642,811,136) -------------
SHARES DESCRIPTION VALUE
----------- ----------------------------------------- -------------
MONEY MARKET FUNDS -- 0.0%
194,670 Morgan Stanley Institutional Liquidity
Funds - Treasury Portfolio -
Institutional Class - 0.01% (c) $ 194,670
(Cost $194,670) -------------
TOTAL INVESTMENTS -- 100.0% 642,882,685
(Cost $643,005,806)
NET OTHER ASSETS AND
LIABILITIES -- (0.0)% (98,497)
-------------
NET ASSETS -- 100.0% $ 642,784,188
=============
(a) Investment in an affiliated Fund.
(b) Non-income producing security.
(c) Rate shown reflects yield as of February 28, 2022.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of February 28,
2022 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
2/28/2022 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Exchange-Traded Funds*................................ $ 642,688,015 $ 642,688,015 $ -- $ --
Money Market Funds.................................... 194,670 194,670 -- --
-------------- -------------- -------------- --------------
Total Investments..................................... $ 642,882,685 $ 642,882,685 $ -- $ --
============== ============== ============== ==============
* See Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 7
FT CBOE VEST FUND OF DEEP BUFFER ETFS (BUFD)
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 2022 (UNAUDITED)
SHARES DESCRIPTION VALUE
----------- ----------------------------------------- -------------
EXCHANGE-TRADED FUNDS -- 100.0%
CAPITAL MARKETS -- 100.0%
927,026 FT Cboe Vest U.S. Equity Deep
Buffer ETF - January (a) (b) $ 29,873,042
849,400 FT Cboe Vest U.S. Equity Deep
Buffer ETF - February (a) (b) 30,077,254
946,608 FT Cboe Vest U.S. Equity Deep
Buffer ETF - March (a) (b) 29,945,565
965,169 FT Cboe Vest U.S. Equity Deep
Buffer ETF - April (a) (b) 29,846,404
877,008 FT Cboe Vest U.S. Equity Deep
Buffer ETF - May (a) (b) 29,846,336
880,540 FT Cboe Vest U.S. Equity Deep
Buffer ETF - June (a) (b) 29,823,890
907,416 FT Cboe Vest U.S. Equity Deep
Buffer ETF - July (a) (b) 29,792,736
869,332 FT Cboe Vest U.S. Equity Deep
Buffer ETF - August (a) (b) 29,811,568
925,312 FT Cboe Vest U.S. Equity Deep
Buffer ETF - September (a) (b) 29,795,231
928,747 FT Cboe Vest U.S. Equity Deep
Buffer ETF - October (a) (b) 29,862,188
875,567 FT Cboe Vest U.S. Equity Deep
Buffer ETF - November (a) (b) 29,861,213
938,907 FT Cboe Vest U.S. Equity Deep
Buffer ETF - December (a) (b) 29,828,230
-------------
TOTAL EXCHANGE-TRADED FUNDS
-- 100.0% 358,363,657
(Cost $359,070,351) -------------
SHARES DESCRIPTION VALUE
----------- ----------------------------------------- -------------
MONEY MARKET FUNDS -- 0.0%
99,435 Morgan Stanley Institutional Liquidity
Funds - Treasury Portfolio -
Institutional Class - 0.01% (c) $ 99,435
(Cost $99,435) -------------
TOTAL INVESTMENTS -- 100.0% 358,463,092
(Cost $359,169,786)
NET OTHER ASSETS AND
LIABILITIES -- (0.0)% (52,644)
-------------
NET ASSETS -- 100.0% $ 358,410,448
=============
(a) Investment in an affiliated Fund.
(b) Non-income producing security.
(c) Rate shown reflects yield as of February 28, 2022.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of February 28,
2022 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
2/28/2022 PRICES INPUTS INPUTS
-------------- -------------- -------------- --------------
Exchange-Traded Funds*............................... $ 358,363,657 $ 358,363,657 $ -- $ --
Money Market Funds................................... 99,435 99,435 -- --
-------------- -------------- -------------- --------------
Total Investments.................................... $ 358,463,092 $ 358,463,092 $ -- $ --
============== ============== ============== ==============
* See Portfolio of Investments for industry breakout.
Page 8 See Notes to Financial Statements
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF ASSETS AND LIABILITIES
FEBRUARY 28, 2022 (UNAUDITED)
FT CBOE VEST FT CBOE VEST
FUND OF FUND OF
BUFFER ETFS DEEP BUFFER ETFS
(BUFR) (BUFD)
----------------- -----------------
ASSETS:
Investments, at value - Affiliated................................................... $ 642,688,015 $ 358,363,657
Investments, at value - Unaffiliated................................................. 194,670 99,435
----------------- -----------------
Total investments, at value....................................................... 642,882,685 358,463,092
Cash................................................................................. 634,804 --
Receivables:
Capital shares sold............................................................... 134 828
Dividends......................................................................... 1 --
----------------- -----------------
Total Assets...................................................................... 643,517,624 358,463,920
----------------- -----------------
LIABILITIES:
Payables:
Investment securities purchased................................................... 634,804 --
Investment advisory fees.......................................................... 98,632 53,472
----------------- -----------------
Total Liabilities................................................................. 733,436 53,472
----------------- -----------------
NET ASSETS........................................................................... $ 642,784,188 $ 358,410,448
================= =================
NET ASSETS CONSIST OF:
Paid-in capital...................................................................... $ 641,187,011 $ 358,614,545
Par value............................................................................ 277,500 172,000
Accumulated distributable earnings (loss)............................................ 1,319,677 (376,097)
----------------- -----------------
NET ASSETS........................................................................... $ 642,784,188 $ 358,410,448
================= =================
NET ASSET VALUE, per share........................................................... $ 23.16 $ 20.84
================= =================
Number of shares outstanding (unlimited number of shares
authorized, par value $0.01 per share)........................................... 27,750,002 17,200,002
================= =================
Investments, at cost - Affiliated.................................................... $ 642,811,136 $ 359,070,351
================= =================
Investments, at cost - Unaffiliated.................................................. $ 194,670 $ 99,435
================= =================
Total Investments, at cost........................................................... $ 643,005,806 $ 359,169,786
================= =================
See Notes to Financial Statements Page 9
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2022 (UNAUDITED)
FT CBOE VEST FT CBOE VEST
FUND OF FUND OF
BUFFER ETFS DEEP BUFFER ETFS
(BUFR) (BUFD)
----------------- -----------------
INVESTMENT INCOME:
Dividends............................................................................ $ 2 $ 2
----------------- -----------------
Total investment income........................................................... 2 2
----------------- -----------------
EXPENSES:
Investment advisory fees............................................................. 499,601 265,321
----------------- -----------------
Total expenses.................................................................... 499,601 265,321
----------------- -----------------
NET INVESTMENT INCOME (LOSS)......................................................... (499,599) (265,319)
----------------- -----------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments - Affiliated.......................................................... (41,465) (7,486)
In-kind redemptions - Affiliated.................................................. 2,214,300 610,605
----------------- -----------------
Net realized gain (loss)............................................................. 2,172,835 603,119
----------------- -----------------
Net change in unrealized appreciation (depreciation) on investments - Affiliated..... (8,166,294) (2,972,464)
----------------- -----------------
NET REALIZED AND UNREALIZED GAIN (LOSS).............................................. (5,993,459) (2,369,345)
----------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS................................................................... $ (6,493,058) $ (2,634,664)
================= =================
Page 10 See Notes to Financial Statements
FIRST TRUST EXCHANGE-TRADED FUND VIII
STATEMENTS OF CHANGES IN NET ASSETS
FT CBOE VEST FT CBOE VEST
FUND OF FUND OF
BUFFER ETFS DEEP BUFFER ETFS
(BUFR) (BUFD)
------------------------------------- --------------------------------------
SIX MONTHS ENDED YEAR SIX MONTHS ENDED PERIOD
2/28/2022 ENDED 2/28/2022 ENDED
(UNAUDITED) 8/31/2021 (UNAUDITED) 8/31/2021 (a)
---------------- ----------------- ----------------- -----------------
OPERATIONS:
Net investment income (loss)................... $ (499,599) $ (250,042) $ (265,319) $ (90,593)
Net realized gain (loss)....................... 2,172,835 8,720,929 603,119 817,234
Net change in unrealized appreciation
(depreciation).............................. (8,166,294) 7,988,398 (2,972,464) 2,265,770
---------------- ----------------- ----------------- -----------------
Net increase (decrease) in net assets resulting
from operations............................. (6,493,058) 16,459,285 (2,634,664) 2,992,411
---------------- ----------------- ----------------- -----------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold...................... 391,210,295 417,166,735 222,072,345 216,796,683
Cost of shares redeemed........................ (43,695,496) (137,987,462) (22,136,209) (58,680,118)
---------------- ----------------- ----------------- -----------------
Net increase (decrease) in net assets resulting
from shareholder transactions............... 347,514,799 279,179,273 199,936,136 158,116,565
---------------- ----------------- ----------------- -----------------
Total increase (decrease) in net assets........ 341,021,741 295,638,558 197,301,472 161,108,976
NET ASSETS:
Beginning of period............................ 301,762,447 6,123,889 161,108,976 --
---------------- ----------------- ----------------- -----------------
End of period.................................. $ 642,784,188 $ 301,762,447 $ 358,410,448 $ 161,108,976
================ ================= ================= =================
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period........ 12,950,002 300,002 7,700,002 --
Shares sold.................................... 16,650,000 18,750,000 10,550,000 10,550,002
Shares redeemed................................ (1,850,000) (6,100,000) (1,050,000) (2,850,000)
---------------- ----------------- ----------------- -----------------
Shares outstanding, end of period.............. 27,750,002 12,950,002 17,200,002 7,700,002
================ ================= ================= =================
(a) Inception date is January 20, 2021, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
See Notes to Financial Statements Page 11
FIRST TRUST EXCHANGE-TRADED FUND VIII
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FT CBOE VEST FUND OF BUFFER ETFS (BUFR)
SIX MONTHS
ENDED YEAR PERIOD
2/28/2022 ENDED ENDED
(UNAUDITED) 8/31/2021 8/31/2020 (a)
-------------- -------------- --------------
Net asset value, beginning of period........................... $ 23.30 $ 20.41 $ 20.05
-------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.01) (0.02) --
Net realized and unrealized gain (loss)........................ (0.13) 2.91 0.36
-------- -------- --------
Total from investment operations............................... (0.14) 2.89 0.36
-------- -------- --------
Net asset value, end of period................................. $ 23.16 $ 23.30 $ 20.41
======== ======== ========
TOTAL RETURN (b)............................................... (0.60)% 14.16% 1.80%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $642,784 $301,762 $ 6,124
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets (c).............. 0.20% (d) 0.20% 0.20% (d)
Ratio of net investment income (loss) to average net assets.... (0.20)% (d) (0.20)% (0.20)% (d)
Portfolio turnover rate (e).................................... 1% 1% 0%
FT CBOE VEST FUND OF DEEP BUFFER ETFS (BUFD)
SIX MONTHS
ENDED PERIOD
2/28/2022 ENDED
(UNAUDITED) 8/31/2021 (a)
-------------- --------------
Net asset value, beginning of period........................... $ 20.92 $ 20.07
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.02) (0.01)
Net realized and unrealized gain (loss)........................ (0.06) 0.86
-------- --------
Total from investment operations............................... (0.08) 0.85
-------- --------
Net asset value, end of period................................. $ 20.84 $ 20.92
======== ========
TOTAL RETURN (b)............................................... (0.38)% 4.24%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $358,410 $161,109
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets (c).............. 0.20% (d) 0.20% (d)
Ratio of net investment income (loss) to average net assets ... (0.20)% (d) (0.20)% (d)
Portfolio turnover rate (e).................................... 1% 6%
(a) Inception dates for BUFR and BUFD are August 10, 2020 and January 20,
2021, respectively, which are consistent with the respective Fund's
commencement of investment operations and are the dates the initial
creation units were established.
(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.
(c) The Fund indirectly bears its proportionate share of fees and expenses
incurred by the underlying funds in which the Fund invests. This ratio
does not include these indirect fees and expenses.
(d) Annualized.
(e) 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.
Page 12 See Notes to Financial Statements
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
FEBRUARY 28, 2022 (UNAUDITED)
1. ORGANIZATION
First Trust Exchange-Traded Fund VIII (the "Trust") is an open-end management
investment company organized as a Massachusetts business trust on February 22,
2016, 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 fifty-five funds that are offering shares. This
report covers the two funds (each a "Fund" and collectively, "the Funds") listed
below. The shares of each Fund are listed and traded on the Cboe BZX Exchange,
Inc. ("Cboe BZX").
FT Cboe Vest Fund of Buffer ETFs - (ticker "BUFR")
FT Cboe Vest Fund of Deep Buffer ETFs - (ticker "BUFD")
Each Fund represents a separate series of shares of beneficial interest in the
Trust. Unlike conventional mutual funds, each Fund issues and redeems shares on
a continuous basis, at net asset value ("NAV"), only in large blocks of shares
known as "Creation Units."
Each Fund is an actively managed exchange-traded fund.
The investment objective of BUFR is to seek to provide investors with capital
appreciation. BUFR seeks to achieve its investment objective by providing
investors with US large-cap equity market exposure while limiting downside risk
through a laddered portfolio of twelve FT Cboe Vest U.S. Equity Buffer ETFs ("FT
ETFs"). Under normal market conditions, BUFR will invest substantially all of
its assets in the FT ETFs, which seek to provide investors with returns (before
fees, expenses and taxes) that match the price return of the SPDR(R) S&P 500(R)
ETF Trust ("SPY"), up to a predetermined upside cap, while providing a buffer
against the first 10% (before fees, expenses and taxes) of SPY losses, over a
defined one-year period. The buffer is only provided by the FT ETFs. BUFR itself
does not provide any buffer against losses. BUFR simply seeks to provide
diversified exposure to all the FT ETFs in a single investment. In order to
understand BUFR's strategy and risks, it is important to understand the
strategies and risks of the FT ETFs.
The investment objective of BUFD is to seek to provide investors with capital
appreciation. BUFD seeks to achieve its investment objective by providing
investors with US large-cap equity market exposure while limiting downside risk
through a laddered portfolio of twelve FT Cboe Vest U.S. Equity Deep Buffer ETFs
("FT DB ETFs"). Under normal market conditions, BUFD will invest substantially
all of its assets in the FT DB ETFs, which seek to provide investors with
returns (before fees, expenses and taxes) that match the price return of the
SPY, up to a predetermined upside cap, while providing a deep buffer against
losses between -5% and -30% (before fees, expenses and taxes) of SPY, over a
defined one-year period. The buffer is only provided by the FT DB ETFs. BUFD
itself does not provide any buffer against losses. BUFD simply seeks to provide
diversified exposure to all the FT DB ETFs in a single investment. In order to
understand BUFD's strategy and risks, it is important to understand the
strategies and risks of the FT DB ETFs.
2. SIGNIFICANT ACCOUNTING POLICIES
The Funds are each considered an investment company and follow accounting and
reporting guidance under Financial Accounting Standards Board Accounting
Standards Codification Topic 946, "Financial Services-Investment Companies." The
following is a summary of significant accounting policies consistently followed
by the Funds in the preparation of the financial statements. The preparation of
the financial statements in accordance with accounting principles generally
accepted in the United States of America ("U.S. GAAP") requires management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
A. PORTFOLIO VALUATION
Each Fund's NAV is determined daily as of the close of regular trading on the
New York Stock Exchange ("NYSE"), normally 4:00 p.m. Eastern time, on each day
the NYSE is open for trading. If the NYSE closes early on a valuation day, the
NAV is determined as of that time. Each 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.
Each Fund's investments are valued daily at market value or, in the absence of
market value with respect to any portfolio securities, at fair value. Market
value prices represent last sale or official closing prices from a national or
foreign exchange (i.e., a regulated market) and are primarily obtained from
third-party pricing services. Fair value prices represent any prices not
considered market value prices and are either obtained from a third-party
pricing service or are determined by the Pricing Committee of the Funds'
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. Each Fund's investments are valued as
follows:
Page 13
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
FEBRUARY 28, 2022 (UNAUDITED)
Common stocks and other equity securities listed on any national or
foreign exchange (excluding Nasdaq and the London Stock Exchange
Alternative Investment Market ("AIM")) are valued at the last sale price
on the exchange on which they are principally traded or, for Nasdaq and
AIM securities, the official closing price. Securities traded on more than
one securities exchange are valued at the last sale price or official
closing price, as applicable, at the close of the securities exchange
representing the principal market for such securities.
Shares of open-end funds are valued at fair value which is based on NAV
per share.
Certain securities may not be able to be priced by pre-established pricing
methods. Such securities may be valued by the Trust's Board of Trustees or its
delegate, the Advisor's Pricing Committee, at fair value. These securities
generally include, but are not limited to, restricted securities (securities
which may not be publicly sold without registration under the Securities Act of
1933, as amended) for which a third-party pricing service is unable to provide a
market price; securities whose trading has been formally suspended; a security
whose market or fair value price is not available from a pre-established pricing
source; a security with respect to which an event has occurred that is likely to
materially affect the value of the security after the market has closed but
before the calculation of a Fund's NAV or make it difficult or impossible to
obtain a reliable market quotation; and a security whose price, as provided by
the third-party pricing service, does not reflect the security's fair value. As
a general principle, the current fair value of a security would appear to be the
amount which the owner might reasonably expect to receive for the security upon
its current sale. When fair value prices are used, generally they will differ
from market quotations or official closing prices on the applicable exchanges. A
variety of factors may be considered in determining the fair value of such
securities, including, but not limited to, the following:
1) the type of security;
2) the size of the holding;
3) the initial cost of the security;
4) transactions in comparable securities;
5) price quotes from dealers and/or third-party pricing services;
6) relationships among various securities;
7) information obtained by contacting the issuer, analysts, or the
appropriate stock exchange;
8) an analysis of the issuer's financial statements; and
9) the existence of merger proposals or tender offers that might affect
the value of the security.
The Funds are subject to fair value accounting standards that define fair value,
establish the framework for measuring fair value and provide a three-level
hierarchy for fair valuation based upon the inputs to the valuation as of the
measurement date. The three levels of the fair value hierarchy are as follows:
o Level 1 - Level 1 inputs are quoted prices in active markets for
identical investments. An active market is a market in which
transactions for the investment occur with sufficient frequency and
volume to provide pricing information on an ongoing basis.
o Level 2 - Level 2 inputs are observable inputs, either directly or
indirectly, and include the following:
o Quoted prices for similar investments in active markets.
o Quoted prices for identical or similar investments in markets
that are non-active. A non-active market is a market where
there are few transactions for the investment, the prices are
not current, or price quotations vary substantially either
over time or among market makers, or in which little
information is released publicly.
o Inputs other than quoted prices that are observable for the
investment (for example, interest rates and yield curves
observable at commonly quoted intervals, volatilities,
prepayment speeds, loss severities, credit risks, and default
rates).
o Inputs that are derived principally from or corroborated by
observable market data by correlation or other means.
o Level 3 - Level 3 inputs are unobservable inputs. Unobservable
inputs may reflect the reporting entity's own assumptions about the
assumptions that market participants would use in pricing the
investment.
The inputs or methodologies used for valuing investments are not necessarily an
indication of the risk associated with investing in those investments. A summary
of the inputs used to value each Fund's investments as of February 28, 2022, is
included with each Fund's Portfolio of Investments.
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded as of the trade date. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
Dividend income is recorded on the ex-dividend date.
C. AFFILIATED TRANSACTIONS
BUFR and BUFD invest in securities of affiliated funds. Each Fund's investment
performance and risks are directly related to the investment performance and
risks of the affiliated funds. Dividend income, if any, realized gains and
losses, and change in appreciation (depreciation) from affiliated funds are
presented on the Statements of Operations.
Page 14
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
FEBRUARY 28, 2022 (UNAUDITED)
Amounts related to these investments in BUFR at February 28, 2022 and for the
six months then ended are as follows:
CHANGE IN
UNREALIZED REALIZED
SHARES AT VALUE AT APPRECIATION GAIN VALUE AT DIVIDEND
SECURITY NAME 2/28/2022 8/31/2021 PURCHASES SALES (DEPRECIATION) (LOSS) 2/28/2022 INCOME
-----------------------------------------------------------------------------------------------------------------------------------
FT Cboe Vest U.S.
Equity Buffer ETF
- January 1,569,340 $ 25,142,439 $ 32,977,686 $ (5,430,007) $ 713,322 $ 151,072 $ 53,554,512 $ --
FT Cboe Vest U.S.
Equity Buffer ETF
- February 1,420,111 25,402,513 32,842,354 (4,986,521) (485,241) 322,289 53,095,394 --
FT Cboe Vest U.S.
Equity Buffer ETF
- March 1,651,537 25,206,024 32,671,356 (4,276,136) (2,438) 168,467 53,767,273 --
FT Cboe Vest U.S.
Equity Buffer ETF
- April 1,702,333 25,234,357 32,710,831 (3,925,853) (721,441) 196,388 53,494,282 --
FT Cboe Vest U.S.
Equity Buffer ETF
- May 1,446,322 25,232,697 32,612,603 (3,853,242) (598,751) 236,313 53,629,620 --
FT Cboe Vest U.S.
Equity Buffer ETF
- June 1,457,239 25,188,007 32,681,028 (3,795,900) (639,677) 192,937 53,626,395 --
FT Cboe Vest U.S.
Equity Buffer ETF
- July 1,522,937 25,254,902 32,783,330 (3,783,078) (877,556) 142,216 53,519,814 --
FT Cboe Vest U.S.
Equity Buffer ETF
- August 1,449,036 25,175,010 33,050,757 (3,726,282) (1,006,811) 194,110 53,686,784 --
FT Cboe Vest U.S.
Equity Buffer ETF
- September 1,556,856 24,842,175 33,123,503 (3,842,245) (620,891) 131,147 53,633,689 --
FT Cboe Vest U.S.
Equity Buffer ETF
- October 1,567,549 24,921,718 33,030,094 (3,677,896) (797,963) 134,223 53,610,176 --
FT Cboe Vest U.S.
Equity Buffer ETF
- November 1,447,871 25,053,554 33,933,883 (3,655,094) (1,907,184) 160,547 53,585,706 --
FT Cboe Vest U.S.
Equity Buffer ETF
- December 1,610,975 24,997,377 33,249,151 (3,683,621) (1,221,663) 143,126 53,484,370 --
------------------------------------------------------------------------------------------------
$301,650,773 $395,666,576 $ (48,635,875) $ (8,166,294) $ 2,172,835 $642,688,015 $ --
================================================================================================
Page 15
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
FEBRUARY 28, 2022 (UNAUDITED)
Amounts related to these investments in BUFD at February 28, 2022 and for the
six months then ended are as follows:
CHANGE IN
UNREALIZED REALIZED
SHARES AT VALUE AT APPRECIATION GAIN VALUE AT DIVIDEND
SECURITY NAME 2/28/2022 8/31/2021 PURCHASES SALES (DEPRECIATION) (LOSS) 2/28/2022 INCOME
-----------------------------------------------------------------------------------------------------------------------------------
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - January 927,026 $ 13,402,138 $ 18,627,186 $ (2,365,523) $ 154,262 $ 54,979 $ 29,873,042 $ --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - February 849,400 13,421,030 18,555,731 (2,411,515) 431,310 80,698 30,077,254 --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - March 946,608 13,452,408 18,555,152 (2,185,653) 67,797 55,861 29,945,565 --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - April 965,169 13,464,511 18,541,399 (1,962,630) (257,140) 60,264 29,846,404 --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - May 877,008 13,465,196 18,543,598 (1,950,617) (281,439) 69,598 29,846,336 --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - June 880,540 13,396,029 18,516,666 (1,920,717) (221,351) 53,263 29,823,890 --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - July 907,416 13,441,726 18,593,333 (1,907,164) (378,868) 43,709 29,792,736 --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - August 869,332 13,434,043 18,700,002 (1,894,760) (472,661) 44,944 29,811,568 --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - September 925,312 13,351,278 18,622,438 (1,851,865) (360,880) 34,260 29,795,231 --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - October 928,747 13,394,736 18,725,179 (1,889,302) (402,689) 34,264 29,862,188 --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - November 875,567 13,392,943 19,011,110 (1,848,017) (727,648) 32,825 29,861,213 --
FT Cboe Vest U.S.
Equity Deep Buffer
ETF - December 938,907 13,422,261 18,751,650 (1,860,978) (523,157) 38,454 29,828,230 --
------------------------------------------------------------------------------------------------
$161,038,299 $223,743,444 $ (24,048,741) $ (2,972,464) $ 603,119 $358,363,657 $ --
================================================================================================
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income of each Fund, if any, are declared and paid
quarterly, or as the Board of Trustees may determine from time to time.
Distributions of net realized gains earned by each Fund, if any, are distributed
at least annually.
Distributions from net investment income and realized capital gains are
determined in accordance with federal income tax regulations, which may differ
from U.S. GAAP. Certain capital accounts in the financial statements are
periodically adjusted for permanent differences in order to reflect their tax
character. These permanent differences are primarily due to the varying
treatment of income and gain/loss on significantly modified portfolio securities
held by the Funds and have no impact on net assets or NAV per share. Temporary
differences, which arise from recognizing certain items of income, expense and
gain/loss in different periods for financial statement and tax purposes, will
reverse at some time in the future. During their applicable taxable periods,
none of the Funds paid a distribution in 2021.
Page 16
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND VIII
FEBRUARY 28, 2022 (UNAUDITED)
As of August 31, 2021, the components of distributable earnings on a tax basis
for each Fund were as follows:
Accumulated Net
Undistributed Capital and Unrealized
Ordinary Other Appreciation
Income Gain (Loss) (Depreciation)
------------- ------------- --------------
FT Cboe Vest Fund of Buffer ETFs $ (228,991) $ -- $ 8,041,726
FT Cboe Vest Fund of Deep Buffer ETFs -- -- 2,258,567
E. INCOME TAXES
Each Fund intends to qualify or continue to qualify as a regulated investment
company by complying with the requirements under Subchapter M of the Internal
Revenue Code of 1986, as amended, which includes distributing substantially all
of its net investment income and net realized gains to shareholders.
Accordingly, no provision has been made for federal and state income taxes.
However, due to the timing and amount of distributions, each Fund may be subject
to an excise tax of 4% of the amount by which approximately 98% of each Fund's
taxable income exceeds the distributions from such taxable income for the
calendar year.
The Funds are subject to accounting standards that establish a minimum threshold
for recognizing, and a system for measuring, the benefits of a tax position
taken or expected to be taken in a tax return. For BUFR, the taxable years ended
2020 and 2021 remain open to federal and state audit. For BUFD, the taxable year
ended 2021 remains open to federal and state audit. As of February 28, 2022,
management has evaluated the application of these standards to the Funds and has
determined that no provision for income tax is required in the Funds' financial
statements for uncertain tax positions.
Each Fund intends to utilize provisions of the federal income tax laws, which
allow it to carry a realized capital loss forward indefinitely following the
year of the loss and offset such loss against any future realized capital gains.
Each Fund is subject to certain limitations under U.S. tax rules on the use of
capital loss carryforwards and net unrealized built-in losses. These limitations
apply when there has been a 50% change in ownership. At August 31, 2021, the
Funds had no capital loss carryforwards for federal income tax purposes.
Certain losses realized during the current taxable year may be deferred and
treated as occurring on the first day of the following taxable year for federal
income tax purposes. At August 31, 2021, the following Funds listed below
incurred and elected to defer net late year ordinary or capital losses as
follows:
Qualified Late Year Losses
----------------------------------------
Ordinary Losses Capital Losses
--------------- --------------
FT Cboe Vest Fund of Buffer ETFs $ 228,991 $ --
FT Cboe Vest Fund of Deep Buffer ETFs -- --
As of February 28, 2022, the aggregate cost, gross unrealized appreciation,
gross unrealized depreciation, and net unrealized appreciation/(depreciation) on
investments (including short positions and derivatives, if any) for federal
income tax purposes were as follows:
Net
Gross Gross Unrealized
Unrealized Unrealized Appreciation
Tax Cost Appreciation (Depreciation) (Depreciation)
-------------- -------------- -------------- --------------
FT Cboe Vest Fund of Buffer ETFs $ 643,005,806 $ 3,261,242 $ (3,384,363) $ (123,121)
FT Cboe Vest Fund of Deep Buffer ETFs 359,169,786 1,310,785 (2,017,479) (706,694)
F. EXPENSES
Expenses, other than the investment advisory fee and other excluded expenses,
are paid by the Advisor (see Note 3).
3. INVESTMENT ADVISORY FEE, AFFILIATED TRANSACTIONS AND OTHER FEE ARRANGEMENTS
First Trust, the investment advisor to the Funds, is a limited partnership with
one limited partner, Grace Partners of DuPage L.P., and one general partner, The
Charger Corporation. The Charger Corporation is an Illinois corporation
controlled by James A. Bowen, Chief Executive Officer of First Trust. First
Trust is responsible for the ongoing monitoring of the securities in each Fund's
portfolio, managing the Funds' business affairs and providing certain
administrative services necessary for the management of the Funds.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
FEBRUARY 28, 2022 (UNAUDITED)
First Trust is paid an annual unitary management fee of 0.20% of each Fund's
average daily net assets. In addition, each Fund incurs pro rata share of fees
and expenses attributable to investments in other investment companies
("acquired fund fees and expenses"). The total of the unitary management fee and
acquired fund fees and expenses represents each Fund's total annual operating
expenses.
First Trust is responsible for each Fund's expenses, including the cost of
transfer agency, sub-advisory, custody, fund administration, legal, audit and
other services, but excluding fee payments under the Investment Management
Agreement, interest, taxes, acquired fund fees and expenses, if any, brokerage
commissions and other expenses connected with the execution of portfolio
transactions, distribution and service fees payable pursuant to a Rule 12b-1
plan, if any, and extraordinary expenses.
Cboe Vest(SM) Financial LLC ("Cboe Vest"), an affiliate of First Trust, serves
as the Funds' sub-advisor and manages each Fund's portfolio subject to First
Trust's supervision. Pursuant to the Investment Management Agreement, between
the Trust, on behalf of the Funds, and the Advisor, and the Investment
Sub-Advisory Agreement among the Trust, on behalf of the Funds, the Advisor and
Cboe Vest, First Trust will supervise Cboe Vest and its management of the
investment of each Fund's assets and will pay Cboe Vest for its services as the
Funds' sub-advisor a sub-advisory fee equal to 50% of the monthly unitary
management fee paid to the Advisor, less Cboe Vest's 50% share of each Fund's
expenses for that month.
The Trust has multiple service agreements with The Bank of New York Mellon
("BNYM"). Under the service agreements, BNYM performs custodial, fund
accounting, certain administrative services, and transfer agency services for
each Fund. As custodian, BNYM is responsible for custody of each Fund's assets.
As fund accountant and administrator, BNYM is responsible for maintaining the
books and records of each Fund's securities and cash. As transfer agent, BNYM is
responsible for maintaining shareholder records for each Fund. BNYM is a
subsidiary of The Bank of New York Mellon Corporation, a financial holding
company.
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 an index fund.
Additionally, the Lead Independent Trustee and the Chairs of the Audit
Committee, Nominating and Governance Committee and Valuation Committee are paid
annual fees to serve in such capacities, with such compensation allocated pro
rata among each fund in the First Trust Fund Complex based on net assets.
Independent Trustees are reimbursed for travel and out-of-pocket expenses in
connection with all meetings. The Lead Independent Trustee and Committee Chairs
rotate every three years. The officers and "Interested" Trustee receive no
compensation from the Trust for acting in such capacities.
4. PURCHASES AND SALES OF SECURITIES
For the six months ended February 28, 2022, the cost of purchases and proceeds
from sales of investments for each Fund, excluding short-term investments and
in-kind transactions, were as follows:
Purchases Sales
-------------- --------------
FT Cboe Vest Fund of Buffer ETFs $ 4,460,807 $ 4,941,859
FT Cboe Vest Fund of Deep Buffer ETFs 1,683,847 1,912,459
For the six months ended February 28, 2022, the cost of in-kind purchases and
proceeds from in-kind sales for each Fund were as follows:
Purchases Sales
-------------- --------------
FT Cboe Vest Fund of Buffer ETFs $ 391,205,769 $ 43,694,016
FT Cboe Vest Fund of Deep Buffer ETFs 222,059,597 22,136,282
5. CREATIONS, REDEMPTIONS AND TRANSACTION FEES
Each Fund generally issues and redeems its shares in primary market transactions
through a creation and redemption mechanism and does not sell or redeem
individual shares. Instead, financial entities known as "Authorized
Participants" have contractual arrangements with a Fund or one of the Fund's
service providers to purchase and redeem Fund shares directly with the Fund in
large blocks of shares known as "Creation Units." Prior to the start of trading
on every business day, a Fund publishes through the National Securities Clearing
Corporation ("NSCC") the "basket" of securities, cash or other assets that it
will accept in exchange for a Creation Unit of the Fund's shares. An Authorized
Participant that wishes to effectuate a creation of a Fund's shares deposits
with the Fund the "basket" of securities, cash or other assets identified by the
Fund that day, and then receives the Creation Unit of the Fund's shares in
return for those assets. After purchasing a Creation Unit, the Authorized
Participant may continue to hold the Fund's shares or sell them in the secondary
market. The redemption process is the reverse of the purchase process: the
Page 18
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
FEBRUARY 28, 2022 (UNAUDITED)
Authorized Participant redeems a Creation Unit of a Fund's shares for a basket
of securities, cash or other assets. The combination of the creation and
redemption process with secondary market trading in a Fund's shares and
underlying securities provides arbitrage opportunities that are designed to help
keep the market price of a Fund's shares at or close to the NAV per share of the
Fund.
Each Fund imposes fees in connection with the purchase of Creation Units. These
fees may vary based upon various fact-based circumstances, including, but not
limited to, the composition of the securities included in the Creation Unit or
the countries in which the transactions are settled. The price for each Creation
Unit will equal the daily NAV per share of a Fund times the number of shares in
a Creation Unit, plus the fees described above and, if applicable, any
operational processing and brokerage costs, transfer fees, stamp taxes and part
or all of the spread between the expected bid and offer side of the market
related to the securities comprising the creation basket.
Each Fund also imposes fees in connection with the redemption of Creation Units.
These fees may vary based upon various fact-based circumstances, including, but
not limited to, the composition of the securities included in the Creation Unit
or the countries in which the transactions are settled. The price received for
each Creation Unit will equal the daily NAV per share of a Fund times the number
of shares in a Creation Unit, minus the fees described above and, if applicable,
any operational processing and brokerage costs, transfer fees, stamp taxes and
part or all of the spread between the expected bid and offer side of the market
related to the securities comprising the redemption basket. Investors who use
the services of a broker or other such intermediary in addition to an Authorized
Participant to effect a redemption of a Creation Unit may also be assessed an
amount to cover the cost of such services. The redemption fee charged by a Fund
will comply with Rule 22c-2 of the 1940 Act which limits redemption fees to no
more than 2% of the value of the shares redeemed.
6. DISTRIBUTION PLAN
The Board of Trustees adopted a Distribution and Service Plan pursuant to Rule
12b-1 under the 1940 Act. In accordance with the Rule 12b-1 plan, the Funds are
authorized to pay an amount up to 0.25% of their average daily net assets each
year to reimburse First Trust Portfolios L.P. ("FTP"), the distributor of the
Funds, for amounts expended to finance activities primarily intended to result
in the sale of Creation Units or the provision of investor services. FTP may
also use this amount to compensate securities dealers or other persons that are
Authorized Participants for providing distribution assistance, including
broker-dealer and shareholder support and educational and promotional services.
No 12b-1 fees are currently paid by the Funds, and pursuant to a contractual
arrangement, no 12b-1 fees will be paid any time before December 31, 2022 for
BUFR and January 15, 2023 for BUFD.
7. INDEMNIFICATION
The Trust, on behalf of the Funds, has a variety of indemnification obligations
under contracts with its service providers. The Trust's maximum exposure under
these arrangements is unknown. However, the Trust has not had prior claims or
losses pursuant to these contracts and expects the risk of loss to be remote.
8. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Funds
through the date the financial statements were issued and has determined that
there were no subsequent events requiring recognition or disclosure in the
financial statements that have not already been disclosed.
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ADDITIONAL INFORMATION
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FIRST TRUST EXCHANGE-TRADED FUND VIII
FEBRUARY 28, 2022 (UNAUDITED)
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies and information on how each Fund voted proxies relating to
its portfolio securities during the most recent 12-month period ended June 30 is
available (1) without charge, upon request, by calling (800) 988-5891; (2) on
each Fund's website at www.ftportfolios.com; and (3) on the Securities and
Exchange Commission's ("SEC") website at www.sec.gov.
PORTFOLIO HOLDINGS
Each Fund files portfolio holdings information for each month in a fiscal
quarter within 60 days after the end of the relevant fiscal quarter on Form
N-PORT. Portfolio holdings information for the third month of each fiscal
quarter will be publicly available on the SEC's website at www.sec.gov. Each
Fund's complete schedule of portfolio holdings for the second and fourth
quarters of each fiscal year is included in the semi-annual and annual reports
to shareholders, respectively, and is filed with the SEC on Form N-CSR. The
semi-annual and annual report for each Fund is available to investors within 60
days after the period to which it relates. Each Fund's Forms N-PORT and Forms
N-CSR are available on the SEC's website listed above.
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
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.
Page 20
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
FEBRUARY 28, 2022 (UNAUDITED)
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.
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, has ceased making LIBOR available as a
reference rate over a phase-out period that began December 31, 2021. There is no
assurance that any alternative reference rate, including the Secured Overnight
Financing Rate ("SOFR") will be similar to or produce the same value or economic
equivalence as LIBOR or that instruments using an alternative rate will have the
same volume or liquidity. 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.
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND VIII
FEBRUARY 28, 2022 (UNAUDITED)
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. In February 2022, Russia invaded Ukraine which has caused and could
continue to cause significant market disruptions and volatility within the
markets in Russia, Europe, and the United States. The hostilities and sanctions
resulting from those hostilities could have a significant impact on certain fund
investments as well as fund performance. 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
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FIRST TRUST
First Trust Exchange-Traded Fund VIII
INVESTMENT ADVISOR
First Trust Advisors L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
INVESTMENT SUB-ADVISOR
Cboe Vest(SM) Financial LLC
1765 Greensboro Station Pl, 9th Floor
McLean, VA 22102
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
320 South Canal Street
Chicago, IL 60606
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