FIRST TRUST First Trust Exchange-Traded Fund VIII -------------------------------------------------------------------------------- First Trust Innovation Leaders ETF (ILDR) First Trust Expanded Technology ETF (XPND) ---------------------------- Annual Report For the Year Ended August 31, 2022 ---------------------------- -------------------------------------------------------------------------------- TABLE OF CONTENTS -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII ANNUAL REPORT AUGUST 31, 2022 Shareholder Letter........................................................... 2 Fund Performance Overview First Trust Innovation Leaders ETF (ILDR)................................. 3 First Trust Expanded Technology ETF (XPND)................................ 5 Notes to Fund Performance Overview........................................... 7 Portfolio Commentary......................................................... 8 Understanding Your Fund Expenses............................................. 12 Portfolio of Investments First Trust Innovation Leaders ETF (ILDR)................................. 13 First Trust Expanded Technology ETF (XPND)................................ 16 Statements of Assets and Liabilities......................................... 18 Statements of Operations..................................................... 19 Statements of Changes in Net Assets.......................................... 20 Financial Highlights......................................................... 21 Notes to Financial Statements................................................ 22 Report of Independent Registered Public Accounting Firm...................... 28 Additional Information....................................................... 29 Board of Trustees and Officers .............................................. 36 Privacy Policy............................................................... 38 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 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 any 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 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 any Fund described in this report will achieve its investment objective. Each Fund is subject to market risk, which is the possibility that the market values of securities owned by the Fund will decline and that the value of the Fund's shares may therefore be less than what you paid for them. Accordingly, you can lose money investing in a Fund. See "Risk Considerations" in the Additional Information section of this report for a discussion of certain other risks of investing in the Funds. Performance data quoted represents past performance, which is no guarantee of future results, and current performance may be lower or higher than the figures shown. For the most recent month-end performance figures, please visit www.ftportfolios.com or speak with your financial advisor. Investment returns, net asset value and share price will fluctuate and Fund shares, when sold, may be worth more or less than their original cost. The Advisor may also periodically provide additional information on Fund performance on each Fund's webpage at www.ftportfolios.com. HOW TO READ THIS REPORT This report contains information that may help you evaluate your investment. It includes details about each Fund and presents data and analysis that provide insight into each Fund's performance and investment approach. By reading the portfolio commentary from the portfolio management team of the Funds, you may obtain an understanding of how the market environment affected each Fund's performance. The statistical information that follows may help you understand each Fund's performance compared to that of 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 each Fund are spelled out in its prospectus, statement of additional information, and other Fund regulatory filings. Page 1 -------------------------------------------------------------------------------- SHAREHOLDER LETTER -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII ANNUAL LETTER FROM THE CHAIRMAN AND CEO AUGUST 31, 2022 Dear Shareholders: First Trust is pleased to provide you with the annual report for certain series of the First Trust Exchange-Traded Fund VIII (the "Funds"), which contains detailed information about the Funds for the twelve months ended August 31, 2022. At their most recent meeting (September 20-21, 2022), the Federal Open Market Committee announced a 75 basis point interest rate hike, the third rate hike in as many meetings. Overall, the Federal Reserve (the "Fed") has raised its benchmark Federal Funds target rate (upper bound) from 0.25% this past March to 3.25% as of September 30, 2022, the fastest pace for rate hikes since 1994. The Fed is hiking interest rates aggressively to combat the surge in inflation that commenced in the second quarter of 2021. Perhaps the most common measure of inflation is the Consumer Price Index ("CPI"). The CPI has averaged 3.0% per year since 1926 but stood at an eye-popping 8.3% on a trailing 12-month basis in August 2022. Its recent high point was 9.1% in June 2022. For borrowers, these rate hikes will raise the cost of capital, making it tougher to secure loans for consumers and businesses. The goal is to raise interest rates high enough to cool some of the demand for goods and services so that inflation can begin to moderate. The Fed would eventually like to see the CPI back near the 2.0% level. It will take some time to play out. Guidance from Fed Chairman Jerome Powell indicates that more rate hikes are coming, perhaps as much as another 100 basis points by year-end. We'll see. One of the areas that has yet to cool off is the housing market, in my opinion. We have seen a substantial selloff this year in the stock and bond markets, but not housing. Prices appreciated markedly across the U.S. during the coronavirus ("COVID-19") pandemic. Demand was high and inventories were uncharacteristically low. Simply put, housing affordability has become a huge challenge for many prospective buyers. The S&P CoreLogic Case-Shiller U.S. National Home Price Index, which tracks the value of single-family homes, soared 45.2% from the end of 2019 through June 2022. Keep in mind, historically, home prices tend to rise with inflation over time. They are not supposed to increase 45% over 30 months. The rapid increase in short-term lending rates has caused the rate on a 30-year fixed-rate mortgage to nearly double from 3.27% at the end of 2021 to 6.43% as of September 21, 2022, according to Bankrate. The sharp rise in mortgage rates is just beginning to have a slight effect on demand. Redfin reported that close to 63,000 deals on existing homes fell through in July 2022, or around 16% of homes under contract that month, according to CNBC. Fed Chairman Powell is trying to engineer a soft landing for the economy via monetary policy. In other words, the Fed is trying to avoid a deep and lengthy recession. That is why the relative resilience of the real estate markets, both residential and commercial, is so critical at this juncture. One other plus going for the U.S. economy today is the strong labor market. As of this report, companies are still hiring. If these sources of strength eventually succumb to the economic headwinds and turn weaker, the odds of achieving a soft landing drop dramatically, in my opinion. For those investors who like to follow the news closely, in addition to monitoring the state of the economy, keep an eye on the war between Russia and Ukraine as well as the COVID-19-induced lockdowns of cities in China. Any good news on those two fronts could be a net positive for the markets moving forward. As I previously noted, it is going to take some time to remedy this situation. As always, we encourage investors to be diversified and stay the course. 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 2 -------------------------------------------------------------------------------- FUND PERFORMANCE OVERVIEW (UNAUDITED) -------------------------------------------------------------------------------- FIRST TRUST INNOVATION LEADERS ETF (ILDR) The First Trust Innovation Leaders ETF (the "Fund") seeks to provide capital appreciation. Under normal market conditions, the Fund will invest at least 80% of its net assets (plus any borrowings for investment purposes) in common stock and depository receipts issued by U.S. and non-U.S. companies that may benefit from the development or application of scientific and technological innovation. This includes, but is not limited to, companies that are poised to benefit from new products or services, scientific research, technological improvements and/or enhancements to existing products or services related to automation, advanced medicine, networks, advanced computing, enhanced mobility, energy revolution and e-commerce. 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 NYSE Arca, Inc. under the ticker symbol "ILDR." --------------------------------------------------------------------------------------------------------------------- PERFORMANCE --------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL CUMULATIVE TOTAL RETURNS TOTAL RETURNS Inception Inception 1 Year Ended (5/25/21) (5/25/21) 8/31/22 to 8/31/22 to 8/31/22 FUND PERFORMANCE NAV -33.75% -19.66% -24.25% Market Price -33.40% -19.24% -23.75% INDEX PERFORMANCE Russell 3000(R) Growth Index -19.44% -6.90% -8.67% --------------------------------------------------------------------------------------------------------------------- (See Notes to Fund Performance Overview on page 7.) ---------------------------------------------------------- % OF TOTAL LONG-TERM SECTOR CLASSIFICATION INVESTMENTS ---------------------------------------------------------- Information Technology 48.6% Health Care 24.1 Industrials 13.2 Consumer Discretionary 7.3 Communication Services 6.8 -------- Total 100.0% ======== ---------------------------------------------------------- % OF TOTAL LONG-TERM TOP TEN HOLDINGS INVESTMENTS ---------------------------------------------------------- Amazon.com, Inc. 5.6% Microsoft Corp. 5.2 Alphabet, Inc., Class C 3.3 Uber Technologies, Inc. 2.9 Autodesk, Inc. 2.4 Vertex Pharmaceuticals, Inc. 2.4 Keysight Technologies, Inc. 2.2 Alnylam Pharmaceuticals, Inc. 2.1 Siemens AG 2.0 ServiceNow, Inc. 2.0 -------- Total 30.1% ======== Page 3 -------------------------------------------------------------------------------- FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST INNOVATION LEADERS ETF (ILDR) (CONTINUED) PERFORMANCE OF A $10,000 INITIAL INVESTMENT MAY 25, 2021 - AUGUST 31, 2022 First Trust Innovation Russell 3000(R) Leaders ETF Growth Index 5/25/21 $10,000 $10,000 8/31/21 11,435 11,337 2/28/22 9,242 10,396 8/31/22 7,575 9,133 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 -------------------------------------------------------------------------------- FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXPANDED TECHNOLOGY ETF (XPND) The First Trust Expanded Technology ETF (the "Fund") seeks to provide long-term capital appreciation. Under normal market conditions, the Fund will invest at least 80% of its net assets (plus any borrowings for investment purposes) in the common stocks of companies identified by the Fund's investment advisor as either information technology companies or consumer discretionary and communication services companies whose operations are principally derived from and/or dependent upon technology. 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 NYSE Arca, Inc. under the ticker symbol "XPND." --------------------------------------------------------------------------------------------------------------------- PERFORMANCE --------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL CUMULATIVE TOTAL RETURNS TOTAL RETURNS Inception Inception 1 Year Ended (6/14/21) (6/14/21) 8/31/22 to 8/31/22 to 8/31/22 FUND PERFORMANCE NAV -22.19% -13.10% -15.67% Market Price -22.19% -13.10% -15.67% INDEX PERFORMANCE S&P 500(R) Information Technology Index -14.35% -4.10% -4.95% --------------------------------------------------------------------------------------------------------------------- (See Notes to Fund Performance Overview on page 7.) ---------------------------------------------------------- % OF TOTAL LONG-TERM SECTOR CLASSIFICATION INVESTMENTS ---------------------------------------------------------- Information Technology 89.0% Communication Services 11.0 -------- Total 100.0% ======== ---------------------------------------------------------- % OF TOTAL LONG-TERM TOP TEN HOLDINGS INVESTMENTS ---------------------------------------------------------- Apple, Inc. 5.0% Microsoft Corp. 4.5 Visa, Inc., Class A 4.4 Alphabet, Inc., Class A 4.4 Mastercard, Inc., Class A 4.3 NVIDIA Corp. 3.9 T-Mobile US, Inc. 3.5 Broadcom, Inc. 3.5 Adobe, Inc. 3.2 Texas Instruments, Inc. 3.1 -------- Total 39.8% ======== Page 5 -------------------------------------------------------------------------------- FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXPANDED TECHNOLOGY ETF (XPND) (CONTINUED) PERFORMANCE OF A $10,000 INITIAL INVESTMENT JUNE 14, 2021 - AUGUST 31, 2022 First Trust Expanded S&P 500(R) Information Technology ETF Technology Index 6/14/21 $10,000 $10,000 8/31/21 10,837 11,097 2/28/22 9,764 10,804 8/31/22 8,433 9,505 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 6 -------------------------------------------------------------------------------- NOTES TO FUND PERFORMANCE OVERVIEW (UNAUDITED) -------------------------------------------------------------------------------- Total returns for the periods since inception are calculated from the inception date of each Fund. "Average Annual Total Returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative Total Returns" represent the total change in value of an investment over the periods indicated. Each Fund's per share net asset value ("NAV") is the value of one share of the Fund and is computed by dividing the value of all assets of the Fund (including accrued interest and dividends), less all liabilities (including accrued expenses and dividends declared but unpaid), by the total number of outstanding shares. The price used to calculate market return ("Market Price") is determined by using the midpoint of the national best bid and offer price ("NBBO") as of the time that the Fund's NAV is calculated. Under SEC rules, the NBBO consists of the highest displayed buy and lowest sell prices among the various exchanges trading the Fund at the time the Fund's NAV is calculated. 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 7 -------------------------------------------------------------------------------- PORTFOLIO COMMENTARY -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII ANNUAL REPORT AUGUST 31, 2022 (UNAUDITED) ADVISOR First Trust Advisors L.P. ("First Trust" or the "Advisor") is the investment advisor to the First Trust Innovation Leaders ETF (the "Fund"). First Trust is responsible for the ongoing monitoring of the Fund's investment portfolio, managing the Fund's business affairs and providing certain administrative services necessary for the management of the Fund. PORTFOLIO MANAGEMENT TEAM The following persons serve as the portfolio managers of the Fund: BOB HENSLEY, CFA, VICE PRESIDENT OF FIRST TRUST DAVID MCGAREL, CFA, CHIEF INVESTMENT OFFICER, CHIEF OPERATING OFFICER AND MANAGING DIRECTOR OF FIRST TRUST CHRIS PETERSON, CFA, SENIOR VICE PRESIDENT OF FIRST TRUST JARED WOLLEN, CFA, VICE PRESIDENT OF FIRST TRUST Each portfolio manager has served in such capacity for the Fund since May 2021. COMMENTARY MARKET RECAP Very few asset classes have generated attractive returns to investors in 2022. From the close of 2021 through August 31, 2022, the S&P 500(R) Index was down 16.14%. The NASDAQ Composite, with a tech bias, was down 24.07%. But most surprising, the Bloomberg Global-Aggregate Total Return Index, a broad measure of investment grade fixed-income, was down 15.55% and the U.S. 10-Year Treasury was down 12.19%. The 10-Year Treasury is widely regarded as a 'risk-free' asset, and it was down 12.19%. The reduction in asset prices has largely been due to more aggressive monetary policy in the face of high and sustained inflation. As of the writing of this report, the U.S. Consumer Price Index was up 8.3% year-over-year. Additionally, the yield available on active U.S Treasuries dated 2-years, 5-years, and 10-years were up 328%, 257% and 188% year-to-date, respectively. This sudden and massive repricing to risk-free assets reverberated across all asset classes precipitating the widely negative performance. FUND PERFORMANCE For the 12-month period ended August 31, 2022, the Fund returned -33.75% on a net asset value ("NAV") basis and -33.40% on a market price basis. The Russell 3000(R) Growth Index (the "Benchmark") returned -19.44% over the same period. The Fund's underperformance was primarily attributable to poor stock selection led by a portfolio overweight to Information Technology stocks. For reference, the Goldman Sachs Non-Profitable Technology Index has fallen -48% year-to-date. The Fund pursues innovation and innovative companies typically spend heavily today in anticipation of high future profits. Overweighting high growth, unprofitable stocks was the largest detriment to performance for the period as unprofitable stocks were inordinately impacted because of tightening monetary conditions. The portfolio management team has a positive view on the network and advanced computing themes which has driven an overweight to the Information Technology sector. The Health Care sector also detracted from the Fund's performance during the period as the Fund had nearly double the Benchmark's weight in the sector and it was the second worst-performing sector in the Benchmark. Early lifecycle health care companies generally have high research and development expenses and potential for growth, but lack of profits was also detrimental to emerging biotechnology and device companies. MARKET AND FUND OUTLOOK During 2021, the Federal Reserve's (the "Fed") ultra-low interest rate policy and an elevated balance sheet represented exceptionally loose monetary policy in the U.S. In addition to this, substantial fiscal spending was employed to offset the coronavirus-related lockdowns. This combination ultimately conspired to drive inflation above the Fed's target rate of 2%. The Fed's chief tools to rein in demand price pressures are through contracting money supply and tightening monetary conditions. The Fed is doing this, and historically, rising rate environments more often than not result in a recession. Tightening policy has a myriad of impacts to economies globally including higher debt funding costs, higher mortgage rates, lower capital market activity levels (reducing supply and competition) and making saving relatively more attractive than spending or investing. Our expectation is that 2022's rapid increase in interest rates will tighten economic conditions in due course and result in a domestic recession. However, equity markets tend to be forward-looking, and valuations have fallen considerably in anticipation of lower earnings growth and lower economic activity. Page 8 -------------------------------------------------------------------------------- PORTFOLIO COMMENTARY (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII ANNUAL REPORT AUGUST 31, 2022 (UNAUDITED) There is a mounting degree of uncertainty facing today's financial markets. Inflation at historic levels has introduced a paradigm shift in the Fed's priorities, which has increased market volatility and resulted in an elevated dispersion of possible market outcomes. In the face of uncertainty, the Fund is favoring companies with strong balance sheets that can withstand higher financing costs or loss of access to capital markets. While profitability is important, companies with strong margin profiles that generate healthy amounts of cash organically can also thrive in the current environment, in our opinion. We believe slowing economic conditions will likely reduce the impetus for capital markets to fund new private ventures, which may alleviate competition. Access to affordable labor may improve, in our opinion. We believe the opportunity to reconsider growth at any cost and remodulate a company for profitable growth could enhance future expected economic returns for shareholders. In short, we are optimistic for the future but acknowledge that high volatility and increased uncertainty have weighed not only on Fund performance, but also financial markets broadly. The Fund continues to search out innovative, disruptive companies but with a mind for durable businesses that have sufficient cash flows to endure an economic slowdown. Page 9 -------------------------------------------------------------------------------- PORTFOLIO COMMENTARY (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII ANNUAL REPORT AUGUST 31, 2022 (UNAUDITED) ADVISOR First Trust Advisors L.P. ("First Trust" or the "Advisor") serves as the investment advisor to the First Trust Expanded Technology ETF (the "Fund"). First Trust is responsible for the ongoing monitoring of the Fund's investment portfolio, managing the Fund's business affairs and providing certain administrative services necessary for the management of the Fund. PORTFOLIO MANAGEMENT TEAM The Fund's portfolio is managed by a team (the "Investment Committee") consisting of: DANIEL J. LINDQUIST, CHAIRMAN OF THE INVESTMENT COMMITTEE AND MANAGING DIRECTOR OF FIRST TRUST JON C. ERICKSON, SENIOR VICE PRESIDENT OF FIRST TRUST DAVID G. MCGAREL, CHIEF INVESTMENT OFFICER, CHIEF OPERATING OFFICER AND MANAGING DIRECTOR OF FIRST TRUST ROGER F. TESTIN, SENIOR VICE PRESIDENT OF FIRST TRUST STAN UELAND, SENIOR VICE PRESIDENT OF FIRST TRUST CHRIS A. PETERSON, SENIOR VICE PRESIDENT OF FIRST TRUST ERIK RUSSO, VICE PRESIDENT OF FIRST TRUST OMAR SEPULVEDA, VICE PRESIDENT OF FIRST TRUST The Investment Committee members are primarily and jointly responsible for the day-to-day management of the Fund. Each Investment Committee member has served as a part of the portfolio management team of the Fund since 2021. MARKET RECAP U.S. equity markets lost ground and experienced heightened volatility over the 12-month period ended August 31, 2022 as tightening monetary policy, flagging earnings, and reduced sentiment sent shares lower. Volatility was seen late in third quarter of 2021, due to anxiety about potential Federal Reserve (the "Fed") tapering of asset purchases and fears of financial contagion after Chinese real estate firm Evergrande failed to make its U.S. dollar debt payments. However, the fourth quarter of 2021 showed U.S. equities were rebounding as strong third quarter earnings, solid economic growth, and the passage of fiscal stimulus in the form of a trillion-dollar infrastructure bill lifted sentiment. Although the U.S. market experienced volatility in December 2021 due to worries about inflation-driven, tighter Fed policy, equities eventually looked past the Fed's announced acceleration in asset purchase tapering. Volatility continued during much of the first quarter of 2022, due to a more hawkish Fed, high inflation, and the uncertainty regarding Russia's war against Ukraine. While the first quarter of 2022 showed stocks decline through early March, they enjoyed a late quarter rally that began after the March 2022 Federal Open Market Committee meeting. However, U.S. sentiment soured during the second quarter of 2022, as the Fed embarked on an aggressive rate hike cycle to rein in persistently high inflation. Signs of inflation impacting consumer confidence and consumption, including earnings misses by Target and Walmart, increased perceived expectations of an economic downturn. The Fed started raising rates in mid-March 2022 as they began to combat rising inflation, raising them four times to an upper bound rate of 2.50% as of the end of August 2022. The U.S. equity market declined over the 12-month period ended August 31, 2022, with the S&P 500(R) Index returning -11.23% during that timeframe. The Energy sector stocks were top sector performers within the S&P 500(R) Index during the same period. The Utilities and Consumer Staples sectors were the only other sectors to post positive returns, while the Communication Services, Consumer Discretionary, and Information Technology sector stocks were the worst performers. On a size basis, the S&P 400(R) MidCap Index returned -10.37% and the S&P SmallCap 600(R) Index returned -12.12% over the same period. FUND PERFORMANCE The Fund returned -22.19% on a net asset value ("NAV") basis and on a market price basis for the 12-month period ended August 31, 2022. The S&P 500(R) Information Technology Index (the "Benchmark") returned -14.35% over the same period, underperforming the S&P 500(R) Index by over 3.00%. The Fund's focus on Information Technology stocks and those whose operations are principally derived from and/or dependent upon technology, contributed to the Fund's underperformance relative to the overall equity market. The Fund also underperformed the S&P 500(R) Information Technology Index. Much of the underperformance can be attributed to the Fund's underweighting in Apple, Inc. and overweight exposure to the Software industry and Communication Services' Interactive Media & Services industry. The Fund held less than 5% in outperforming Apple, Inc. (+4.13% return for the period), while the stock made up approximately 24% of the Benchmark. The Fund's overweighted software names ZoomInfo Technologies, Inc. (-61.23%), Adobe, Inc. (-43.73%), and Page 10 -------------------------------------------------------------------------------- PORTFOLIO COMMENTARY (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII ANNUAL REPORT AUGUST 31, 2022 (UNAUDITED) ServiceNow, Inc. (-34.18%), also contributed to the Fund's relative underperformance. The Fund also had exposure to the underperforming Interactive Media & Services industry stocks Meta Platforms, Inc. (-47.58%) and Alphabet, Inc. (-25.21%). This industry is in the Communication Services sector, which it is not included in the Benchmark. A factor attribution analysis revealed the Fund had heavy factor loadings to small size and low quality stocks relative to the S&P 500(R) Information Technology benchmark. Small size was the worst performing factor by a wide margin, as smaller names were the first to be sold off over the last 12 months. The Fund's higher exposure to smaller size, due in part to the Fund's modified market capitalization weighting scheme, created a drag on performance. High quality names Apple, Inc. and Microsoft Corp. each carried a weight of 20% or greater in the Benchmark. The Fund limits weights to a maximum of 4.5% at every rebalance to lower exposure to single-stock risk. MARKET AND FUND OUTLOOK We believe market risk will be more elevated in the near term due to uncertainty across several spectrums including inflation, geopolitical risks, and slowing growth. Valuations for growth stocks, and technology stocks in particular, have come down over the course of the year, though they remain above long-term averages, as the Fed has embarked on a rate hiking cycle to combat inflation. In general, higher interest rates lead to lower valuation multiples of equities as future cash flows get discounted back to the present at higher rates. Against this backdrop we remain constructive on equities for the long-term but believe market volatility will likely remain heightened in the near term. Page 11 FIRST TRUST EXCHANGE-TRADED FUND VIII UNDERSTANDING YOUR FUND EXPENSES AUGUST 31, 2022 (UNAUDITED) As a shareholder of First Trust Innovation Leaders ETF or First Trust Expanded Technology ETF (each a "Fund" and collectively, the "Funds"), you incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, if any, and other Fund expenses. This Example is intended to help you understand your ongoing costs of investing in the Funds and to compare these costs with the ongoing costs of investing in other funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held through the six-month period ended August 31, 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 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 MARCH 1, 2022 AUGUST 31, 2022 PERIOD PERIOD (a) --------------------------------------------------------------------------------------------------------------------- FIRST TRUST INNOVATION LEADERS ETF (ILDR) Actual $1,000.00 $ 819.70 0.75% $3.44 Hypothetical (5% return before expenses) $1,000.00 $1,021.42 0.75% $3.82 FIRST TRUST EXPANDED TECHNOLOGY ETF (XPND) Actual $1,000.00 $ 863.60 0.65% $3.05 Hypothetical (5% return before expenses) $1,000.00 $1,021.93 0.65% $3.31 (a) Expenses are equal to the annualized expense ratio as indicated in the table multiplied by the average account value over the period (March 1, 2022 through August 31, 2022), multiplied by 184/365 (to reflect the six-month period). Page 12 FIRST TRUST INNOVATION LEADERS ETF (ILDR) PORTFOLIO OF INVESTMENTS AUGUST 31, 2022 SHARES DESCRIPTION VALUE --------------------------------------------------------------------- COMMON STOCKS -- 98.6% AEROSPACE & DEFENSE -- 3.1% 500 AeroVironment, Inc. (a) $ 44,325 101 Northrop Grumman Corp. 48,277 ------------- 92,602 ------------- AUTOMOBILES -- 1.1% 120 Tesla, Inc. (a) 33,073 ------------- BIOTECHNOLOGY -- 16.8% 299 Alnylam Pharmaceuticals, Inc. (a) 61,794 650 Apellis Pharmaceuticals, Inc. (a) 39,331 1,444 Arcus Biosciences, Inc. (a) 34,772 649 BioMarin Pharmaceutical, Inc. (a) 57,891 1,498 Coherus Biosciences, Inc. (a) 16,748 449 Intellia Therapeutics, Inc. (a) 26,967 2,366 Myovant Sciences Ltd. (a) 40,435 101 Regeneron Pharmaceuticals, Inc. (a) 58,687 805 REGENXBIO, Inc. (a) 23,747 1,748 Rocket Pharmaceuticals, Inc. (a) 26,937 1,201 SpringWorks Therapeutics, Inc. (a) 33,352 422 Ultragenyx Pharmaceutical, Inc. (a) 20,125 250 Vertex Pharmaceuticals, Inc. (a) 70,440 ------------- 511,226 ------------- COMMUNICATIONS EQUIPMENT -- 4.1% 162 Arista Networks, Inc. (a) 19,421 500 Ciena Corp. (a) 25,370 200 F5, Inc. (a) 31,412 200 Motorola Solutions, Inc. 48,682 ------------- 124,885 ------------- CONSTRUCTION & ENGINEERING -- 1.6% 600 MasTec, Inc. (a) 48,300 ------------- DIVERSIFIED TELECOMMUNICATION SERVICES -- 1.2% 2,602 Radius Global Infrastructure, Inc., Class A (a) 35,830 ------------- ELECTRICAL EQUIPMENT -- 2.6% 1,001 Bloom Energy Corp., Class A (a) 25,435 60 Generac Holdings, Inc. (a) 13,225 349 Schneider Electric SE (EUR) (b) 41,481 ------------- 80,141 ------------- ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS -- 6.2% 299 Cognex Corp. 12,591 400 Keysight Technologies, Inc. (a) 65,556 250 TE Connectivity Ltd. 31,552 800 Trimble, Inc. (a) 50,600 90 Zebra Technologies Corp., Class A (a) 27,148 ------------- 187,447 ------------- SHARES DESCRIPTION VALUE --------------------------------------------------------------------- ENTERTAINMENT -- 0.8% 200 Take-Two Interactive Software, Inc. (a) $ 24,512 ------------- HEALTH CARE EQUIPMENT & SUPPLIES -- 4.4% 180 Align Technology, Inc. (a) 43,866 212 Dexcom, Inc. (a) 17,428 694 Globus Medical, Inc., Class A (a) 41,078 68 Intuitive Surgical, Inc. (a) 13,990 899 Outset Medical, Inc. (a) 16,443 ------------- 132,805 ------------- HEALTH CARE PROVIDERS & SERVICES -- 1.2% 600 Castle Biosciences, Inc. (a) 17,400 350 Guardant Health, Inc. (a) 17,521 ------------- 34,921 ------------- INDUSTRIAL CONGLOMERATES -- 2.9% 144 Honeywell International, Inc. 27,266 600 Siemens AG (EUR) (b) 60,777 ------------- 88,043 ------------- INTERACTIVE MEDIA & SERVICES -- 4.7% 901 Alphabet, Inc., Class C (a) 98,344 1,000 ZoomInfo Technologies, Inc. (a) 45,420 ------------- 143,764 ------------- INTERNET & DIRECT MARKETING RETAIL -- 6.1% 1,319 Amazon.com, Inc. (a) 167,210 180 Etsy, Inc. (a) 19,010 ------------- 186,220 ------------- IT SERVICES -- 6.7% 8 Adyen N.V. (EUR) (a) (b) (c) (d) 12,345 449 Block, Inc. (a) 30,941 250 Cloudflare, Inc., Class A (a) 15,642 50 MongoDB, Inc. (a) 16,143 366 PayPal Holdings, Inc. (a) 34,199 100 Snowflake, Inc., Class A (a) 18,095 1,510 Switch, Inc., Class A 51,265 374 Twilio, Inc., Class A (a) 26,023 ------------- 204,653 ------------- LIFE SCIENCES TOOLS & SERVICES -- 1.4% 75 Thermo Fisher Scientific, Inc. 40,899 ------------- ROAD & RAIL -- 2.8% 2,999 Uber Technologies, Inc. (a) 86,251 ------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 8.1% 1,251 Allegro MicroSystems, Inc. (a) 29,173 175 Enphase Energy, Inc. (a) 50,127 50 Lam Research Corp. 21,896 374 NVIDIA Corp. 56,452 200 NXP Semiconductors N.V. 32,916 See Notes to Financial Statements Page 13 FIRST TRUST INNOVATION LEADERS ETF (ILDR) PORTFOLIO OF INVESTMENTS (CONTINUED) AUGUST 31, 2022 SHARES DESCRIPTION VALUE --------------------------------------------------------------------- COMMON STOCKS (CONTINUED) SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (CONTINUED) 1,598 Rambus, Inc. (a) $ 41,212 125 Synaptics, Inc. (a) 14,451 ------------- 246,227 ------------- SOFTWARE -- 22.8% 135 Adobe, Inc. (a) 50,414 150 Aspen Technology, Inc. (a) 31,590 352 Autodesk, Inc. (a) 71,012 234 Crowdstrike Holdings, Inc., Class A (a) 42,731 300 Datadog, Inc., Class A (a) 31,485 299 Elastic N.V. (a) 25,089 150 Five9, Inc. (a) 14,717 75 Intuit, Inc. 32,384 599 Microsoft Corp. 156,621 3,895 Palantir Technologies, Inc., Class A (a) 30,069 136 ServiceNow, Inc. (a) 59,108 400 Sprout Social, Inc., Class A (a) 24,016 600 Trade Desk (The), Inc., Class A (a) 37,620 281 Workday, Inc., Class A (a) 46,241 266 Workiva, Inc. (a) 18,059 133 Zscaler, Inc. (a) 21,179 ------------- 692,335 ------------- TOTAL COMMON STOCKS -- 98.6% 2,994,134 (Cost $3,666,972) ------------- MONEY MARKET FUNDS -- 1.4% 42,611 Morgan Stanley Institutional Liquidity Funds - Treasury Portfolio - Institutional Class - 2.06% (e) 42,611 (Cost $42,611) ------------- TOTAL INVESTMENTS -- 100.0% 3,036,745 (Cost $3,709,583) NET OTHER ASSETS AND LIABILITIES -- (0.0)% (1,059) ------------- NET ASSETS -- 100.0% $ 3,035,686 ============= (a) Non-income producing security. (b) This security is fair valued by the Advisor's Pricing Committee in accordance with procedures adopted by the Trust's Board of Trustees, and in accordance with provisions of the Investment Company Act of 1940, as amended. At August 31, 2022, securities noted as such are valued at $114,603 or 3.8% of net assets. Certain of these securities are fair valued using a factor provided by a third-party pricing service due to the change in value between the foreign markets' close and the New York Stock Exchange close exceeding a certain threshold. On days when this threshold is not exceeded, these securities are typically valued at the last sale price on the exchange on which they are principally traded. (c) This security is exempt from registration upon resale under Rule 144A of the Securities Act of 1933, as amended (the "1933 Act") and may be resold in transactions exempt from registration, normally to qualified institutional buyers. This security is not restricted on the foreign exchange where it trades freely without any additional registration. As such, it does not require the additional disclosure required of restricted securities. (d) This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the 1933 Act. (e) Rate shown reflects yield as of August 31, 2022. % OF TOTAL CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS --------------------------------------------------------------------- USD 96.2% EUR 3.8 -------- Total 100.0% ======== Currency Abbreviations: EUR - Euro USD - United States Dollar Page 14 See Notes to Financial Statements FIRST TRUST INNOVATION LEADERS ETF (ILDR) PORTFOLIO OF INVESTMENTS (CONTINUED) AUGUST 31, 2022 ----------------------------- VALUATION INPUTS A summary of the inputs used to value the Fund's investments as of August 31, 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 8/31/2022 PRICES INPUTS INPUTS --------------------------------------------------------------- Common Stocks: Electrical Equipment......................... $ 80,141 $ 38,660 $ 41,481 $ -- Industrial Conglomerates..................... 88,043 27,266 60,777 -- IT Services.................................. 204,653 192,308 12,345 -- Other Industry Categories*................... 2,621,297 2,621,297 -- -- Money Market Funds.............................. 42,611 42,611 -- -- --------------------------------------------------------------- Total Investments............................... $ 3,036,745 $ 2,922,142 $ 114,603 $ -- =============================================================== * See Portfolio of Investments for industry breakout. See Notes to Financial Statements Page 15 FIRST TRUST EXPANDED TECHNOLOGY ETF (XPND) PORTFOLIO OF INVESTMENTS AUGUST 31, 2022 SHARES DESCRIPTION VALUE --------------------------------------------------------------------- COMMON STOCKS -- 99.7% ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS -- 6.2% 4,329 Amphenol Corp., Class A $ 318,311 234 CDW Corp. 39,944 7,927 Corning, Inc. 272,055 1,907 Keysight Technologies, Inc. (a) 312,538 ------------- 942,848 ------------- ENTERTAINMENT -- 0.2% 1,368 Warner Music Group Corp., Class A 36,621 ------------- INTERACTIVE MEDIA & SERVICES -- 4.7% 6,253 Alphabet, Inc., Class A (a) 676,700 981 ZoomInfo Technologies, Inc. (a) 44,557 ------------- 721,257 ------------- IT SERVICES -- 18.7% 393 Akamai Technologies, Inc. (a) 35,480 1,721 Automatic Data Processing, Inc. 420,630 3,944 Cognizant Technology Solutions Corp., Class A 249,142 164 FleetCor Technologies, Inc. (a) 34,855 153 Gartner, Inc. (a) 43,654 3,093 International Business Machines Corp. 397,296 212 Jack Henry & Associates, Inc. 40,746 2,005 Mastercard, Inc., Class A 650,362 2,485 Paychex, Inc. 306,500 3,407 Visa, Inc., Class A 677,005 ------------- 2,855,670 ------------- MEDIA -- 2.4% 731 Charter Communications, Inc., Class A (a) 301,632 1,261 Interpublic Group of (The) Cos., Inc. 34,854 544 Omnicom Group, Inc. 36,394 ------------- 372,880 ------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 35.2% 4,936 Advanced Micro Devices, Inc. (a) 418,918 2,258 Analog Devices, Inc. 342,155 3,462 Applied Materials, Inc. 325,670 1,082 Broadcom, Inc. 540,037 1,496 Enphase Energy, Inc. (a) 428,514 902 KLA Corp. 310,405 688 Lam Research Corp. 301,282 5,457 Marvell Technology, Inc. 255,497 4,189 Microchip Technology, Inc. 273,332 4,958 Micron Technology, Inc. 280,276 89 Monolithic Power Systems, Inc. 40,333 3,900 NVIDIA Corp. 588,666 4,660 ON Semiconductor Corp. (a) 320,468 3,495 QUALCOMM, Inc. 462,284 SHARES DESCRIPTION VALUE --------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (CONTINUED) 374 Teradyne, Inc. $ 31,656 2,828 Texas Instruments, Inc. 467,214 ------------- 5,386,707 ------------- SOFTWARE -- 23.4% 1,305 Adobe, Inc. (a) 487,339 1,958 Cadence Design Systems, Inc. (a) 340,242 5,315 Fortinet, Inc. (a) 258,787 1,018 Intuit, Inc. 439,552 2,632 Microsoft Corp. 688,189 621 Palo Alto Networks, Inc. (a) 345,779 345 PTC, Inc. (a) 39,637 710 Roper Technologies, Inc. 285,832 805 ServiceNow, Inc. (a) 349,869 981 Synopsys, Inc. (a) 339,446 ------------- 3,574,672 ------------- TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS -- 5.4% 4,815 Apple, Inc. 757,014 2,528 Hewlett Packard Enterprise Co. 34,381 551 NetApp, Inc. 39,744 ------------- 831,139 ------------- WIRELESS TELECOMMUNICATION SERVICES -- 3.5% 3,760 T-Mobile US, Inc. (a) 541,289 ------------- TOTAL COMMON STOCKS -- 99.7% 15,263,083 (Cost $17,041,737) ------------- MONEY MARKET FUNDS -- 0.2% 27,402 Morgan Stanley Institutional Liquidity Funds - Treasury Portfolio - Institutional Class - 2.06% (b) 27,402 (Cost $27,402) ------------- TOTAL INVESTMENTS -- 99.9% 15,290,485 (Cost $17,069,139) NET OTHER ASSETS AND LIABILITIES -- 0.1% 9,468 ------------- NET ASSETS -- 100.0% $ 15,299,953 ============= (a) Non-income producing security. (b) Rate shown reflects yield as of August 31, 2022. Page 16 See Notes to Financial Statements FIRST TRUST EXPANDED TECHNOLOGY ETF (XPND) PORTFOLIO OF INVESTMENTS (CONTINUED) AUGUST 31, 2022 ----------------------------- VALUATION INPUTS A summary of the inputs used to value the Fund's investments as of August 31, 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 8/31/2022 PRICES INPUTS INPUTS --------------------------------------------------------------- Common Stocks*.................................. $ 15,263,083 $ 15,263,083 $ -- $ -- Money Market Funds.............................. 27,402 27,402 -- -- --------------------------------------------------------------- Total Investments............................... $ 15,290,485 $ 15,290,485 $ -- $ -- =============================================================== * See Portfolio of Investments for industry breakout. See Notes to Financial Statements Page 17 FIRST TRUST EXCHANGE-TRADED FUND VIII STATEMENTS OF ASSETS AND LIABILITIES AUGUST 31, 2022 FIRST TRUST FIRST TRUST INNOVATION EXPANDED LEADERS ETF TECHNOLOGY ETF (ILDR) (XPND) ---------------- ----------------- ASSETS: Investments, at value............................................ $ 3,036,745 $ 15,290,485 Receivables: Dividends..................................................... 998 18,608 Dividend Reclaims............................................. 9 -- ---------------- ----------------- Total Assets.................................................. 3,037,752 15,309,093 ---------------- ----------------- LIABILITIES: Investment advisory fees payable................................. 2,066 9,140 ---------------- ----------------- Total Liabilities............................................. 2,066 9,140 ---------------- ----------------- NET ASSETS....................................................... $ 3,035,686 $ 15,299,953 ================ ================= NET ASSETS CONSIST OF: Paid-in capital.................................................. $ 4,272,713 $ 18,650,974 Par value........................................................ 2,000 9,000 Accumulated distributable earnings (loss)........................ (1,239,027) (3,360,021) ---------------- ----------------- NET ASSETS....................................................... $ 3,035,686 $ 15,299,953 ================ ================= NET ASSET VALUE, per share....................................... $ 15.18 $ 17.00 ================ ================= Number of shares outstanding (unlimited number of shares authorized, par value $0.01 per share)........................ 200,002 900,002 ================ ================= Investments, at cost............................................. $ 3,709,583 $ 17,069,139 ================ ================= Page 18 See Notes to Financial Statements FIRST TRUST EXCHANGE-TRADED FUND VIII STATEMENTS OF OPERATIONS FOR THE YEAR ENDED AUGUST 31, 2022 FIRST TRUST FIRST TRUST INNOVATION EXPANDED LEADERS ETF TECHNOLOGY ETF (ILDR) (XPND) ---------------- ----------------- INVESTMENT INCOME: Dividends........................................................ $ 8,413 $ 140,740 Foreign withholding tax.......................................... (581) -- ---------------- ----------------- Total investment income....................................... 7,832 140,740 ---------------- ----------------- EXPENSES: Investment advisory fees......................................... 24,730 109,296 ---------------- ----------------- Total expenses................................................ 24,730 109,296 ---------------- ----------------- NET INVESTMENT INCOME (LOSS)..................................... (16,898) 31,444 ---------------- ----------------- REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) on: Investments................................................... (555,618) (1,675,116) In-kind redemptions........................................... 209,636 112,124 Foreign currency transactions................................. 77 -- ---------------- ----------------- Net realized gain (loss)......................................... (345,905) (1,562,992) ---------------- ----------------- Net change in unrealized appreciation (depreciation) on investments................................................... (994,121) (2,600,150) ---------------- ----------------- NET REALIZED AND UNREALIZED GAIN (LOSS).......................... (1,340,026) (4,163,142) ---------------- ----------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................................ $ (1,356,924) $ (4,131,698) ================ ================= See Notes to Financial Statements Page 19 FIRST TRUST EXCHANGE-TRADED FUND VIII STATEMENTS OF CHANGES IN NET ASSETS FIRST TRUST FIRST TRUST INNOVATION EXPANDED LEADERS ETF TECHNOLOGY ETF (ILDR) (XPND) -------------------------------- -------------------------------- Year Ended Period Ended Year Ended Period Ended 8/31/2022 8/31/2021 (a) 8/31/2022 8/31/2021 (b) -------------- -------------- -------------- -------------- OPERATIONS: Net investment income (loss)............................ $ (16,898) $ (3,670) $ 31,444 $ (870) Net realized gain (loss)................................ (345,905) 8,703 (1,562,992) -- Net change in unrealized appreciation (depreciation).... (994,121) 321,283 (2,600,150) 821,496 -------------- -------------- -------------- -------------- Net increase (decrease) in net assets resulting from operations........................................... (1,356,924) 326,316 (4,131,698) 820,626 -------------- -------------- -------------- -------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Investment operations................................... (5,085) -- (16,900) -- -------------- -------------- -------------- -------------- SHAREHOLDER TRANSACTIONS: Proceeds from shares sold............................... 2,079,627 3,116,857 4,886,380 15,578,560 Cost of shares redeemed................................. (1,125,105) -- (1,837,015) -- -------------- -------------- -------------- -------------- Net increase (decrease) in net assets resulting from shareholder transactions............................. 954,522 3,116,857 3,049,365 15,578,560 -------------- -------------- -------------- -------------- Total increase (decrease) in net assets................. (407,487) 3,443,173 (1,099,233) 16,399,186 NET ASSETS: Beginning of period..................................... 3,443,173 -- 16,399,186 -- -------------- -------------- -------------- -------------- End of period........................................... $ 3,035,686 $ 3,443,173 $ 15,299,953 $ 16,399,186 ============== ============== ============== ============== CHANGES IN SHARES OUTSTANDING: Shares outstanding, beginning of period................. 150,002 -- 750,002 -- Shares sold............................................. 100,000 150,002 250,000 750,002 Shares redeemed......................................... (50,000) -- (100,000) -- -------------- -------------- -------------- -------------- Shares outstanding, end of period....................... 200,002 150,002 900,002 750,002 ============== ============== ============== ============== (a) Inception date is May 25, 2021, which is consistent with the commencement of investment operations and is the date the initial creation units were established. (b) Inception date is June 14, 2021, which is consistent with the commencement of investment operations and is the date the initial creation units were established. Page 20 See Notes to Financial Statements FIRST TRUST EXCHANGE-TRADED FUND VIII FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD FIRST TRUST INNOVATION LEADERS ETF (ILDR) YEAR PERIOD ENDED ENDED 8/31/2022 8/31/2021 (a) -------------- -------------- Net asset value, beginning of period........................... $ 22.95 $ 20.07 -------- -------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)................................... (0.08) (0.02) Net realized and unrealized gain (loss)........................ (7.66) 2.90 -------- -------- Total from investment operations............................... (7.74) 2.88 -------- -------- DISTRIBUTIONS PAID TO SHAREHOLDERS FROM: Net investment income.......................................... (0.00) (b) -- Net realized gain.............................................. (0.03) -- -------- -------- Total distributions............................................ (0.03) -- -------- -------- Net asset value, end of period................................. $ 15.18 $ 22.95 ======== ======== TOTAL RETURN (c)............................................... (33.75)% 14.35% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in 000's)........................... $ 3,036 $ 3,443 RATIOS TO AVERAGE NET ASSETS: Ratio of total expenses to average net assets.................. 0.75% 0.75% (d) Ratio of net investment income (loss) to average net assets.... (0.51)% (0.49)% (d) Portfolio turnover rate (e).................................... 58% 9% FIRST TRUST EXPANDED TECHNOLOGY ETF (XPND) YEAR PERIOD ENDED ENDED 8/31/2022 8/31/2021 (a) -------------- -------------- Net asset value, beginning of period........................... $ 21.87 $ 20.18 -------- -------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)................................... 0.04 (0.00) (b) Net realized and unrealized gain (loss)........................ (4.89) 1.69 -------- -------- Total from investment operations............................... (4.85) 1.69 -------- -------- DISTRIBUTIONS PAID TO SHAREHOLDERS FROM: Net investment income.......................................... (0.02) -- -------- -------- Net asset value, end of period................................. $ 17.00 $ 21.87 ======== ======== TOTAL RETURN (c)............................................... (22.19)% 8.37% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in 000's)........................... $ 15,300 $ 16,399 RATIOS TO AVERAGE NET ASSETS: Ratio of total expenses to average net assets.................. 0.65% 0.65% (d) Ratio of net investment income (loss) to average net assets.... 0.19% (0.03)% (d) Portfolio turnover rate (e).................................... 88% 0% (a) Inception dates for ILDR and XPND are May 25, 2021 and June 14, 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) Amount is less than $0.01. (c) 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. (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. See Notes to Financial Statements Page 21 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII AUGUST 31, 2022 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 ("SEC") under the Investment Company Act of 1940, as amended (the "1940 Act"). The Trust currently consists of fifty-six funds that are offering shares. This report covers the two funds (each a "Fund" and collectively, the "Funds") listed below. The shares of each Fund are listed and traded on the NYSE Arca, Inc. First Trust Innovation Leaders ETF - (ticker "ILDR") First Trust Expanded Technology ETF - (ticker "XPND") 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. ILDR's investment objective seeks to provide capital appreciation. XPND's investment objective seeks to provide long-term capital appreciation. Under normal market conditions, ILDR will invest at least 80% of its net assets (plus any borrowings for investment purposes) in common stock and depository receipts issued by U.S. and non-U.S. companies that may benefit from the development or application of scientific and technological innovation. Under normal market conditions, XPND will invest at least 80% of its net assets (plus any borrowings for investment purposes) in the common stocks of companies identified by the Fund's investment advisor as either information technology companies or consumer discretionary and communication services companies whose operations are principally derived from and/or dependent upon technology. There can be no assurance that a Fund will achieve its investment objective. The Funds may not be appropriate for all investors. 2. SIGNIFICANT ACCOUNTING POLICIES The Funds are each considered an investment company and follow accounting and reporting guidance under Financial Accounting Standards Board Accounting Standards Codification Topic 946, "Financial Services-Investment Companies." The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of the financial statements. The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. A. PORTFOLIO VALUATION Each Fund's NAV is determined daily as of the close of regular trading on the New York Stock Exchange ("NYSE"), normally 4:00 p.m. Eastern time, on each day the NYSE is open for trading. If the NYSE closes early on a valuation day, the NAV is determined as of that time. Foreign securities are priced using data reflecting the earlier closing of the principal markets for those securities. Each Fund's NAV is calculated by dividing the value of all assets of 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: 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. Securities trading on foreign exchanges or over-the-counter markets that close prior to the NYSE close may be valued using a systematic fair valuation model provided by a third-party pricing service. If these foreign securities meet certain criteria in relation to the valuation model, their valuation is systematically adjusted to reflect the impact of movement in the U.S. market after the close of the foreign markets. Page 22 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII AUGUST 31, 2022 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. 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. If the securities in question are foreign securities, the following additional information may be considered: 1) the value of similar foreign securities traded on other foreign markets; 2) ADR trading of similar securities; 3) closed-end fund or exchange-traded fund trading of similar securities; 4) foreign currency exchange activity; 5) the trading prices of financial products that are tied to baskets of foreign securities; 6) factors relating to the event that precipitated the pricing problem; 7) whether the event is likely to recur; and 8) whether the effects of the event are isolated or whether they affect entire markets, countries or regions. Because foreign markets may be open on different days than the days during which investors may transact in the shares of a Fund, the value of the Fund's securities may change on the days when investors are not able to transact in the shares of the Fund. The value of the securities denominated in foreign currencies is converted into U.S. dollars using exchange rates determined daily as of the close of regular trading on the NYSE. 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. Page 23 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII AUGUST 31, 2022 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 August 31, 2022, is included with each Fund's Portfolio of Investments. In December 2020, the SEC adopted Rule 2a-5 under the 1940 Act, establishing requirements to determine fair value in good faith for purposes of the 1940 Act. The rule permits fund boards to designate a fund's investment adviser to perform fair value determinations, subject to board oversight and certain other conditions. The rule also defines when market quotations are "readily available" for purposes of the 1940 Act and requires a fund to fair value a portfolio investment when a market quotation is not readily available. The SEC also adopted new Rule 31a-4 under the 1940 Act, which sets forth recordkeeping requirements associated with fair value determinations. The compliance date for Rule 2a-5 and Rule 31a-4 is September 8, 2022. Effective September 8, 2022 and pursuant to the requirements of Rule 2a-5, the Trust's Board of Trustees designated the Advisor as its valuation designee to perform fair value determinations and approved new Advisor Valuation Procedures for the Trust. B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME Securities transactions are recorded as of the trade date. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income, if any, is recorded on the accrual basis. Withholding taxes and tax reclaims on foreign dividends have been provided for in accordance with each Fund's understanding of the applicable country's tax rules and rates. Distributions received from a Fund's investments in real estate investment trusts ("REITs") may be comprised of return of capital, capital gains and income. The actual character of the amounts received during the year is not known until after the REITs' fiscal year end. A Fund records the character of distributions received from the REITs during the year based on estimates available. The characterization of distributions received by a Fund may be subsequently revised based on information received from the REITs after their tax reporting periods conclude. C. FOREIGN CURRENCY The books and records of the Funds are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the exchange rates prevailing at the end of the period. Purchases and sales of investments and items of income and expense are translated on the respective dates of such transactions. Unrealized gains and losses on assets and liabilities, other than investments in securities, which result from changes in foreign currency exchange rates have been included in "Net change in unrealized appreciation (depreciation) on foreign currency translation" on the Statements of Operations. Unrealized gains and losses on investments in securities which result from changes in foreign exchange rates are included with fluctuations arising from changes in market price and are shown in "Net change in unrealized appreciation (depreciation) on investments" on the Statements of Operations. Net realized foreign currency gains and losses include the effect of changes in exchange rates between trade date and settlement date on investment security transactions, foreign currency transactions and interest and dividends received and are included in "Net realized gain (loss) on foreign currency transactions" on the Statements of Operations. The portion of foreign currency gains and losses related to fluctuations in exchange rates between the initial purchase settlement date and subsequent sale trade date is included in "Net realized gain (loss) on investments" on the Statements of Operations. D. DIVIDENDS AND 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 portfolio securities held by the Funds and have no impact on net assets or NAV per share. Temporary differences, which arise from recognizing certain items of income, expense and gain/loss in different periods for financial statement and tax purposes, will reverse at some time in the future. The tax character of distributions paid by each Fund during the fiscal year ended August 31, 2022, was as follows: Distributions Distributions Distributions paid from paid from paid from Ordinary Income Capital Gains Return of Capital --------------- --------------- ----------------- First Trust Innovation Leaders ETF $ 5,085 $ -- $ -- First Trust Expanded Technology ETF 16,900 -- -- During the fiscal year ended August 31, 2021, none of the Funds paid a distribution. Page 24 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII AUGUST 31, 2022 As of August 31, 2022, the components of distributable earnings on a tax basis for each Fund were as follows: Accumulated Undistributed Capital and Net Unrealized Ordinary Other Appreciation Income Gain (Loss) (Depreciation) --------------- --------------- ----------------- First Trust Innovation Leaders ETF $ (10,531) $ (528,761) $ (699,735) First Trust Expanded Technology ETF 14,544 (1,548,181) (1,826,384) E. INCOME TAXES Each Fund intends to continue to qualify as a regulated investment company by complying with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended, which includes distributing substantially all of its net investment income and net realized gains to shareholders. Accordingly, no provision has been made for federal and state income taxes. However, due to the timing and amount of distributions, each Fund may be subject to an excise tax of 4% of the amount by which approximately 98% of each Fund's taxable income exceeds the distributions from such taxable income for the calendar year. 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 ILDR and XPND the taxable years ending 2021 and 2022 remain open to federal and state audit. As of August 31, 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, 2022, for federal income tax purposes, the Funds had a capital loss carryforward available that is shown in the table below, to the extent provided by regulators, to offset future capital gains. Non-Expiring Capital Loss Carryforwards -------------- First Trust Innovation Leaders ETF $ 528,761 First Trust Expanded Technology ETF 1,548,181 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 August 31, 2022, the 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 --------------- -------------- First Trust Innovation Leaders ETF $ 10,531 $ -- First Trust Expanded Technology ETF -- -- In order to present paid-in capital and accumulated distributable earnings (loss) (which consists of accumulated net investment income (loss), accumulated net realized gain (loss) on investments and net unrealized appreciation (depreciation) on investments) on the Statements of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to paid-in capital, accumulated net investment income (loss) and accumulated net realized gain (loss) on investments. These adjustments are primarily due to the difference between book and tax treatments of income and gains on various investment securities held by the Funds and in-kind transactions. The results of operations and net assets were not affected by these adjustments. For the fiscal year ended August 31, 2022, the adjustments for each Fund were as follows: Accumulated Accumulated Net Realized Net Investment Gain (Loss) Paid-in Income (Loss) on Investments Capital -------------- -------------- --------------- First Trust Innovation Leaders ETF $ 6,371 $ (209,705) $ 203,334 First Trust Expanded Technology ETF -- (32,919) 32,919 Page 25 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII AUGUST 31, 2022 As of August 31, 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: Gross Gross Net Unrealized Unrealized Unrealized Appreciation Tax Cost Appreciation (Depreciation) (Depreciation) -------------- -------------- -------------- -------------- First Trust Innovation Leaders ETF $ 3,736,480 $ 166,698 $ (866,433) $ (699,735) First Trust Expanded Technology ETF 17,116,869 565,337 (2,391,721) (1,826,384) 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 selection and 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. Pursuant to the Investment Management Agreement between the Trust and the Advisor, First Trust manages the investment of each Fund's assets and is responsible for the expenses of each Fund, including the cost of transfer agency, custody, fund administration, legal, audit, license fees and other services, but excluding fee payments under the Investment Management Agreement, interest, taxes, pro rata share of fees and expenses attributable to investments in other investment companies ("acquired fund fees and expenses"), brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution and service fees payable pursuant to a Rule 12b-1 plan, if any, and extraordinary expenses. Each Fund has agreed to pay First Trust an annual unitary management fee based on each Fund's average daily net assets at a rate set forth below: Rate -------------- First Trust Innovation Leaders ETF 0.75% First Trust Expanded Technology ETF 0.65% 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 fiscal year ended August 31, 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 -------------- -------------- First Trust Innovation Leaders ETF $ 1,898,276 $ 1,938,220 First Trust Expanded Technology ETF 14,993,909 14,774,971 Page 26 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII AUGUST 31, 2022 For the fiscal year ended August 31, 2022, the cost of in-kind purchases and proceeds from in-kind sales for each Fund were as follows: Purchases Sales -------------- -------------- First Trust Innovation Leaders ETF $ 2,050,303 $ 1,110,568 First Trust Expanded Technology ETF 4,873,046 1,831,304 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 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, 2023. 7. INDEMNIFICATION The Trust, on behalf of the Funds, has a variety of indemnification obligations under contracts with its service providers. The Trust's maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. 8. SUBSEQUENT EVENTS Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements that have not already been disclosed. Page 27 -------------------------------------------------------------------------------- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -------------------------------------------------------------------------------- TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF FIRST TRUST EXCHANGE-TRADED FUND VIII: OPINION ON THE FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS We have audited the accompanying statements of assets and liabilities of First Trust Innovation Leaders ETF and First Trust Expanded Technology ETF (the "Funds"), each a series of the First Trust Exchange-Traded Fund VIII, including the portfolios of investments, as of August 31, 2022, the related statements of operations for the year then ended, and the statements of changes in net assets and the financial highlights for the periods indicated in the table below, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Funds as of August 31, 2022, and the results of their operations for the year then ended, and the changes in their net assets and the financial highlights for the periods listed in the table below in conformity with accounting principles generally accepted in the United States of America. ------------------------------------------------------------------------------------------------------------------------------ INDIVIDUAL FUNDS STATEMENTS OF STATEMENTS OF FINANCIAL INCLUDED IN THE TRUST OPERATIONS CHANGES IN NET ASSETS HIGHLIGHTS ------------------------------------------------------------------------------------------------------------------------------ First Trust Innovation Leaders ETF For the year ended For the year ended August 31, 2022 and for the period August 31, 2022 from May 25, 2021 (commencement of operations) through August 31, 2021 ------------------------------------------------------------------------------------------------------------------------------ First Trust Expanded Technology ETF For the year ended For the year ended August 31, 2022 and for the period August 31, 2022 from June 14, 2021 (commencement of operations) through August 31, 2021 ------------------------------------------------------------------------------------------------------------------------------ BASIS FOR OPINION These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on the Funds' financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of August 31, 2022, 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 October 21, 2022 We have served as the auditor of one or more First Trust investment companies since 2001. Page 28 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII AUGUST 31, 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. FEDERAL TAX INFORMATION For the taxable year ended August 31, 2022, the following percentages of income dividend paid by the Funds qualify for the dividends received deduction available to corporations: Dividends Received Deduction ---------------------------- First Trust Innovation Leaders ETF 31.84% First Trust Expanded Technology ETF 100.00% For the taxable year ended August 31, 2022, the following percentages of income dividend paid by the Funds are hereby designated as qualified dividend income: Qualified Dividend Income ---------------------------- First Trust Innovation Leaders ETF 35.70% First Trust Expanded Technology ETF 100.00% A portion of each of the Funds' 2022 ordinary dividends (including short-term capital gains) paid to their shareholders during the fiscal year ended August 31, 2022, may be eligible for the Qualified Business Income Deduction (QBI) under Internal Revenue Code Section 199A for the aggregate dividends each Fund received from the underlying Real Estate Investment Trusts (REITs) these Funds invest in. RISK CONSIDERATIONS RISKS ARE INHERENT IN ALL INVESTING. CERTAIN GENERAL RISKS THAT MAY BE APPLICABLE TO A FUND ARE IDENTIFIED BELOW, BUT NOT ALL OF THE MATERIAL RISKS RELEVANT TO EACH FUND ARE INCLUDED IN THIS REPORT AND NOT ALL OF THE RISKS BELOW APPLY TO EACH FUND. THE MATERIAL RISKS OF INVESTING IN EACH FUND ARE SPELLED OUT IN ITS PROSPECTUS, STATEMENT OF ADDITIONAL INFORMATION AND OTHER REGULATORY FILINGS. BEFORE INVESTING, YOU SHOULD CONSIDER EACH FUND'S INVESTMENT OBJECTIVE, RISKS, CHARGES AND EXPENSES, AND READ EACH FUND'S PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION CAREFULLY. YOU CAN DOWNLOAD EACH FUND'S PROSPECTUS AT WWW.FTPORTFOLIOS.COM OR CONTACT FIRST TRUST PORTFOLIOS L.P. AT (800) 621-1675 TO REQUEST A PROSPECTUS, WHICH CONTAINS THIS AND OTHER INFORMATION ABOUT EACH FUND. CONCENTRATION RISK. To the extent that a fund is able to invest a significant percentage of its assets in a single asset class or the securities of issuers within the same country, state, region, industry or sector, an adverse economic, business or political development may affect the value of the fund's investments more than if the fund were more broadly diversified. A fund that tracks an index will be concentrated to the extent the fund's corresponding index is concentrated. A concentration makes a fund more susceptible to any single occurrence and may subject the fund to greater market risk than a fund that is more broadly diversified. CREDIT RISK. Credit risk is the risk that an issuer of a security will be unable or unwilling to make dividend, interest and/or principal payments when due and the related risk that the value of a security may decline because of concerns about the issuer's ability to make such payments. 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, Page 29 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII AUGUST 31, 2022 (UNAUDITED) additional compliance costs associated with corrective measures and/or financial loss. In addition, cyber security breaches of a fund's third-party service providers, such as its administrator, transfer agent, custodian, or sub-advisor, as applicable, or issuers in which the fund invests, can also subject a fund to many of the same risks associated with direct cyber security breaches. DEFINED OUTCOME FUNDS RISK. To the extent a fund's investment strategy is designed to deliver returns tied to the price performance of an underlying ETF, an investor may not realize the returns the fund seeks to achieve if that investor does not hold shares for the entire target outcome period. In the event an investor purchases shares after the first day of the target outcome period or sells shares prior to the end of the target outcome period, the buffer that the fund seeks to provide against a decline in the value of the underlying ETF may not be available, the enhanced returns that the fund seeks to provide (if any) may not be available and the investor may not participate in a gain in the value of the underlying ETF up to the cap for the investor's investment period. Additionally, the fund will not participate in gains of the underlying ETF above the cap and a shareholder may lose their entire investment. If the fund seeks enhanced returns, there are certain time periods when the value of the fund may fall faster than the value of the underlying ETF, and it is very unlikely that, on any given day during which the underlying ETF share price increases in value, the fund's share price will increase at the same rate as the enhanced returns sought by the fund, which is designed for an entire target outcome period. Trading flexible exchange options involves risks different from, or possibly greater than, the risks associated with investing directly in securities, such as less liquidity and correlation and valuation risks. A fund may experience substantial downside from specific flexible exchange option positions and certain positions may expire worthless. DERIVATIVES RISK. To the extent a fund uses derivative instruments such as futures contracts, options contracts and swaps, the fund may experience losses because of adverse movements in the price or value of the underlying asset, index or rate, which may be magnified by certain features of the derivative. These risks are heightened when a fund's portfolio managers use derivatives to enhance the fund's return or as a substitute for a position or security, rather than solely to hedge (or offset) the risk of a position or security held by the fund. EQUITY SECURITIES RISK. To the extent a fund invests in equity securities, the value of the fund's shares will fluctuate with changes in the value of the equity securities. Equity securities prices fluctuate for several reasons, including changes in investors' perceptions of the financial condition of an issuer or the general condition of the relevant stock market, such as market volatility, or when political or economic events affecting the issuers occur. In addition, common stock prices may be particularly sensitive to rising interest rates, as the cost of capital rises and borrowing costs increase. Equity securities may decline significantly in price over short or extended periods of time, and such declines may occur in the equity market as a whole, or they may occur in only a particular country, company, industry or sector of the market. ETF RISK. The shares of an ETF trade like common stock and represent an interest in a portfolio of securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities, although lack of liquidity in an ETF could result in it being more volatile and ETFs have management fees that increase their costs. Shares of an ETF trade on an exchange at market prices rather than net asset value, which may cause the shares to trade at a price greater than net asset value (premium) or less than net asset value (discount). In times of market stress, decisions by market makers to reduce or step away from their role of providing a market for an ETF's shares, or decisions by an ETF's authorized participants that they are unable or unwilling to proceed with creation and/or redemption orders of an ETF's shares, could result in shares of the ETF trading at a discount to net asset value and in greater than normal intraday bid-ask spreads. FIXED INCOME SECURITIES RISK. To the extent a fund invests in fixed income securities, the fund will be subject to credit risk, income risk, interest rate risk, liquidity risk and prepayment risk. Income risk is the risk that income from a fund's fixed income investments could decline during periods of falling interest rates. Interest rate risk is the risk that the value of a fund's fixed income securities will decline because of rising interest rates. Liquidity risk is the risk that a security cannot be purchased or sold at the time desired, or cannot be purchased or sold without adversely affecting the price. Prepayment risk is the risk that the securities will be redeemed or prepaid by the issuer, resulting in lower interest payments received by the fund. In addition to these risks, high yield securities, or "junk" bonds, are subject to greater market fluctuations and risk of loss than securities with higher ratings, and the market for high yield securities is generally smaller and less liquid than that for investment grade securities. 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. Page 30 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII AUGUST 31, 2022 (UNAUDITED) 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. MARKET RISK. Market risk is the risk that a particular security, or shares of a fund in general, may fall in value. 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 evelopments, 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 COVID-19 global pandemic and the ensuing policies enacted by governments and central banks have caused and may continue to cause significant volatility and uncertainty in global financial markets. While the U.S. has resumed "reasonably" normal business activity, many countries continue to impose lockdown measures. Additionally, there is no guarantee that vaccines will be effective against emerging variants of the disease. These events also adversely affect the prices and liquidity of the Fund's portfolio securities or other instruments and could result in disruptions in the trading markets. Any of such circumstances could have a materially negative impact on the value of the Fund's shares and result in increased market volatility. During any such events, the Fund's shares may trade at increased premiums or discounts to their net asset value and the bid/ask spread on the Fund's shares may widen. 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. Page 31 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII AUGUST 31, 2022 (UNAUDITED) 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. VALUATION RISK. The valuation of certain securities may carry more risk than that of common stock. Uncertainties in the conditions of the financial markets, unreliable reference data, lack of transparency and inconsistency of valuation models and processes may lead to inaccurate asset pricing. A fund may hold investments in sizes smaller than institutionally sized round lot positions (sometimes referred to as odd lots). However, third-party pricing services generally provide evaluations on the basis of institutionally-sized round lots. If a fund sells certain of its investments in an odd lot transaction, the sale price may be less than the value at which such securities have been held by the fund. Odd lots often trade at lower prices than institutional round lots. There is no assurance that the fund will be able to sell a portfolio security at the price established by the pricing service, which could result in a loss to the fund. NOT FDIC INSURED NOT BANK GUARANTEED MAY LOSE VALUE REMUNERATION First Trust Advisors L.P. ("First Trust") is authorised and regulated by the U.S. Securities and Exchange Commission and is entitled to market shares of certain First Trust Exchange-Traded Fund VIII funds it manages (the "Funds") in certain member states in the European Economic Area in accordance with the cooperation arrangements in Article 42 of the Alternative Investment Fund Managers Directive (the "Directive"). First Trust is required under the Directive to make disclosures in respect of remuneration. The following disclosures are made in line with First Trust's interpretation of currently available regulatory guidance on remuneration disclosures. During the year ended December 31, 2021, the amount of remuneration paid (or to be paid) by First Trust Advisors L.P. in respect of the Funds is $9,761. This figure is comprised of $376 paid (or to be paid) in fixed compensation and $9,385 paid (or to be paid) in variable compensation. There were a total of 24 beneficiaries of the remuneration described above. Those amounts include $5,013 paid (or to be paid) to senior management of First Trust Advisors L.P. and $4,748 paid (or to be paid) to other employees whose professional activities have a material impact on the risk profiles of First Trust Advisors L.P. or the Funds (collectively, "Code Staff"). Code Staff included in the aggregated figures disclosed above are rewarded in line with First Trust's remuneration policy (the "Remuneration Policy") which is determined and implemented by First Trust's senior management. The Remuneration Policy reflects First Trust's ethos of good governance and encapsulates the following principal objectives: i. to provide a clear link between remuneration and performance of First Trust and to avoid rewarding for failure; ii. to promote sound and effective risk management consistent with the risk profiles of the funds managed by First Trust; and iii. to remunerate staff in line with the business strategy, objectives, values and interests of First Trust and the funds managed by First Trust in a manner that avoids conflicts of interest. First Trust assesses various risk factors which it is exposed to when considering and implementing remuneration for Code Staff and considers whether any potential award to such person(s) would give rise to a conflict of interest. First Trust does not reward failure or consider the taking of risk or failure to take risk in its remuneration of Code Staff. First Trust assesses performance for the purposes of determining payments in respect of performance-related remuneration of Code Staff by reference to a broad range of measures including (i) individual performance (using financial and non-financial criteria), and (ii) the overall performance of First Trust. Remuneration is not based upon the performance of the Funds. The elements of remuneration are balanced between fixed and variable and the senior management sets fixed salaries at a level sufficient to ensure that variable remuneration incentivizes and rewards strong individual performance but does not encourage excessive risk taking. No individual is involved in setting his or her own remuneration. Page 32 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII AUGUST 31, 2022 (UNAUDITED) ADVISORY AGREEMENT BOARD CONSIDERATIONS REGARDING CONTINUATION OF INVESTMENT MANAGEMENT AGREEMENT The Board of Trustees of First Trust Exchange-Traded Fund VIII (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 following two series of the Trust (each a "Fund" and collectively, the "Funds"): First Trust Innovation Leaders ETF (ILDR) First Trust Expanded Technology ETF (XPND) The Board approved the continuation of the Agreement for each Fund for a one-year period ending June 30, 2023 at a meeting held on June 12-13, 2022. The Board determined for each Fund 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 for each Fund, the Board considered its duties under the Investment Company Act of 1940, as amended (the "1940 Act"), as well as under the general principles of state law, in reviewing and approving advisory contracts; the requirements of the 1940 Act in such matters; the fiduciary duty of investment advisors with respect to advisory agreements and compensation; the standards used by courts in determining whether investment company boards have fulfilled their duties; and the factors to be considered by the Board in voting on such agreements. At meetings held on April 18, 2022 and June 12-13, 2022, 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 each Fund (including the relevant personnel responsible for these services and their experience); the unitary fee rate payable by each Fund as compared to fees charged to a peer group of funds (the "Expense Group") and a broad peer universe of funds (the "Expense Universe"), each assembled by Broadridge Financial Solutions, Inc. ("Broadridge"), an independent source, and as compared to fees charged to other clients of the Advisor, including other exchange-traded funds ("ETFs") managed by the Advisor; the expense ratio of each Fund as compared to expense ratios of the funds in the Fund's Expense Group and Expense Universe; performance information for each Fund; the nature of expenses incurred in providing services to each Fund and the potential for the Advisor to realize economies of scale, if any; profitability and other financial data for the Advisor; any indirect 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 18, 2022, 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 12-13, 2022 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 each 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 a Fund knowing that the Advisor manages the Fund and knowing the Fund's unitary fee. In reviewing the Agreement for each Fund, 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 each Fund and reviewed all of the services provided by the Advisor to the Funds, as well as the background and experience of the persons responsible for such services. The Board noted that each Fund is an actively-managed ETF and noted that the Advisor's Research Group is responsible for the day-to-day management of the Funds' investments. The Board considered the background and experience of the members of the Research Group. The Board considered the Advisor's statement that it applies the same oversight model internally with its Research Group as it uses for overseeing external sub-advisors, including portfolio risk monitoring and performance review. In reviewing the services provided, the Board noted the compliance program that had been developed by the Advisor and considered that it includes a robust program for monitoring the Advisor's and each Fund's compliance with the 1940 Act, as well as each Fund's compliance with its investment objective, policies and restrictions. The Board also considered a report from the Advisor with respect to its risk management functions related to the operation of the Funds. Finally, as part of the Board's consideration of the Advisor's services, the Advisor, in its written materials and at the April 18, 2022 meeting, described to the Board the scope of its ongoing investment in additional personnel and infrastructure to maintain and improve the quality of services provided to the Funds and the other funds in the First Trust Fund Complex. In addition to the written materials provided by the Advisor, at the April 18, 2022 meeting, the Board also received a presentation from representatives of the Advisor's Research Group, who discussed the services that the Group provides to the Funds, including the Page 33 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII AUGUST 31, 2022 (UNAUDITED) Group's day-to-day management of the Funds' investments. In light of the information presented and the considerations made, the Board concluded that the nature, extent and quality of the services provided to the Trust and each Fund by the Advisor under the Agreement have been and are expected to remain satisfactory and that the Advisor has managed each Fund consistent with its investment objective, policies and restrictions. The Board considered the unitary fee rate payable by each Fund under the Agreement for the services provided. The Board considered that as part of the unitary fee the Advisor is responsible for each 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, acquired fund fees and expenses, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution and service fees pursuant to a Rule 12b-1 plan, if any, and extraordinary expenses, if any. The Board received and reviewed information showing the fee rates and expense ratios of the peer funds in the Expense Groups, as well as advisory and unitary fee rates charged by the Advisor to other fund (including ETFs) and non-fund clients, as applicable. Because each Fund pays a unitary fee, the Board determined that expense ratios were the most relevant comparative data point. Based on the information provided, the Board noted that the unitary fee rate for ILDR was equal to the median total (net) expense ratio of the peer funds in its Expense Group and that the unitary fee rate for XPND was below the median total (net) expense ratio of the peer funds in its Expense Group. With respect to the Expense Groups, the Board, at the April 18, 2022 meeting, discussed with Broadridge its methodology for assembling peer groups and discussed with the Advisor limitations in creating peer groups for actively-managed ETFs, including that the Expense Group for XPND contained both actively-managed ETFs and open-end mutual funds, and different business models that may affect the pricing of services among ETF sponsors. The Board took these limitations and differences into account in considering the peer data. With respect to fees charged to other non-ETF clients, the Board considered differences between the Funds and other non-ETF clients that limited their comparability. In considering the unitary fee rates overall, the Board also considered the Advisor's statement that it seeks to meet investor needs through innovative and value-added investment solutions and the Advisor's demonstrated long-term commitment to each Fund and the other funds in the First Trust Fund Complex. The Board considered performance information for each Fund. The Board noted the process it has established for monitoring each Fund's performance and portfolio risk on an ongoing basis, which includes quarterly performance reporting from the Advisor for the Funds. The Board determined that this process continues to be effective for reviewing each Fund's performance. Because ILDR commenced operations on May 25, 2021 and XPND commenced operations on June 14, 2021 and therefore each Fund has a limited performance history, comparative performance information for the Funds was not considered. On the basis of all the information provided on the unitary fee for each Fund and the ongoing oversight by the Board, the Board concluded that the unitary fee for each Fund continues to be reasonable and appropriate in light of the nature, extent and quality of the services provided by the Advisor to each Fund under the 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 Funds and noted the Advisor's statement that it believes that its expenses relating to providing advisory services to the Funds will likely increase during the next twelve months as the Advisor continues to build infrastructure and add new staff. The Board noted that any reduction in fixed costs associated with the management of the Funds would benefit the Advisor, but that the unitary fee structure provides a level of certainty in expenses for the Funds. The Board considered the revenues and allocated costs (including the allocation methodology) of the Advisor in serving as investment advisor to each Fund for the period from inception through December 31, 2021 and the estimated profitability level for each Fund calculated by the Advisor based on such data, as well as complex-wide and product-line profitability data, for the twelve months ended December 31, 2021. The Board noted the inherent limitations in the profitability analysis and concluded that, based on the information provided, the Advisor's profitability level for each Fund was not unreasonable. In addition, the Board considered indirect benefits described by the Advisor that may be realized from its relationship with the Funds. The Board considered that the Advisor had identified as an indirect benefit to the Advisor and FTP their exposure to investors and brokers who, absent their exposure to the Funds, may have had no dealings with the Advisor or FTP, and noted that the Advisor does not utilize soft dollars in connection with the Funds. The Board concluded that the character and amount of potential indirect 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 each Fund. No single factor was determinative in the Board's analysis. LIQUIDITY RISK MANAGEMENT PROGRAM In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "1940 Act"), the Funds and each other fund in the First Trust Fund Complex, other than the closed-end funds, have adopted and implemented a liquidity risk management program (the "Program") reasonably designed to assess and manage the funds' liquidity risk, i.e., the risk that a fund could not meet requests to redeem shares issued by the fund without significant dilution of remaining investors' interests in the fund. The Board of Trustees of the First Page 34 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII AUGUST 31, 2022 (UNAUDITED) Trust Funds has appointed First Trust Advisors, L.P. (the "Advisor") as the person designated to administer the Program, and in this capacity the Advisor performs its duties primarily through the activities and efforts of the First Trust Liquidity Committee (the "Liquidity Committee"). Pursuant to the Program, the Liquidity Committee classifies the liquidity of each fund's portfolio investments into one of the four liquidity categories specified by Rule 22e-4: highly liquid investments, moderately liquid investments, less liquid investments and illiquid investments. The Liquidity Committee determines certain of the inputs for this classification process, including reasonably anticipated trade sizes and significant investor dilution thresholds. The Liquidity Committee also determines and periodically reviews a highly liquid investment minimum for certain funds, monitors the funds' holdings of assets classified as illiquid investments to seek to ensure they do not exceed 15% of a fund's net assets and establishes policies and procedures regarding redemptions in kind. At the April 18, 2022 meeting of the Board of Trustees, as required by Rule 22e-4 and the Program, the Advisor provided the Board with a written report prepared by the Advisor that addressed the operation of the Program during the period from March 16, 2021 through the Liquidity Committee's annual meeting held on March 17, 2022 and assessed the Program's adequacy and effectiveness of implementation during this period, including the operation of the highly liquid investment minimum for each fund that is required under the Program to have one, and any material changes to the Program. Note that because the Funds primarily hold assets that are highly liquid investments, the Funds have not adopted any highly liquid investment minimums. As stated in the written report, during the review period, no fund breached the 15% limitation on illiquid investments, no fund with a highly liquid investment minimum breached that minimum and no fund filed a Form N-LIQUID. The Advisor concluded that each fund's investment strategy is appropriate for an open-end fund; that the Program operated effectively in all material respects during the review period; and that the Program is reasonably designed to assess and manage the liquidity risk of each fund and to maintain compliance with Rule 22e-4. Page 35 -------------------------------------------------------------------------------- BOARD OF TRUSTEES AND OFFICERS -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII AUGUST 31, 2022 (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 TERM OF OFFICE THE FIRST TRUST DIRECTORSHIPS NAME, AND YEAR FIRST FUND COMPLEX HELD BY TRUSTEE YEAR OF BIRTH AND ELECTED OR PRINCIPAL OCCUPATIONS OVERSEEN BY DURING PAST POSITION WITH THE TRUST APPOINTED DURING PAST 5 YEARS TRUSTEE 5 YEARS ------------------------------------------------------------------------------------------------------------------------------------ INDEPENDENT TRUSTEES ------------------------------------------------------------------------------------------------------------------------------------ Richard E. Erickson, Trustee o Indefinite Term Physician, Edward-Elmhurst Medical 220 None (1951) Group; Physician and Officer, o Since Inception Wheaton Orthopedics (1990 to 2021) Thomas R. Kadlec, Trustee o Indefinite Term Retired; President, ADM Investors 220 Director, National Futures (1957) Services, Inc. (Futures Commission Association and ADMIS o Since Inception Merchant) (2010 to July 2022) Singapore Ltd.; Formerly, Director of ADM Investor Services, Inc., ADM Investor Services International, ADMISHong Kong Ltd., and Futures Industry Association Denise M. Keefe, Trustee o Indefinite Term Executive Vice President, Advocate 220 Director and Board Chair (1964) Aurora Health and President, of Advocate Home Health o Since 2021 Advocate Aurora Continuing Health Services, Advocate Home Division (Integrated Healthcare Care Products and System) Advocate Hospice; Director and Board Chair of Aurora At Home (since 2018); Director of Advocate Physician Partners Accountable Care Organization; Director and Board Chair of RML Long Term Acute Care Hospitals; and Director of Senior Helpers (since 2021) Robert F. Keith, Trustee o Indefinite Term President, Hibs Enterprises 220 Formerly, Director of (1956) (Financial and Management Trust Company of Illinois o Since Inception Consulting) Niel B. Nielson, Trustee o Indefinite Term Senior Advisor (2018 to Present), 220 None (1954) Managing Director and Chief o Since Inception Operating Officer (2015 to 2018), Pelita Harapan Educational Foundation (Educational Products and Services) ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED TRUSTEE ------------------------------------------------------------------------------------------------------------------------------------ James A. Bowen(1), Trustee, o Indefinite Term Chief Executive Officer, First 220 None Chairman of the Board Trust 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 36 -------------------------------------------------------------------------------- BOARD OF TRUSTEES AND OFFICERS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII AUGUST 31, 2022 (UNAUDITED) POSITION AND TERM OF OFFICE NAME AND OFFICES AND LENGTH OF PRINCIPAL OCCUPATIONS YEAR OF BIRTH WITH TRUST SERVICE DURING PAST 5 YEARS ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS(2) ------------------------------------------------------------------------------------------------------------------------------------ James M. Dykas President and Chief o Indefinite Term Managing Director and Chief Financial Officer, First (1966) Executive Officer Trust Advisors L.P. and First Trust Portfolios L.P.; o Since Inception Chief Financial Officer, BondWave LLC (Software Development Company) and Stonebridge Advisors LLC (Investment Advisor) Donald P. Swade Treasurer, Chief Financial o Indefinite Term Senior Vice President, First Trust Advisors L.P. and (1972) Officer and Chief First Trust Portfolios L.P. Accounting Officer o Since Inception W. Scott Jardine Secretary and Chief Legal o Indefinite Term General Counsel, First Trust Advisors L.P. and First (1960) Officer Trust Portfolios L.P.; Secretary and General Counsel, o Since Inception BondWave LLC; Secretary, Stonebridge Advisors LLC Daniel J. Lindquist Vice President o Indefinite Term Managing Director, First Trust Advisors L.P. and First (1970) Trust Portfolios L.P. o Since Inception Kristi A. Maher Chief Compliance Officer o Indefinite Term Deputy General Counsel, First Trust Advisors L.P. and (1966) and Assistant Secretary 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 37 -------------------------------------------------------------------------------- PRIVACY POLICY -------------------------------------------------------------------------------- FIRST TRUST EXCHANGE-TRADED FUND VIII AUGUST 31, 2022 (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 2022 Page 38 This page intentionally left blank. This page intentionally left blank. FIRST TRUST First Trust Exchange-Traded Fund VIII 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 320 South Canal Street Chicago, IL 60606 [BLANK BACK COVER]